The Top 3 Things CROs Are Quietly Talking About These Days

So backstage at SaaStr Annual this year, and in a number of other conversations since, I’ve had a chance to get a few quiet moments with maybe two dozen top CROs and VPs of Sales.

I’ve asked all of them what’s really on their minds.  

Yes, macro issues come up, and how they have to sell to more stakeholders now, and sales cycles are longer.  But the best long ago adapted.  A tougher selling environment happens, It just is what it is.  The top CROs and VPs of Sales don’t complain about macros. They adapt to them.

But 3 issues have come up again and again, that CROs don’t want to talk about in public.  That they don’t want to be on the record about.  Because they’re triggering, or in conflict with the LinkedIn Vibe.  But they talk about it backstage.

The Top 3 Frustrations of Top CROs Today:

#1.  Sales Folks Just Won’t Go Back To The Office.

This was the #1 concern and complaint I heard from so, so many CROs.  Many although not most CROs are back to the office themselves. And they don’t care where there top performers work anymore. But the rest? 

Almost all of them think it’s critical sales reps outside of the Top 10% work from the office at least 2 days a week, and ideally 3. They also don’t think remote onboarding and training and culture is working well enough in sales. But they’ve thrown up their hands in many cases. 

No matter what the company mandates, folks still won’t come in.

And they see this as the #1 thing impacted sales — that they can have an impact on.  They see it in the numbers.  Folks outside of top performers are just less productive from home, in large part because they’re not trained as well and pushed as much.

The best way to drive sales team performance is to have 1–2 folks on the team just making lots of money from closing lots of deals.

An oldie but a goodie here:

• Yes, sales reps can be a bit lazy.
• Yes, they can blame marketing or competition or whatever for not closing.
• Yes, they can talk a lot about “pipeline” without closing anything.

But … at the end of the day, sales is hard. Sales is a lot of Nos. You have to believe. You have to believe it can be done. And it’s easy to get discouraged.

And when you see a couple of folks ringing the bell every day, making tons of money, and having a good time doing it … that drives the rest of the team.

And over time, it also attracts more top reps to your team.

So rather than figure out how to make the struggling reps better, slow it down.  Figure out how to make 1 or 2 sales reps that are already smart, and closing … be wildly successful.  They blaze that path after that for you, to a significant extent.

With the turbulence in the market in 2023, sales cycles have only been getting longer and a lot more complicated.

At this year’s SaaStr Annual, CEO and co-founder of Capchase Miguel Fernandez and Director of Marketing Rose Johnson share five tips for getting sales right in any market. 

They wanted to quantify this trend of a longer sales cycle, so they commissioned a study of 500 revenue leaders in the U.S. to find out what was going on. 

What were some of the reasons for longer sales cycles? 

1. Churn increase due to greater scrutiny of costs
2. Contract values declining
3. More stakeholders involved in decision-making 

Capchase combined the study with their data set of thousands of SaaS companies and looked at what the best companies do to overcome these hurdles. 

Here are the top five tips to get sales right, no matter the market. 

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Despite economic headwinds, optimism remains for the future of B2B SaaS. Klaviyo’s IPO was one recent bright spot, but what will it take for this type of activity to become a trend?

SaaStr's very own CEO and Founder, Jason Lemkin, will lead a panel of investors, exploring the current state of investments, the trends fueling growth, and what they anticipate for the years to come.

So over the past decade-and-a-half we’ve come up with a lot of yardsticks, metrics and rules for SaaS companies.

E.g.,:

• CAC of < 12-14 months is Good-to-Great
• Paying sales reps 25%-30% of what they close is Good
• A burn multiple of 1 or less is Good

These metrics do sort of work, if you have some capital to spend (e.g., can invest in marketing that takes a little while to pay off).

But — they break if you aren’t really a traditional, 80%+ Gross Margin, 100%+ NRR SaaS company.

And even today, I’m seeing way way too many venture-backed startups with hybrid, less than 100% recurring, and/or SMB models spending money like … they can use enterprise SaaS metrics.

They can’t.

You can’t spend like you do.  Or it ends up all gone, faster than anyone planned.  Even though you used and even met those “Standard SaaS” metrics.….

So things aren’t all “bad” in SaaS.  Many Cloud leaders stock prices are way, way up in 2023, the Cloud platform leaders have re-accelerated, and leaders like Shopify are having close-to-record years.

But for many startups, the hangover from the Excesses of 2021 is a real and tough one.

And the latest Carta data here supports that. Startups shutting down are up 238% this year — already.

“My App Stack” is a new series where we dig in with top CMOs, CROs, CTOs and CEOs on just what apps they’re really using to run their business.  I always learn a lot from these — they are in essence a best practices list from each leader.  Last week we had a great one with Samyutha Reddy, Head of Enterprise Marketing at Jasper.ai, check it out here.

This week we have Jack Moberger, Director of Enablement at Algolia!

Up Next: Wednesday, December 6th @ 10AM

Topic: State of SaaS with Altimeter Capital

Speaker: Jamin Ball, Partner at Altimeter Capital

Workshop Wednesdays is new series where we’ll be bringing some of the best SaaStr speakers to you LIVE, every Wednesday. 

Each workshop will be hosted in a live, interactive 30-minute format at 10am Pacific each and every Wednesday. This workshop will be 100% LIVE, not pre-recorded, and will be hosted in an, interactive 30-minute format, including Q&A.

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