The Brutish Sales Playbook Too Many Are Running Today

A lot has changed in SaaS the past 2-3 years, and so much of the old go-go days sales playbook just doesn’t work today.

So a lot of SaaS companies experiencing slow or even no growth are running what I call the Brutalist Sales Playbook.

What do I mean? It’s growing revenue at any cost. I get it. But also, it’s brutal.

Some examples. And you are probably running some of these plays too. Even though just a few years ago — you never would have:

1. Incessant Price Increases on The Base

They just keep going up and up and up. Especially unearned price increases on the existing customer base. Same product, same features, now priced higher. Many have raised prices every year the past 3 years. We used to hesitate here, to keep NPS up. But if growth has slowed to say 20%? Then a price increase is the simplest way to hit the plan. On paper at least.  Raise prices for new customers? At least they get to choose. Force annual pricing increases on existing customers? That’s something quite different.

2. CRO Constantly Pushing Upsells

I’ve seen this so many times. Heads of Sales jumping into every top customer call, not to help — but to find some pressure point to ask for even more money. The other day, we did a vendor call with a VP of CS. The CRO joined 20 minutes late — and asked for $50,000 to fix a critical bug. Personally, I no longer want to talk to a CRO after a deal is signed.

3. Threats on Cancellation

SaaS used to be … a service. Easy to sign up. Easy to get going. And yes, while less discussed — easy to leave. But now many vendors are making threats on cancellation. Keeping your data hostage, or restricting access to data that used to be allowed post-termination. Roach Hotels in SaaS are becoming more and more common — by design.

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So we’re coming up fast on 2024 SaaStr Annual — Sep 10-12 in SF Bay Area in our 40+ Acre Indoor-Outdoor campus.

It’s early, but we can see some trends in terms of the most popular sessions .. so far.

#1: “Klaviyo: The Secrets to Winning with 200,000 SMBs (and More) with Klaviyo’s CEO and SaaStr’s Founder & CEO“

We’ve been super fans of Klaviyo and CEO Andrew Bialecki for years at SaaStr and Andrew and Jason will do a deep dive on how to get to almost $1B in ARR selling to SMBs, and more.  Klaviyo is just one of 3 SaaS IPOs since 2021!

#2. “How to Build a Category Defining Gen AI Company and Scale from 0 to 100 with Cohere’s former VP of Marketing“

This should be a fun session on the top demand gen and marketing lessons from Cohere.

#3: “Lessons from the Field: How to Leverage Pricing and Packaging to Drive Growth, Revenue and Profit with Miro, Splunk, Loom, and OpenAI“

A truly all-star session on pricing and packaging!

#4: “What’s Really Working in B2B AI: 5 Things That Are Actually Working and 5 Things That Aren’t in SaaS AI with Ironclad’s CEO“

Legal is one of the areas that has exploded in innovation with AI.  Ironclad is already at nine-figures in ARR and early to AI.  An honest deep dive on what works — and what doesn’t really work — in adding AI to SaaS.

#5: “Transitioning from Sales-Led to Product-Led Growth and Scaling to $100M ARR with Apollo.io’s Co-founder and CEO“

Apollo has exploded into one of the fastest growing sales and data vendors.  A deep dive on the SLG / PLG motion from founder-CEO Tim Zheng.

That’s just a start!  We’ll have 100s more sessions, braindates, workshops, AMAs and mentorship sessions!  Check out some of the agenda here.

How do you tell the best reps from the mediocre ones?

SaaStr Founder and CEO Jason Lemkin shares the 7 things the best sales reps get right and the 8 ways the rest make things worse.

#1: They listen to your problems and give you the best solution using their product.

The best sales reps solve your problems. Some spaces, like OpenAI, are on fire, so it’s order-taking to some extent. When you’re doing so well that you’re in order-taking mode, sales reps don’t have to solve a problem.

But for the rest of us, order takers won’t work today. The reason sales isn’t yucky or sleazy is because the best sales reps solve your problems. They ask you what’s going on, demo what you’re doing, and show you exactly why they can solve one of your top 10 problems.

The best sales reps don’t immediately go into discounting and pricing. To find the best on your team, listen to their calls, watch their Zooms, and see what they’re doing.

So Microsoft is hardly a newly minted public company, the frequest focus of our 5 Interesting Learning series. But it’s become so central to Cloud the past years, and both LinkedIn and GitHub (which Microsoft acquired) are at the pulse and heart of B2B and B2D, respectively.  So it’s a great and important one for us all to learn from.

And at $260 Billion in ARR, what’s the #1 learning?

• Azure and Cloud up +30% (!)
• Overall Cloud up +22% (!)
• Dynamics (its CRM and more) up +19% (!), even as Salesforce has seen growth slow to single digits
• LinkedIn up +10%, and accelerating (!)
• Office up +12% and seats up +7% (!)
• GitHub has doubled in past 24 months to $2B ARR (!)

Just about everything in Cloud, SaaS and AI is firing on all cylinders at Microsoft.

That’s breathtaking at Microsoft’s scale.

Okta’s VP of Engineering, Monica Bajaj, and Senior Director of Platform Product Marketing, Priya Ramamurthi, share Okta’s playbook to PLG, developer experience, and Enterprise ARR.

It all boils down to one thing: you have to be able to work with other teams within your organization to understand what the customer requires and how to execute and deliver it.

In the early days, when Cash is King, pay the sales reps a full commission on all cash paid up-front. It’s what I did. 95% of the time, this is what you want to do.  

As as a SaaS founder, I paid nothing on multiyear deals without cash upfront, because we had basically a 100% renewal rate at term expiration. (We had churn, but it wasn’t due to contract expiration).

This is relatively uncommon, apprarently < 10% of startups pay a 100% commission on Y2/Y3+ prepaid cash.

But at this time, cash was king. And bringing in $400k for 3 years of product now instead of $150k for one year that I had to renew twice was 100% worth it to me. Plus, the “churn” risk was pushed out to Year 4, at least from a financials perspective.

Later, cash becomes a bit less important, and if nothing else, you worry a bit about incenting too much discounting just to get the multiyear cash deal. 

You have to be careful there. Which is a fair and real concern, even with firm boundaries on discounting. After all, why would a customer prepay multiple years, if not for a substantial additional discount? So if your renewal rates are very high, you are robbing the future a bit here.

Ultimately, after $10m ARR, we moved to a format where we paid out 25% commissions on Year 2 and 3 cash up front, instead of a 100% commission.

Yes, you will also hate sales management.

Maybe not being a founder, or a manager in another function. But you will ultimately not be good at sales management, and thus not happy at it.

Why do I say this? Because the best sales leaders I know … also love to sell. They love it.

• Sometimes, they carry a quota themselves.
• Sometimes, they just help the team hit theirs.
• But they are always in the hunt to not just close deals, but get better. Get better at the playbook. Get better vs. the competition. Get better at FUD and counter FUD. They are deeply … present in sales.

Now there are many folks I know who are tired of selling and just want to get into management and “manage a team”. Maybe that sort of, kind of, works in a Really Big Tech Company. But almost all of these folks I see fail. Because they don’t really want to sell themselves, they are mostly just managing “playbooks” and dashboards. That’s not enough, especially today. Except in a few rare instances where sales is mostly order taking. Everything is just too competitive. With other vendors — and for budget overall.

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