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Learnings from a Great SaaS VP of Sales

by

Sammy Abdullah

One of our companies just hired a VP of Sales we really like, and below is what we learned about the SaaS GTM from talking to him. To give you some context, the company is sub $10mm of ARR and has 3 sellers today. It’s a thoroughly enterprise product with an ACV of $150k. If your SaaS company is of a similar ilk, the below conversation may be very helpful.

Should AE’s be doing upgrades? Account Executive should own the upgrade. The CSM is vital to spotting those opportunities, but sales should own that opportunity. A real sales cycle should go to the AE. CS cannot upsell. It’s a bridge too far to ask the CS.

What is the right quota and profile of the AE? The right profile is someone who can close a consultative sales deal, with a challenger profile. Quota should be overall compensation x7 or x9. The quota for the current team may be right, but not for the future team. Also at $500k quotas, you won’t increase the ACV. People that can do that will require higher salaries.

How would you structure comp of the AE? I like an OTE of 50/50 of base/commission. No commission cap. We should have an accelerator on commission for those that achieve 100% of quota. You want AE’s hitting at least 80% of target.

If an AE is underperforming, what do you do? I give an AE two sales cycles to improve it. You take things into account like pipeline. On new hires, if it’s not going to workout, you see it within a month.

Where are we going to get new AE’s from? Startups and scaleups will have the AE’s we need, especially those with an enterprise or infrastructure play. They cannot come from corporations because of our resources and our challenger sales process. They must have a consultative approach.

What is your view on SDR’s? It’s mixed. They can be extremely valuable if they’re able to personalize outreach or follow up on MQLs and qualify them to SQLs. You do need fewer SDRs given the tools out there; the real role of an SDR is to be on a call with a prospect since we now have lots of tools and automations. I do like hiring SDRs because you can train them into great AE’s. It is resource intensive. I ideally like to see 1 SDR per every 5 AE’s because I do expect AE’s to do their own outbounding and outreach.

We try to hire SDR’s in teams. Hiring one SDR at a time can be hard on that SDR. I would start with hiring 2 and let’s see what happens. Once they’re putting out a steady amount of SQLs, it’s up to an AE to continue to qualify them.

How many AE’s do you want under you ideally? At most I want 8 AE’s. Ideal is 5 AE’s.

Who should the CS leader report to? Ideally to the sales leader given the land and expand importance for the company.

Where should marketing focus its resources? Thought leadership. We need to go to events, present our vision, and do account based marketing. It is marketing’s job to support AE engagement with white papers and tailored insights, especially at the moment. Later when we roll out the agent proposition or enter new verticals, then you may need a different marketing motion.

What percent of leads ideally are coming from outbounding versus inbound marketing? There is no ideal. If you’re ok with no ACV growth, then it’s ok to rely on inbound, but we need to be proactive which starts with sales. We will be more of a sales led commercial organization than a marketing led commercial organization.

As we add the marketing component, this will change, but outbounding will always be the leader here. If you can get to 40% inbound from marketing activities, then you’re in really good shape, but the quality would need to be as high. If you set up marketing too early, you will bring in a lot of shitty leads that you then have to spend time to disqualify. AE’s definitely need to do a healthy level of outbounding.

How do you determine what current AE’s you keep? First thing to look at is current performance. I also compare what top performers are doing well and what non-performers are doing. Then I need to determine if I can level up the non-performers. The top performers as I understand need more coaching to get the max out of them, and we need to build a repeatable sales process and playbook.

What is the right amount of pipeline versus overall quota goal? I have not seen the CRM instance with the different close rates and stages. The 35% close rate is very high, but we should have unweighted pipeline of 5x or 6x.

Thank you for your readership. See more blogs and SaaS data at blossomstreetventures.com. Email the author at sammy@blossomstreetventures.com.

‍

Sammy Abdullah

Managing Partner & Co-Founder

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