Larry Shurtz: How to Hire, Train & Retain the Best Vertical Teams | E1151

Intro (0s)

• Inaccurate forecasting indicates a lack of business understanding, insufficient customer diligence, inadequate opportunities, or incorrect questioning.

Entry Point into Sales (48s)

• Larry Shurtz initially pursued electrical engineering in college with the goal of building robots.
• Realizing his passion lay in promoting the benefits of robots rather than building them, he transitioned to marketing.
• His first job out of college, at Eli Lilly, introduced him to foundational sales methodology, sparking his love for sales.
• Larry Shurtz led a 1,300-person team at Salesforce, generating $2.1 billion in revenue.
• Key takeaways from his Salesforce experience include:
  • Prioritization: Identifying and focusing on the most impactful tasks.
  • Customer-centricity: Understanding customer needs and aligning solutions accordingly.
  • Adaptability: Embracing change and adjusting strategies as needed.
  • Team building: Creating a collaborative and high-performing team environment.

Sales Leaders' Prioritization Pitfalls (3m12s)

• Sales leaders often try to do too much, leading to health challenges and spreading themselves too thin.
• This negatively impacts teams as the list of tasks keeps growing without removing anything, eventually leading to burnout.
• Prioritization is challenging and requires a framework.
• The most important aspect is people (talent, human capital).
• The job is to deliver the number (meet targets).
• Ruthless prioritization involves focusing on people, executing on the number, and customer success.

Art vs. Science in Sales (5m55s)

• Larry Shurtz discusses the balance between art and science in sales.
• Historically, he thought sales was 70% art and 30% science, but now believes it's closer to 60% art and 40% science.
• He considers the art of sales to be the EQ of reading customers and building relationships, which he believes cannot be trained.
• Empathy is a key component of EQ and is difficult to train.
• When hiring for sales, Larry Shurtz looks for people with high EQ and coachability.
• He believes that EQ is more important than IQ in sales and that it is difficult to train.
• He also looks for people who are coachable and willing to learn and grow.
• He uses a variety of methods to assess EQ and coachability, including interviews, role-playing, and personality tests.

Definition & Purpose of Sales Playbook (9m13s)

• Sales playbooks should start with the desired outcome and work backward.
• Playbooks should be simple and focused on the critical actions needed to achieve the outcome.
• Measurement and cadence are essential to track progress and make adjustments.
• Hire for cultural fit and coachability.
• Provide ongoing training and development opportunities.
• Create a supportive and collaborative work environment.
• Offer competitive compensation and benefits.
• Recognize and reward top performers.

Structure of Hiring Process (10m55s)

• Understand the specific requirements and responsibilities of the role you're hiring for.
• Craft a compelling value proposition to attract talented candidates.
• Keep interview teams small (maximum of five people) to foster better connections and assess cultural fit.
• Move quickly through the hiring process to secure top talent, but avoid hasty decisions.
• Conduct thorough diligence and multiple interviews to ensure you hire the right person, even if it takes more time.
• Larry Shurtz focuses on three key areas when interviewing potential hires: track record, culture fit, and motivations.
• Consider the team the candidate would bring with them and ensure they are a good fit for the company and its customers.
• Tailor the offer to what matters most to the candidate, whether it's on-target earnings, equity, or accelerators.
• Sales team expectations have shifted towards servant leadership, empathy, and loyalty, rather than a purely commission-based approach.
• Strong leadership and a positive work environment can often outweigh financial incentives in driving employee loyalty.

Lessons in Scaling Sales Teams (25m29s)

• Onboarding should be a year-long process with prioritized information and include in-person indoctrination to communicate company culture and meet with executives.
• New hires should shadow experienced colleagues to learn the ropes before meeting with big customers and should always come prepared when meeting with customers.
• Listening to customer support calls can help train empathy in sales representatives, and pairing new hires with mentors or using a buddy system can facilitate learning and support.
• Hiring mistakes are costly, so it's important to be diligent during the interview process, trust your gut feeling, and thoroughly investigate any red flags in interpersonal skills or preparation.
• If coaching is not effective after 30 days, it's best to address the issue promptly rather than delaying the inevitable decision.
• While some salespeople may have abrasive personalities, it's important to avoid hiring people who are offensive or disrespectful, as they may damage customer relationships.
• Building a team of the best vertical teams is about recognizing and valuing the unique talents of each individual, and it's important to be self-aware and recognize that there may be others who are just as talented as you are.

Quality vs. Quantity in Sales (35m33s)

• In the early stages of a business (with an ARR of $0-10 million), it's better to focus on acquiring big, well-known brands (category killers) as clients rather than just getting as many clients as possible.
• Closing the deal with category killers may be easier, but the real challenge is ensuring their success.
• For a company to be successful in the early stages, it needs to identify the industries and verticals it can be successful in, acquire big-name clients, and focus heavily on customer success.
• Customer success is crucial because if clients are not successful, they won't become references for the company.
• The titles of customer-facing roles may not always accurately reflect their actual responsibilities.
• In a consumption-based business like Snowflake, customer success is built on ensuring customers are successful in using the product.
• Salespeople alone cannot ensure customer success; someone needs to manage the technical architecture and foundations of the customer's success.
• Companies that claim they don't need customer success still have someone playing that role, regardless of their title.

Interplay between CS & Sales (39m2s)

• Vertical sales playbooks allow companies to tailor messaging and content to specific customer segments, increasing effectiveness and customer satisfaction.
• Verticalization requires deep industry knowledge and expertise from everyone involved, which can be costly to achieve.
• When choosing a vertical to focus on, consider the potential return on investment and whether the value proposition is pervasive enough to attract multiple customers.
• Assigning dedicated account executives, solutions engineers, and customer success managers depends on customer size and product/service complexity.
• Discounting should be based on scale and customer risk perception, and a business case should be presented to justify discounts.
• In case of delayed deals, understand the reasons and identify decision-makers to maintain trust and positive customer relationships.

Why Larry is Good at Sales Forecasting (51m32s)

• Accurate forecasting in sales is crucial for success and reflects a deep understanding of the business and customer opportunities.
• Asking the right questions and talking to the right people is essential for accurate forecasting and balancing risk.
• Empathy is important in sales leadership, but leaders should push back against excuses and maintain a results-oriented mindset.
• A bad culture in sales teams can result from a lack of empathy and understanding from leaders.
• Larry Shurtz emphasizes the importance of empathy and active listening in leadership, recalling a meeting with Godfrey Sullivan, the CEO at Hyperion, who demonstrated remarkable empathy and preparation in handling a challenging customer situation.
• Shurtz also highlights the value of having a boss who can listen effectively and provide reassurance, even when things are not going as planned.
• Empathy and listening are two of Shurtz's most significant career learnings, both personally and professionally.

Quick-Fire Round (59m10s)

• Larry Shurtz would like to change the world of sales by improving teams' ability to convey value to customers.
• He believes that outbound sales are not dead and that AI will help enable the right outbound teams to do it better.
• Feature-Advantage-Benefit (FAB) selling is a sales strategy that Shurtz believes is dead.
• The most common ways that fast-scaling sales teams break prioritization are:
  • Lack of focus
  • Waiting for something to be different before trying something new.
• For founders considering a vertical sales playbook approach, Shurtz advises them to:
  • Focus and pick a specific spot to implement the vertical playbook.
  • Work outcomes backward.
• Shurtz is not particularly impressed by any recent company sales strategies.
• He believes that in the cloud world, companies need to adopt a land-and-expand-and-retain sales strategy to succeed.