Communication inside GTM teams often feels like a game of telephone. An AE hears one version of a prospect’s need, the SE hears another, and by the time it’s relayed to product, the details are fuzzy or contradictory. Even strong verbal communicators lose precision over time, and few people write everything down in full detail. The result? The original customer message is shortened, altered, and interpreted differently by each person who touches it.

This happens constantly in GTM teams and it leads to messy pipelines, roadmap debates driven by anecdotes, and missed opportunities to double down on what customers actually want.

Stop Playing Telephone

Start with Meeting Recorders

Meeting recorders are one of the most important GTM innovations of the last five years. They let everyone focus on the conversation instead of scribbling notes (though note-taking still has its benefits as an active listening exercise).

The real value comes after the fact. A recording provides a direct record of what was said so the team can go back to the source. But raw recordings create a new problem: too much information. No one wants to replay hours of calls across dozens of opportunities.

Using GenAI to Build a Common Understanding

This is where GenAI tools like ChatGPT bridge the gap between filtered information (that gets distorted as it moves between people) and raw information (that’s overwhelming to process).

GenAI can distill full conversations into a structured format the whole team understands and acts on.

Capturing Use Cases

This is one of my favorite—and most practical—applications in GTM. At its core, our job is to help customers solve specific problems. When we can do that consistently, customers land, renew, and expand naturally.

The Framework: From Transcript → Use Case

Record every meeting

Most people don’t even notice when a meeting recorder joins an online call. Always respect prospects who don’t want recordings, but you’ll usually be able to capture at least 80% of meetings. Even in-person conversations are often recorded when paired with presentations.

(If you can’t record a meeting, take detailed notes and use those raw notes later in lieu of a transcript.)

Capture Use Case(s) from an Initial Meeting

Here is a prompt I like to use to capture use case(s) with prospects. It’s relatively generic so you’d probably want to modify it to best fit your product or service.

Analyze the transcript of a first call with a prospect and clearly capture the use case(s) they describe.

• Treat one use case as the high-level business problem or outcome they are trying to solve.

• If the prospect mentions smaller frustrations, features, or process gaps that all relate to the same high-level goal, roll them up under that single use case rather than breaking them out separately.

• Only create multiple use cases if the prospect is discussing entirely different business problems or initiatives.

For each use case, provide:

Use Case Summary – A concise, plain-English description of the overall problem they want to solve.

Current State (if mentioned) – A paragraph on how the process works today. If not discussed, write “Not mentioned.”

Pain / Trigger – A paragraph on what’s broken or motivating change. If unclear, write “Not mentioned.”

Desired Outcome / Success – What “good” looks like in their words. If not described, write “Not mentioned.”

Keep the writing in paragraph form, and use examples when possible. Do not split out sub-issues like integrations, templates, or executive summaries as their own use cases unless they represent separate, unrelated initiatives.

Update Use Case(s) from Subsequent Meetings

Each subsequent meeting can provide more details. Maybe it’s additional context, expansion of scope, or removal of irrelevant use cases. You want an updated picture but also a record of what’s changed.

Analyze the meeting transcript and compare it against the current master list of active use cases.

Steps:

1. Identify any new use cases introduced.

2. Identify any changes to existing use cases (expanded scope, clarified inputs, deprioritized, etc.).

3. Identify any use cases removed or deprioritized.

4. Summarize these as the “Deltas from Prior List.”

5. Update the Master List of Active Use Cases in full detail. For each use case include:

• Use Case Summary (plain-English problem to solve).

• Current State (how it’s done today).

• Pain / Trigger (what’s broken or motivating change).

• Desired Outcome / Success (what good looks like).

6. Show the priority order of the use cases.

Important Instructions:

• Do not lose or strip out detail from prior versions of the use case summaries if it is still relevant. Each use case should carry forward all previously captured context, plus any new updates or clarifications.

• If a workflow is discussed in detail (e.g., Paid Search Automation), elevate it into its own use case instead of nesting it under a broader one.

• If an item is clearly about evaluation (pricing, SLA, credits, onboarding logistics), do not treat it as a use case.

• Use simple, clear language so that someone with no context from prior meetings can understand the use case fully.

•Keep the writing in paragraph form, and use examples when possible. Do not split out sub-issues like integrations, templates, or executive summaries as their own use cases unless they represent separate, unrelated initiatives.

Turn Use Cases into Alignment & Trust

Great - you’ve captured the use cases. Now what?

Collaborate internally

If the AE ran the first call, they can share the structured use cases with the SE to prep for solutioning. Product and engineering can also use the same format to understand what the customer is really asking for, without relying on second-hand summaries.

Collaborate with the prospects

This is where it gets powerful. Start follow-up meetings by restating the use cases as you understand them. Prospects can clarify, downplay brainstorms, or confirm priorities. This shows you listened and gives everyone a structured baseline for problem-solving.

Once the use cases are aligned, selling becomes straightforward: if your product solves their problem at a price justified by the value, you’ll likely win the customer.

Closing Reflection

When you consistently capture, refine, and validate customer use cases, selling stops being guesswork. It becomes about aligning your product to the problems customers care most about.

If this resonates, subscribe to Scaling GTM to get more playbooks like this.

And if you’d like tailored help applying this at your company, let’s talk.

Modern GTM for Founders published a sharp piece this week: The CRO Turnover Crisis: Why Revenue Leadership Is Broken and How to Fix It. The headline stat - the average CRO tenure is just 17 months. Most don’t even last two years. The reason? Founders often hire the wrong leader for their stage, expecting someone to solve problems they weren’t brought in to fix .

Reading that article reminded me of a founder I was working with recently in helping them hire a VP of Sales (I tell founders I work with that the last thing I’m going to do with them is help them hire a Sales Leader). The company had gotten to $5M ARR, growing quickly, and getting 100% of its pipeline through inbound.

He had two final candidates and he really liked both of them. Candidate A did a scale up from $20M to $60M and Candidate B had worked at a similar stage and helped take his organization from $2M to $20M. Both were strong, but Candidate B seemed to better understand their stage and challenges.

I told him I would hire Candidate B but he ultimately went with Candidate A. He said that because the plan was to get to $60M in 4 years, he wanted the same person for that four years, and that Candidate had seen that scale, he was the right person.

I hope I’m wrong but I don’t think that person will last 2 years.

Why CROs Don’t Last

The Modern GTM article talked about the costs to the business by making this mistake, which are both alarming and telling about some of the root causes:

• A bad revenue leadership hire can cost 5 - 15x salary once you add disruption, lost growth, and morale hits .

• 62% of companies report flat or declining growth after swapping CROs .

• External “scale” hires often hurt growth, with one study showing a 7% drop in growth rate after bringing in an outside CRO.

Is it an issue that all these CROs don’t know what they are doing or is it that they aren’t set up for success.

Not all Sales Problems are Sales Problems

In many cases, what founders think of as “sales problems” aren’t really sales problems at all - they’re company problems. Misaligned strategy, lack of ICP clarity, poor product-market fit, unrealistic targets… none of those get solved by parachuting in a new CRO who has been successful scaling a company that has already solved many of these problems.

It reminds me of the old joke: three people lose their keys in the dark, and one starts searching under a streetlight. The others ask why, and he says, “Because this is where the light is.”

Sales has the clearest metrics of success - you can see someone was 73% of their goal. But how can you judge whether Product, Engineering, or Marketing is 73% of their target?

Builder vs. Scaler

Think about the difference of a Sales Leader who has taken a team from $20M to $60M. At $20M, they probably have several leaders under them and while they might be very engaged in deals, are they really in the weeds with figuring out ICP, messaging, building outbound motion etc.

Now think about the leader at a $5M company. They have some foundation from what the founder and maybe 1 or 2 AEs has already done but they are building the plane in flight. They are implementing systems for the first time or fixing things that haven’t been set up right in the first place. They’re also intimately involved in every deal and every member of their team.

It reminds me of a baseball team. There is a GM who is putting the team, and much of the organization, together. They are involved in day-to-day decisions with the roster but also building a whole system for success beyond just this year. Then you have a manager who is all about now. They are trying to win each game. They are coaching and directing each of the players to get as much out of them as they can. You could have a great GM but would you put them in a Manager’s role and expect them to be successful?

A Simple Framework

Just kidding - there is no “simple framework” in hiring a CRO or scaling an early stage company. If there was, there wouldn’t be such a high failure rate.

But I think there’s a few principles a founder should keep in mind as they are looking to hire sales leader and more importantly, thinking about how to scale.

• If you have sales problems and you think if you just have to hire a CRO to solve them, you’re setting them, and your company, up for failure

• Most problems are actually company problems and your job as CEO is to get the teams aligned on how best to address

• Working about getting to your next milestone, not the milestone beyond the next one

• Look for candidates who can solve the problems directly in front of you. If they can solve those problems, they can grow into the next role or they can be a partner with the leader who can take the company to the next level

One of my core leadership beliefs is that a leader’s job is setting up their team to be successful - whether that’s a Sales Leader hiring AEs, or a CEO hiring a CRO.

As a founder, your job is to set up your CRO for success by being honest about the problems you need solved today. If this resonates, subscribe to Scaling GTM for more playbooks - and if you’re wrestling with this exact decision, let’s talk.

“We figured $200K OTE sounded about right. And I think their quota should be $1.6M. And we want to grow $5M this year so we’re going to hire 3 AEs”

The problem? Their ACV was $50K, which meant each AE would need to close nearly 32 new customers in year one - when they were only getting 30 new inbound opportunities each month, with no additional SDR support.

Those AEs never had a shot and 2 of them were gone within 6 months.

What is OTE?

OTE stands for On-Target Earnings - the total annual compensation an AE makes if they hit 100% of quota. It’s made up of two parts:

• Base Salary (guaranteed)

• Variable Compensation (sales commission at quota)

In SaaS, the norm is a 50/50 split. For example, an AE with a $200K OTE would typically earn $100K in base and $100K in variable commission. This balance gives reps stability while still making half their earnings performance-driven .

Quota Is Typically 4–6× of OTE

The most important ratio in SaaS comp design is quota-to-OTE. The industry benchmark is 4-6×, with 5× often considered “steady state”. I personally think 4x is a good number, especially if you haven’t gotten GTM Fit yet.

Why this matters:

• Cost of Sale: If quota is ~5× OTE, then your sales expense equals ~20% of new ARR. That leaves room for gross margins, marketing costs, and customer success while still hitting efficient CAC payback targets.

• Rep Motivation: At 4–6×, top reps see a clear path to earning six-figure commissions if they hit quota, which keeps them motivated and competitive.

• Sustainability: Ratios below 3× mean you’re “buying revenue” at too high a cost- burning cash. Ratios above 6× make it nearly impossible for reps to succeed, leading to attrition.

This ratio is less about “what feels fair” and more about ensuring your GTM model is financially viable. It aligns individual earnings with company unit economics.

When Might the Ratio Fall Outside of this?

It’s pretty rare but there are some occasions where you might want to go outside of it.

• Land & Expand motion: Early deals may have lower ASPs so the goal is just to land customers in year 1. Start quotas lower and move to 4-6x once expansions kick in.

• No GTM Fit yet: Not enough data → AE carries more risk, so quotas may be lower until motion is proven.

• New market/product: Similar dynamic - don’t push all risk onto the AE when you’re testing something new.

Which Comes First: Quota or OTE?

You can really start with either one and then use the ratio to determine the other. What I typically like to do is first decide what type of AE you need, and then start with OTE.

For example:

• If you have smaller ACVs and more transactional sales, you could hire an SMB AE with an OTE of $125K-$175K.

• If you’re selling more mid-market, that OTE might be closer to $200K.

• And if it’s an enterprise motion with high deal sizes, you might start with an AE at $300K OTE.

These are very general guidelines. I always recommend using compensation benchmarking applications to validate specific ranges for your role and geography (e.g., Pave, Carta, Option Impact).

How to Set AE OTE the Right Way

• Leverage Data to Figure out Quota: Model ACV × win rate × # deals. That’s your baseline.

• Golden Ratio: Stay in the 4–6× range; <4× means you’re buying revenue, >6× risks underpaying.

• 50/50 Split: Don’t overcomplicate—stick with the market norm unless cycle length demands otherwise.

• Market Check: Align with stage benchmarks; don’t try to reinvent the wheel.

• Don’t Underpay: A+ reps demand A+ comp. If you can’t afford it, keep founder-led sales a bit longer.

Getting AE compensation right isn’t about what feels “fair.” It’s about building a system that aligns incentives, attracts top talent, and protects your unit economics.

Part Two of the Scaling GTM series on setting AE quotas and OTE. See the first post here: Setting AE Quotas at an Early Stage.

In the last article, I talked about how to set a full-year quota. The full year quota is assumes an AE is fully ramped up, already has deals in cycle, and is regularly booking new meetings.

The reality is that it takes anyone time to get up to speed and to start building pipeline. So as part of the first-year quota, you need to include a ramping component. And importantly, this should be part of any financial model you build as well.

The Challenge with Straight Quotas

You can’t assign full quota from day one. A new AE needs time to ramp up, learn your product, understand the ICP (ideal customer profile), and become effective at selling. On top of that, pipeline takes time to build, opportunities take time to mature, and the first bookings usually don’t show up until well after the average sales cycle has run its course.

Without a ramping quota, you set your new hire up to fail, or worse, you misdiagnose the problem as performance when the reality is timing.

What Is a Ramping Quota?

A ramping quota recognizes the reality of sales cycles and gives your AE a fair runway to reach productivity.

Think about the sequence for a 60-day sales cycle:

• Month 1: Onboarding, learning ICP, prospecting. No closed deals expected.

• Month 2: First meetings occur, opportunities enter the pipeline, but they’re not closeable yet.

• Month 3+: Early deals begin to close as the cycle time passes.

That’s why ramping matters - it aligns expectations with reality while still holding your AE accountable for building pipeline and progressing deals.

Example: $600K Annual Quota with a 60-Day Sales Cycle

Let’s say your standard AE quota is $600K ARR/year (~$50K/month). Here’s how a ramp might look:

Rules of Thumb

Here’s the simple framework I recommend:

1. 0% quota until average sales cycle length passes. If your cycle is 60 days, expect no bookings in the first two months.

2. 50% quota at 1× average sales cycle + 1 month. For a 2-month cycle, ramp to 50% in Month 3.

3. 100% quota at ~2× average sales cycle + 1 month. For a 2-month cycle, full quota by Month 5.

You can use the Ramped Quota Calculator in the Quota Setting Workbook to calculate this for your business.

This balances realism with accountability: your AE is incentivized to build pipeline early, but not penalized for things outside their control.

Why This Matters

• Realistic expectations: Prevents false negatives on good hires who simply need time.

• Pipeline accountability: Even at 0% quota, you still measure activity - prospecting, meetings, pipeline created.

• Smooth transition: By the time full quota kicks in, the AE has worked through a complete sales cycle.

Takeaway

If your sales cycle is 60 days, don’t expect bookings before 60 days. If they close deals, that’s a bonus and the comp plan will accommodate that. Align quotas to reality, not wishful thinking. A ramping quota gives your AE the structure to succeed, while giving you the clarity to separate timing from performance.

Up Next in the Series

In the next article, I’ll cover how to set On-Target Earnings (OTE) for your AEs - tying together base salary, variable compensation, and realistic ramp expectations so you can build a comp plan that scales with your business.

I need more accounts.

Why? We just gave you 200 accounts last month.

I know, but my SDRs and I just reached out to all of them and didn’t get any response so I need some more accounts.

This was a conversation I had with an AE on my team. Or I should say this is a variation of a conversation I have had with multiple AEs.

AEs want more accounts - this is not going to change. Accounts are like options and they want more options that could potentially cash in later.

Firing off generic emails to one or two people at a company, hoping for a meeting is not an effective way to develop new opportunities. And if these are within your ICP, you were also burning through the best potential opportunities.

Assign 50 Accounts at a time

If you know your ICP and you have a compelling message that is very effective as long as you can have a conversation with them, assign 50 accounts at a time. But there’s a catch…

Accounts cannot be swapped out until some sort of contact has been made with them.

The AE will only get a new account if they can show that they talked to someone at that account and it was clear that they don’t have the problem that our solution solves or it’s not a high enough priority at the time.

That means that the sales team has to be more creative in their type of outreach and have a more targeted message. Instead of just sending someone a sequence of unhelpful and generic emails that don’t rise above the noise, they may take a different approach like using warm introductions or having an executive reach out. I’ve seen AE send a box of golf balls to an executive who was an avid golfer to get that meeting

It encourages quality over quantity.

Who knows the ICP better?

Let’s say you have a list of 2000 accounts who could be potential customers that you want to target and try to develop and opportunity. You need to start somewhere so how do you decide which ones are going to be the 5, 10, 50 accounts that you reach out to first?

Who is better able to prioritize that list of accounts to reach out to first? Is it the AE or the company? The company is going to have much more and better data determine which accounts are most likely turn into to good customers. It’s not saying that the AE don’t have that intuition. It’s just that the intuition of all the AE on what makes a good customer could be combined with the hard data that the company has to prioritize accounts to prospect to.

This doesn’t mean that you should exclude the input of the AE. If they have some sort of relationship or see some sort of signal, those accounts should be added to the list. But it’s unlikely that they are going to have some intuition about every account on the list that is going to be superior to the data that the company has.

What about hot accounts?

There are going to be hot accounts – those that have given some signal and should be reached out to because they could be a good prospect. There should be room on the account list to add those as they come in.

I was talking to someone recently who talked about an ICP account coming in via their self-service mechanism. While they tried to set up a meeting with that individual (who wasn’t ready to meet yet), they never assigned the account to the Sales team for them to try and get access to others at the account. This was a wasted opportunity.

How often are new accounts added?

I think it makes sense to swap out and add new accounts on a quarterly basis with early stage companies. The profile is going to change and new information is added so that gives you more flexibility to do it on a quarterly basis as opposed to a yearly basis.

And if you assign 50 accounts, I think five accounts a week to target is the right number. That gives the AE 10 weeks to reach out to five accounts each week with some overlap in the prospecting.

Help the Team Out

This isn’t met to take away the autonomy of the Sales team - it’s meant to help them out. The company is going to have a better perspective of what makes good accounts to target. Help the AEs by giving them the list of best accounts to focus on first.

I was talking with a founder recently who is seeing a lot of momentum through their open source tooling. There are a ton of different opportunities that they have to pursue but the big question they are trying to figure out is which way to go.

There’s certainly a lot of tactical things that could be done to outbound more effectively or execute better on the deals that they had but I said the biggest opportunity I saw was implementing a Land and Expand Strategy in their business.

Land and Expand Strategy

The "land and expand" strategy is a sales approach where a company initially secures a small deal or entry point within a larger organization and then expands its footprint by selling additional products or services over time. This method leverages the initial success to build trust, demonstrate value, and uncover further opportunities within the organization. Here's a more detailed breakdown of the strategy:

1. Landing: This involves securing an initial contract or deal with a client, often with a smaller scope or a limited product offering. The goal at this stage is to get a foot in the door and begin building a relationship with the client. It’s crucial to ensure the initial implementation is successful and delivers clear value.

2. Expanding: After establishing a foothold and proving the value of the initial offering, the next step is to expand within the organization. This can be achieved through various means:

   • Cross-selling: Offering complementary products or services to the initial offering.

   • Upselling: Providing enhanced or premium versions of the current product or service.

   • Increasing usage: Encouraging wider adoption within the client’s organization, such as getting more departments or teams to use the product.

Key Elements of the Strategy

• Customer Success: Ensuring that the initial deployment is highly successful and that the client sees immediate benefits. A strong customer success team is crucial in this phase to support and ensure customer satisfaction.

• Relationship Building: Developing strong relationships with key stakeholders within the client’s organization. Understanding their needs and goals can help identify further opportunities for expansion.

• Proactive Communication: Regularly communicating with the client to provide updates, gather feedback, and discuss new opportunities. This keeps the relationship active and shows the client's ongoing commitment.

• Value Demonstration: Continually demonstrating the value and ROI of the product or service. This helps in justifying the expansion and securing additional budget from the client.

• Flexibility and Adaptability: Being open to adjusting the approach based on client feedback and changing needs. Customizing solutions can often lead to further expansion opportunities.

Benefits of the Land and Expand Strategy

A Land and Expand strategy, when executed successfully, is a great growth strategy since it doesn’t require you to grow through new customer acquisition, a much more expensive and slow approach to selling than expanding.

With a Platform business, it’s even more powerful since the number of use cases are only limited by the imagination of the end users.  In addition to this great revenue growth strategy, there are additional benefits of this strategy:

• Lower Initial Risk: Clients are more likely to agree to a smaller initial contract, which lowers their risk and investment.

• Stronger Client Relationships: Continuous interaction and expansion foster long-term relationships and customer loyalty.

• Market Penetration: It allows companies to penetrate larger accounts gradually, which might be difficult to achieve with a single, large initial deal.

Land and Expand Works Best with Platforms

Land and Expand can be used whether you are selling a Platform or Tool but it works best when selling a Platform.  Let’s start with defining the difference between the two and then we’ll talk about why Platforms make work best for Land and Expand. 

Platforms vs Tools

The most simple way to explain the difference between the two is that a platform doesn’t provide capabilities in and of itself - it requires an application or other functionality on top of it to provide value.  Whereas a tool provides functionality without necessarily requiring any other tool or application to provide value.

Platforms

A platform is a comprehensive environment or framework that provides a foundation for developing, deploying, and managing applications and services. Platforms typically offer a wide range of functionalities and support multiple tools, applications, and services. They are designed to be extensible and scalable, allowing users to build and integrate various components to create more complex solutions. They are much more horizontal meaning that the use cases vary a lot by industry (although certain vertical use cases could exist as well).  Examples of platforms include:

• AWS: A comprehensive cloud platform offering a wide array of services for computing, storage, networking, machine learning, and more, enabling users to develop and run applications at scale.

• Databricks: A data storage and processing platform that provides the functionality to store different types of data in different formats and different types of processing engines that allow you to use and manipulate the data in a variety of ways

Tools

A tool is a specific application or software designed to perform a particular function or a set of functions. Tools are typically focused on solving specific tasks or problems - they are usually more vertical, meaning they cover a particular business process that doesn’t really vary across industry.   They are often used individually or as part of a larger process but have a limited scope in terms of functionality. Examples of tools include:

• Microsoft Excel: Used for spreadsheets, data analysis, and visualization.

• Adobe Photoshop: Used for photo editing and graphic design.

• JIRA: Used for issue and project tracking.

Use Cases are the Key

The biggest difference between platforms and tools is that platforms support a much larger set of use cases.  Tools do some things very well and while there can be multiple use cases they support, they are much more limited and all within a certain range.

By their nature, Platforms support many more use cases than Tools, which is why they have so much value for Land and Expand - the expansion can grow continuously as those use cases are deployed.  

Platforms

Computer Vision (CV) is a type of platform that allows a user to do things like object detection, classification, segmentation, keypoint detection, and object segmentation.

The CV platform is going to support an almost unlimited set of applications.  You could think of anything human sight is able to do, which is almost infinite in its applicability, and that’s probably just scratching the surface of what a CV platform can do.

Tools

A Chatbot that uses LLMs and RAGs to provide customer service to website and telephone users is a type of tool.

The chatbot is primarily interacting with end customers to support them.  There might be some difference whether it’s an incoming request or it’s reaching out to do surveys, or lead qualification but it’s still the same.  The chatbot might be leveraged internally to help with knowledge management but again, that’s tangential.  You’re not going to use it to run accounts payable in Finance.

How Do You Implement Land and Expand?

Identify Target Accounts

Long Term Potential Growth

Identify potential clients by their potential for long term growth.  The initial land is rarely profitable so it’s important to focus efforts on landing customers that have a strong potential for growth.  

Come Up with High Value Use Cases

As part of the effort to identify accounts with long term potential growth, you should get a good sense of the high value use cases - those that provide a lot of business value and are relatively easy to implement.

Many prospects will come in with their own use cases but you should be able to bring a set of these to the table, particularly when doing outbound targeting.  These use cases can be captured from existing customers.

Decide How to Handle Unprofitable Accounts

You will get prospects who don’t fit your target profile.  They may be too small or not have enough use cases to expand over time.  If you service them the same way as you do with the high value target accounts, they will be a drain on the organization - both from a profitability and focus perspective.

This is where a self-service or PLG motion could be used.  While you might not be targeting these less than ideal customers, you will probably get them coming inbound.  If you can serve them profitably, that’s great.  If not, you will have to pass on these customers (which is most often done through pricing) or else they will become a drain on the business.  

Land the Initial Deal

Target High Priority/Value Use Case

There may be a ton of potential use cases but you want to start with the high priority or value use case to get the initial win.  If the prospect has a bunch of potential use cases, it’s important to get the initial win and come up with a roadmap to address the other use cases in the future.  

Tailored Value Proposition

Develop a compelling value proposition tailored to address the specific pain points and needs of the target department or business unit. Highlight the immediate benefits and ROI of your solution.

Pilot Programs or Trials

Offer pilot programs, trials, or smaller-scale projects to demonstrate the value of your product or service with minimal risk to the client.  If applicable, open source is also a good tool to allow prospects to try the product first.  

Strong Sales and Onboarding Process

Ensure a seamless sales process and onboarding experience. Set clear expectations, timelines, and deliverables.

Ensure Initial Success

Customer Success Team

Deploy a customer success team to support the client, ensuring they derive maximum value from the initial implementation. Provide training, resources, and ongoing support.  This all should be discussed during the initial sales cycle.  While there is a transaction, the primary goal should be the successful implementation and realization of value.  

Monitor and Measure

Track key performance indicators (KPIs) and gather feedback to measure the success of the initial deployment. Use metrics such as usage rates, satisfaction scores, and ROI to demonstrate value.  These measurements of value should be in the client’s language.  They should be tracked to use in future discussions with other prospects and to get a better understanding of the value of different types of use cases.  

Address Issues Promptly

Be proactive in identifying and addressing any issues or challenges the client faces. Quick resolution builds trust and satisfaction.

Build Relationships

Regular Communication

Maintain regular communication with key stakeholders within the client organization.  The Sales and CS team should have regular check-ins with the users, champions, and executive sponsors.  Quarterly Business Reviews are a great tool to make sure that the teams are aligned on a more strategic level.  

Understand Client Needs

Deepen your understanding of the client’s broader needs and strategic goals. Identify additional areas where your solutions can add value.  This is a good area to bring in and establish contacts with the Product and Executive team.  Relationships should be with different people in the organization.

Expand Within the Organization

Identify Expansion Opportunities

If you do everything else right, this should come much easier.  The account team should bring thought leadership on different potential use cases, including the value and ease of implementation.  The customer may have their own list of additional use cases but a good account team will be thought leaders in these areas. 

Propose Value-Added Solutions

Develop tailored proposals for expanded engagements, highlighting how additional products or services can solve further pain points or contribute to the client’s goals.

The best way to do this is to have a pre-built roadmap with the customer where the list of projects and use cases have already been prioritized based on value and client needs.  The proposals flow naturally at that point and are not necessarily about how much software is sold but how the enable solutions.

Leverage Internal Champions

Cultivate internal champions within the client organization who can advocate for your solutions and help facilitate introductions to other departments or decision-makers.  If regular communication is happening and value is being delivered, champions will develop.  

Deliver Continuous Value

Ongoing Support and Training

Continue to provide high levels of support and training as the client expands their usage of your product or service. Ensure they are fully leveraging the capabilities and benefits.

Innovate and Adapt

Stay attuned to the client’s evolving needs and industry trends. Be ready to adapt your offerings and approach to meet new challenges and opportunities.

Collect and Act on Feedback

Regularly collect feedback from the client and act on it to improve your products, services, and customer experience. Show the client that their input is valued and leads to tangible improvements.

Measure, Optimize, and Expand Target Accounts

Track Expansion Metrics

Measure the success of your expansion efforts using relevant metrics such as revenue growth, customer retention rates, and product adoption rates.

Optimize the Strategy

Continuously analyze the results of your land and expand strategy and make adjustments as needed. Identify what works well and replicate it, while refining or eliminating less effective approaches.

Expand the Target Accounts

As the playbook is successfully implemented at the initial set of target accounts, expand to other accounts.  These most typically come from looking at what other customers are doing who don’t fit into the target account.  Over time, the number of target accounts will increase as capabilities of the platform increases.

I had a former VP who used to have a great set of rhetorical questions on the value of SAs (Solution Architects, aka SEs - Sales Engineers) in selling a technical product.

If you have the best SA and the best AE in the world, they’re going to sell a ton - I think everyone would agree with that.

What would happen if you had the best SA and your worst AE working together? They would still have some success because the SA would win over the customer with the value that they brought to the table, all in spite of the AE.

Now what if you had the best AE and the worst SA? They probably wouldn’t sell anything because no matter how good the AE was, if the SA isn’t showing the value of the solution, the prospect can’t buy.

The Right Ratio of AE to SA Input

The best sellers I have seen have had a partnership with an SE (or multiple SEs). They treat them not just as someone who can answer the technical questions that they can’t but as a partner who they can strategize on every part of the deal - even non-technical components. They realize that most SAs are not just knowledgable about their product area but an intelligent person who could come up with ideas or solutions to help progress the deal forward.

That same leader who talked about how critical an SA is to winning opportunities has this to say about the AE to SA partnership.

The partnership on an opportunity should be a democracy. They should both have equal input to what needs to be done to move a deal forward. It’s not 80% on the AEs and 20% on the SAs. It’s pretty much 51/49. And the only reason it’s not 50/50 is that AEs are more accountable than SAs - their job often depends on their success or lack there-of.

How to Get the AE/SA Partnership Right

Put just as much emphasis on SA as AE hiring from the start.

Founders don’t typically see the importance of good SAs early on. That’s because they are doing the selling and know the product better than most SAs would or they have someone from the Engineering team on prospect calls, who are usually very good on calls but that just isn’t scalable long term.

So they just look for less expensive (usually more junior) folks who have some technical background. They might get lucky with the first one or they can cover for that person but it’s going to catch up with them over time.

Make them equal participant in all things Sales

When doing account or opportunity plans, invite the SAs as well as the AEs to the calls. They have a unique perspective and their input will be just as valuable as the AEs. Remember that you are one step removed while the SA has a front row seat.

They shouldn’t be asked to attend calls just to sit there for the whole time - they won’t want to join. You should ask them questions just as much as the AEs.

Don’t let AEs treat them as a resource just there to support them

Some AEs who might not have had to sell a very technical product, or one without much technical differentiation, or just don’t have the experience may see the SAs on their team as a commodity - someone who has enough technical skills to answer the prospect’s questions. They schedule a meeting with the prospect and then try to find someone to fit it into their calendar as opposed to centering the meeting around this person.

This is one of the most frustrating aspects of the job for SAs, and the quickest way to lose good ones, is to let them feel like they are subservient to the AEs. Like I said above, they should be seen as pretty much equal partners.

One of the clearest signs that this is happening is that meetings get put on their calendar with no agenda and no discussion ahead of time. I used to tell SAs, both when I led them, and as a Sales Leader, that you can decline meetings if you were not given any agenda or context on what the meeting is about.

Look for more technical SAs early on

There are all different types of SAs - someone who are engineers converted to SAs, consultants turned to SAs, or career SAs across different industries and companies. They each bring different things to the organization.

The career SAs will bring some of those key soft skills that really help selling like building great demos, tying technical pain points to business value, managing a successful POC, competitive positioning, etc.

Diversity is good and you will eventually want this but early on, look for more technical SAs. The product is likely to be missing features or be a bit more buggy or hard to use than more mature products and the more technical SAs will do a better job of keeping this all stitched together.

Hire SAs with Initiative

The first SAs you hire (or ones starting at Player/Coach) should have initiative. There is so much value that they can bring to the table as you’re growing your company and you want someone who will take this initiative on their own and not just wait to be told what to do.

When I joined Tonic.ai at the beginning of 2022, they had a Round Robin system for giving first meetings to AEs. There were 8 AEs at the time and whenever a first meeting came in, it would go to the next person in the queue. I had only worked with territories during my time at Cloudera and Oracle. At those companies, there would be AEs and regional teams responsible for different geographic areas and all the accounts in those areas. The accounts might be divided up between the AEs by size or industry but when a lead was generated for those accounts, it went to the person who owned it.

At Tonic, we were moving to East and West Teams, creating an Enterprise segment, and more than doubling the Sales team so at that size and complexity, it becomes much harder to do round robin since there are multiple rules and people involved. So we moved the team to a territory model where they had all the accounts in specific a geographic area.

When should you use Round Robin vs. some sort of Territory model to assign accounts and opportunities to your AEs?

Round Robin Benefits

The best reason for Round Robin is that it gives equal opportunity to each AE on the Sales team. They all have similar amounts and types of opportunities (good and bad). Here are the benefits

• It’s simple to manager. You can use a Google Sheet to track or set it up in your CRM.

• All the AEs get the same number of opportunities handed to them (outside of what prospecting they do on their own)

• It’s a good way to judge effectiveness of each AE. If you’re selling a very technical product and one person has the Bay Area while another has the mid-west, the first person is going to be drowning in good opps while the second is going to be scratching for a few not-so-great opportunities.

• It’s very easy to add new AEs and keep it fair for everyone. If you have 2 AEs and add a third one, they each get the same number of new opportunities

• New AEs can hit the ground running. They will get opps as soon as you are ready for them to take their own. No delay as they start to prospect and develop their own.

• You can scale SDRs and AEs separately. If the SDR meetings are round-rosined, it goes to the next person in their list

• No need to figure out how to split up territories until you have more scale and data to best determine it.

My preference at an early stage company is to use round robin until the Sales Team gets to a certain size - usually 10+ AEs.  If you haven’t had to break down by company size or some geography at that point already, you should begin to think about doing a more hybrid model (probably because you will be looking to have 2 teams at this size).

Hybrid Model

A Round Robin model won’t work once you start getting to a certain scale, which is why most mature companies have Territories. There are also benefits in segmenting accounts based on size or industry, which you often see with larger companies as well.

You don’t have to switch right over to a Territory model as you begin to scale - you can evolve into that. In fact, you might even do this when you go to 2 AEs. Maybe 1 was covering Commercial but your second AE was hired to cover Enterprise accounts so you have 2 “territories”.

For example, you could have a couple of Enterprise AEs and a couple of Commercial AEs - let’s say 1K employees is your dividing line. When new opportunities come in, figure out whether it’s Commercial or Enterprise and then round robin based on that. That might even evolve to where you have East/West and Commercial/Enterprise, so 4 teams and it’s just divided up that way.

Territory Model

There is no exact time on when to do this but you’ll start to see some coordination issues popping up and if you’ve used the Hybrid model, it will just slowly evolve into a full Territory model.

I won’t talk about the intricacies into figuring this all out since we’re primarily focused on early-stage companies here.

Some Other Considerations

Let’s talk about some other considerations where the above ideas don’t fit.

In Person Meetings

Since COVID, a lot more meetings have moved virtual that used to be in person. However, there are still companies that frequently require meeting face-to-face. Those might be for larger opportunities or companies that just typically have in-person presence (e.g.: manufacturing). In those cases, you want AEs more geographically close to their prospects. Until you get to scale, you will probably have to fly people to most meetings but you still would rather have people closer. If you’re in the US, you might start with an East and West AE and then move to Northeast, Southeast, Central, and West.

Extremely Targeted Market

If your target market is so small (let’s say total possible customer list is <1K) then you might want to just start with more of a Territory model. In that case, you’re probably selling a much higher ASP product and it’s likely there will be a lot more in-person meetings anyway.

Outbound

I’m not a big fan of Round Robin for outbound. It creates issues because multiple AEs/SDRs might reach out to an account (not a good look) and the bigger issue is how you handle it if someone comes inbound at a later point.

This is for another post, but I’m a strong believer in assigning accounts for outbound efforts when you have multiple AEs/SDRs. It all comes down to being super tight on the ICP, which should be owned by the company and not individual AEs. There is value in letting AEs and SDRs be creative in how they find leads but like I said, I’ll cover that in another post.

This isn’t a post about Product Market Fit (PMF). It has been discussed by many people who know much more about the concept than I do. I think a good description of PMF is when a company’s product satisfies a strong market demand, evidenced by consistent and growing sales, enthusiastic customer feedback, and low churn rates. It indicates that the product effectively solves a significant problem for a well-defined target audience, making it a must-have solution.

There are a lot of different opinions on what PMF is but the best I’ve seen is from First Round Capital - the 4 Levels of PMF. I like that it’s more of a continuum than a binary.

Less talked about is GTM fit. Companies who are seeing PMF can fail to take their companies to the next level because they haven’t figured out GTF fit.

GTM Fit is Related to PMF

GTM Fit is part of and related to PMF. You can’t ultimately have PMF if you don’t figure out GTM fit. However, it has less to do with the product than how you’ve gone to market. Do you have a team in place to effectively, efficiently, and consistently acquire new customers?

This is a breakdown of First Round’s 4 Stages of PMF and you can see (highlighted in green) that some of the metrics are focused on GTM.

So, what is GTM Fit?

Another great article is Stage 2 Capital, The Science of Scaling. A lot of great actionable advice and metrics that all early stage companies should use in growing their business. They describe GTM Fit as:

Go-to-market-fit is acquiring and retaining customers consistently and scalably

You might have a great product that the market would love if they were aware of it or if it was distributed in the way that they buy. Building up that distribution network, whether it’s a PLG or SLG motion is part of what GTM Fit entails.

Can you have PMF Fit without GTM Fit?

If you use the strict criteria in the tables above, the answer is no. However, I think you can have PMF without GTM Fit. The spirt of PMF is that you have a product that the market wants and is willing to pay for. However, you might not be efficiently and effectively delivering it to them because you haven’t figured out GTM Fit.

Let’s say I created a DevOps tool that makes the lives of DevOps folks much easier and they are willing to pay for it - I have established some sort of PMF. However, I’m generating most of my opportunities and customers through SDR outbound. I have SDRs generate new opportunities (though not as much as I want) through prospecting and when they get those opportunities, I have very expensive AEs who are responsible for closing those opportunities and are doing that but not at a great rate. This might be a very expensive approach to generate and close new opportunities and it’s not a high enough volume.

That might be because that’s now how the DevOps folks I am trying to reach typically solve this pain point. Maybe they search for solutions and test it out using an open source or free version first. The ones who get the most value eventually convert to the more valuable paying customers. In that case, I might want to work on generating more inbound through a content marketing strategy. The primary sales motion might be having more AEs converting some of these users on free or lower tier plans to higher tier. This could require less experience and probably less expensive Sales teams.

So in this case, I have some sort of PMF but I haven’t established GTM Fit yet because I’m not efficiently or effectively acquiring new customers.

Finding GTM Fit

The first step to finding GTM fit is measuring the right things. These measurements won’t give you the solution but they can tell you if you’re on the right path and they will help you in your decision making.

Some of the GTM financial metrics like LTV:CAC, Payback Period, and Magic Number show you whether you are efficiently acquiring new customers. However, these numbers are a bit like looking in the rear-view mirror. But you can break them down into components that you can track more operationally like “First Meetings per Salesperson per Month” and “Meeting to Customer %”

LTV/CAC

The Lifetime Value of a customer should be more than the cost to acquire that customer.

• LTV = ACV *  % Gross Margin % / Churn Rate

• CAC = Demand Gen CAC + Sales CAC

• Demand Gen CAC = [Cost Per Meeting] / [Meeting to Customer %]

• Sales CAC = [Salesperson Monthly Cost] / [Customers Acquired per Month per Salesperson]

• Customers Acquired per Month per Salesperson = [First Meetings per Salesperson per Month] * [Meeting to Customer %]

Payback Period

The cost of acquiring a customers divided by the monthly recurring revenue of those customers. 

• Monthly ARR = ACV / 12

• CAC = Demand Gen CAC + Sales CAC

• Demand Gen CAC = [Cost Per Meeting] / [Meeting to Customer %]

• Sales CAC = [Salesperson Monthly Cost] / [Customers Acquired per Month per Salesperson]

• Customers Acquired per Month per Salesperson = [First Meetings per Salesperson per Month] * [Meeting to Customer %]

Magic Number

The increase in recurring revenue over a quarter by the sales and marketing expenses of the previous quarter. 

• ARR Increase = New Customer ARR + Expansion ARR - Churn ARR

• Sales & Marketing Costs (Previous Quarter) = Sales Costs + Marketing Costs

• New Customers ARR = New Customer ACV * Customers Acquired per Month

• Expansion ARR = Expansion ACV * Expanding Customers per Month

Need Help Finding out to how to get GTM Fit?

If you’d like help figuring out where you are on the path to finding GTM fit and what you need to do to get there take this GTM assessment.

What is a _____?

Let’s start out with getting a foundation of what CROs (Chief Revenue Officer) are and what they do. Then I’ll talk about how Fractional CROs and GTM Advisors and how they differ.

What is a CRO or VP of Sales?

At early stage companies, CROs are often (thought not always) synonymous with VP of Sales in that they are both responsible for revenue generation. In reality, CROs are slightly more senior as they include not only the sales team but also Customer Success and the Pre Sales Team.

CROs are responsible for everything related to revenue generation at a company and these are just some of those activities:

• Runs weekly forecast calls with the sales team to review pipeline and sales projections.

• Develops and manages sales quotas and targets for sales teams and individuals.

• Conducts regular one-on-one coaching sessions with sales managers and representatives.

• Reviews and optimizes the sales funnel and lead conversion rates.

• Oversees the CRM system and ensuring data accuracy and utilization.

• Implements sales enablement tools and resources to improve team performance.

• Coordinates with marketing to ensure alignment on lead generation and qualification processes.

• Analyzes sales metrics and reports to identify trends and areas for improvement.

• Leads strategic account planning sessions to identify growth opportunities within key accounts.

• Developing and executes territory and account management strategies.

• Monitors competitor activities and adjusting sales tactics accordingly.

• Drives the adoption of best practices in sales processes and methodologies.

• Ensures effective onboarding and training programs for new sales hires.

• Manages the sales budget and allocating resources effectively.

• Reporting on sales performance to the executive team and providing actionable insights.

What is a Fractional CRO?

A Fractional CRO will do most of these activities but on a part-time basis - typically one or two days per week.

They do most of the things that a CRO/VP of Sales would do except those which are personnel related. They aren’t hiring (or firing) people and they don’t manage people directly.

Overall, they are doing all the other activities like having 1:1 sessions with the AEs or running pipeline calls like a CRO would.

Some Fractional CROs work on a specific day of the week while others might spread one day of work over several different days of the week.

What is a GTM Advisor?

A GTM Advisor can be involved in any of these activities but they are rarely doing the work themselves - instead, they are advising, or coaching.

The CEO or current Head of Sales is talking to them, going through some of the challenges that they have and the GTM Advisor is providing guidance, templates, examples, best practice - whatever that person needs to help them find GTM Fit.

What do GTM Advisors Typically Help With?

Since the structure is a bit different than the other two roles, I’m often asked what GTM advisors work on. Here are some of the things I’ve seen:

• Put the KPIs in place to track GTM effectiveness

• Use those KPIs to understand what’s working, what’s not working, and where you should focus

• Doing a full assessment of how well the team is performing. This is typically done through call reviews

• Reviewing GTM assets

• Defining and refining ICPs and Key Personas

• Improving outbound prospecting motions through better targeting techniques

• Identifying key customer pain points that should be a focus of your product, messaging, and sales motions

• Creating a GTM roadmap on what you should be focusing on and in what order.

What are the positives and negatives of each one?

CRO / VP of Sales

Positives

It’s pretty simple - if you hire a great one, your company will get much more in return than what it costs. You will achieve and exceed your revenue targets for years to come and the company’s fortunes will grow as well.

Negatives

If you hire a great one, there are no negatives. You will have a great leader who will help your company achieve and exceed your revenue targets

If you hire someone who isn’t the right fit it will probably set you back several years. This could be do to their strengths not aligning to what your company needs or them just not being up to the level of what your company needs.

Fractional CRO

Positives

• Much less expensive than a full-time CRO/VP of Sales. If you only have 1 or 2 people on the Sales team, you are adding a lot of oveheard costs to your GTM with someone like this. A Fractional CRO might be 20% of the cost and not get any equity

• You get the experience and expertise of a CRO without the costs of what you would pay for a CRO/VP of Sales

• You might be able to get a higher performing person than you would be able to get on a full-time basis. Essentially, they become your bridge to the next level when your company can attain a next level CRO

• In some cases, you can “try it before you buy it”. Maybe you’re not ready to commit to someone just yet just as they aren’t ready for your company either (too many unknowns) so this allows you see if there is a good match without making a permanent move.

Negatives

• You’re still going to be ultimately responsible for Revenue activities that the Fractional CRO doesn’t cover or during times when they aren’t available.

• They’re working on a temporary basis. There is usually some minimum contract length but if that engagement ends, you may be back to being with a CRO

• Your (eventual) full-time CRO may have very different ideas on how to do things so some of the things that the Fractional CRO puts in place might change later.

• They usually don’t have skin in the game like someone who has equity or is based on a commission plan.

GTM Advisor

Positives

• They are the lowest cost option. If you get value, the returns will be huge. If you don’t get the value, there’s very little lost - probably 1/2 a month of what a CRO would cost.

• You get the experience and expertise of a CRO without the costs of what you would pay for a CRO/VP of Sales

• You might be able to get a higher performing person than you would be able to get on a full-time basis. Essentially, they become your bridge to the next level when your company can attain a next level CRO

• In some cases, you can “try it before you buy it”. Maybe you’re not ready to commit to someone just yet just as they aren’t ready for your company either (too many unknowns) so this allows you see if there is a good match without making a permanent move.

Negatives

• You still need someone to “do the work”. This isn’t necessarily a bad thing since you often have to go through the exercise (like defining your ICP) to really understand the essence of what’s being done.

• They’re working on a temporary basis. There is usually some minimum contract length but if that engagement ends, you may be back to being with a CRO

• Your (eventual) full-time CRO may have very different ideas on how to do things so some of the things that the Fractional CRO puts in place might change later.

• They usually don’t have skin in the game like someone who has equity or is based on a commission plan.

When does each one make sense?

None of these are hard rules but good guidelines. In short, a GTM Advisor or Fractional CRO can help you bridge the time period from when you were doing founder-led sales to when you’re ready to really scale your GTM team.

GTM Advisor

When you’re starting to scale GTM - maybe you’ve hired an AE or are thinking about it. You’ve made some sales yourself but now you need to build and measure processes and hire and manage someone to execute those process.

• Revenue/ARR: $500K - $5M

• AEs/SDRs: 0 - 4

Fractional CRO

You need a bit more of a hands-on approach. Maybe the team is large enough that it’s taking a higher percentage of your time than you can commit. You also need to start building out more best practices to help the team scale. But ultimately, your still not ready to hire a VP of Sales.

• Revenue/ARR: $1M - $5M

• AEs/SDRs: 4 - 8

VP of Sales

You’re ready to truly scale up the GTM team and you need a full-time leader. This is the person who can scale you to $20M and hopefully $50M. They will build an organization with first line leaders (as you continue to grow) and put the processes into place for a scaling organization. You’re probably starting to achieve GTM Fit and just need that extra push.

• Revenue/ARR: $5M+

• AEs/SDRs: 6+

Costs of Each

These are the typical monthly cost of a VP of Sales, Fractional CRO, and GTM advisor.

• VP of Sales: $400K - $500K OTE per year

• Fractional CRO: $10K - $15K per month

• GTM Advisor: $3500 - $5000 per month

Which one do you need?

You can email me jim@scalinggtm.com and I’m happy to give you my thoughts. You can also fill out this GTM assessment which will help us get started on understanding where you’re at and where you need to go.

Early stage founders typically come from a product or engineering background so they have very little GTM experience. They hustled their way to some good customers with positive signs that they’re on to something. To show more traction, they need to continue growing revenue and the customer count, but what’s the best way to do that?

Founders are trying to find GTM Fit

They know where they want to get to, but they don’t have the experience or expertise to get there. They might not even know where to start. In short, they need a framework to help them GTM Fit.

What is GTM Fit?

GTM Fit is intertwined with Product Market Fit

Product Market Fit has elements of GTM Fit in it. The following table is from a great article First Round Capital put out about the Levels of PMF. The green highlights are mine, representing components of GTM Fit.

You need a framework to Pursue GTM Fit

These numbers are the gold standard when it comes to analyzing GTM. Each of them can be broken down into operational metrics that you can use to track how you are doing.

LTV/CAC

The Lifetime Value of a customer should be more than the cost to acquire that customer.

• LTV = ACV *  % Gross Margin % / Churn Rate

• CAC = Demand Gen CAC + Sales CAC

• Demand Gen CAC = [Cost Per Meeting] / [Meeting to Customer %]

• Sales CAC = [Salesperson Monthly Cost] / [Customers Acquired per Month per Salesperson]

• Customers Acquired per Month per Salesperson = [First Meetings per Salesperson per Month] * [Meeting to Customer %]

Payback Period

The cost of acquiring a customers divided by the monthly recurring revenue of those customers. 

• Monthly ARR = ACV / 12

• CAC = Demand Gen CAC + Sales CAC

• Demand Gen CAC = [Cost Per Meeting] / [Meeting to Customer %]

• Sales CAC = [Salesperson Monthly Cost] / [Customers Acquired per Month per Salesperson]

• Customers Acquired per Month per Salesperson = [First Meetings per Salesperson per Month] * [Meeting to Customer %]

Magic Number

The increase in recurring revenue over a quarter by the sales and marketing expenses of the previous quarter. 

• ARR Increase = New Customer ARR + Expansion ARR - Churn ARR

• Sales & Marketing Costs (Previous Quarter) = Sales Costs + Marketing Costs

• New Customers ARR = New Customer ACV * Customers Acquired per Month

• Expansion ARR = Expansion ACV * Expanding Customers per Month

But we’re an early stage start-up

.. we don’t really have enough data that we can use to make decisions

Like most things that early stage companies finding GTM fit requires a lot of experimentation and you need a framework to understand if you’re going in the right direction and to measure what’s working versus not working.

Get a GTM assessment

Answer a few questions on this form to get started on understanding where you are in your pursuit of GTM Fit. T

We’re going to grow $7 million next year!

“That’s incredible!”, I said. I was talking to the cofounders of a fast growing AI company. They were working on their plan for next year and the big question they had was if they should hire some more reps or hire a VP of sales first who can grow the team. They were looking for some advice on which approach was best to take.

They certainly had a ton of momentum as they just landed a deal worth almost $1 million bringing their ARR to almost $4 million.

They had one sales rep who was more of a glorified SDR and meeting scheduler. The cofounders were doing most of the selling.

I asked them where that number came from and they said it was where their Board thought that they should be at the end of the year. The thought process was that they should get $2 million from their existing customers and $5 million from new customers.

“You Need 11 AEs”

I told him I wanted to do some math and come back to them with some thoughts on their target. I wanted to build out a capacity model, which basically shows you how much revenue each AE can bring in.

The quota for the AEs was $1.2 million so even if they had all those reps fully ramped and with pipeline at the beginning of the year, they would need 6 AEs. But this wasn’t the case. They had one rep and they were just starting the interview process for several new reps.

One of the things that you need to account for is the ramp period. Part of that is them learning the product and your sales process. But most importantly, it’s the generation of pipeline and the maturing of that pipeline so that you can eventually close it. Some pipeline is going to exist already for new AE, but I’ve never seen a new AE come in with fully loaded pipeline where they can hit they are fully loaded in the first quarter.

When I did this math, it came out to be that they needed 11 new AEs. Oh, and by the way, they needed to be in the seat by the beginning of May (it was already late November). If they brought them in halfway through the year they wouldn’t have much impact because the sales cycles were almost 6 months.

I also talked to their Head of Marketing about the plan for next year and I asked him how likely it was that they hit their growth target. He felt it was very unlikely and he was looking at it from another angle - how much pipeline was needed for them to get to that target.

Failing to Plan is Planning to Fail

Were they going to be a successful business? Nothing is ever certain with early stage companies, but the odds are very much in their favor. They had a really compelling product and value proposition and some great leaders.

However, I just couldn’t see them hitting that $7 million growth target for that year. I understand where the number came from and why the board would want to push them to such heights, but they just didn’t have the infrastructure in place to grow that quickly.

You can tell yourself things like we’ll just figure it out or were different or people will step up and close this business but this is just a case of the planning fallacy.

What I recommended was that they hire that VP of sales since they needed someone to thoughtfully build out and hire the team, but they should reset expectations on the targets for the next year. Talk to the Board about why they think it’s going to be tough to achieve and set a realistic target based on the new numbers. They can still leave the stretch goal out there but they shouldn’t base the rest of the plan (like headcount) on that larger number.

No model is perfect, but they can help you give an idea where your blind spots might be.

No, this is not what I mean by Extreme Feedback. ExtremeFeedback is amped up feedback - it’s specific, actionable, consistent, and both positive and constructive. It’s the feedback we all want in our jobs.

People generally want to improve and get better. They Want constructive and timely feedback on how they can improve at their jobs.  Nothing is more frustrating than doing what you think is a good job but not getting the results and not getting direction on how you can improve from your manager. 

The rise of conversational intelligence tools

Conversational Intelligence tools like Gong and Chorus along with more remote meetings ushered in an incredible change in meetings. How often do you now see a Notetaker when joining a meeting online? I remember when it used to feel a bit strange but now no one even mentions it (except when some people ask to turn it off). It’s an incredible change that allows anyone to get that feedback on a regular basis from their managers - and it can be bidirectional. hey can hear what questions are asked, what the exact responses are without being filtered through the AE who might have forgotten the full context or, what often happens, not fully understood the context of what that person was talking about.

Not only does this provide a more accurate picture of different prospect and customer interaction. It’s also more comprehensive. Most meetings can be recorded if they are done virtually and even in person meetings can be recorded for future reference, especially if somebody in the meeting is remote.

The Old Way to Give Feedback in GTM

Before these tools became more prevalent there was a variety of ways to get and give feedback in GTM settings. The problem was that, unlike many other jobs, others couldn’t see the work output. They had to rely on what happened from someone else’s recollection.

There were different levels of observation and feedback provided – some more removed than others.

Guessing at the issue

An AE is not delivering the results expected and their manager does their best to determine what the issue is. Maybe they don’t think that they are generating enough pipeline or they aren’t making contacts at a high enough level. Whatever the reason they are basing it off of what they are seeing (or not) and hearing secondhand and sometimes even thirdhand.

Responding to request for help

Maybe the AE comes to them with challenges that they see. For example, they know they need to get to the economic buyer, but don’t know how to do that so they asked their manager for feedback on the best approach.

Sometimes this works, but maybe the person providing feedback is only getting the symptoms and not hearing about the root cause. Maybe the real issue is that the AE hasn’t developed a champion who is willing to take them to meet the economic buyer. A good manager will eventually figure this out but it might take a bit of time and digging to really understand this.

Attending meetings

This was the best way to see an AE in action and to provide feedback. By attending the same meeting with their team, the manager could see directly what they were doing, what they were not doing, and provide feedback and coaching based on that. It’s often general feedback, and some high-level since they usually don’t recall specific questions or parts of the conversation

Extreme Feedback - The New Way

Extreme Feedback is giving specific, actionable, and consistent feedback to attendees of a meeting.  You’re just like a coach, who might give very tactical and specific feedback to a player trying to improve their hitting in baseball.

Extreme Feedback can be used by anyone - even an AE can let their VP of Sales or CEO know that they would’ve liked them to jump in and talk about their new funding at a certain point in the call.

There are several components to extreme feedback:

It’s Specific

With revenue intelligence tools, you have the exact transcript and audio of the conversation so instead of saying something “You should ask more questions about the timing of their project”, you can say “When she was talking about her project goals, you should have followed that up with a question on overall timeline before jumping to next steps".”

It’s Actionable

Because it’s so specific, it becomes much more actionable. In the situation above, the AE knows now that they should be asking questions about timeline when a their prospect is talking about their timeline.

This is much more actionable than feedback like “Do better discovery” or even somewhat targeted feedback like “Get more details about their project timing.” You’ve gotten feedback exactly where and how you can use it in the future.

It’s Consistent

Managers should make this part of their daily or weekly cadence. They can listen to calls of folks on their team to find opportunities provide feedback. This has to be done regularly to ensure that it’s acted upon.

Maybe the AE forgets about the feedback on asking about project timelines and the next time the situation comes up, they make the same mistake. By doing this consistently, the person providing the feedback can ensure that their suggestions are being acted upon.

It includes both positive and constructive feedback

Constructive feedback is good to help people grow and improve. We all have areas that we need to work on. But extreme feedback should also reinforce the things that are being done well. No one wants to listen to feedback where everything they do is wrong. The positive stuff should be highlighted to reinforce those good things and not get the person frustrated that they feel that they aren’t improving.

Scoring meetings

One way that you can take extreme feedback to the next level is to create a scorecard for certain types of meetings - for example, initial discovery calls. By using a scorecard, you can highlight what parts of a meeting are most critical ensure that people are executing on this as part of your overall sales process.

It also helps to create a trend over time so that the person can see if they are improving. It can be used to compare different individuals on the team. Everyone is going to have different strengths and weaknesses and if someone is doing particularly well in an area like presenting a proposal, the scorecard will capture this and you can use to share with other members of the team for them to learn.

There are three data points that would be very helpful for me to understand where your GTM is.

I said this to the CEO of a series a software company I had just been introduced to. This cofounder had some early success with founder led sales through referrals and other connections. They wanted to start growing sales by hiring an AE and they hired a good, hungry AE who they were very pleased with. He was doing what they expected but they were not seeing the results that they had hoped for, and he was not hitting his quota in his first few quarters.

I’d like to see how many first meetings you had with prospects last month, the percentage of first meetings that ultimately turn into closed, one opportunities, and your ASP.

These are the golden three sales KPIs.

First meetings

This is the best proxy for pipeline generation. Are you consistently generating new opportunities that can turn into customers? You could be winning every POC and think you have a home run but if you don’t have enough at bats, you’re not going to win the game.

To achieve GTM fit, you need at least one channel of consistent new opportunities that your sales team can work.

What about SQOs?

Some people use Sales Qualified Opportunities (SQOs) to measure their pipeline generation. This is an important metric and one you should be measuring but I start with first meetings. SQOs are usually subjective, especially as an early stage company where first meetings are a very objective metric. It’s also helpful because you might have an issue on the execution side with those first meetings or you might not be targeting the right type of prospects and this helps uncover that.

What about Leads?

Similar situation with Leads, but they are earlier. There are so many different types of leads - maybe they were people who signed up for a white paper or who put their name in to win a prize at a conference. These also need to be tracked for other reasons but you really want to start tracking at a point when a person is willing to go through the effort of having a meeting with someone.

First meetings to customer conversion rate

Conversion rates show how well you are executing on the opportunities that you’ve identified. Again, we could look at conversion from opportunities to customers, but I prefer going back to first meetings because I think it’s much cleaner and helpful to identifying other potential issues like bad targeting of prospects.

As subsequent steps to this, you’ll need to dig into the steps from first meeting to becoming a customer but this gives you a starting point to see how well your Sales team is executing.

For early stage companies, I think 10% is a pretty good number to start with. If you’re below that you probably need to better understand why and if you’re above that you’re going in the right direction.

This number is also going to vary based on how the new opportunities are first meetings came in.

Average Sale Price (ASP)

This number doesn’t tell you as much about how well you’re generating pipeline or how well the sales team is executing, but it is a key part in understanding how much revenue you’re producing with the prospects you’ve identified.

What about Average Sales Cycle?

This is a very important metric as well. There’s a big difference in your business if your sales cycles take 18 months versus 18 days. However, it’s usually correlated with the ASP, so as long as we know that we can make an estimation for what the sales cycle length is.

• <$25K ASP: ~2 months

• $25K - $75K ASP: ~4 months

• >$75k: ~8 months

But what about…?

• Expansions - a similar concept could be applied to expansions, but this is for new logos, which is the primary focus for many early stage companies

• PLG - even if you are a PLG company with self service revenue, you can use this for the SLG portion of your business. First meetings is still a good proxy for potential interest in growing their plan. If you’re 100% PLG, there’s different metrics you should use.

• Your numbers vary A LOT - rarely are you ever going to see consistent numbers month over month. Maybe you did a conference or had a webinar. It’s just noisy for early stage companies. Using a three month average or something similar is a pretty effective approach. If you’re seeing consistent growth like 10% a month, you can use that when doing your basic projections.

• Different sized customers - I think it’s simpler to use one number and just average that out, but there’s no reason you couldn’t break this down into two or more sets of numbers. If someone asks me this, I might ask them how well they have defined their ICP

Now What?

The first thing I do with these numbers is get a sense on how much revenue is going to be generated this year. For example:

• First meetings per month: 20

• First meeting to customer conversion rate: 10%

• ASP: $50K

This company is going to generate New Logo revenue of about $1.2M a year at this rate. The actual number is going to be dependent on amount in the pipeline currently, average sales cycle, and net retention.

If you have one or more AEs, this gives you a sense of what the quota should be. If this company had 2 AEs, each with $1.2M of quota, they aren’t being set up for success.

Most importantly, it gives you a sense of what you should be working on. It’s rarely going to be the case that any one of these numbers is perfect and couldn’t be improved. But the key to figure out which one needs the most work at this point. Often times that will be the number of first meetings generated. That might be the long pole in the tent until you hire additional AE.

If you’re looking for further guidance, let’s talk. Fill out this GTM Assessment and then we can set up some time to chat.

I was asked to help out the sales team at an early stage company. They had just hired two new AEs to focus on Enterprise selling, which they defined as companies greater than 5,000 employees because they had landed a fairly large customer and they felt that it was time to scale the business.

The AEs had success in previous companies and came with good references, but they weren’t driving much new business and the CEO felt that they might not be a good fit.

The CEO was trying to understand whether it was an issue with the AEs being a bad fit or if there was an issue with their GTM motion. He asked me to review a few calls, and to give my opinion and see what feedback I could provide.

Reviewing calls to do feedback

I listen to those calls and while I could tell they had some room for growth (like we all do), they knew what they were doing. I had trouble seeing how even one a top AE could be successful with the prospects on the calls I listened to. The product just wasn’t a great fit for these prospects. They had technical requirements that just weren’t supported.

When I shared this feedback to the CEO, I talked about how I didn’t think the prospects were a great fit. He said that these were large companies with good logos - exactly what they wanted. It seemed to me like he was basing this on company size so I asked him how they defined their ICP (Ideal Customer Profile). He said it was large companies who worked with some of the more modern DevOps tools but that was pretty much it. And the reason that those modern tools were included is because they didn’t have integrations with the more legacy tools that weren’t cloud based.

They also had a persona that they were going after. What was interesting about this persona was that if you had that role in your company, it usually meant you already had the technology or solution in place that they were trying to sell. Implicitly, this meant that they were trying to displace existing technology, which can be very difficult to do, especially if you don’t support all the technical requirements.

Building out an ICP

I suggested that we take a look at what their ICP should be based on their data. So I asked for information regarding all closed opportunities over time. For each one of these accounts, I also asked for employee count, industry, date founded, and other information about the technologies that they had (technographics).

Based on all this information, we could calculate a win rate, ARR, and ASP. Ideally I would also include net retention as well but this was a start.

You can see we categorized the attributes in the screenshot above. Some of these data points overlapped, some of it was missing, but it still gave us a pretty good picture of their profile.

They Shouldn’t Have Hired Enterprise AEs

(Note: Some of this data has been modified and/or blurred to protect their confidential information but it still directionally correct)

The first thing that jumped out was the difference for win rate based on company size. When they had an opportunity with a company with less than 1000 employees, the win rates were all north of 24%. But when they had an opportunity with a company greater than 1000 employees the win rate was single digits. And remember that they defined Enterprise as greater than 5000 employees.

The other big data point that jumped out was the year that the company was founded. Almost 90% of their customers were founded after 2010.

These two data points were correlated and it made sense when we thought about it. As I mention earlier, their product only worked with more modern DevOps solutions that have been around for less than 15 years. Companies founded before 2010 didn’t have those tools yet as an option so they had to use some older technology that the product didn’t support yet. Company size also matters because most companies founded in the last 10 to 15 years are usually not over 1000 employees. There were plenty of exceptions to this, but the odds were against them.

Focus on your ICP and then expand

One of the more interesting points that came out of this is that there was a cohort of their customers who met all of the attributes of the ICP, including some of the technographics. Whenever they had an opportunity with one of those prospects who checked every single box they had a greater than 50% chance of winning that opportunity. That meant that all outbound efforts should go into finding these prospects to create a consistent and scalable GTM.

One of your primary jobs as the leader of an early stage company is to find GTM Fit. When you do that, you are able to fund growth to get to your next milestones. It can be tempting to chase every type of opportunity that comes your way and to go whale hunting. What you really want to is to look for some sort of niche, which is essentially your ICP, that you can consistently find and close business on. This creates positive momentum, makes the business more efficient, and allows you to improve the product.

By no means does this mean avoiding companies that don’t fit in your ICP. When those opportunities come to you, have a decision making framework in place to determine how to handle. Maybe it’s presence of budget and a clear path to winning based on your characteristics.

Those companies just outside your ICP that you land will be next set of customers that you target.

Very few AEs like to fill out Salesforce or HubSpot with information about their opportunities.   It’s one of those necessary evils in selling. Keeping an up-to-date CRM is critical for the whole team to understand an opportunity and to help find the blind spots and see around corners.

I once worked with the CFO years who believed that someday reps will just conduct meetings and everything will be filled out in the CRM for them. We’re much closer to that reality than I realized back then.

Capturing Information from a First Call

I was recently working with a younger AE on opportunity reviews. His CEO was frustrated because he felt that Salesforce should be updated with more details about the opportunity.  The AE was doing good job of the right questions during his calls, but he wasn’t as effective and conveyed back the key points to the rest of the team about the opportunity

The company was using SPICED, which is a sales methodology from the company Winning by Design.  They could’ve just have easily used other common methodologies like BANT or MEDDICC.  Each one is an acronym meant to capture some of the key details about the opportunity.

One of the suggestions I made to the AE was to use ChatGPT to fill out these fields based on the transcript from his calls.  Note that this only works in cases where you have a notetaker on a call, which many companies do, and you have permission to use that with ChatGPT. Many companies will just request that their data isn’t used for training.

AI Prompt

This is the prompt that I gave him:

I'm uploading the transcript from an initial discovery call. $person is from $company and their role is $role. $vendorpeople are also on the call and they are from $vendor. You can find information about their product at $vendorwebsite. We use SPICED as a sales methodology, which stands for Situation, Problems, Impact, Critical Events, and Decision. Based on the transcript from the call, can you provide SPICED details from this call? If there is any one of those areas that you don't know, just reply with "Unknown at this point"

$person: 
$role: 
$company:  
$vendorpeople: 
$vendorwebsite: 
$vendor: 

He would export a transcript of the call, upload it to ChatGPT, and put in this prompt. If he had multiple calls, he combined the call transcripts into one document and used that.

What about for more experienced AEs?

I also used this with the more experienced AEs on the team. They knew what good looks like and had more context than what they input just because they had more pressing things to do. This became a productivity hack for them in which they could spend less time filling out Salesforce while providing more of the details to the rest of the team.

Benefits of this Approach

An Enablement Tool

It ended up being a great learning tool for him because he could write out what he thought those fields should be and then see what ChatGPT would provide back and then he would compare those.

Better Opportunity Reviews

It also helps with opportunity reviews because SPICED captures the most critical details about the opportunity and it’s comprehensive so if you looked at the information in the CRM, there wasn’t any doubt about whether information was just not filled in or not asked during the meeting. If there was a gap in SPICED, that could be discussed and a plan could be created to obtain that information.

Improved Productivity

AEs no longer had to parse through their notes to fill out SPICED (if they were even taking notes at all while a notetaker was being used). Now they could just export the transcript, ask the question to ChatGPT, and just paste those answers into Salesforce or HubSpot

What Next?

It’s not hard to imagine that note-taking tools will do this automatically for AEs, filling out the fields in the CRM tool automatically from not just one call but all calls and emails.

“I really like this company, but I’m working my butt off and I’m just not making any money and I don’t see a path to hit my quota”

Stan was very frustrated and I could hear it in his voice. I had been doing coaching sessions with him for the past month and was very impressed with him and his ability to take the feedback I had given him and apply it to his opportunities.  But I could tell something was off during this session so I just asked him what’s up. He had just gotten his commission check from last quarter and while He knew he didn’t hit his quota. It was frustrating for him to see how far off he was from what he was hoping to earn.

I was working with a company on coaching their AE and so I didn’t know what their quotas were or how they were calculate.  I knew that their wins were on the smaller side, around $18,000.  I asked him what his quota was and he said $750,000. I did the quick math in my head and realized that he needed to close 30 new customers over the entire year to hit his quota.

And well, I didn’t know how many first meetings he had each month or the conversion rate of those meetings to wins, I had a pretty good suspicion that his quota was unattainable.

Setting Quota isn’t the Same as Building a Compensation Plan

While quotas are the key part of a compensation plan, they aren’t interchangeable. Quotas are just a number - the primary numbers that the Sales team is measured and paid on. Quota is just one part of the commission plans, which include a lot of different elements, most of which you’ll have to determine based on how you want your GTM organization structured.

• Are AEs paid on renewals or is that another team like Customer Success? If AEs are paid on renewals, what’s the rate for that?

• How are multiple years deal handled?

• Who is responsible for expansions?

The Golden 3 KPIs 

There are three KPI’s that I’m always looking for when talking to an early stage company that gives me a really good picture of where they are:

• ASP or Average Deal Size

• First Meeting to Closed Won Conversion Rate

• First Meetings per Month

There is a fourth one that is pretty important which is time it takes to close a deal, but I can usually estimate what that is depending on the ASP. By no means is this going to tell you everything about an early-stage business (churn rate, expansion rate are just a few of the other critical KPI‘s), but it gives you a pretty good sense of how a sales team is doing.

These metrics are really all that you need when setting AE quota.

Some Simple Math

After Stan shared his frustrations with me, I went back to John the CEO, and asked him for those three numbers.  With these numbers, I could determine what a fair quota was. [Note that I’m using an AE Productivity model, which is essentially the inverse of the quota setting model. In this case, I’m taking quota and working back to see how many meetings/wins are needed and in the AE Quota Setting model, I take first meetings per month to calculate quota.]

While I expected a mismatch, I was shocked how unattainable Stan’s quota was. He was getting just under 20 first meetings a month.  But the quick model I had built out showed that he needed 53 meetings per month.  That was almost three per work day.  And this is a sale that often took several meetings and a small POC to get a win. There just weren’t enough hours in the day or enough meetings to justify his quota.

Justification but Not Good Reasons

I went back to John and told him that there was no way that his AEs could hit these quotas and that they were set up for failure.  His justification included these 3 reasons:

• He was told that quota should be a multiple of OTE to justify the cost and that’s how he set it.

• He wanted Stan to generate more meetings and this was a way to do that

• A good AE should convert a higher percentage of opportunities to wins

Let’s address each of those items because on the surface, they seem reasonable:

Using OTE to Calculate Quota

Best practices for AE compensation says that quota should be 5x OTE, although most start-ups are around 4x OTE. Stan, and the other AEs, had quota around 4x so it made sense from that perspective.

However, there are also benchmarks that show what quota should be based on the ASP and for <$25K, it’s usually around $600K. This would indicate that they should have a more junior AE with a lower OTE selling this product.

I brought this up to John and he said the product was too complex for such a junior seller and he needed to hire AEs with Stan’s experience. I said that might mean you have GTM fit issue. While you can sell your product at that price point, it doesn’t justify the cost to do so. Ultimately, the ASP needs to be higher or it needs to be more self-service sales (i.e.: PLG).

Generate More Meetings

John’s next point was that Stan should generate more meetings himself. A fair point - there was certainly room for improvement here - but Stan was already generating a meeting or two per week and he would have to generate almost 4x that. Generating 30 meetings per month was just not realistic with the work he had to do selling the product. They also hadn’t built out a prospecting playbook that someone working full-time could generate that many meetings.

This ultimately led us to a discussion on what the breakdown should be on where first meetings come from and how much should be inbound vs. outbound. This ultimately was one of the biggest takeaways as they needed a much stronger inbound channel for the product they were selling.

Convert a Higher Number to Customers

The final issues that John raised was that Stan should convert a higher number to customers. My assessment was that Stan was a good rep and that wasn’t the primary issue. Ultimately, they were getting a lot of first meetings from people who didn’t match their ICP, leading to a low conversion rate. We had discussed targeting and qualifying better but the number of meetings was already too low so that made it difficult to implement for John.

Setting a Realistic Quota

I think the ultimate question in this case was whether John’s company was ready to hire AEs or not. They didn’t have the playbook, whether it’s for prospecting, finding their ICP, or executing against that, to cost-effectively scale up the Sales team.

There are cases where you want to hire an AE to start figuring out some of these things and that’s a perfectly reasonable approach - you just can’t set their quota like this is all figured out already. You have to realize it’s an investment until these things have been figured out. If the risk is all on the AE side, you’re not going to keep good reps for long.

Setting Quotas

Setting AE quota should be one of the easier things that you do.  In the Quota Setting model, you can fill in three numbers and it will calculate the quota.  Let’s check out what Stan’s quota should have been:

• ASP: $37,000 for their average new logo deal

• First Meetings to Closed Won Rate: They convert 1 out of every 10 first meetings into a customer so 10%

• First Meetings Per Month Per AE: While it varies from month to month, they are getting 18 meetings per month per AE

Note that the expected bookings is 90% of quota, which is a common way to give the AEs a little bit of a stretch goal - to make sure that those above average are the ones hitting their quota.

I’m OK if the numbers you use are slightly above your baseline because you plan to improve over the year. For example, the number of meetings per month might increase 5% each month as inbound ramp up. But assuming something like a 2X improvement and one of these metrics on just a hope of prayer is not going to end well. This is where I see most organizations make the mistake. They might feel that the AEs need to generate twice as many meetings but is that on the AE or something for the whole company to figure out.

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“I know my prospects and I know what they want.” 

Stacy was getting frustrated. I had listened to a couple dozen of their first calls with prospects and I thought I saw a pattern there, or at least the lack of a pattern.  Stacy is the CEO and cofounder of a data engineering company and I had been working with her on improving the conversion of first calls to opportunities.

I noticed on all these calls that whenever the prospect talked about the challenges that they had, they never mentioned the need to document how data progressed through their pipelines. However, this was a feature that Stacy‘s rep always brought up on the first call. I was merely pointing out that the reps were spending valuable time talking about this feature, but it didn’t seem to be one of the primary challenges that they were trying to solve.

“Let me go through a bunch of the first calls and pull out what problems your prospects are trying to solve.” 

I realized that the pitch and demo that the AES were doing was just not hitting the mark. Prospects liked it but it’s not like they jumped out of their seats, saying yes, this will solve the problems that I have.  Stacy agreed with this approach and said I could go through and build up what I think were the different personas and what problems they had.

Categorizing the personas 

I knew I couldn’t create just one list of challenges that their prospects were facing.  I knew that they had different types of roles, so one list would be two general and not hit the mark for some of those people.  Knew that the people they first interacted with were at different levels. Sometimes it was individual contributors, sometimes it was managers and directors, and sometimes they were VPs or even c level folks.

So the first thing I had to do was put these people in different buckets. I got a list of the title of the primary person that they met with in all of their first meetings and there were several hundred of these. I thought, how do I even start creating different buckets for these?  

I realized that ChatGPT could be a useful tool so I loaded those titles into a prompt, and I asked ChatGPT to categorize them along two different dimensions – level and type of roll.  The first output was pretty granular, but I realized that level could probably be broken down into IC, manager, and executive. Roll was a little more challenging, but I was able to combine the roles into about five different types. – data engineering, analyst, data scientist, engineering, product management, and other.  Once I had these, I asked ChatGPT to create a table with these titles, their level, and their role.

Who are the best personas?

With these categories, we were now able to get some information about them. How many first calls do we have and what was the win rate with each of them? The most interesting thing we found is that when they talk to individual contributors first they were most likely to turn into a customer and the team thought they should only reach out to management and ideally the executives. There were very few first calls and they turned into opportunities the least.  The company was only targeting management and higher in the outbound.  this wasn’t something we were looking for when we started, but it changed who the team went after for prospecting

What challenges do they have?

Now it was time to answer the initial question – what challenges did these prospects have?  In order to figure this out I got the audio of about 40 first calls.  

Side note: The tool that they use for not has an integration with ChatGPT so we could just leverage that and it’s already set up with the configuration not to use the data for training. Just note that your company might have different policies when it comes to using ChatGPT or similar tools.

I use this following prompt for each of the transcripts.

I'm uploading the transcript from an initial discovery call. $person is from $company and their role is $role. $vendorpeople are also on the call and they are from $vendor. You can find information about their product at $vendorwebsite. Based on the transcript from the call, can you provide details on the problems $person has, which they are looking for $vendor to potentially solve?

$person: 
$company:
$role:
$vendorpeople: 
$vendorwebsite:
$vendor:

Summarizing the data

I compiled the information into a document so that we had the information for each persona and whether it was a winner or loss and then used this prompt to analyze them.

I'm uploading a document that details the challenges faced by a group of people at different companies. Based on what's in the document, what are the common set of challenges seen by these individuals? List them out from most common to least.

I played around with this data a bit and found some other interesting insights:

• Since the calls were broken down by wins and losses, I was able to ask what was the difference between the winds and the losses.  Not a ton but there were a few nuggets on what they should look out for.

• Beyond 10 meetings there wasn’t much incremental value with each call. In fact, it probably could be limited to five transcripts each.

• There was very little difference between individual contributors and management. That was nice because they didn’t have to change their messaging depending on who they were talking to.

• Some of the personas were pretty much the same so they could be consolidated as well

So What Happened?

“I’m shocked”

Stacy couldn’t believe the level of insights.  Their product roadmap and their messaging was focusing on a whole set of issues that weren’t on the list of top challenges.  Of course a lot of the thing on the list were issues that they addressed in the product, but this provided a much tighter list of challenges that their prospects and customers were having.

This exercise, which didn’t take long to do, changed several thing:

• Sales team now added ICs to their prospecting and removed the C-Level executives.  It doesn’t mean they don’t want that connection as part of the sales cycle but it changed the perspective on who started projects

• AEs changed their discovery and demo scripts.  They spent more time focusing on solving the challenges that prospects typically had and asked questions around these.  It also gave them some good talking points around “these are the typical challenges we see with other companies similar to yours.”

• Project Management changed the roadmap.  There was nothing brand new but it allowed them to change the prioritization on things that were more relevant based on what the prospects said vs. what Product Management THOUGHT was important