In this episode, Steli Efti (CEO and co-founder of Close) takes over our podcast to talk about cultivating a winning mentality in your team. Before founding Close, Steli ran Elastic Sales - Silicon Valley's secret sales team on demand - and has contributed to raising the sales IQ in the bay. He shares how winning is the foundation of a solid sales team, how caring is harder than it sounds, and how Close managed to grow it's sales org while being fully remote.
As Steli reminds us, if you aren't keeping customers happy in a recurring revenue model you're heading for trouble. Winning is important, but how you win is just as important in SaaS. can be hard to pinpoint — except when it comes to discovery. If you're running through your script and not actually trying to connect with your prospects, they can tell. And you aren't teeing yourself up for success in the second part of the conversation:
Once you've run your discovery and you're convinced that you're the best fit, you need to shift gears. Steli and the team at Close call "friendly strength" the ability to take control of the conversation once your discovery phase has uncovered pain points that your product is singularly adapted to resolve. Instead of remaining passive, and offering advice — Steli urges sales people to position themselves as the expert and solve their customers' problem with them.
If your discovery reveals a mismatch, an equally important tip that Steli gives is to turn poor-fit customers away. In the long term, you won't be creating value for them and you'll also be negatively impacting your reputation. You'll also be setting up a much better relationship with those customers when they do meet the right level of maturity for your product.
I wanted to start off by sharing a little bit about what was our starting point with the show. We've seen it happen before: a salesperson who's a top performer in one environment, when they leave to join a new company, all of a sudden, they're finding themselves in a tough spot struggling to meet their objectives. Sound familiar?
Yes. Happened once or twice before in front of me. So, yeah, for sure.
What we think it comes down to is sales culture and depending how well suited that culture is to that individual, we believe that their output will change drastically. What's your take on this?
I would agree. I think that culture, at the end of the day, you're creating a design that makes humans interact in a certain way. And, so, every company culture, every team culture, might heighten or amplify certain strengths of an employee or team member, or might amplify and heighten their weaknesses, or develop weaknesses they didn't have before, or in the great cases, develop strengths that they were missing. I think culture influences people in a tremendous way, and no where could this be more true than in sales culture.
Rewinding a little bit in your path, and back when you were working on Elastic Sales, you were actually building and outsourcing sales teams for companies who had a product and very little idea of how to sell it.
That's right. We were Silicon Valley's secret sales team on demand, and I think we played a big role in changing the culture in the Valley. In 2012, 2013, a lot of companies, a lot of startups were thinking, "Sales, blah. That's in the past. We're going to be building these B2B apps that are consumer grade, viral growth, bottom up, and we won't even need to hire any salespeople. That's the model in the past."
I think a few players in this space, plus us, was the realities of the world changed that quite dramatically. I think, today, there's a lot higher sales IQ in the Valley and in startups generally around the world. We provided a really important bridge between all the companies that had raised a ton of money, were building B2B software, and had forgotten to think about their go-to-market and sales, and then would find themselves thinking, "Holy sh*t, it's really difficult to build a sales team. How do we fix this?" And, usually around that time, we would give you a cold call and pitch you on using us.
In that time, you must have come across quite a few different sales cultures. Obviously, as you mentioned, some not at all advanced but probably some pretty well established ones too. What are some tell signs for a culture that's just not going to work out for the people who are working in it?
There's many ways to look at it. One simple way is to look at the results the team is generating. That's usually, in Sales, the first thing you look at. Is the culture generating a winning mentality, winning results? A lot of tiny, little problems, even if you don't have your culture fully figured out, if your team is winning, if they are closing deals, if they are hitting their numbers, if they're succeeding, they're making money, some small problems will just never grow and bubble up to really significant roadblocks.
Winning is really crucial, so that's the first thing I would look at, "Is this sales team winning?" If not, there's something wrong here, for sure, and the culture is probably the foundational issue on which everything else was built. But you can have a team that is generating revenue and still has a terrible culture, depending on what incentives and goals you have. Many startups and founders that I interacted with, they really wanted to create value in the market. They didn't want to steal money from customers. They didn't want to scam people into purchasing their software.
If you're just into, like, "Let's make money and rob people of their money," you can create a sales culture that empowers that. You could have a team that's really destroying value in the marketplace but is enriching themselves and the business. And that might be by design, and you might be totally happy with that. I don't want to be in business with you, but you might be totally happy with that.
But most startups don't have that. Most startup founders, and in SaaS especially where it's a monthly renewed subscription, you need your customers to be happy. You need to deliver value. So, typically, you wouldn't encounter a team that's crushing their numbers but is like terrible to their customers. Most of the time in the startup world, the problem would be too much kindness, like, there was some kind of a… The pendulum always swings too much to the other side. Sometimes there's overreaction, overcorrection.
I think that a lot of founders, they have this mentality of a lot of software people, "I hate sales. I hate salespeople. Sales is evil, so we are going to do this totally different. We're going to sell the way I like to buy which is, our salespeople are going to be pure information providers. They're going to be very soft-spoken. They're going to be very friendly. They're going to offer some information and never intrude in the customer's space, never be annoying, never be too persistent or too demanding. And, so, we're going to be this amazing sales team that only is kind of like friendly."
And I like friendly and think friendly is a really important part of the mix, but friendly and weak is a culture that generates a lot of problems and that won't work. I always give an example of like a good doctor. If I go to a great doctor, I want that doctor to be friendly. I want that person to be interested in me. I don't want to walk through the door and the doctor is already prescribing medicine without me saying anything about my problems. But I don't want the opposite issue either where the doctor is so friendly that at the end, he or she never knows what to recommend.
They're like, "Well, I'm only a human being. I'm going to give you these 400 pages of information. There are seven different potential ways to do this, but then there's a Wikipedia page that says we should do something else. I mean, I'm not god, so you should really take all this information." It's like, "No. I'm not coming to you for me to do all the work and all the deciding. I have no experience. I have no expertise in this. I want to come to you, share all that information, and then I want to have an expert that can tell me what to do. I want somebody to lead the way that I believe has my best interests at heart." And that's the best sales culture.
And the thing that I've seen oftentimes missing in startups is that they were creating these friendly sales systems that were too friendly and too weak, didn't have that confidence, that clarity, to tell the customer sometimes, "Here is what you need," and, "Here's why you need it." And that could create teams that would not close deals, not hit their numbers, not accomplish what they really wanted. That, then, creates a snowball effect that creates more and more customers start complaining, people start pointing fingers at each other, and it becomes this huge cultural issue within the business.
So, first thing I look at is, "Is this team winning?" and then I might look at, "How are they winning? Are they winning ethically? Are they winning by creating value in the world? Are they winning shortsightedly by just stealing from people?" But if you're winning, that's the prerequisite for everything else in sales at the end of the day.
Is that the culture you just described the sales culture you've built up Close?
Yeah. We always talk about friendly strength which is the model that we implement internally and the way that we teach our customers in the world how to do sales. You want to have the best interests of the customer at heart. You want to create value. But once you're convinced… I always tell people, "Sales is really simple. You ask a lot of questions. You have a real interest in understanding who your customer is, what the problems are, what the context of their world looks like. And once you have all the information necessary in the appropriate context, you make a determination if they are a good fit, if we can help that customer better than any of our competitors can. If the answer to that question is 'Yes,' selling is easy."
At that point, I don't ask you to buy. I'm telling you to buy. But it's suddenly a discussion, you don't even have any say. Like, I'm taking over at that point. I'm now the expert. I'm going to tell you how much to buy, when to buy, how to buy. I'm going to take over and lead the way. But until then… I have this all the time. I speak at so many conferences around the world. I'm a "sales expert," so sometimes there's a lot of people coming to tell me nice things, but once in a while there's always some alpha sales douche - it's usually a man - that wants to challenge me.
They'll come up to me and be like, "If you're so good at selling, sell me your product right now." And I always tell them the same thing, "Fuck you. I don't sell everything to everybody. I'm not pitching my mother to buy my CRM software." Like, "Who are you? What is your business? What problems do you have?" Like, "First, I need to know who you are." I'm not just selling everybody. I'm not just pitching anybody that crosses my path on buying my software. It's dumb. To me that makes no sense.
So, for us, friendly strength is really at the core of everything we try to do. We want to be incredibly friendly, but when we are convinced we can help the customer, we want to be strong, confident, and we want to lead the way and not be wishy-washy. And, so, that's the way that we sell, and that's the way that we like to buy as well.
You talk a lot about creating this kind of intimacy with your customers, and I'm just wondering, what does that look like in practice in your team's day to day?
I think the most important thing when it comes to intimacy is that leaning in in trying to build relationships and truly caring, it's not mechanical. It's really more of a culture of caring. People ask me all the time, "Well, how do I ask better questions? What is the perfect sales question to ask two minutes and ten seconds into the….?" I don't know. Like, care, how bad you actually truly care about understanding this human being in front of you. If you care, you'll ask the right questions because if the prospect says something that makes no sense, you're not just going to go, "Oh, koo, koo, koo," and you're going to run. You're going to actually go, "Wait a second. Help me out. I didn't fully get that. What do you mean by this? Why do you care about this?"
We've all had this. Sometimes you have a conversation with somebody. They ask all the right questions, but you can tell they don't care about your answer. They're just going through a list. "Oh, how many people are on your team?" "Well, we're between 20 and 30." "Great. Great. And have you used…" You can just tell that the person doesn't care.
And, then, we've also had, rarely, the case where you talk to somebody where you feel, "This person really cares," and you feel really understood. If you can do that, there's an instant connection. There's an instant intimacy. There's an instant trust. Because I feel like you truly cared. You asked all the right questions. You listened really carefully. So, when you tell me, "I think we're the right partner for you," that sounds much more truthful than somebody that was just like running through a question, "How about this, how about that, how about…. We're perfect for you." I'm like, "Well you spent two minutes with me, and you didn't care that much about what I was saying. How am I perfect for you?"
I think caring about the customers, truly caring, sounds a bit difficult. How do we do this? Just hire people that are naturally the type of people that care and then display and demonstrate to them that you care. You can't just tell the sales team to do so and then you see the founders, the CEO, nobody ever talks to the customers, nobody cares about them.
But we want to engage with as many customers as possible. We have phone calls. We visit them at their offices whenever we're in different towns. We'll invite them to dinners. We'll spend time with them as much as we can. And on top of the amount of time that we spend with our customers, the quality of time. We really try to create a culture within the company where people know that we care about our customers, and we want everybody to spend as much time as possible to truly understand our customers. But without customer intimacy, you won't have any customer insights. Without customer insights, sooner or later, you're in real trouble as a business.
Basically, healthy relationships come first and foremost, and having a solid script, sticking to a tight process, all of this comes second.
Yeah. I think all these things are important, don't get me wrong. But if you're the type of person that doesn't care, all you want to do is you want to get through your script and to the end of the call where you ask for money. You could write the best script in the world, you're not going to make money, at least not the way that I wanted, in the way where the customer feels good, the way where the customer feels like, "Yes, this is the type of business I want to be in business with. I want to trust them with my sales problems. I want to trust them with my money. I want to trust them with the future of my sales team, and challenges they have."
If you don't care and you're not truly interested in people, you won't succeed. But on the flip side, I also want you to be confident, strong. I want you to take leadership and charge over the relationship with the customer. I don't want you to be passive. I don't want you to be weak. I don't want you to be somebody that's like, "Oh, I never want to intimidate anybody. I never want to make any…" If you have the need to always be liked and loved, you have no place in our sales team. You have no place in our business because our number one priority is not winning a popularity contest.
My doctor might tell me something I really don't want to hear, but I want a doctor that will tell me this truth. I want somebody I respect, not love. I tell our people, "We want to earn the respect of our customers not their love, not their admiration, not their thinking we are really, really nice. That's okay, but that's not really a priority in business. We want to make sure that we balance both of these things, and that's what we're looking for in everybody that we're hiring.
Another thing that's interesting about the sales team you built at Close is that, correct me if I'm wrong, but you guys are fully remote. Right?
Yes, that's absolutely correct.
When it comes to sharing that culture that you just described, how do you go about it when your reps are scattered about across the world?
That's a good question. Again, everything always starts with picking the right people. Culture is never easy, but it's easier if you invite people to join your team that are aligned with your whole culture and that will strengthen it and amplify it already. If you're hiring willy-nilly people that are completely different in terms of their value system and their culture, and then you want to create a strong cohesive one, it's going to be a massive undertaking. In many cases, impossible to accomplish.
Perhaps, it always starts and ends with picking the right people and actually hiring for culture not just for skillset. Which, again, is easy to say, hard to do. It's like me telling somebody that's overweight to eat broccoli and work out every day. It's not rocket science. It's not that difficult to remember. But it's emotionally hard to do if you don't like broccoli and you don't want to sweat. It's going to be emotionally challenging.
It's exactly the same thing for sales teams. Sales teams say, "Oh, yeah, we want to hire great people," but then they want to hit their quarterly numbers. They're behind. They need somebody that has a million contacts in the space they already want. They think this person can bring in a ton of revenue, and there might be a little red flag here, a little red flag there, but it's much easier to be like, "Ah, maybe those red flags don't matter. Maybe it's all going to work out." And then you hire these people that are not a culture fit, and then, all of a sudden, the performance of everybody else on the team goes down and you have all these problems. So, picking the right people is the most important thing.
After that, we do a lot of things to stimulate strong culture within our sales team, both from the amount of care that we give that team, the feedback it gets, the thing we empower that team to do. One of the first things we teach our salespeople is how to disqualify people and really empower them to tell customers…. We tell customers every day, or prospects, people that are interested in buying our software, every day, "No. We're not for you. You need 'X.' You need something else." Every day we turn away business. Every day. You do that a couple of times in front of the new sales rep, you actually reward them when they do, you don't punish them, because some companies, they say they want everybody to do "A," but then they never reward "A" when you do it. And nothing good comes your way when you do this thing. So, you stop doing it.
Teaching our reps that we only sell to qualified customers, teaching them that we want to empower long-term relationships, you know how many customers come and buy from us? Because three years ago we told them "No," and they're like, "This business has my respect forever, and if I ever get to a place where what they have is right for me, I'm going straight to them to buy their product."
It's hiring the right people and then teaching them and empowering to do this well. And, then, there's a lot of little things that we do in helping the sales team to celebrate their success and share these little moments. There was a time… We don't do this anymore but, I think, for a four or five month period… What's the social app that went public from L.A., a billion-dollar business, more in the teenage…?
Snapchat. When Snapchat first came out, we started using it for our sales team as a group, and we used it to share little wins so that any time the sales rep would close a deal or do something cool, they would record a little video, snap, and send it to the rest of the sales team and me, and we would respond with little stories back. These were kind of a fun, lighthearted way to have these little moments, these little cultural moments. So, there's all these little things you can do, need to do. Everything you can do in an office, you can do remotely as well. It just takes a little bit more care, a little bit more effort, a little bit more intentionality.
But even doing contests, you can do funny little contests every day virtually with the sales team, have them record videos of pictures of them performing that and making sure that people feel taken care of. If your sales reps feel that you care about them, it's much easier for them to care about the customer. It's easy to tell the sales reps to really care about the customer, but if you don't care about them and they don't feel being taken care of in the business, they're not going to do that either.
We spend a lot of time making sure that the culture that we have, although it's remote, is super strong, and it's consistently been the number one thing that our employees say when we serve our team. It's the number one reason people will say they are working at this company and happy here. They all say the same thing. "The team and the culture. I love the people that work here. I love the culture that we have developed. That's the number one reason why I work here." It just needs a bit of work but can be accomplished remotely just like in an office.
It's fun as well that you guys use video so much, and I'm just curious, "How do videos fit into your sales strategy when it comes to interacting with clients?"
We try to use video as much as we can. We don't send a lot of prerecorded videos although, sometimes, in our success team, whenever they have a customer that might be super busy and they want to share something really insightful, they might record a little video stream and just send it in an email and say, "We can't schedule a 10-minute call, but here is an 8-minute video. Watch this. It's going to help you get more value out of our product."
But we like to have video chats with our customers. We like to see them and have them see us face to face. We're humans. Humans are social animals. We like what we see. We like to connect to other human beings. So, the more we have context, "How does this person look? What's their body language? What is the place they're working out of?" All these little clues actually create intimacy, and with intimacy and context, you have a better connection, and then you can have better conversion at the end of the day. So, we do like to have a lot of video calls with our customers whenever it's appropriate or possible.
There's one topic I really wanted to pick your brain on. There's a lot of sales resources out there, obviously. Close is one of them, and it does a terrific job of giving sales tips to salespeople. I was curious, what's that one piece of advice that gets pushed to salespeople today that really gets under your skin?
I think that there's an overemphasis on technology, and this is funny coming from somebody that's building technology for salespeople. The business emphasis, like, if you have the right tools, just the right tools, and if you have the right hats, like these little cool trick-ity tricks that nobody knows, and then you can be successful. To me, there's nothing more wasteful than always chasing the shortcuts. To me, the things that will make you successful, the things that we try to teach the world of salespeople, the things that we teach our own people, are the things that are timeless. Like, I want you to master the basics, because the basics are going to be timeless, the fundamentals.
What was something that was true in sales 10 years ago and we still do it today? Now, what is the newest sales tool that is super cool and works really well today? That is interesting, but it might be a total failure tomorrow, and then what? What do we do then? What's the coolest little hack? People always ask me, "What are the hacks to get your subject lines, to get better open rates of subject lines?" I always tell people, "Write in the subject line, 'I have your parents in my basement with a gun at their head.'" I guarantee you, you're going to get almost 100% open rate. Even people that don't have parents will open that email. But just because somebody opens an email doesn't mean they will feel compelled to read your email, and then they will feel confident, comfortable, and trust it in wanting to start a relationship with you. "If you trick me into opening your email, I never want to do business with you again. I don't need people that trick me into things."
And I think that that shortsighted, hack mentality, and that idea that, "I can't sell, but if I only had the right software tool, that's going to solve all my sales problems," I think that those things are very shortsighted, but they're very popular. So, people keep teaching them because people want to believe those things, and it does get under my skin.
One final question to wrap this up. Steli, I wanted to know why you use so much profanity, and have you ever managed to do a sales call without actually cursing in it?
Yeah. For sure. I use profanity in certain situations, and it is the natural thing for me to do. Day to day, I don't swear a lot. It's not really part of my day-to-day vocabulary. We could be speaking for hours, and I would never swear. If I get really passionate about something, if we get into a passionate discussion, I start swearing. It's just the way that I express the intensity of my emotions.
Oftentimes, when I'm on stage, I will talk about something. I always try to talk about things I'm passionate about on stage and give the audience something I believe they need to hear. And, so, naturally, swearing happens and occurs. But it's so funny that I have this global reputation. I go to conferences, and people come up to me and they go, "Are you going to swear a lot?" So, there's like these enthusiasts that tell me, "Oh, my god, this is so awesome that you say fuck so much." And then there's once in a while, every three months, I get an email from somebody, usually super sweet, usually way too long, writing me basically a summary of "I love you. I love everything you teach. But please, please, please, can you stop swearing? It breaks my heart. I can't deal with how much you swear."
I can't help it. When I'm passionate, I swear, but there's no strategy or logic behind it. But it is something that stands out to people. I can tell you this, people, it resonates with them for whatever reason. I don't know why, but it definitely does.
I also think that people, I hope, but my sense is that people sense that I don't do this for show, for effect. I'm not on stage pretending to be somebody that I'm not. But what people sometimes miss is that I'm not always the way I'm on stage. Like, I have different versions of me. People think I always peek in every door and scream at people 24/7, and this is not true. It is a side of me that sometimes I scream and kick in doors, but many times I don't. But I try to be as authentic as I can possibly be. And then I find you can get away with a lot if you do.
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