PODCAST 76: Bottom-up Approach for Sales Rep Productivity Model w/ Kevin Egan

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This week on the Sales Hacker podcast, we talk to Kevin Egan, VP of North American Sales at Slack.

Kevin’s sales career has taken him from Oracle, to Dropbox, to Salesforce, and now, to Slack. We hear his best practices on developing a sales team, measuring rep productivity, why companies should lead with their product first, and what the sales team’s responsibility is inside of a product-led go-to-market strategy.

If you missed episode 75, check it out here: 3-Layer Approach to Stage-Appropriate Leadership w/ Jason Holmes

What You’ll Learn

  • How experience as a sales engineer can play into your role as a sales leader
  • Kevin’s rep productivity model
  • Why rep productivity is the output, not the input
  • Why and how you must lead with your product
  • The sales team’s role in a bottom-up approach

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Show Agenda and Timestamps

  1. Show Introduction (0:05)
  2. About Kevin Egan & Slack (2:40)
  3. Kevin’s Experience As a Sales Leader (4:32)
  4. Why You Must Lead With Product (14:16)
  5. The Sales Team’s Role in a Freemium Model (15:52)
  6. Rep Productivity Is the Output, Not the Input (26:48)
  7. Sam’s Corner (38:22)

Show Introduction

Sam Jacobs: Hey, folks. It’s Sam Jacobs. Welcome to The Sales Hacker Podcast. Today, we’ve got Kevin Egan, the Vice President of North American Sales at Slack. Kevin has led sales teams at Salesforce, Dropbox, and at Slack. And he’s seen top-down-led sales organizations, and he’s seen bottom-up product-led sales organizations, and he has some thoughts on it.

First, we want to thank our sponsors. We’ve got Lucidchart Sales Solutions. Lucidchart is the leading account planning platform for modern sales orgs. With Lucidchart, you can visually map out key contacts and crucial account data to uncover critical insights that will allow you to close bigger deals faster.

Our second sponsor is Outreach, the leading sales engagement platform that enables sales reps to humanize their communications at scale, from automating the soul-sucking manual work that eats up selling time to providing action-oriented tips on what communications are working best. Outreach has your back.

Now, without further ado, let’s listen to this interview with Kevin Egan.

About Kevin Egan & Slack

Sam Jacobs: Today, we’re honored and excited to have Kevin Egan on the show. Prior to Slack, Kevin spent four years as VP of Sales at Dropbox, where he helped build the outbound sales team covering SMB through large enterprise. Prior to that, Kevin spent 10 years at Salesforce where he moved from an AE role to various senior sales management operations and recruiting roles. He’s a recognized speaker on the topic of new selling models within the SaaS space, which is what we’ll be talking about, and acquiring top talent to make it happen. He went to Holy Cross. He’s a father of two.

Kevin Egan: Thanks so much, Sam.

Sam Jacobs: Let’s give you the opportunity to tell us what you think Slack does.

Kevin Egan: Well, Slack is a work platform that allows people to work more efficiently, connect with employees, and connect with their data and applications more efficiently. The benefit is: We’re seeing higher employee engagement and faster time to market for products, and also the ability for employees to tap into collective intelligence across their company as they use Slack more and more day-in and day-out.

Kevin’s Experience As a Sales Leader

Sam Jacobs: You’ve been doing this for a long time with Slack, Dropbox, Salesforce. But, Let’s go to the beginning: How’d you get into sales?

Kevin Egan: I had the benefit of starting at Oracle, and I moved out to California right after I graduated college. I started in a contract role at the IT help desk services for internal employees at Oracle. At that point, the company was about 10 to 15,000 employees. Iit was a big help desk, and the year was 1996. The internet was really entering into corporations. Email was becoming a prevalent communication tool, and I helped people reconnect networks, understand where they were dropping network connections, and get in and out of applications. I also learned Unix and database administration.

After about a year, I was able to move into the inside sales organization as a sales engineer or a sales consultant. I was there for about four years. I ultimately moved into field sales engineering and supporting.

Sam Jacobs: When you hear that title, is there a specific definition for what a sales engineer is and does?

Kevin Egan: The core role of a solutions or sales engineer is around solution mapping — understanding what the technical and business requirements are of a customer, and mapping the technical or the product solution to that. So, essentially: mapping needs to product, and obviously providing credibility around the solution in terms of how to solve the problems.

Sam Jacobs: So what year did you get to Salesforce?

Kevin Egan: Between Oracle and Salesforce, I had a couple stops, but I got to Salesforce in 2002.

Why You Must Lead With Product

Sam Jacobs: What’s your philosophy on if you see a group of people doing some activity with high frequency and high volume? Is your instinct to put gates around that activity from a product perspective to force them to upgrade?

Kevin Egan: You don’t want to get into a place where any humans or sales people are putting in gates anywhere. The product itself is the driver, and that’s what’s new about this new world of selling, especially in collaboration. With collaboration tools — like Dropbox and Slack — there’s no concept of a top-down sales model. Everyone knows, “It must be bottom-up.” Because, if you don’t have that usage, if end-users aren’t gravitating to your service on their own and self-selecting into that service and seeing value, then pushing something tops down is going to be extremely difficult.

So you want it to drive virality. In some ways, you want it to drive the sales reps job of education and facilitating training sessions, and driving clarity on what the benefits of the service are. So it’s mainly the product that’s driving virality, but sometimes that sales person can certainly help with making it super clear on business value.

The Sales Team’s Role in a Freemium Model

Sam Jacobs: What is the role of sales in this construct (A), and then (B) is it the same profile of person as it would be at a more traditional outbound B2B enterprise sales solution?

Kevin Egan: So what we would do at Salesforce, and this translated beyond into Dropbox and Slack, is guide people through pilots and success criteria for demonstrating how the product would add business value. At Salesforce, we gave away a free 30-day trial. For the most part, the sales team was trying to get in the app with the customer to help them customize the application, create custom fields, float those custom fields up into customer reports and dashboards, add more users to the pilot in the platform, get more people’s fingertips touching the product and in the product. All of this was with the goal in mind to see teams working together, and ultimately getting more done more quickly.

That idea of teams getting more done more quickly is the same concept we’re talking about at Slack, which is: “How do we drive efficiency among the myriad of ways different people are working?” And I do think while you might not call Salesforce a freemium company, they were the first in cloud computing to provide the first free service plus a lot of sales people to help consult with the pilot and testing of the usage.

Rep Productivity Is the Output, Not the Input

Sam Jacobs: How did you learn what metrics to focus on?

Kevin Egan: So it all comes down to: What is rep productivity at the end of the day. That’s the number one metric. To me, that’s the output. That is: “What are reps producing on average by segment by geo?” From there, you back into the inputs. What does the pipeline need to look like in terms of coverage? Where does the pipeline come from? It needs to come from marketing. It needs to come from partners. It needs to come from the AEs themselves, and then it needs to come from BDRs. In Salesforce speak, we call that the four horsemen, and that was marketing, sales, BDR and AE. To what extent do we expect contribution from each of those? When we did get that contribution, what did it roll up in terms of pipeline coverage?

Sam Jacobs: Awesome. And I say awesome in the sense that you probably know this, but so many companies, they view the rep and the hiring of the rep as the inputs and the outputs.

RELATED: The Ultimate Guide to Sales Productivity

Sam’s Corner

Sam Jacobs: Hey, folks. Sam’s corner. So Kevin’s experience at Salesforce starting off as a sales engineer is incredibly interesting. Many other folks have started off as sales engineers on their path to becoming sales leaders, and that’s interesting because what it means is, if you’re in sales engineering, you need to really understand the product in a way that’s deeper than a traditional AE. You must have technical knowledge and insight. And if you worked at Salesforce, you have that knowledge of analytics and data. To really to be a high-level executive, you need two things in tandem. It’s all about recruiting people that help your team close deals, in conjunction with understanding how to view and analyze the data that the business is producing.

Kevin said something else that is super important to grab onto: They have a rep productivity model. Rep productivity is the output, not the input. Hiring salespeople does not generate revenue. Revenue comes from inputs like marketing contribution. For instance, marketing contributes pipeline by generating leads, awareness, and getting people to raise their hands to speak with the sales team. The BDR team (or the SDR team) generates demand directly by reaching out to people and getting meetings. Channels and partners: They generate demand by discussing your solution and recommending your solution to their customers. And then there’s the account executives. But all of those elements go into the pipeline model, and that pipeline model and the output of that, which is the money, the revenue, is the output. It’s not the input.

So many people build their revenue model by just saying, “Each rep that I hire is $2 million in business. If I hire five people, it’ll be $10 million. Boom, there I go. I’ve got a perfect spreadsheet.” It’s not how it works. It’s not how demand is generated.

And then of course (because he works at Slack) the conversation is about the consumerization of the enterprise and how you must lead with the product. You have to build enthusiasm with the product. Then, you apply enterprise strategy and skills, like qualification, proper discovery, and mapping the business pain to the solutions your product can deliver. All of that happens once you develop that enthusiasm at the framing level — a bottom-up approach. It’s not a top-down approach. So, if it’s a product that’s going to be used by thousands of users within the organization, maybe it’s time to look at a free trial or some kind of freemium use case that builds enthusiasm and interest.

What We Learned

  • How experience as a sales engineer can play into your role as a sales leader
  • Kevin’s rep productivity model
  • Why rep productivity is the output, not the input
  • Why and how you must lead with your product
  • The sales team’s role in a bottom-up approach

Don’t miss episode 77 (next week’s episode)

Before we go, let’s thank our sponsors. Outreach, the leading sales engagement platform and Lucidchart Sales Solution, which is the leading account planning platform for modern sales orgs.

If you want to reach out to me with feedback, you can reach me on LinkedIn. If you haven’t rated the show, please give us five stars on the iTunes rating system so that we can remain in business and continue to bring you this show.

As always, thanks so much for listening, I’ll talk to you next time.

This is a sponsored guest post from a Sales Hacker partner.

Sam Jacobs is the Founder of Aqueduct Revenue Advisors and the New York Revenue Collective and regarded as one of the top start-up CROs in the tech community.

He has has over 15 years of experience scaling companies from post-revenue to ~$300M, has helped raise over $400M in institutional capital, and has helped companies of all sizes achieve an average annualized revenue growth rate of 48% over the last 15 years.