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“Firing the CRO gives the CEO another six months of life.”
Fighting the urge and our egos to lead from the front is tough to do as a sales leader. But doing so could save our future. At current rates of innovation, sales leaders should avoid working for those stubborn companies that think they can win with a subpar product and barely executable go-to-market strategy. The CEO inside this company prematurely believes product-market fit is there and gravitates toward the notion "we have a sales problem" when revenue targets aren't met. This same CEO - perhaps with pressure from the board of directors or outside investors - usually makes the call to staff up the sales team once the product is even half-baked. Unfortunately, the adage "put feet on the street" is way past its expiration date.
That once popular wisdom is now part of a bygone era where go-to-market strategies started with a sales-led growth mindset. It looks something like this: We have a minimum viable product, so now it's time to sell it to anyone even remotely (or not at all) interested. Instead of smartly collecting early user feedback to iterate and make the product better, companies invest in expensive sales talent and build out a formal sales process. To accelerate growth, additional marketing power comes along to compliment the sales team. We'll spend our way to new markets by investing in demand generation, ads, sponsorships, content, and analyst relationships. Wait for a flood of new leads.
At this point – because even mediocre sales teams can sell – we bring in a few customers. There are just enough bread crumbs at this point, however, to fool sales leaders into thinking we have a repeatable sales process. Time to double down. More hires to make, more marketing dollars to spend, more pressure on revenue generating teams. Without a viral loop built into the product (and where are those leads?), the time it takes to execute on this go-to-market strategy is excruciatingly long. Not to mention customer acquisition costs skyrocket.
While all of this is in motion, a most likely under-invested product team tries to meet one-off demands from sellers to get deals across the finish line. Ask any product leader. This is an execution and scaling nightmare, but what choice do we have in this sales-led growth model. There are sales numbers to hit. Plus, it's enticing to think that maybe the next $100,000 customer will give us the green light to finally invest in product headcount. Pulling teams into this crosscurrent makes the idea of a product-led growth model next to impossible. Finding product-market fit becomes out of reach and company survival feels like a house of cards.
And who takes the fall for this disastrous strategy when growth stalls? You guessed right, the head of sales. Todd Abbott, CEO of InsightSquared, shared during the Revenue Collective sales kickoff in January, "what I've learned is that we struggle from a sales leadership standpoint because we have more dependencies than any other function in the company. You cannot execute if marketing doesn't deliver, if product doesn't deliver, if ops or finance isn't supporting you, and yet, we have been unable to control our own destiny. You're the first to go when the number doesn't come in. The oldest play in the book is firing the CRO gives the CEO another six months of life." Stay tuned for Part Two – the benefits of a product-led growth model.
Start your week with the stories and insights that matter most to the sales community.