SaaSX — Execute Better. Grow Faster.

Who hates annual employee performance reviews? Everyone, that’s who.

Employees hate them, managers hate them. HR probably hates them.

There are plenty of studies and articles and trends to back this up. Like this one.  And this one. Publications like The New York Times and The New Yorker are spreading the word. And there’s even a book about how much performance reviews suck. 

So, what’s the solution? Resigning ourselves to stick with something that doesn’t work? There has to be a better way. 

I’ve experimented with many different ways to conduct performance reviews. Formal. Informal. Annual. Quarterly. Ad hoc. Paper. Online. 360 reviews. You name it, I’ve probably done it. 

The problem with performance reviews has been written about extensively (as evident by the links above). The bottom line is that they are:

* Not agile and therefore not aligned with the rhythms or realities of the modern workplace. * Often not specifically relevant to the employee’s role or their actual contribution. * Too time-consuming & too cumbersome to administer, so managers and staff just go through the motions. * Potentially damaging to the employee/manager relationship unless the manager is highly skilled at giving the right feedback and coaching for improvements.  * Not consistently effective at getting the outcomes you want from the employee. * Easily buried away in some folder and quickly forgotten about just a few days after the review (i.e. not relevant to the realities of work).

My solution: Just do away with the annual review. It’s a relic. 

My biggest problem with annual performance reviews as the primary formal feedback mechanism with an employee is that workplace goals, strategies and tactics change too frequently for a yearly review to be relevant.

People also ebb and flow too frequently for an annual review to be relevant. Yes, employees have certain characteristics that don’t change much over time, but they also have so much that can impact their situational work performance—from the specific nature of their most recent projects and responsibilities, what is happening in their personal life, even what’s happening within the walls of the office or the company culture. I am not saying an A player drops to a C player. Individual performance is nuanced and never really static. 

If you want to throw traditional performance reviews out the window and take a more agile approach, here is what I found worked best for me:

Frequent, regularly scheduled meetings

Meet with each of your team members regularly, without fail. 

When you approach reviews as something that should be agile, the nature of the meetings will shift over time. Sometimes one-on-one meetings will be perfunctory. Sometimes you will dive deep into issues or trends you are seeing.

A sales methodology is just a standard approach to selling. It’s the how.  Not to be confused with a sales process that describes the steps in the methodology. It’s the what. 

Do you need a sales process? Yes. Do you need a sales methodology? Yes. They go hand in hand.

Without a sales methodology, your sales team will not know how to sell. And more importantly, they will not know how you want them to sell. Even if you have a team of very experienced salespeople, this is true.

It’s your responsibility, as the sales leader to prescribe the approach you want your team to take. You can’t leave this up to each individual. That’s not scalable, and it’s also not effective. Even the most experienced salesperson needs and wants a guide for how you want them to sell to your buyers. 

“The sales methodology is like a set of rules for how you sell your products or services to customers.” Sales Hacker

How to implement a sales methodology

The first step, of course, is to select which sales methodology is right for your organization. I’ve listed some popular ones at the bottom of this article. Familiarize yourself with the options and determine which makes the most sense for your type of sale. 

Once you have selected the sales methodology, you will need to:

* Create sales playbook materials in support of the methodology* Train existing team members on the new sales methodology* Incorporate training into your new hire onboarding materials* Conduct periodic refresher training via lunch & learns, workshops, etc, to ensure the methodology is adopted and used correctly on an ongoing basis* Lean on the sales methodology during pipeline reviews, coaching, opportunity huddles, and deal strategy sessions

Rolling out a sales methodology will fail if you don’t incorporate it into your sales culture and make it part of your everyday conversations. Only you, as the sales leader, can ensure the sales methodology is successful.

Avoid the “we don’t need one” trap 

If you hire experienced salespeople, it’s easy to fall into the trap of “we don’t need a sales methodology”. You think they are experienced and they know how to sell so why get in their way.

I’ve made this mistake myself and it resulted in poor sales execution and salespeople approaching every deal differently, making deal management frustrating for everyone—the customers, the sales team and me. 

Every salesperson needs a framework for how you want them to sell. And every team needs to use the same approach to selling. Without one, you are no more than a loosely held together band of lone wolves, each making things up on the fly, or randomly pulling in various approaches based on the situation. 

You’ll find yourself being unable to coach and provide deal strategy, because each deal will be in a different state. Some sellers will use X as a qualification criteria, others will use Y. Some will handle objections this way, some that way. Some will have a late-stage deal with fundamental information still uncovered, others will have deals stuck in the first stage because they are digging too deep.

If you hire experienced salespeople, it never hurts to hear about what type of methodology they have used in the past, what’s worked and what hasn’t. A sales methodology can be adapted as you use it and find what’s working best.

The bigger the addressable market and how much it is needed by the market indicates how much effort is needed for the customer success function.

Customer success is your product. Your product is customer success. Period, end of story.

It’s time to change the culture of expectation for customer success.

Having worked with products that had incredible product-market fit (PMF) and products that didn’t, I can tell you that perfectly executed customer success plays do not make or break a product. What makes or breaks a product is how good it is, and how the size of the total addressable market (TAM) is for that product.

Product/market fit means being in a good market with a product that can satisfy that market.Mark Andreesen

What customer success can’t do

No amount of customer success brute force can convince customers to adopt a product they don’t want, need and find valuable. No customer success intervention can get a customer to use a product they don’t find easy and useful. Customer success can’t be held accountable for:

* Getting a customer to adopt your product.* Getting a customer to use your product. * Getting a customer to renew their subscription if they haven’t been using your product and receiving value leading up to the renewal term.

What customer success can do

Assuming product-market fit exists, what can customer success influence?

* A customer’s relationship with, and affinity for, your company and brand.* A customer’s strategy for successfully using your product to meet their business needs.* A customer’s vision for how and where your product can be used, leading to deeper adoption and organic expansion.* Your customer’s willingness to renew their subscription, assuming the customer has been using the product and receiving value from it.

Customer success as a push or pull function

Customer success follows a fairly standard playbook, especially in SaaS. The motions are onboarding, adoption, engagement, expansion, and renewal. 80% of these apply to any SaaS company, with the 20% being specific to the company and product.

As you think about the strategy of your customer success, consider how push/pull it is (using the rudimentary chart included in this article). If you need a “push” customer success strategy, you will need more customer success staff and resources, because it’s more effort. You may even want to consider shifts in overall market and product strategy to help move it up and to the right on the chart. That’s not easy, but it is what’s required to reap the rewards of a more “pull” customer success strategy which is considerably less effort.

Don’t get me wrong—customer success motions are rarely effortless. But as you move up and to the right, they do become easier and the strain on customer success as a function is lifted.

Growing a SaaS company at >50% YOY (at scale) is hard. If it was easy, everyone would do it. One of the big reasons it’s so hard is that you’re constantly trading off between short-term results and long-term scalability. This is true in technology, where there’s constant angst around amassing tech debt in the name of feature pace. But it’s also true in sales, marketing, customer success, operations, support, and product. Short- and long-term tradeoffs complicate the best-laid plans.

Long-Term Slow Down

I fell into this trap for a few years back in the day. Leaning too far to the long-term side slows down short-term performance. And that can turn into slogging rather than flying. When you think long-term first, and focus on processes more than performance, you lose agility and urgency.

For me, urgency is a critical success factor in driving outsized growth. I seldom see one without the other.

Short-Term Mayhem

The other trap is speed at all costs. The common misnomer here is that the debt you amass in short-term prioritization takes a long time to come back and bite you. Wrong. It comes back faster than you think. And it can bite very, very hard. The irony here is that when that debt does bite you it impedes short-term performance. And, if you’re sprinting like a bat out of hell, you may very well grow so fast that you attract premature liquidity interest. Guess what? When the wheels are flying off the car flying down the road at 180mph isn’t the best time to go through diligence.

The cost of only focusing on short-term growth is that you accrue debt everywhere — people, processes, systems, technology — you name it. Do that for longer than short bursts with recovery between them and you burn the company and its people out. That’s neither sustainable nor healthy.

Dividing & Conquering Short- and Long-Term Tradeoffs

My preferred solution to the short/long-term conundrum was to have people divided into two camps. The floor-it-at-all-costs camp just answered to urgency. And the long-term, process/systems camp wove a sustainable net in parallel. The important cultural thing here was that neither group could resent the other. Most of the time that worked out, as long as we maintained transparency to the why and cross-built appreciation between the divergent missions. The yin and yang of that relationship became a rallying cry for conquering short- and long-term tradeoffs.

The long-term groups end up taking great pride in stabilizing and creating sustainability. The short-term groups stay urgent and almost reckless but know they have a net to catch them. Both are driving growth. This is a critical understanding and appreciation. The short-termers are driving this month and this quarter. The long-termers are driving this year and next. Both are driving valuation.

So if you want to give the sales and marketing teams the freedom to get a little bit reckless, charge the ops team with making that possible. And if you want to give a skunkworks engineering group carte blanche to launch MVPs, create a group that tidies up behind them to ensure that everything still works and complies with standards. And if you need to experiment with divergent pricing and packaging, do it — fast — but then have some folks come behind and translate that into systemic reality. It’s the separation of church and state that makes the short- and long-term tradeoffs work.

You’re Charging on a Credit Card — When Do You Pay?

Nurturing the characteristics of a charismatic company to inspire devoted, loyal advocates to provide social proof.

Social proof is huge in SaaS marketing. What people think and say about your SaaS has a lot to do with its momentum and market fit. But how they feel about your solution has wider implications. Real advocacy comes from having a devoted tribe. That’s the difference between marketing coming from just you, or having thousands of authentic voices spreading the word on your behalf. The latter is incredibly powerful. And it comes from creating a charismatic brand.

Inspiring devotion from visitors, followers, and customers.

I saw this play out at ion interactive before we were acquired. Devotion wasn’t limited to customers. It started with people who were familiar with us. And then it extended to those who actively followed us. And yes, it culminated in passionate customers. The customer piece was great, but the wider social proof that came from people on the outskirts had massive value as well. Just last week I interviewed someone who was clearly a devoted, passionate, ion advocate. She was never a customer. And only used the platform for a short time. But she loved the company. More accurately, she loved what we stood for. Our point of view deeply resonated with her.

6 ways to nurture the characteristics of a charismatic SaaS company and inspire social proof.

My inspiration for this post came from a breakfast meeting I had yesterday with an old friend. One of the topics we discussed was what made some SaaS companies spread like wildfire while others have to work so hard for traction. There are a lot of factors in play there, but one of the ones that came up was fan-like devotion and social proof. That led to a discussion around the idea of charisma and how that dovetailed with SaaS culture. And that led to how founders can nurture the characteristics that make a company magnetic.

Today, as I was noodling this article, I Googled charisma and did some reading. It’s interesting to me to think about these characteristics outside the context of a person, in the broader context of an entire company.

Charisma is the ability to attract, charm, and influence the people around you.Psychology Today

Being attractive, charming and influential sounds like a pretty good road toward breeding passionate advocates.

Charisma — a personal magic of leadership arousing special popular loyalty or enthusiasm for a public figure (such as a political leader)Merriam-Webster

But, what makes a company charismatic? I’m going to draft off of six elements of personal charisma courtesy of Psychology Today and reframe them in the context of a company…

1. Emotional Expressiveness

As a company, do we express our point of view spontaneously and genuinely? This cuts to the core for me, which is authenticity. An authentic voice is a unique one, and a differentiated, real perspective on a space or problem is both valuable and useful — inspiring advocacy and social proof.

2. Emotional Sensitivity

To me, as a company, do we listen, have empathy, and express our brand with a high emotional IQ? Do we make everyone who interacts with us feel valued and heard? One of the most critical things a growing SaaS company does is listen, ingest and respond to feedback in the form of evolutionary changes. When those adjustments show emotional sensitivity...

Many SaaS companies go through due diligence in a less-than-ideal state. That’s a lot less stressful when you know what that means.

A while back I wrote about what to expect in SaaS due diligence and provided an interactive institutional readiness report card to help you prepare, but today I want to address the consequences of being unprepared for SaaS due diligence. Founders find themselves in diligence situations feeling unprepared all the time. Could be with a bank for a line of credit. Might be for venture debt. Could be for investment. Perhaps for an exit or partial liquidity event. Or could just be for an annual audit. Diligence is pretty common and universally painful. How painful? That depends on preparedness. Today, I want to look at what it means to you and your process if you go into diligence unprepared. Punchline: It’s not the end of the world. But it’s going to cost you time, resources, and money.

What is SaaS diligence?

It’s strangers going through your closets and hampers looking at your underwear. In SaaS, due diligence processes look at many things at a high level and certain things at a deep and specific level. For more on this look back at my articles on what to expect and how to prepare to be acquired. From a pragmatic perspective, SaaS due diligence is similar to an audit where they take samples of everything and drill into those things where the samples don’t true up. So let’s take the position that some important samples like churn, revenue or COGS don’t true up. That’s what we mean by being unprepared for SaaS due diligence. But what does that mean to the deal?

What is being unprepared for SaaS diligence?

Let’s start with the less painful stuff.

There are many ways you can be unprepared for SaaS due diligence. Contracts could be undocumented. There could be unknown liability or legal exposure. Employee records or policies could be incomplete. And so on. Many things like that do have consequences, but they’re contractual reps and warranties more than they are valuation killers. So in a way, they’re less painful. (Still stressful.)

Reps and warranties are essentially risk mitigators that get written into your contract with the buyer or investor. Anything they’re uncomfortable with, or unsure of, will likely end up in reps and warranties for you to sign off on as your responsibility, not theirs. There are many flavors of reps & warranties — some longer term, some shorter. Some with potentially harsh financial and legal consequences and some not so much.

The more buttoned up you are, the fewer anomalous reps and warranties will be in your contract, and the less stressed you will be to negotiate them out or sign off on them.

The top (or bottom) three ways to be unprepared for SaaS due diligence

There are real, painful consequences that impact the process and financial outcome. These consequences come to be when important SaaS due diligence items are unprepared. My top three ways to get yourself into this super-hot water are revenue, churn, and COGS. There are others, but the consequences are similar, so I’ll just focus on these three.

Consequences of being unprepared in SaaS revenue booking

Revenue a...

A commented Google Slide Org Chart Template to help you look at SaaS marketing roles and responsibilities from the CMO to the coordinator.

I’ve been working a lot recently with SaaS marketing org charts. That work has been in the form of growth planning, organizational design, and talent evaluation. Scale matters a lot in thinking through the marketing needs of a SaaS company. A startup needs a marketer. A fledgling market-fit stage company needs a small team. A funded, pedal-to-the-metal growth play needs a lot more — including a CMO. Wherever you are in that continuum, the attached SaaS marketing org chart template can still be helpful to visualize roles and responsibilities. You simply contract or expand the chart for your scale, stage, and needs.

Revenue scale isn’t the only driver of org-chart scale.

Different SaaS companies have different marketing needs. Some are more sales driven than marketing driven. Others have more demand-gen needs than brand needs. And a few may have little need for traditional marketing at all — although those are rare.

SaaS Marketing Org Chart Google Slides Template

As you look at my SaaS marketing org chart template (and the included comments on each role), align it with your stage, scale, and needs. If you just took a $20M round earmarked largely for sales & marketing, you likely need multiple people in many of these roles. If you’re bootstrapping at $1M in ARR, you likely need one strong, multi-hatted marketing Swiss Army Knife. And if you’re at $100M in revenue, you likely already have the pieces and need more of them — with increasing specificity — to deepen core competencies and scale predictably.

Jobs to be done at every level.

Marketing is a lot of work. But, it shouldn’t degrade into activity-based work. When marketing is focused on data-driven outcomes it’s both productive and scalable. But it’s still a lot of work. There’s strategy and process design at the top; program and measurement design in the middle; and heaps of execution to make it all happen. And, in my worldview, all of that takes place in creating compelling assets and getting them distributed. Yes, it’s all organized by channels and assets. And yes, that all tracks back to my ideas on the art and science of SaaS marketing.

The point is, when you do have the scale, you need the people. And you need them at all levels to execute the myriad jobs to be done. It’s not all high level. And it’s certainly not all low level. It takes a village of talents and skill levels to create and maintain predictably scalable SaaS marketing.

So, I hope you put the template to good use as you evaluate, design,

I’ve been interviewing a lot of candidates for Director of Sales lately, and there is one question I always ask. “What will you focus on in your first 90 days?”. Of course, the obvious answer is “results”, but there is a lot more to it than that.

There isn’t one right answer to this question. But generally, what I am looking for is a candidate who can articulate the importance of focusing on these six things, in this order.

1. The team

A sales leader has to understand the tools they have to work with, and the most important tool they have is their people. There are no sales without salespeople. I want a sales leadership candidate who innately knows that they first thing to focus on is the team. Their strengths, weaknesses, style, coachability, motivation—everything. It is the most important part of leadership and it’s the first thing to put your attention on. A sales leader must be able to quickly get to know their team and build trust and respect from the beginning.

2. The buyers

A leadership candidate who doesn’t know they need to prioritize understanding our prospects and customers is a red flag. Really knowing the ideal customer profile, why they buy, what they care about, what their pains are, what problems they are trying to solve and what their goals are is equally as important as getting to know the team. A sales leader needs to understand their buyers. Period.

3. The product(s)

In some ways, a product…is a product… is a product. A sales leader needs to believe in their product and what it can do for their buyers. But that’s the easy part and it comes after knowing the team and the buyers. A great sales leader can get up to speed on the product without too much fanfare. It’s just table stakes.

4. The metrics

A sales leader has to have their arms around their metrics. From the top (how many calls to get a connect, to get an opportunity, to get a customer), all the way to the bottom (stage conversions, sales cycle, average contract value, win rates, closed won reasons) and everything in between.

5. Their plan

A leader who comes into a function and applies a pre-formulated plan, without first understanding their team, buyers, product and metrics is destined to fail. I have seen this many times. Someone comes in with a prescribed idea of how they will configure the team and run things. They try to overlay that over an existing department. At best it causes friction, distraction, conflict, and annoyance. At worst it blows things up that didn’t need to be blown up. The best leaders adapt what they know to work well from their history to the current situation in front of them in a thoughtful way without a pre-conceived notion of how that will be applied. They learn and assess before acting.

And what is a plan, you may be asking? A leader who comes and gets their arms around their team, their buyers, their product and their metrics will naturally move into planning. At a minimum, the plan will include recruiting, funnel metrics needed to hit quota and key initiatives to execute, such as skill development or sales process adjustment. If deeper change is needed it may include positioning and messaging shifts, new sales enablement, pricing recommendations and more.

6. Their playbook

If you know me, you know I love playbooks. And I like a sales leader who loves playbooks too. Just like a plan, a good candidate knows they will take some aspects of their own existing...

A lot of SaaS marketing is made up. The best marketing is not. And the reasons for that may be way deeper than you think.

Yes, this is another post espousing the value of authenticity in SaaS marketing. But it’s much more than that. Storytelling in tech marketing is critical because what we’re marketing is often obtuse, complex, and conceptually new. All of that is challenging to communicate in compelling, spread-like-wildfire ways. But the story of why is much easier, much more emotional, and holds the gravitas of 1,000 esoteric facts. And when that SaaS storytelling is real, original, authentic and impassioned, it’s even more powerful.

When SaaS storytelling is real, original, authentic and impassioned, it’s even more powerful.

SaaS Storytelling is Far More than Marketing

But I want to take a step back and speak to something even more powerful. And that’s the power of real storytelling as told by far more than the marketing team. When the entire organization believes in the story, it’s infinitely more powerful. Everyone talks about it. Every department contributes to message momentum. Every task is executed within a single worldview. And yes, this does track back to having a rock-solid point of view. But more than anything, it’s about always remembering the why and making that the guiding storyline.

SaaS Storytelling Builds a Tribe

Not only do employees want to believe, so do buyers. Believing in something makes it easier to buy. And more forgiving to keep, despite inevitable shortcomings. Anna loves to talk about building a tribe, and the fact of the matter is that tribes churn less because they believe in something greater than the sum of its features.

The fact of the matter is that tribes churn less because they believe in something greater than the sum of its features.

Many SaaS companies, and brands in general, lose site of their authentic story. It often gets lost in marketing spin that is, and is often sniffed out as, hollow. That inauthentic messaging may bring campaign success, but it’s far less likely to bring enduring growth that comes from a believing tribe. Spin is not storytelling, it’s storymaking, and I hate it.

Growth-stage SaaS founders usually started out with a pretty solid reason why. It’s often a pain that we see or experience and one we believe we can solve. When we have a strong addressable market, it’s then a pain we believe many people or organizations need to solve. Wrapped up in that mission is the authentic story that people can believe in. And that’s the story that will make it easier to recruit top talent, attract impassioned customers, build organic traffic, acquire customers less expensively, and keep churn in check.

Of course it’s not quite that simple, but it is in one sense. We all have the choice to build on a foundation of authenticity or to execute short-term spin campaigns. You can smell the latter a mile away. If you’re chasing your competitor’s story instead of your own, you’ll end up chasing them to the bottom. If feature or price parity is all you worry about, you’ll seldom leap forward with true innovation.

Your authentic story can and should guide the entire organization to continuously innovate and elevate as a leader rather than a follower. Let everyone else spin and chase you and your innovations.

I have been thinking a lot about the continuum of maturity in SaaS customer success organizations. It really boils down to degrees of a spectrum ranging from reactive to proactive. Here are the 11 areas I evaluate when assessing a customer success organization for strengths and weaknesses. How well they execute against these usually indicates how successful they are at engaging customers and guiding them to positive outcomes.

* The handoff from sales to customer success * Is there a documented process, with best practices for the handoff of a customer from sales to customer success? Is it lean, agile and effective? Having a process isn’t enough to indicate maturity, because if the process is complicated, time-consuming or clunky then it’s just a burden on everyone. Whether your average contract value is $5,000 or $500,000, the handoff isn’t rocket science and doesn’t need to be complex. But it does need to be done well, in order to set the customer, and your team up for long-lasting success. * Onboarding process * You may need one onboarding process for all customers, or you may need slightly different versions for different types of customers and contracts. But either way, you have to have one. If you wing it or approach it as ‘unique to each customer’ you are going to drop balls, miss important steps and set your team up to constantly be scrambling. Don’t chalk chaos up to your high-growth. Customer onboarding is one thing that should be orderly, and efficient, no matter how fast you are growing and adding customers. Make onboarding a repeatable machine.* Lightweight onboarding load on customer * It’s one thing to have an onboarding process, it’s another for it to be designed to be lightweight for your customer. If your onboarding process just dumps a bunch of work on the customer, you are likely to find yourself with a lot of disengaged customers and extended onboarding periods that lack velocity. Design your onboarding to be less work for your customer, not more. * Value-driven touches * Customer success should add value to the customer journey. A playbook that is designed for CSRs to reach out every 45 days to “check in” is pointless. Customer success representatives should be adding value at every touch, finding ways to educate customers, support them and bring insights. It’s up to customer success leadership to create the infrastructure to enable this, and the standards to hold it to. * Proactive intervention * Customer success that simply reacts to problems isn’t really customer success. Many customer success teams simply go through the mechanics of processing requests, renewals and expansions, with little proactive work at all. In addition to proactive outreach on a regular cadence, excellent customer success teams proactively intervene based on a set of flags—when a customer disengages, when a stakeholder changes, when there is a significant business event, etc. * Health scores * A mature customer success organization keeps tabs on the health of their customer base, and intervenes (see above) when needed, well in advance of a potential crisis. * Renewal process * Renewal really starts on day one and isn’t about processing paperwork or reaching out 90-days in advance of the renewal. The #1 priority for a recurring revenue business is to get the revenue to renew, so renewal should be at the top of the strategic agenda and i...