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How to build a sustainable sales model that drives long term customer retention

Steli Efti | CEO & Co-founder of Close

  • | Acquisition | Growth | Metrics | Retention | Sales
  • May 2019
  • EP9

Always Be Closing

How to set your sales team up for long term success

In today’s episode, I chatted to Steli Efti, the CEO & Co-founder of Close. A cloud-based CRM software optimized to help salespeople close more deals.

We talked about how Close aligns their sales, success, and company around long term retention.

We also touched on how to build a predictable, repeatable, and scalable sales process, how to define your ideal customer persona, the biggest mistake sales teams make, and why building up your sales teams confidence will reduce churn by aligning their pitch with the value your company delivers.

I hope you enjoy the show.


Highlights

Time
Started as a sales team on demand and pivoted to an inside sales CRM 00:05:30
Biggest sales mistake made by 200+ venture-backed startups 00:06:30
Sales exploration vs sales execution 00:07:20
Defining your Ideal customer personas 00:12:20
Incentivizing your sales team for sustainable growth 00:19:30
Building your sales team’s confidence 00:28:00

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Steli Efti

CEO & Co-founder of Close

About the podcast

My name is Andrew Michael and I started CHURN.FM, as I was tired of hearing stories about some magical silver bullet that solved churn for company X.

In the real world tackling churn and increasing retention is one of the hardest problems a subscription business faces.

In this podcast, you will hear from founders and subscription economy pros who are taking a systematic approach to increase retention and engagement within their organizations.

Transcription

Andrew Michael:
Hey Steli, Welcome to the show.

Steli Efti:
Thank you so much for having me.

Andrew Michael:
It’s a pleasure. It’s really it’s great to have you, Steli. Obviously, I think you as well, yourself come from Greece. So I’m based on out in Cyprus. So it’s interesting to hear someone who’s made the trip out from Europe and over to the valley. Maybe you can just start off and just give a little quick of your history to date? How you got over to Silicon Valley, and then what you’re working on currently.

Steli Efti:
Yeah. As you said, I’m originally from Greece. Grew up in Germany. And often when I’m in the U.S. I tell people, Americans usually, when I give talks, I say, “I have the best that Europe has to offer, the two opposite ends of the cultural spectrum in Europe. Germans and Greeks, they don’t mix that well culturally.”

Andrew Michael:
Absolutely.

Steli Efti:
And so, I grew up even in the most conservative part of Germany, the most German part of Germany, which is Stuttgart, a big kind of car town. And dropped out of school at a fairly young age, started my entrepreneurial journey around 18 or so and did a few small businesses in Germany. Nothing really related to technology or software, but did quite well in a young age. And then 12, 13 years ago, I had an idea for a technology start-up. And I had no idea about tech or start-ups. I knew nobody who had any clue about how to build software or how to build an internet company or how to raise or any of that. And so, I decided to do the only unreasonable possible which is I sold everything I had, I bought a one-way ticket to San Francisco and I made the leap from Europe to the U.S. thinking this would be a great adventure, and I would build the next big unicorn, billion dollar business that would change the world in Silicon Valley.

Steli Efti:
I don’t wanna kill the suspense instantly for the listeners, but that first venture didn’t quite work out that way as I’d imagined. It was not quite as easy as I thought it would be. So the first company was a soul-crushing, slow failure and defeat. I worked on that company for five years and made kind of every mistake you can make. And I made every mistake three to four times just to be sure that is doesn’t work. So at the end, I had to finally accept failure with that company. I was financially bankrupt, emotionally bankrupt, spiritually bankrupt. I was really kinda-

Andrew Michael:
As you do, yeah.

Steli Efti:
… quite done after those five years. And then I got lucky and a friend of mine had an idea. I wanted just to support him, give him some advice, and before I knew it, we had started a new start-up and that company got accepted into white [inaudible 00:03:15] which kind of made a big difference and we went off the races and became … I moved sort of being a total outsider in Silicon Valley, trying to understand how the system works, trying to understand how to build software products to all of the sudden being at this incredible incubator, and meeting all these amazing investors and raising all this money, and building an amazing, and getting some early success. But that company as well, had to go through a bunch of pivots and turns and twists. But is the company that today, it changed, re-pivoted quite drastically twice, but today’s the company that I’m still running and today we’re quite successful.

Steli Efti:
And we had started as a company called ElasticSales. It was kind of a sales team on demand that was full out-sourced for [inaudible 00:04:05] companies and so [inaudible 00:04:07] start-ups good and sales companies could reach out to us. And we would build the sales team kind of quote on quote in the [inaudible 00:04:12] for them and got out and inquire customers for them. And pivoted from that to an inside sales CRM business. So from day one, we started building software that was what we called our “secret sauce,” and was only available to our sales people.

Steli Efti:
The reason we build software was that we thought that the soft would allow our sales team to kind of scale and our sales people to be happier, more productive at work. And eventually, the software became so good that we decided to test it in the market and put it out there and see if anyone wanted to buy it. And very quickly we realized that a lot more people wanted to buy the software than the services and the services out grew … the software business outgrew the services one and that’s the company I’m running today. It’s called Close. You can find us at close.com. It’s inside sales CRM that a lot of start-ups around the world are using. And we’re highly profitable. We’re fully remote. And yeah, that’s kind of the short-ish version of from Europe to Silicon Valley to today.

Andrew Michael:
Nice. I think obviously in that is definitely lots of ups and downs and having to keep pushing forward to make sure you get to where you want it to be. I actually wanted to touch on where you started talking about Elastic Inc. and how you actually started out as the consultancy. I think I watched one of your talks that you worked around 200 plus different venture-backed companies and helping them scales their sales?

Steli Efti:
Yup.

Andrew Michael:
What I want to sort of dive into is what is some of the biggest things that you saw that the companies where doing wrong when it came to their sales and setting up the sales funnels within these venture-backed companies? What would you say is the number one biggest mistake?

Steli Efti:
The biggest mistake. The biggest mistake was the hope that sales could solve a fundamental issues with the business, right? So a lot of these companies, they did not have product-market fit. There were operating one or two steps ahead of … they were two or three steps ahead of where their company really was. And so they would reach out to us and they had raised [inaudible 00:06:19], they had like 6 millions in the bank and they had like 12 customers and product launch, and what they wanted was to scale sales when what they really needed was a sales exploration verus sales execution, right? So it’s like thinking about your sales process and your sales model is a separate product that needs to be MVP-ed as well, right?

Andrew Michael:
Yeah.

Steli Efti:
And it needs to be iterated on until you have something that truly can scale, was something that most companies didn’t wanna think about and weren’t thinking about. They were thinking about product in a very kind of lean, start-up way, but they were thinking about sales in the kind of old-school way of like, let’s just spend a million dollars, hire a ton of sales reps, and just go out there and get a ton of customers in one big giant leaping step, right?

Andrew Michael:
Yeah.

Steli Efti:
And that just never, ever worked. They weren’t ready to scale a sales team. They were way ahead of there … I think that that was kind of … Throughout the [inaudible 00:07:21] the number one issues that all these companies had.

Andrew Michael:
All of them. And what was like the typical approach, how would you approach a company like that? That was set the stage, they hadn’t really got product market fit. What would your advice be for them when it came to sales then?

Steli Efti:
So we advise them to realize that the first step they have to do is realize that they need a sales model that is predictable, repeatable, and scalable before they think about scaling. And to accomplish these things, we had to define and explain to them, what does predictable mean? Well predictable means that you can tell me today what your sales numbers are gonna be for the next two, three, four months and you’re gonna be right about it, right? Do you know that it should take a certain type of actions? Do you know round-a-bout never has to be perfect? But do you know ballpark what the results are gonna be of certain actions.

Steli Efti:
If you have closed a bunch of deals, but none of the way that you closed these deals can be repeated, you don’t have predictability. If you don’t have predictability, you cannot scale, right? So we had to teach them that they had to find these models of selling that didn’t just result in a closed deal, but they were designed in away where you knew, if we do this sort of actions, if we do these sort of inputs, this is gonna be the output at the end and we can kind of see the future.

Steli Efti:
And then when you have that repeatability and predictability then you still might not be ready to scale, because then you need to check, does the sales model that you built, does it scale?

Steli Efti:
Right, I’ll give you a dumb example. Maybe the way I sell is that, I have a cousin that works at a certain kind of company and so I pitch my cousin. The cousin buys. And let’s say I have 12 cousins and I decide every month I’ll pitch one cousin-

Andrew Michael:
It’s a big ole’ Greek family, yeah?

Steli Efti:
… Yeah. That’s a pretty big Greek family, but that would be pretty repeatable, pretty predictable. I will pitch one of my family members every month and chances are that they’re gonna all say yes. Cool. But it’s obviously not scalable. I don’t have 10 cousins. I don’t have a hundred cousins I could pitch every month. I don’t have a thousand of them. So it might be a source that is predictable and repeatable, but it might be a source that just in terms of quantity is very low. Even id it’s high quality. So I cannot hire a thousand people and tell them to do the same thing that I’m doing right now, right? So that is the area that then determines if it’s can be scaled.

Steli Efti:
So we would explain to them that they have to figure out predictability, repeatability, and scalability, and that the phase they’re in, the way they need to think about selling right now is that they need to do a lot of experiments. They need to find sales market fit and they need to figure these things out and be very involved in them before they’re thinking about hiring tons and tons of people and quote on quote scaling something.

Andrew Michael:
Interesting. I think definitely the concept of experimenting with sales is something that’s definitely overlooked, and trying to really understand and fine tune and perfect sales model. Could you [inaudible 00:10:36] maybe a couple examples of experiments that sales teams could be making to improve their sales process?

Steli Efti:
Yeah, I think the first and foremost thing is the thing nobody wants to think about which is lead generation, right? So most start-ups again, when they think about experimentation around selling what they think is, practicing a different pitch, working on their PDF executive summary or their [inaudible 00:11:03], thinking about their negotiation tactics or their contract or what kind of discounts to give, helping their sales reps to do a better pitch or become better sales people. All that stuff is fine, but it’s irrelevant.

Steli Efti:
The most significant thing you’ll probably gonna struggle with is finding great, lead sources. That means understanding who your ideal customer is and who it isn’t right now, understanding where to find these customers, where to find contact information about these types of customers and then realizing if that source of leads, how big it is, how repeatable, how scalable it is. Once you have the [inaudible 00:11:48] part figured out and that usually it’s a lot of back and forth, a lot of trial and error, a lot of experimentation. Once you have that figured out, then you can start testing around, how do we approach these leads? How do we contact these people? How do we get them to take notice of our company, our product? And how do we start a conversation and a qualification and exploration process?

Steli Efti:
Once you figure out that, how are these people buying today? How do they wanna be approached? What kid of messaging communication is effective for them? Once you figure out all these things, then and only then, is the very last step, you start worrying about how do we pitch? How do we demo?

Andrew Michael:
That makes sense. Yeah.

Steli Efti:
How do we negotiate? And how do we close? And I’ll tell you this, if I had the choice between two companies, one that has an amazing lead source, amazing kind of clarity on to connect with those leads, but was terrible at pitching and negotiating and closing, or a company that had no lead source whatsoever, so clarity on the channels, but had incredible ninjas of selling, right? These amazing pitchers and negotiators. If I could choose one company to put all my money in, I would choose the first one. Because if you’re terrible at selling, but you have an incredible ideal for you or ideal customer is and you have a super great way to reach them, it’s incredibly well-scalable, even if you’re bad at pitching and negotiating, you’re still gonna close a lot of deals, right?

Andrew Michael:
Yeah.

Steli Efti:
And it’s gonna be easy to fix your problem. Because coaching you to get better at selling is not that difficult. But if you’re in a company that doesn’t know who their customer is, doesn’t know how to reach them and how to contact them, no sales pitching in the world is gonna save you.

Andrew Michael:
Is gonna work. Yeah. Let’s talk about that in a little bit more detail then. Or when it comes to the ideal customer profiles, how would you typically go about figuring out what a company’s ideal customer profile looks like and what would that research that you would do to determine this and figure it out?

Steli Efti:
Well hopefully when you start the company you had somebody in mind. If it was yourself. That’s typically a really good way of starting because you know yourself quite intimately, right? But hopefully, you had some idea of who your ideal customer is. The biggest mistake that a lot of companies make in the beginning when they’re trying to define that is that they go way too broad way too quickly, right? So companies will come to me and they’ll say, “Steli, our results are very inconsistent. Every month we do the same outreach, we do the same amount of calls, the same amount of emails, but we get … our results are not consistent. Why?” And you know, it depends obviously every company is different. But nine of out ten times, the reason for why is because they’re, the definition of their ideal customer is way too broad.

Steli Efti:
So I’ll ask them, “What’s your ideal customer?” And they say, “Well, we have a very good idea of who our ideal customer is. Ideal customer is any company in the U.S. between 1 and a hundred thousand employees.” Well, of course, this is so broad that if you email a thousand companies this month and a thousand companies next month, in this month’s bucket there are mostly one to two companies and a few thousand person companies, and next month you emailed mostly a thousand person companies and a few one to two … of course your results are going to be completely different. These are very different companies.

Steli Efti:
So what I advise companies to do is to start incredibly niche. So niche that you feel uncomfortable. So niche that you go, “Steli, this is too small. This is only five companies in the world.” And I will respond to that, “Awesome. If it’s only five companies in the world, we know who they are, let’s go get ’em.” And so I would say start super, super specific, see if you can win them over, and then go broader. Okay, now that we have these five customers, who are their competitors? Who are their neighbors? Who are companies that are very, very similar, but not quite exactly this. And so you broaden your definition and you go and you get those customers and then you keep broadening it hopefully until at some point it’s so broad that you own the entire planet and every company in the world. But when you go too broad in the beginning, it makes it impossible for you get consistency or to get any kind of sales process going.

Steli Efti:
The other thing that I’ll say is that in the beginning let’s say that you don’t know how to go super specific. You might start off by just trying to get any low-hanging fruit customer you can get and talk to all kinds of customers and company sizes. That’s fine. That’s fine for your first 10, 20, 30, customers, but once you get to the 30, 40, 50, you need to start looking into, who of these companies was easiest to reach? And who has the easiest way for us to go and reach more of this type of customers? And also who of these companies show the best retention? Who show us the highest success rates? Success measured by they’re getting a ton of value from us and they realize that they get a ton of value.

Steli Efti:
You need to start really collecting data not just based on, well, we got 50 customers. But who of these customers is seeing success with you. And then, based on that success, that should then determine what kind of market you gonna do, what kind of product development you gonna do, what kind of selling and sales outreach you gonna do moving forward.

Andrew Michael:
Yeah so, you definitely, that was actually gonna be my next question and we’re gonna start diving deeper now, but when it comes to retention itself, what role does sales play in retention? And I think like to be clear, sales teams may be sometimes often focused a little bit too much on the short-term goals versus the long-term view, and what is your view on this?

Steli Efti:
I would say that salespeople are, I mean, the founders and the leadership in the company’s always the root of all problems, right? But if there’s a second group, it’s the sales team. I mean it’s a simple as that. Retention problems … Retention either problems or retention wins start with the sales team. The sales team determines who they acquire as a customer and how careful they are to figure out, is this a customer that fits our ideal customer profile? Is this a customer that can truly see success with us? The sales team decides how honest and transparent are we about our short comings. How up front are we about telling people that some of the things they really need are things we don’t yet have. Or how much bullshitting are we gonna do to just close the deal today? How many promises that we’re gonna make that are probably gonna be too much of a stretch?

Steli Efti:
Yeah, absolutely. If the sales team is bringing in revenue and usually the sales team is only being incentivized to focus on bringing as much revenue as possible, they’re not incentivized or educated to worry at all about retention. Then what do they do? All they care about is closing every deal they can. They don’t care about how shitty is. They don’t care about how bad of a fit it is. If they can get your money, they’ll get it. And then they pass on the buck to the success team.

Steli Efti:
The success team then complains all day long because they connect with these customers and they’re like, “What the hell is going on here? They were promised all kinds of things we can’t do. They have these weird expectations. They use cases and use cases where our product breaks.” And then the success team has to kind of deal with al that trouble-

Steli Efti:
… and that’s a lot of times the place where all internal problems and fights are happening. So I think it’s absolutely fundamental if you wanna have great retention to educate your sales team and to incentivize your sales team to care about only closing good deals.

Andrew Michael:
Maybe you can talk us through that a little bit. So it’s definitely interesting concept that we’ve heard before, but how do you go about incentivizing sales teams for only closing good deals? What would that typically look like and how would you go about qualifying leads and sales?

Steli Efti:
Well I’ll give you two simple ways. One was that I said, educate them. You can do this in direct and indirect ways, right? You need to in a sales business, you need to teach your sales team that your business model relies on people staying with you and keep paying you for a really long time. If we close customers that leave later, that leave in a few months because they’re unhappy, this company is gonna implode, right?

Steli Efti:
And so if you have equity in this company, it’s gonna be worthless. If you are planning to have a career based on this company and make more and more money, that’s gonna be gone all of a sudden. And if you wanna actually be part of something great, something where every other company will want to hire because you worked at our company and you’ve made a name for yourself because we made a name as a business in our market versus a business that everybody knows failed because we imploded, you need to know that everything you wanna accomplish here relies on you closing good deals. That’s one thing.

Steli Efti:
The other thing is, giving the sales team a lot of exposure. So sometimes you might wanna have the sales team, you might wanna explore like the set up where you have sales pods or customer pods where you don’t have a room just full of sales people and then a completely different room full of success people. What you might wat to explore is having these customer pods where you have two sales reps, two success reps, and one support rep and they make up one team that supports a customer in their entire life cycle. And that’s a very different system.

Steli Efti:
So if I close a bad deal, my co-worker that sits at the same cubicle with me or the same office room with me, is a success rep that I passed on this deal that I listen to when they talk to the customer when she goes, “What did Steli promise? No, we can’t do this. What did Steli say?” That’s a much closer pen than if you’re some anonymous employee in another building that I know is in some department I don’t care about.

Steli Efti:
So you have to educate people and then when it comes to incentivizing, well, it’s very simple. Don’t just pay me on closed deals. Don’t just pay me on revenue. Give me two sorts of payment. The first payment is based on revenue. And the second part of my commission or bonus payment is based on retention of that … retention numbers based on new revenue.

Steli Efti:
And this will, you’ll have to evolve this basically forever as a growing company. You’ll start with one commission model. And commission models are another really complicated thing that constantly needs to be iterated and worked and fixed and changed as your business changes. But instead of just paying me whatever it is, 10 percent on the first month’s payment, you pay me five percent on the first month payment or six percent on the first month payment and then you pay me the other four percent three months later or six months later, whatever your cut-off is on early churn and retention where the deal has whatever quote on quote proven itself to be a good deal, right?

Steli Efti:
So you split it out a little bit. You incentivize. Or you have some kind of a customer facing bonus where you say, “The sales team gets a little bit of commission and the success team gets a bit of a commission, but then both team get another bonus, or the sales teams gets another big bonus if we hit a certain company-wide retention return rate.” Right? So I’m heavily incentivized to try to help the company to have good retention. Those are some simple ways of helping with this.

Andrew Michael:
That’s fantastic and a lot of that makes total, total sense. As well I think when it comes to sort of aligning that incentive with the long-term sort of view, retention, do you see as well that there’s a ways like you mention it a little bit with team capacity of bringing together customer success and sales, but is there a way as well to sort of closely align their goals together better when it comes to incentive? So monetary is one aspect of that on the one side, but the when it comes to sort of the independent teams working together, and I’ve seen it typically as well like we’ve worked with a few buyers recently where they had this support engineer, they had the customer success and sales person all working together? What would some of like the goals look like for a team that’s working with the customer when it’s not just revenue?

Steli Efti:
Well, it really could just be a, I mean, it could be a number of things, right? You could measure at what pace is this team acquiring, retaining onboard, and expanding a customer, right? What is the NPS score for this group? For these customers, right? Both NPS for the support they’re getting and the customer service they’re getting and also based on how they experience the product, right? If I sell you my product in the wrong way and I onboard you in the wrong way and I support you in the wrong way, your experience with my product might be completely different then if I do it really well and in the right way, and you both of these customers might talk about the product itself in a completely different way, right? Although it was the same product, it was just the way we explained it to you, the things we showed you, the way we onboarded you and we helped you expand were completely different.

Steli Efti:
So you could measure NPS, customer satisfaction. You could just measure, you know, are we acquiring a lot more aggressively than others, but then retaining less? Or are we acquiring slower, but retaining better? You could measure expansion, right? In all kind of things. Is this team really good at upselling? That’s a big initiative. It could be that the customer that we acquire stays them same, but were really good at upgrading them, versus it could be that we care much more about expansion within the customer organization because we’re going after bigger companies. So we don’t care necessarily that much about them upgrading their plans. We care about getting penetration the company.

Steli Efti:
So here are two teams, this team is acquiring 10 customers a month and the other on is doing the same. They have the customer churn rates, but this one team’s just really good at growing these account really crazily, right? So they go from this, they’re starting at 10 seeds, but within 12 months on average they get the size to double to 20 seeds, versus the other team is closing 10 seeds and it only grows to 12, right? What is going on here?

Andrew Michael:
Yeah.

Steli Efti:
It depends really on what is your company priority right now? What is the company-wide strategic priorities? And then you wanna have these priorities break down to the way that you align, design, and incentivize these teams to work.

Andrew Michael:
Yeah. Makes a lot of sense. So the one thing I wanted to touch on earlier as you mentioned something around the promise fit. And I think this is one of the biggest reasons as well when it comes to sales and churn itself is when we have marketing or sales teams promises things that our products can’t do. What is some of the ways that you’ve seen this happen within companies and then companies are able to sort of rectify this? How do you go about educating sales teams and marketing to make sure that they’re aligned with product?

Steli Efti:
Yeah. So I think that this is kind of a struggle balance between both sides. To a certain degree you, as a whole, as a company, as a start-up in the early phases especially, you wanna kind of be pitching the vision that’s slightly ahead of reality, but that is not too far ahead so that it’s not attainable to catch up with that, right? And Theranos or whatever the company’s called with the kind of true blood is all around the media because that was a company that was promising something that was so far in the future that it was unattainable, right? But pretending it’s already reality today. That’s when you get in real trouble.

Steli Efti:
But a lot of times sales teams, sales people really, really wanna say yes to customers. Cause they feel like the more they say yes, the more likely the customer’s gonna like them and buy. So it’s not really, I mean, there’s some cases where sales teams are gonna be, there’s gonna be real black sheep, people that will just lie and don’t care. But a lot of the problems are not with those type of salespeople. Those type of sales people are easy to spot hopefully and easy to get rid of.

Steli Efti:
The problem is more in the gray sheep zone. It’s people that are actually kind of honest and wanna do well, but then when a customer’s like, “Well, are you gonna do feature X, Y, Z?” And you know as a sales person that you’ve discussed it internally and people in the company have said, “Yeah. This is something we wanna do.” Ad it’s not on the roadmap yet, but the customer’s like, “Is this something you’re gonna do?” You don’t just wanna say, no. And you just go, “Well, yeah, it’s totally something we wanna do. I’m not quite sure when, but I think it’s definitely something that we’re gonna have soon.” And then it something that might take another three years to be on the roadmap, right?

Steli Efti:
It’s these little mistakes that create big problems down the line. And so, what you really wanna do is just, you need a sales team that is funny enough, more confident. And this is a funky surprise because you would think well, don’t you have to teach and coach the sales team on honesty? It’s not an honesty issue. It is a confidence issue. When you have a sales team and sales people that are really confident in the product today and really confident in their clarity on what the company’s gonna accomplish in the next month or two, and they’re confident also in saying no, you don’t have these issues.

Steli Efti:
Like I’ll be on calls with customers and the customer says, “Well, Close doesn’t have a mobile app? How the hell is that? Are you gonna have mobile app?” An inexperienced sales rep might go, “Yeah, yeah, yeah, it’s definitely something we wanna have and yeah, it’s crazy that we don’t have it yet, but you know a big focus of ours is [inaudible 00:30:06] working on.” That’s one version of it. [inaudible 00:30:09] Right?

Steli Efti:
And then here’s what I would say to the same customer. You know when the customer’s, “Well, you don’t have a mobile app. What the hell is wrong with you? Are you gonna have a mobile app?” I would say, “Let me ask you this. Is most of your selling down outside and on the go? Or are you mostly inside sales focus?” “Well, we’re mostly inside sale focus, but I think a modern company needs to have a mobile app.” I would say, “I get that and I agree with you. We are a hundred percent focused on insides and we’re the best inside sales CRM in the world. That’s why we’ve grown to thousands of customers around the world. That’s why our customers are crushing it. We’re highly profitable and we get these incredible ratings from our customers. If you want the best inside sale CRM in the world, you’re talking to the right person. We do want to do a better job to support the occasional use case when you are on the go and you wanna update something or look something up. I think we’ve done a poor job. It’s something we wanna do better, but honestly, I don’t know when we’re gonna attack this. It’s not on the roadmap for the next two quarters. So if you absolutely need a mobile app, you need to go somewhere else. But if you really need the best inside sale CRM, [inaudible 00:31:13] let’s keep talking.”

Steli Efti:
And what is the difference between the two of us? It’s not that I’m more honest. It’s just I’m more confident.

Andrew Michael:
[inaudible 00:31:21]

Steli Efti:
I’m confident to tell the truth. I’m confident to sell you on why what we are doing today is good and is what you really need, and this other shit you’re asking about might be a distraction. And an inexperienced, insecure sales rep, they’re not confident enough. So they will always air on the side of saying yes to the customer. Agreeing or making say, or giving these like promise, “Yeah, yeah. I think we’re working on this. I think we’re gonna have this.” Why? Because they’re so insecure.

Andrew Michael:
Yeah. And I think like definitely like you’re saying, the confidence to actually know what the customer really wants when it comes to its So it’s not just like beating around the bush and trying to get every feature under the sun. It’s really focusing on what are they trying to achieve and then having the confidence to tell them that you’ve got what they need.

Steli Efti:
Also the confidence to know who your ideal customer is and who it isn’t. Right? So today if Coca-Cola pings one of our sales reps and says, “We wanna buy CRM for 20,000 sales reps, but we have this huge list of demands.” Nobody in my company goes in a panic. The sales rep just goes, “Ha. That’s funny. We’re not really serving enterprise level customers. If you sign up for the product yourself and you decide you wanna purchase without having to have enterprise level service and support and this huge list of demand, go ahead and do it. But if not, I would recommend you these other vendors.” And it’s not a problem.

Steli Efti:
Versus if we don’t know who are customer is and a big customer comes then the sales rep is gonna jump into action, “Oh my god, this is so exciting. Yes, we need to do all these features. Everybody in this company, please, we need to build features. I’m gonna tell Coca-Cola, yes, these things we are working on it.” And then you’re creating this issues. If your sales rep know who is a qualified customer, who is ideal customer who is, what is on the roadmap and what isn’t. Why are we good at what we do? And why is what we do valuable and why isn’t? Then they can speak confidently and then they are more comfortable to say no. They’re more comfortable to speak the truth.

Andrew Michael:
Yup. And [inaudible 00:33:18] as powerful as understanding your [inaudible 00:33:20] themselves.

Steli Efti:
Yeah.

Andrew Michael:
Last question I wanted to ask for today, Steli. And just to put you on the spot a little bit. I don’t think this would ever happen, but let’s say one day you get put into a new role now heading up sales at a new company, and you’ve been tasked to set up sales and get it working, but also at the same time the company’s having a retention problem. Where do you start? What is the first actions you do within the first month?

Steli Efti:
I visit every single customer. As many as I can that I’ve churned. As many as I can that have been with us for a while. And as many as I can that have just closed. And I try to understand who they are, what they do, what the differences and commonalities are. I would try to visit their office to see the team, meet the people there, watch the new tool they’re using and why and what success and failure they have. Try to understand how they heard about us and what was confusing or why they left. Like I would try to spend as much time with quote on quote un-scalable tactics of like trying to generate as many insights about the customer as possible.

Steli Efti:
And the most context-rich environment is not gonna be me looking at a spreadsheet with some numbers, right? The most context rich environment is gonna be meeting these customers in person ideally at their offices in the natural habitat where I can like see their teams, see what they’re doing, just absorb and learn and ask as many questions as possible to try to get a full picture of what has happened so far? And why are we where we are? And how do companies and customers think about us? And, where there’s a mismatch between the way how we think about us and how other people think about us.

Steli Efti:
I would spend a lot of time trying to understand the customers, the churn, what has happened so far. And I wouldn’t try to understand it based on some metrics and some numbers somebody is generating in a report to me. I would go out there and get my feet and hands dirty and mingle with the customer.

Andrew Michael:
Hear it directly from the horse’s mouth. Yup.

Steli Efti:
Yeah.

Andrew Michael:
So I think that was excellent. Thanks. Just before we wrap up as well, I know a thing of yours as well, you’ve spoken about your two little boys on all your different talks and shows that you have. I don’t want to let this be one of those that they weren’t. So I don’t know if you have a shout out to them as well?

Steli Efti:
Always. Yeah. I appreciate the chance. I have two little ninjas that are lethal and that are my first two truly bosses in my life. So big shout out to those. I miss and love them.

Steli Efti:
And another thing that I wanna shout out as well before we wrap up the episode. One is for people that are listening to this and they’re like, wow where do I start? And I wish I had more resources? Just send me an email. Steli@close.com S-T-E-L-I at close, like closing a deal, dot com. And just put in the subject line: bundle motherfucker and I’ll send you a link where you can get all my eBooks for free, all my resources, how to get started with selling, how to do all the stuff that discussed in kind of an organized way to give you a kick start. And then if you like and love podcasts, I have one with the legendary Hiten Shah. It’s called The Start-up Chat. You can go to the startupchat.com and find it there if you enjoyed this episode you might like that podcast as well so check it out.

Andrew Michael:
Absolutely. So both of those are must resource and must listen. So thanks very much, Steli, it’s really great to have you today. And really, really appreciate the time again. And good luck.

Steli Efti:
Thank you for having me. Thank you so much.

Andrew Michael:
Cheers.