Unlocking Revenue Growth - Dave VanderJagt - Entrepreneur Intel - Episode # 27

Wes: I want to introduce today's guest. He's someone that has over 15 years experience developing and managing high performing B2B and B2C revenue teams. He's a fractional executive who helps businesses pave pathways to profitability, works with businesses to find the right people, processes, and technology to achieve success.

A fractional CRO at Vanderjet CRO. Welcome Dave Vanderjet.

Dave: Thanks Wes, I appreciate it. Thanks for having me.

Wes: Oh man, I'm so excited to have you on here. One, because I think if you stripped me down to the core, like I'm probably a CRO if I had to put a title on me, but I think as an entrepreneur, I mean, sales is so important, so I'm really excited to pick, pick this apart and get in, dive deep with you, but I got to ask you a question that I asked everybody in the podcast first, you know, you've been, you've been an entrepreneur for about 12 years, um, give or take, what's the most important lesson you've learned thus far?

Dave: So many lessons, Wes. Um, one of the biggest ones that, that, that really sticks out to me is, is as people look at their marketing and sales and how they create revenue in their organization, a lot of times it's looked at as more of like an art and, you know, some, some companies just get it and some salespeople just somehow are successful and others aren't.

And one of the biggest learnings that I've had is you can really just still down Everything from your go to market strategy across your marketing sales and customer success, uh, down into a very like basic data oriented model. And, uh, it doesn't require, you know, uh, like a lot of these fabled, um, superpowers, right.

That just some people have and others don't. Um, any, anybody can be successful, you know, in, in creating revenue. It's really about just understanding the, the, the company, the business, the go to market, uh, motion and model and making sure that you have the right, the right butts in the right seats.

Wes: So you've got 15 years experience working with B2B, B2C. In my world, those are two very different paths. However, there's a lot of similarities in some cases, but like keeping focused on the sales side of it. Right. So educate me a little bit. I know what a CRO is. I think I know what a CRO is, but like, what, what does that actually mean as a CRO?

Cause I think it's a relatively new term.

Dave: Yeah, yeah, absolutely. So you're right. There's CRO is still new and I think it's still, um, still kind of gaining acceptance. It's, it's, it's just a term that people, a lot of folks aren't familiar with. What we are familiar with are things like a VP of sales, a chief marketing officer, um, and maybe some kind of, you know, derivations of those things.

But, um, CRO is, is, is kind of new thing. And here's why I think CRO is important. I mean, I think that's the, the organizations of all size ultimately can benefit from having somebody. In a revenue ownership and leadership capacity, but it's particularly effective for companies that are under 20 million in revenue.

And the reason is because. Uh, especially if you have a, uh, a high, a high touch or a sales led growth, um, go to market motion. You need to basically be aligning what's happening within your marketing function with your sales function and your post sales function. So as we think about it from the customer's point of view, everything that happens in the buyer's journey, As they go through the funnel, as they decide, convert, and then they're onboarded, and then whatever your processes are to deliver impact for that client afterward.

Uh, and then eventually that comes back into the marketing function. You know, companies that are under 20 million that only hire salespeople and don't spend any on marketing guarantee they're leaving money on the table because marketing's not coming in to create inbound, uh, or, or support perhaps some of their sales efforts in the way of enablement, um, like they could really benefit from, um, and conversely, uh, companies that maybe have marketing, but then some have sales, but they're operating in their own silos and they're kind of operating on different objectives.

There's no alignment around. Uh, what metrics, KPIs, things that they should be, uh, really like focused on and, and have and develop process around, um, you're, you're just, you're, you're leaving so much money and so much opportunity on the table. So the CRO's role is important because, um, not only marketing sales and CS, but also rev ops, um, and just owning the operational components of people processing technology that support your go to market motion ultimately can roll up and be managed and owned.

Um, by the, by the CRO. And so having, having, having kind of a synergy across each of those different functions, that's really where you see the power of a CRO. And I say that it's important because, uh, for, for companies under 20 million, because, you know, Up to about 20 million or so in revenue in ARR, it's really a team game.

if you think it's just a sales game or you think it's just a marketing game or it's just a, customer success, customer support game, um, you know, again, you're going to, you're going to hamper your growth and certainly your growth potential. So the idea is it's a team game. How do we play this game together, across those functions as a team?

And, the CRO is the person that can build and sort of run and lead that team. I

Wes: something that I mentioned all the time. Like I use the same cue as like under 20 million, because I feel above 20 million. In my experience, you gotta have to move, you gotta move into a professionally managed environment, which takes away from that entrepreneurial, uh, spirited company, in my opinion.

But. Let me ask you a question. So typically entrepreneur has an idea, right? Service, widget, B2B, B2C, like, you know, like little kids that play that game with jump rope, you know, you got to jump in and not get hit. Like, when do you bring in a CRO? Right? Cause if you're an entrepreneur bootstrapping a company, maybe you raise some capital, CRL sounds super fancy and super expensive and visionaries or entrepreneurs are like, well, let me just, you know, I got a, I'm the guy.

I'm going to get this out there. How do you as an entrepreneur transfer that huge responsibility on somebody? What's the timing look like on that?

Dave: think that organizations of any size, even pre revenue, could potentially benefit from a CRO. But the reality is that as you're going through, especially like zero to about a million, maybe two million in revenue, you're, you're basically, let's just assume you're, you're somewhat of a startup. You're finding product market fit.

You're validating your, your, your, uh, value proposition. Your customer base, your audiences, how you operationally deliver your product or service at scale, and you're kind of working on those aspects of product market fit, a CRO can still be incredibly helpful in terms of leading the charge around building, starting to sort of structure that revenue engine or that go to market engine, um, even up to one to 2 million in revenue.

But a lot of times if you're, if you're, if you're hiring a CRO, and by the way, there's a little bit of difference here in terms of whether you're funded or non funded, right? Funded companies. There's probably even more of a reason to have a CRO, um, you know, pre revenue or just zero to a million, um, because you have that pressure of you need to return those dollars to your investors.

So you need to go, you need to learn as fast as possible. So you're executing, but you're also leading, managing, you're kind of doing everything from day one. If you are a more of a bootstrap company, which is more of the companies that I've personally worked with, Um, you know, zero to zero to one, 2 million, like having somebody in that leadership function that can, that understands how all of these marketing sales, you know, CS functions come together and ultimately start to, you know, create rep, uh, enterprise value for the company is important, but you might be able to find that you have a CEO or somebody on your, maybe even your COO has some sales and marketing experience.

They can help with that. I believe once you get past 2 million, um, in revenue, Again, unless you don't, unless you have that specific person that's dedicated to running your revenue organization, that's really when, um, the, the importance or the sort of the criticality of a CRO starts to, starts to come into play, uh, even more.

So at that point, maybe two to 20 million. And again, these are ballpark numbers. Uh, but that's really where, you know, you, you have to figure out, go to market fit and eventually scale up. And so that's where, um, the CRO plays, I believe in even a more pivotal role. So whether you need somebody full time or in my case, fractional, certainly again, just depends a little bit, company to company and what your culture is.

And maybe, you know, flavor or sort of what the, the founder team is, is used to working with. Um, but, but really somebody in that revenue leader role, um, at 2 million plus, I would say is, is critical for companies that are looking to scale.

Wes: So how do you come into a company, right? So you're coming in as a, as a fractional CRO, which, which I love fractional. I've been, I'm a fractional CMO, self consulting. So like, I love the concept of fractional because it's, if you're in that one to 2 million, you may not have the appropriate amount of revenue to hire a full time CRO, right?

So you're going to get the best of the world of get a little taste of a fractional CRO. Get some value, grow into it, right? Make an impact. But I think the question I get from pretty much anybody I know, anybody I talk to, they're like, man, is it hard to find good salespeople? Man, it's hard to find a good sales leader or manager.

I made the deathly move of entrepreneurial business where I put my best salesperson as sales manager. He could sell great, but managing people is a completely different animal. So just kind of picking your brain on those kinds of subjects around, you know, how do you, you know, come into an entrepreneurial company where that visionaries led it.

And you, and now you're gonna come in and start, you're talking about go to market, all these scary terms, right? That sound really like, wow, this is getting real. You know,

Dave: Yeah, absolutely. Well, a lot of companies in that phase are also. Starting to think about how they can shift from founder led sales. Typically one of the founders, maybe it's the CEO or somebody else in the founding team has been the primary salesperson up until now. Maybe they've gotten some support from the rest of the team.

Uh, perhaps they have some like longstanding relationships that they've been able to leverage, um, in the industry to, to sort of build that customer base and start to get traction. And The beautiful part about that is you can start to like, look at, are we actually achieving product market fit as you, as you go through, um, with that type of a, of a, of a structure of your team.

Um, but eventually you're right. Every company is going to, you know, and as you get larger and larger, The importance of, of that, of the individual staying in their lane becomes more and more important. Meaning the CEO can't be, shouldn't be spending, or really only at the detriment to the organization will be spending, you know, significant amounts of time, um, doing sales.

So as we start to shift this person, let's say they're like maybe 40, 60 percent of their time doing sales, like. They're going to need as the organization grows to be more of a CEO and kind of wear that CEO hat, you know, closer and closer to full time. And so, um, as you, as you start to, uh, shift away from that, you know, there's, there's no doubt about it.

Shifting from founder led sales to building out a sales team is incredibly hard. Uh, I've yet to run into anybody Anywhere. And I'm talking, you know, HR, consulting, recruiting, uh, other, you know, investors, like anybody that would admit that, that, that, that, that shift is, is easy. Um, the key here is really the things that you learn in, in product market fit about whom your market is, what they care about, how they like to be sold to, or how you market to them or both candidly.

And then. what experience they're looking for when they, when they purchase your product or service and the impact that it has to your business. If you're really laser focused on those, which you should also be doing at the same time is starting to build out that playbook, right? Like how are, how can, how, how are the things that we're doing from a marketing and sales standpoint, even if they're being kind of managed by the executive team today, how can we start to distill that those things down into something that's more repeatable, predictable, and therefore scalable.

Excuse me. So, you know, one thing I always recommend entrepreneurs and founders start to do is as you're starting to, you know, look ahead and you're starting to see traction, you're starting to see growth and you're starting to think about how do I move away from this founder led sales motion, you know, start to think about, um, You know, how do I, how do I take everything that I've been doing and start to just distill it down into a simple playbook that somebody else, you know, can take, take and move forward.

And that's not also not easy, you know, for, for what it's worth. I mean, building out the playbook, having somebody just follow it and kind of slot in

Wes: just gave me a twitch. I, I just twitched a little bit.

Dave: Yeah, that's, I'm not going to say it's easy either. Um, but you, but you really have to start to think about the business in terms of that.

Um, you know, that kind of like process oriented mindset. Uh, and the reason is because if you don't, you're always going to be left in a place where you have to hire superstars, right? They're probably very expensive. Um, you know, they may or may not stay. Um, those superstars are the people that you're hanging your hat on for growth.

And that's, and that's a shift. That's a gap between like process oriented growth. Uh, so starting to move in that direction, thinking about it, starting to build out those processes, you know, detail them. And then as you start, and then once you get a salesperson in place, like, obviously you have to implement, you have to understand what's working and what's not.

So it still requires handholding. It's not simply like a, Hey, we built this thing. Here you go, go execute it. It's a, you know, we need to figure out how well this is working now that we're trying to move away from, you know, the founder or whoever the lead salesperson has been up and up until now. Um, I'll, I'll add one more thing.

One of the things I see a lot of companies doing is. They throw bodies at go to market issues. Um, so they're, they're, you know, they're, uh, they're solved for, for example, I need more sales is to hire salespeople, but there's no infrastructure built for those sales folks, or, you know, I need to get off of this founder led sales thing.

So, you know, I know they're not going to be as good as I am probably, but we still need somebody and I just can't be doing this as much anymore. So they just, they just hire, you know, one or two salespeople and, you know, just again, throw bodies at problems. And the issue with that is, Again, unless you've hired a superstar, which you probably can't afford in the early stages, then you're, you're, you're relying on hope that they can figure it out.

And maybe with a little bit of coaching and a little bit of mentorship and a little bit of one on one that maybe they can get some traction and do what you're doing. And, uh, that has a, a extremely high failure rate as perhaps you've seen.

Wes: Yeah. No, that's great. I mean, there's, there's a lot to unpack there. I appreciate that share and I think, I think the one thing that stands out to me with that. You know, looking at it from a pure founder led sales organization is you get salespeople like, am I going to get leads? Am I going to have to cold call?

You know, what are you going to do for me? I mean, I'm 43. If I rewind back to like 20 years, I mean, the world is so different today and how people communicate. I have five kids. Um, have an iPhone and like, they're never on the phone. They're like searching, texting, like that communications almost gone. I was with a guy earlier today and he's like, I will not answer my phone unless that contact is in my phone. So how do you, you know, from a, from a today point of view and looking to the future, What are some tactics now? Or like, how do you even penetrate B2C, B2B,

Dave: Yeah,

Wes: how do you even begin that playbook now?

Dave: yeah, absolutely. Well, I think the first place to start is once you've gotten some traction, so let's say you're, you've got a million, 2 million in, in, in revenue. Um, the, one of the first things you need to start doing is it starts to distill down, like what are the revenue economics or the unit economics of this business?

So more specifically, Um, what are the, what are the customer acquisition costs? If we can look at even just a baseline payback period, you know, forget out like lifetime value or LTV, because we're probably too young to really figure out what that number is yet. So it's not, you know, and you need to incorporate churn and things like that.

So it's, it's probably more hypothetical, but just figure it out. Like, you know, based on our margins, right. Based on our, our sales cycles. our annual contract value, customer acquisition costs. What kind of picture is this? Does this start to paint in terms of what, what can we afford to do from a, from a, a sales organizational build out?

Um, so, so specifically, you know, if, Depending on what your annual contract value is, for example, you may be in more of a product led growth motion, or maybe you have more of like a product, like a sales assisted product led growth, um, where the product kind of marketing leads to bring, uh, you know, individual users in and then users through their interactions.

And hopefully through the account starting and other users within that account, starting to show engagement with your platform, you may be doing some outreach to try to secure that account, um, all the way through to like two step sales. And then down into like, you know, target accounts with super, super high annual contract values where you're, you're probably just like literally prospecting less than a hundred, maybe less than 50 accounts.

You know, that's all, that's all you're spending your time focusing on. But each one of those is worth multi hundreds of thousands of dollars, if not millions of dollars per year. Um, should you be able to do that? Right. So the first place to start, I think, is just understand your numbers. And know that even though you're still young, this is where some of that data and, you know, starting to build and start to understand like, what, what, what is the health of this business?

Like what is working? What is not like, what numbers do we have to work with? If you can start to kind of wrap your head around some of these, it'll start to paint a picture for this is the type that like, this is what we can afford. And therefore this is the type of go to market motion we have. This is how we're going to do sales here at this organization.

And therefore this is, these are some of the outputs or like the results that we would need to see our sales team deliver. Once we, uh, once we start to bring in those folks. So, um, really it's just know your numbers, know your data, know what that kind of, that the picture that that's painting and start to think about how you're going to architect your organizational, your, your org chart kind of from there.

Wes: So talking about like a million to 2 million business, um, I'm just curious when you come into a business like that, how much change are you making? Is it like, well, I have no idea how you even got to here and now we have to develop these things. Or is it like small tweaks and just kind of cleaning things up?

Or like how, how far off pace are these organizations when you come meet them where they're at?

Dave: Yeah, yeah, it's a good question. So I had a, I had a, I'll give you a couple of examples. I had a call with a, uh, or actually a, um, potential prospect that I'm speaking with right now that is, you know, their, their annual contract value. So they're a software company, um, and they sell into the MSP space and, um, their annual contract value per customer today averages about 3, 000, maybe 3, 500.

So if you think about this about 250 bucks a month, right? And then hopefully they can land those clients. They can retain them, maybe upsell them, expand them to a point where the account's worth more and that's worth looking at. But until you've kind of really shown competency around, like I can land and then expand accounts, you really have to kind of take up more of a risk.

Averse approach, I believe, to how you look at, um, what kind of, what the sales organization looks like. So in their case, I mean, if you think about it, run the numbers, right? Like an average account executive that has maybe five to seven years of experience. In most areas of the country, you know, today is probably going to run you somewhere around 70 to 90 grand, you know, something like that, you know, base salary, maybe a little less, a little more depending on where you're at.

Plus you got some variable commission in there. Now, if you start to think about, well, each con each, each customer is worth about 3, 000. annually, you can start to kind of like get this picture in your head of like, wow, okay. So then based on what, whatever their gross margins are, you'd have to sling quite a few deals, you know, for this business model to viably make sense, right.

Compared to maybe a, uh, uh, an annual contract value of like 30, 000 annually, where, you know, you, again, you can do the math. You need significantly less customers. to sort of cover or even to the salesperson to break even on what their compensation model is to the company. And then obviously you want to surpass that so that that's net beneficial to the company.

Uh, but getting back to your question, like what are some of the issues? I mean, I, I ran into this company. I think that in my recommendation to them is you're deploying a high touch sales led growth model in a, in a, in a, in a revenue like structure that really can only support sales assisted product led growth or PLG.

So you're, you're always going to be upside down in terms of. Trying to get to a point of profitability. If this is how you're trying to build out your team. Now I understand there's like some level of like, we need to acquire, you know, customers early on, and perhaps we're going to pay knowing that we're going to, we're not going to do that profitably, but that will not.

But if you want to get to on a path to profitability, that that's not going to cut it, right? Like that's not scalable. Like you, maybe you can do that for a period of time, but just understand that that can't be your model in the future. So therefore we're going to have to figure out what sales assisted PLG means to a company like this, or we have to figure out how we can increase those annual contract values so that we maybe could deploy a higher touch sales, sales organization.

So those are like, that's like one example, but it really, it's, um, you know, companies I'd say like, that's, that's probably, that's one that's not infrequent. And then the other one that I see is companies just trying to do too many things, you know, for too many folks in too many different ways. And so they're, they're trying to do, you know, target 12 different, uh, ICPs or, or customer groups.

They're trying to sell them somewhere around six to eight different, you know, products or services, you know, it's kind of like go get whatever you can get, wherever you can get it. And, and that opportunistic mindset. And kind of like spray and pray model for how you're doing business development also does not scale.

Wes: Yeah. I refer to it as the wild, wild west, which I've, I've lived that life. You bring us some interesting points because I think a founder has to make a decision around is this company for scale or is it lifestyle, right? And I think that's a hard decision. Like I was faced with that personally where I wanted scale, but I treated everything as a lifestyle and it just completely skews, but I got a couple of questions for you, like specifically like tech, like what is your favorite CRM sales management software?

I mean, we could go down to the rabbit hole and say, well, it depends on B2B, B2B, and this, that, and the other. But like, there's so many out there now. And like, Salesforce is obviously the monster. I look at Salesforce and I cringe because about 95 percent of it I'm never going to use. But what do you, what do you, what do you like?

Dave: I'm a huge HubSpot fan. Um, I'm not going to sit here and say it's the best. I think there's, there's, you know, nuanced situations. Like you said, B2B, B2C, size, even some industry vertical, like what is your sales process or lack thereof, like. I don't think HubSpot's a fit for every, any, for every company, nor do I think, you know, Pipedrive or Zoho or Salesforce are the right fits for, for everyone.

Um, each of them kind of have pros and cons. So, you know, tough question to answer without getting kind of long winded, but you know, you need to just understand, like think, think, think as well. Like one thing to consider is who, What, what internal competencies do you have with the CRM that you're thinking you're, you're considering?

So like, for example, if your CMO knows HubSpot, but you're thinking, well, yeah, but I can save, you know, 400 or 500 bucks a month by buying Zoho. There's a, there's a, trust me, there's a massive opportunity cost to be paid for somebody that doesn't know this CRM as well, to like get up to. Sure. All CRMs can ultimately probably do most of the same things.

Um, But somebody's proficiency, especially when you have to be nimble, you have to be cost effective, you have to move quickly. I mean, think about like the internal expertise that you have for, for deploying a software that, that somebody or, or, or maybe some, uh, members of your team already know how to use really well.

That, that would be something I would just recommend to most entrepreneurs out there. Like it's okay. I mean, sure. Look at, look at cost comparison, whatnot, but there's no perfect CRM. They all have like their pros and cons. Um, think about how big you want to be and kind of, and also think about like, what is your sales process and how complex is it?

And think about like, what assets do you have internally? And who knows this software? Because if you have people that know this, you're going to be able to get your CRM, get your data kind of in a spot where it's, You know, the data hygiene's intact and you're actually getting actionable data and insights and, uh, and, and sort of what to do next, uh, out of your CRM as well as some governance and accountability and those things.

So I'm a big HubSpot fan. I've used Salesforce. I've used a lot of the other ones out there, but, um, you know, I find HubSpot's a pretty, pretty, uh,

Wes: it's a great response because I mean, it, it really depends, right. It depends on, on what you're looking to do, what the outcomes are. I mean, I get asked a lot of where should we advertise on Google, Facebook? And I'm like, I don't know. It just depends on where your customers are hanging out. I mean, there's, there's a lot of variables or what's your favorite platform.

It's like, well, it depends, you know, um, but going back, I like focusing on the sales side, right. Cause to be clear, CRO covers sales and marketing. So, but picking on the sales aspect, right. Because I think sales is. I guess we could argue or debate like which one's first. But for me, sales solves a lot of problems.

Um, and you can always go knock on a door or reach out specifically, but if there's an entrepreneurial company that like, how do they limp into a sales playbook? Right. If they're like, cause I, I'm sure you get a lot of clients or I get people that they want to test drive it first. They want to try to do it themselves first.

Is there any solution out there that has like a. You know, sales playbook for dummies or just, you know, what's that first step? Cause the goal is people, entrepreneurs try it. They get stuck and realize, wow, this is, this is really hard. I got, I got to go hire Dave, right?

Dave: Yeah. I, you know, one of the, one of the easiest ways to kind of get started on all that is, you know, If you're the founder, you're doing sales, start using a CRM yourself. Like start holding yourself accountable to making sure that you're using at least the basic fundamentals of a CRM. Like, I mean, for me personally, I think I have Sales Starter, uh, you know, a HubSpot subscription for my business, which is one of the kind of lower entry point, um, uh, options from HubSpot.

But even like with the free HubSpot version, you can still do some, some basic Customization. You can set up, you can do some customization of your deal stages. You know, you can even do some basic, um, I'm not sure if workflows is included in, in, in the, um, free version or not, but you can do quite a bit.

Right. And, and, and where I'm getting into here is start, start, start using your CRM yourself. And then after you've been doing that for a while and you've built up your client base and you've got revenue and you've, and you're, you're kind of looking at the next step, pause, go back and start looking at like, Where did these deals and these leads come from?

Like, how did I get these? What was the motion? Was it, was I going to events? Was I, was I just pinging, you know, people on LinkedIn? Or was I calling old folks? Was I going to, I don't know, networking events? Was it all partner channel referral? Like start to take a, take a moment and like, look back. And, and realize that your playbook probably largely already is, is in your CRM today.

Your job then is just to extract it. Look at the things, especially from the business that you've closed, maybe even some of your kind of key customers or accounts that you've been able to show growth, right. As kind of feature accounts and start to like, all right, well, how did we get these? Like, what were the steps?

And if you've done even just a basic job. Of entering data into your CRM as you've kind of progressed those deals to close and maybe you've gone through renewals, you're starting to actually like build out a lot of the steps and then it's just up to you to kind of take it and, you know, build and you can build playbooks and all different kinds of platforms, obviously, but, um, you know, just take it and start to articulate out, this is what we do step by step, we can go through it and you're building the, the, you have the basic building blocks of a playbook that you can start to, you know, hand off to a sales, um, team member or sales rep once you start to build out that team.

Wes: What are your thoughts on AI? Like the last couple of years, AI and sales, and I see social media posts now, and you can pretty much. Tell most of it's written by AI. And, but there's like voices now, like I can do something and somebody could call, like AI can like have conversations. You talk about like product led companies or, you know, supported through sales, but do you have any crystal ball there or any thoughts around AI and how it's going to disrupt or what's it going to do on the sales side of things?

Dave: Yeah, it's a great question. You know, I think. I may be not quite as bullish about AI, certainly not about AI replacing people as some. Um, I think the change is going to be massive. I think it's just going to take a lot longer, um, than, than people think. And I think that like, to your point, people are sniffing it out.

Like there's even tools to kind of sniff out. Is this written by a human? Is this written by AI? Um, you, you can tell, you know, pretty quickly. So. I think, you know, where I leverage AI is, is efficiency plays, right? Any, any, any, any, anywhere where I could save time doing, by doing something that's like normally repetitive.

Um, you know, those are, those are good places for me as, you know, somebody that's building my own company. So I have to do my own sales to also, um, see some, you know, some, um, See some efficiencies and just cut down on the amount of time it takes to do things. Um, but I know that there's some like folks out there, uh, you know, Jake Dunlap with, uh, with skilled consulting is massive.

I mean, he's one of these just like, you know, big kind of voices about AI, especially in sales. And so that, that's just my opinion.

Wes: So what led you down the path of becoming a fractional CRO? Like, was that something you always knew you were going, going to do? Or like what, what pushed you into that, that segment of business?

Dave: Yeah, I appreciate that. So, I mean, early in my career, I did a lot of process improvement work. Um, I worked in manufacturing, I did, you know, Lean Six Sigma, you know, Black Belt. projects, typically to drive out, uh, to drive cost savings in the business. And then I fast forwarded, I kind of shifted careers. I, uh, went, went to grad school, um, uh, did my MBA in marketing and, and actually took on more like direct sales roles, but working with smaller companies, I say direct sales, but as you know, in any small company, especially like less than 10 people, you're wearing multiple hats on a regular basis.

So because of that, I always had kind of a foot in marketing, sort of like a foot in, like building out the organization, hiring talent, even if it was on the technical side. Yeah. Um, and what I found over time was having kind of worked for several of these companies, kind of carrying a bag, being a salesperson, I noticed that in some companies, I was like, I had, I had a huge amount of success and in others, it was almost a complete failure.

And what drove me down the road of being to becoming a CRO was I just had to understand, like, how is it that some of these companies like kind of get it? And like they, and by the way, all of these are for the most part, post product market fit companies, but some of them just like, could not. Could not scale up, right?

Like they just could not get to a point of predictability and consistent growth in their revenue. And, and it wasn't typically just me that was struggling in these companies. It was like anybody that had been in that role had, had shared, you know, equal struggle. So for me, I kind of like had to put my detective hat on and go back and figure out like, how is it that some of these companies.

We're successful. How is it that others were not? And I was going to leave product and maybe even some of the operational components of how they deliver product or service out of it. Just say like, let's just, let's just say that. There's a market, they will buy this product. They will continue to purchase this product or retain.

Um, then, then things kind of fall into the sales and marketing organization. How is it that some companies seem to sort of figure that out and, and, and other companies just continue to struggle and they churn through employees, uh, sometimes even at like the VP level. Um, and so that's what, it was mostly just like a passion.

It was, it was, it was frustration out of my personal experience and not Not seeing consistent results, knowing like I was the same person in each of these companies. How is it? How, how could I not, you know, find success? Um, and, and a bit of it just became more of a personal passion around, like, I think I can deconstruct this whole, like go to market, this whole marketing sales.

Like, how do we drive, how do we, how do we create? Uh, retain and grow revenue. And ultimately I learned that, you know, the CRO as a, as a steward of capital, meaning dollars, time, and people, and needing to resource, you know, those pieces out in the business. Um, that's, that's, that's the easiest place to have them, the amount of control influence, but also accountability, um, around driving revenue growth and the answers.

are not easy and implementing them is even harder, but you can deconstruct most go to market motions down to their bare bones, kind of figure out what's, what's good, what's profitable, what's scalable, what's repeatable and what's not. And if you can do that, well, you can start to focus businesses on things that actually allow them to see the growth that they're, that they're seeking.

Wes: I think what's awesome talking to you is like, you're so process minded, which I find that a lot of sales people, myself included, it's very visionary. It's very like non process, non detail specific, right? So you're always fighting salespeople to like, use the, you know, use the system properly, or like, why can't you do this simple, simple thing?

Um, that, that, that, that's really, that's really interesting. So like why on the fractional side, right? Like, why not just go into one company, go all in and grow that company? You know,

Dave: Yeah,

Wes: what's the, what's the special sauce with the fractional?

Dave: I have a bit of ADHD. It's probably, you know, I like to build. Um, I like to, uh, my culture index profile is, is, is an architect. So I like to kind of build, develop systems, you know, develop those processes, see, you know, obviously optimize them to a point where, where they're predictable, where they're, we're seeing the results that we would expect.

Um, and if they're not obviously then fix, pivot, you know, find out what we need to do. But once that machine is kind of working and it's, and it's, and it's consistent, um, what I find is my, my, my brain kind of starts to shift out of it, you know, which is like, like, let's go on to the next challenge. Let's find something else that kind of like, again, kind of scratches that, that mental kind of, I guess in this way, kind of creative process, um, side of me.

And so, uh, a lot of my, You know, I've been, I've been fortunate. I've, I've worked with several companies in a fractional capacity that we had that success and we were on, on that path. And, uh, and they asked me, you know, are you interested in coming in full time and so flattered, deeply appreciative, you know, of those folks for considering that, but, but I know enough, I've learned enough about myself to know that I'm, I'm.

I'm better served, um, working with clients to kind of help set up these, these foundational elements and then help them sometimes, you know, even replace myself. So occasionally I'll like, one of the last things I'll do for a, um, kind of major things I'll do for a client is to self deprecate. So I'll help them find a CRO of sales or VP of business development or something like that.

Um, and help, you know, vet, find onboard, make sure that person is successful. And, uh, that's ultimately what's good for the, for the client. Then, then that's ultimately good for me. Yeah.

Wes: ask you this and you're going to know the right answer. Like this all sounds amazing. I'm an entrepreneurial company. How long does this take to go from like banging my head against the wall? I need to get this right too, man. We are just like go to markets, just humming, you know, what's the timeframe look like?

Does it six months? Is that two years? Is that, I know it all depends, right? But. What's like a good estimate.

Dave: So let's take a sales led growth company, right? The companies that typically have like longer term sales cycles, let's say four to six months, you know, perhaps even longer, um, selling into to enterprise, maybe mid market companies and larger, you know, give or take that kind of profile. You're looking at a solid like six to eight months of just like learn, build, execute, and start to like, you know, and obviously pivot quickly.

Like one of the critical aspects that I really talked much about is, you know, we talked about metrics, but when you're doing this work fractionally, you have to learn extreme, like even faster than let's say a full time person. Like your responsibility is to turn those, you know, turn those sort of feedback loops, even faster than sort of somebody would normally, because Well, you're not cheap and you also need to prove results and that you're getting on the right path.

So you need to know what your leading indicator metrics are. So things like, you know, meetings booked, you know, qualified opportunities, you know, pipeline progression, are we seeing? Um, sales cycles decrease, right? Like whatever those things are like leading up to, obviously you want closed deals, new customers, retained customers, cash, all those kinds of things.

So, um, so those are, you know, those are some of the things, um, that, that, that, that I would look at over that time.

Wes: So then are you a really good therapist for the first six to eight months? Cause you know, it's funny cause you know, I, I know this world too. And it's people want to go right to execution and they want this done tomorrow and they're like six to eight months, like, man, can't you just like do your thing, like, how do you, how do you manage that?

Dave: Yeah, totally. I mean, six to eight months, I think is reasonable. There's certainly some, some scenarios where it can be shorter than that. Um, but the reality is like, you, you need to, If you're making these like large changes to the business, right? You're kind of maybe focusing, starting to say no to some things.

Uh, perhaps you're deploying a new go to market motion or something like that. It just takes that amount of time. I mean, it's, there's really, I don't see any exceptions to it. Um, you know, it just takes that amount of time and candidly, it takes probably six to eight months of just work, you know, to go, to go fix this thing or sort of build this thing, but it takes another six to 12 months after that.

So now we're closer to like 18 months. To really start to see the actual results, meaning like where you're seeing it show up in your, your cash, you're seeing, you know, deals, customers, you're seeing. You know, probably pipeline, uh, consistently, you know, see that growth and you're seeing that process consistently go all the way to close.

And now you're starting to have line of sight to, okay, the, this, this process is now working. I can, I can now see how I'm a 2 million company, but I see how I can get to 5 million, you know, by, by allocating capital people, time and money towards these set of activities. And then, you know, once you get to 10 million and beyond, you may be considering, you know, a second or third go to market motion.

And so you're kind of starting all over again, but yeah, it just takes, I mean, candidly, it takes time. Now flip side of that, B2C, e commerce, shorter sales cycles, more transactional. You, you could probably shorten that right to maybe three to four months where you could actually start to see some, like, you know, you're doing a lot of build and seeing some results, but man, and anybody that sales like growth, longer sales cycles, you know, six to eight months, that that's been my experience.

Wes: So what's a perfect client for you? That is it. I'm going to guess it's mindset. Like that entrepreneur needs to be mentally ready. They need to be bought in, you know, if they're not bought in, I could see this. And even on my world, it doesn't go well. Like they're just resistant. You know, they, they just want to skip the strategy.

I think you said, you know, learn, build, execute. Like they want to skip the learn, skip the build, and they want to go right to execution, right? It's just like a no win situation.

Dave: I mean, I liken it to, you know, I've got a headache and I call the doctor and in 30 seconds, they tell me I need brain surgery. It's like, how could you possibly know without having spending, spending a little time? Like you got to dig into the business to understand like root cause issues. So this is one of the things about Lean Six Sigma, right?

And Five Wise and getting past symptoms, getting into root cause. Um, and diagnosing root cause and then building a plan to fix that, right? Like those are some of the components I mentioned earlier about like how this, that kind of process oriented thinking transfers into the revenue side of the house.

Um, but I, yeah, you're right. I mean, I see, I see companies all the time. They're like getting an execute this thing, you know, and I look at it and I'm like, this, this project plan is not going to have any material impact on your business because all you've done is diagnose symptoms, but we haven't actually addressed the root cause go to market issue that's causing this.

And therefore. Even if you were to see some results, it wouldn't be predictable, you know, and scalable, like by fixing those things, because you've just like essentially just gone and threw a bandaid on this thing over here. And it's just, all right, we'll wait until that falls off. Or there's a new problem that happens over here that gets, that distracts us and takes us over there.

So, I mean, the, the, the key, I think is like, where are you at? Where do you want to go? Dig into finding out root cause of like, why are you not able to, whatever it is, convert new, new opportunities, retain customers, you know, or whatever those issues are. And then find out what it means. I'll give you an example.

I worked, I had a client that was in a kind of wired systems integrator, um, type, type space. Um, so if you have like a new build, like construction build, you're running wires all over this building, uh, you need, you need a team to actually like figure out where all of your kind of voice data, surveillance, internet, all that stuff kind of goes.

And, um, and, and we, and they, they came to a, they came to myself and I had a partner on this and they were asking us, well, we need to grow, how do we get, how do we grow our revenue? And as we started to dig into the business, we kind of scoped an initial project to kind of dig in. What we started to learn was, um, they were hemorrhaging or sort of not converting deals and opportunities in their pipeline because they didn't have control over the customer experience because they had largely used a subcontractor network to outsource the pricing.

And then not only like the pricing and scope, but Uh, for a project, but also the actual delivery of it. So if, because they didn't have control over these subcontractor networks, as soon as they, as soon as the customer had a poor experience with somebody who wasn't even one of the employees, they would churn.

So they were basically losing deals out of their pipeline from a poor experience. And then they were losing, uh, customers after they sold them because maybe the third or fourth project just kind of blew up in their face and the company decided not to move forward anymore. So in that scenario, like, you know, It's really not even a go to market issue that they have.

They really have an operational problem. Like, you could fix go to market, you could fill the pipeline, you could close all day long, but you're just going to be hemorrhaging, you know, it's kind of like holes in the ship. You can't, you can't patch them fast enough, you know, uh, and another one keeps popping up.

So, you know, figure out what the underlying root cause issue is that's preventing growth. Make sure you dedicate, you know, your resources to fixing those things. And I think, you know, CRO, amongst others, um, can be instrumental in figuring that out.

Wes: man, that's great. I love your analogy. Cause I, I, there's a lot of companies out there that'll just say, yeah, yeah, sure, like we'll fix this, right. And charge you a lot of money. And I see it all the time and it pains me, but, um, appreciate what you're doing. I think, yeah, you provide a wealth of knowledge. Um, so thank you so much, Dave.

Uh, if you learn something on the podcast, you know, share it with somebody, but, but Dave, thank you so much. How can people get in contact with you if they're running into sales challenges? What's the easiest way for them to get in contact with you?

Dave: Yeah. Thanks. Thanks Wes. Um, LinkedIn's a great place. Um, hit me up on LinkedIn. I respond to just about every message on LinkedIn. Um, otherwise, uh, Dave at Vanderjat CRO. com. Also a great place to get in touch with me.

Wes: spell that last name, just so we get it clear?

Dave: You bet V A N D E R J A G T CRO. com.

Wes: Well, Dave, man, I really appreciate it. Thanks so much.

Dave: Thanks Wes.

Unlocking Revenue Growth - Dave VanderJagt - Entrepreneur Intel - Episode # 27
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