Are you worried about hitting your AE headcount targets without sacrificing your talent bar?
When most companies scale up, their bar for AE talent decays.
40% of SaaS reps attrit within their first 12 months.
That devastates the CRO's annual model and costs a ton of ARR.
But it gets even worse when you're growing fast:
Do you keep your high bar for AE talent, or do you hit your hiring goals?
Hard to do both. Those goals are at-odds with each other:
When this happens, companies miss their revenue plans.
But there's a bigger issue:
Their culture decays. They bring in too many of the wrong people.
On the other hand...
If you keep a high talent bar while scaling, you'll build a buzzing org that crushes their numbers.
Have You Ever Been Here?
Last week, I talked to a CRO well on his way to $100M ARR.
But not without growing pains.
He told me about a hiring class they had in May:
He modeled that he'd keep 70% of them and attrit 30% by the end of their first 12 months.
Pretty standard model.
But here was the result:
His team missed on seven reps instead of three.
Here's how the math worked out:
One bad hiring class cost him almost $1M ARR:
- Instead of three reps turning over, seven did.
- That means four more than what he modeled for.
- Each rep produces $60k+ per month in ARR by month four.
- It takes 4 months to backfill and ramp a replacement.
So, four un-modeled attritions * $60k/month * 4 months =
...In lost ARR.
And that's only ONE hiring class!
Imagine if that happens a few times throughout the year.
You wouldn't stand a chance against your ARR plan.
Here are nine ways to keep a HIGH bar for AE talent while scaling.
The above is a Youtube version of this post.
Watch it above, and read it below:
Fuzziness on your ideal rep profile is the most deadly mistake when scaling.
If you don't do this, you'll decimate your talent bar.
Throwing body after body into your company with no clarity.
Your org will turn into a mess.
Now, you don't have to get this PERFECT.
It’s okay to get your profile wrong…
The point is to have a clear profile you can iterate on and test.
When you have a clear profile, you'll know what's off.
When you don't, you won't.
There are three elements of an ideal rep profile:
What traits, experiences, or skills do reps need to execute your sales process?
Here's a great way to build your profile:
Deconstruct your existing top producers.
What attributes drive their over-performance?
Turn those into competencies to vet for in the hiring process.
Try to stick to 6-8 attributes that are critical for success in your selling environment.
If you do more than that, make sure you're clear on which ones are must-have and which are nice-to-have.
These two words are your enemy when scaling with a high talent bar:
‘Ad-hoc’ and 'inconsistency.'
There are three elements of a consistent hiring process:
Effective? Also yes.
If you want your hiring process to predict, repeat the same steps over and over.
Otherwise, you’ll get noise instead of signal.
Same stages. Same steps.
THAT is how you see signal rather than noise.
It should feel like you’re doing the same thing over and over.
No “special snowflake” hiring processes.
There's a caveat to this one:
People want to bring their friends along for the ride.
Those friends aren't always strong performers!
Often, when a rep makes a referral, it's because they want their friend to work with them.
Not because they think their friend is going to crush the job.
That said, with referrals, you can usually soft-verify past performance.
The key is to make sure your people know their brands are on the line.
Press on people who give referrals:
“Knowing their success or failure would get linked with you, would you bet your reputation on them?”
Once you understand that...
Then the key here becomes consistency.
EVERYONE understands that they should focus more on referrals.
FEW sales leaders do this with the regularity that they should.
Have your managers make this a recurring agenda item with their (best) reps.
Don't let them end 1:1s without asking:
"Who's the best sales rep you know? I don't care if they're on the market or not. Leave that to me."
When you're growing, time is not on your side.
Especially when it comes to hiring.
You don't have time to invest an entire hiring on someone who comes up short and has a bad backchannel at the end.
So, before you invest too much time in a hiring process...
Run a quick-and-dirty "virtual back channel" upfront.
After your initial screen...
Check to see if you have any mutual connections on LinkedIn.
And shoot them this message:
That question works wonders.
The same people who would have said "Yes! Definitely a great hire!"
...will instead respond with...
"Hmmm... top quartile? I'm not sure about that. Top 50% maybe."
Steal that question.
It's a much better question than "would you hire this person?"
A lot of companies do 'mock sales meetings' in their hiring process.
But they usually do it at the end of the hiring process.
This is fine if you're growing slowly.
But if you're growing fast, time isn't on your side.
Too many people ‘bomb’ at the end. That’s a lot of wasted time on a hiring process.
Better to get that info upfront.
Move it to the 2nd stage, after the hiring manager screen.
Yes, it will FEEL heavy to your managers (they'll be doing more mock calls).
But it will prevent them from draining hours and weeks on candidates who won't cut it.
Net net, they'll spend less total time on hiring (but more time in mocks).
Your managers will get desperate to make a hire if they fall behind on headcount targets.
That’s when they’re likely to make a bad decision.
Get someone from outside their team who has no stake in the game when it comes to filling that headcount.
That 'second opinion' will keep them from making a dumb decision.
Here are a few good options:
Interviewing is a complex skill.
When someone is desperate to make a hire, they become CONSUMED with cognitive bias.
They miss obvious red- and yellow-flags.
And make bad hires that attrit before their 12 month anniversary.
Reference calls are a waste of time...
If you do them like most people.
Here's the deal:
People don't like to give bad references.
So most of the time, all you hear is:
"Yeah! Totally! She was awesome! Definitely hire her!"
Here's how to do reference calls that get the truth.
First, frame the call so the reference lets their guard down:
If you're doing a reference call, you're late enough in the process for this to be true.
This talk track "thaws out" your reference.
They'll often share things they otherwise wouldn't have.
You with me?
Three questions to ask in great reference calls:
Nudge your reference to go into detail.
Some people will give you only 1-2 answers and won't offer much context.
Aim for between five and seven strengths and weaker points.
And once your reference answers, try to get EXAMPLES.
The examples are worth their weight in gold.
I learned this one from the CTO at Gong.
Think about the top concern or red flag you have with a candidate.
And then turn it into a STATEMENT (not a QUESTION) on the reference call.
"I understand that James has great business acumen, but can be lazy at prospecting."
Now shut up.
Do NOT ask... "Is that true?"
Make it a statement, then PAUSE.
You'll get RICH insight on the candidate.
The reference will often elaborate in a way that influences your hiring decision.
And again, try to get examples.
If you're gunning to keep a high talent bar even as you scale...
Aim for top-quartile reps.
People join fast-growing companies for accelerated career opportunities.
When you aren’t clear what those are, your people will get frustrated.
I made this mistake in SPADES my first year as a sales leader.
I used to think it was enough to tell my reps we were growing fast. And that opportunities will pop up left and right.
After all, that was enough for me.
But most people cannot cope with that kind of ambiguity.
On the flip side, I was taking to a great SVP Sales the other day.
He has this ALL mapped out:
Exact promotion paths and pass/fail promotion criteria for each one.
Don't be like me in my first year. Be like that SVP Sales.
Truth is, I was being lazy.
Do the work and map this out.
Define promotion criteria and career paths.
A lot of people won't like this one.
This isn't the "fun" part of sales leadership.
Because it involves holding low performers accountable, and yes, terminating people.
But, you can be liked, or you can keep a high talent bar in the face of rapid growth.
Define clear performance management criteria.
And stick to them.
Manage out mishires fast.
Here's a rule of thumb:
It always took you too long to address a performance issue.
Address mediocrity swiftly, or your bar for talent will decay.
Your lowest performer DEFINES your bar for talent.
Think about your current lowest producer.
Are you willing to accept that as a talent bar for the long term?
If not, do something about it.
Here's What To Do Next
There's one more thing to do.
Once you build your 'ideal rep profile,' this cheat sheet will tell you EXACTLY what to ask to hire top-producing SaaS AEs.
Here's a bonus:
When you download it, I'll send you a few tips for scaling to $100M over the next week or so.
You'll get one tip at a time via email every few days.