PreSales is the Oil in the Sales Engine: A Conversation with John Care and Matt Darrow
Last week, I sat down with legendary PreSales thought leaders John Care, of Mastering Technical Sales, and Vivun CEO, Matt Darrow. The topic of our discussion? How to run your PreSales team like a business in 2021, you can watch the full session here. The highlights? Learn what it means in dollars to lose your best SE, why data-driven PreSales teams are unstoppable, and how to define and secure the technical win.
Let’s dive deeper into the discussion.
PreSales is the backbone of revenue generation in B2B tech
We’ve all heard it said that B2B buying has changed forever, this is because today’s buyers have become experience-first. They expect support and guidance during their entire evaluation, from trial to pilot to purchase and beyond. Ultimately, they want a sure thing.
In response to this shifting dynamic, industry leaders like Snowflake, Atlassian, and Zoom are increasing their investments in their PreSales organizations, recognizing that they’re the key to influencing and enabling this new buying behavior to successful outcomes. They understand that delivering PreSales success at scale can not only help with short-term revenue attainment and maximizing technical win rates but with growing market size and share as well. Darrow pointed out that we are seeing this reflected in the AE to SE ratios and dedicated PreSales processes as PreSales is increasingly becoming the center of influence.
There’s a flip side to this story though. Every personnel decision you make for your PreSales team has a direct financial impact, and it’s extremely important to understand what your decisions mean in dollars. According to John Care, in his book The Sales Engineer Manager’s Handbook: Mastering Technical Sales, it takes a new hire SE 6-8 months to become useful and 12-18 months to hit full speed, which is consistent with our benchmark findings that it took 50% of respondents 6+ months to ramp their SEs.
So how do you calculate the real cost of hiring and firing?
Care suggests using, what he has named, The Rock Star SE Loss Formula:
Sourced from Chapter 11 of The Sales Engineer Manager’s Handbook
Where FBC is the Fully Burdened Cost of the SE, and that is the annual pay at 100% achievement plus benefits and overhead. Usually, that is an additional 40-50%, and for a €100,000 SE that would be €145,000 per year, around 170K in US dollars.
QY1 is the effective quota that the SE would support for the next 12 months.
QY2 is the effective quota that the SE would support in months 12-24. Effective quota is the sum of quotas that the SE supports, divided by the number of SEs supporting that quota. So if 5 SEs support reps carrying a 15,000,000 quota then the effective quota is 3,000,000.
There’s a significant risk attached to losing your best SEs. Care’s calculations show that when top talent leaves your PreSales team for greener pastures, it will cost you anywhere from $3.5-6 million in revenue because of their impact on the bottom line. When you find these SE gems, you better hang on to them and find a way to reproduce them.
If you’re not using data to run your team, you are behind.
PreSales is positioned at the intersection of sales, product, and engineering, and knows more than anyone else that data is the foundation for learning, growing, proving impact, and better decision making.
If you don’t know where your team is spending their time, then you’re the blind leading the blind. Capturing and logging activities are for the benefit of the team, it’s the basis for knowing what works so you can help them do more of it and then reward them. It’s important to know the win rates attached to specific activities. If your team is crushing discovery but needs work on custom builds, you will only know what needs to be improved if you have data.
Being able to analyze trends over time and view the full picture to continually improve and streamline work is necessary for catapulting your team to the next level and accelerating revenue attainment. If PreSales is the oil in the sales engine, then data is the gas pedal. It lets you go faster, run the team as a business, and provides insights for maximizing technical win rates, shortening evaluation cycle times, nailing forecasts, and creating net new opportunities.
The technical win matters, a lot
PreSales knows which deals will close, but do you know exactly what it will take to get the technical win for each and every one?
Here’s how Care measures the time it takes to get the tech win relative to the business win and uses it to project revenue a Quarter ahead. Check out his back-of-the-napkin calculations from the webinar.
Key: WB= Business Win | WT= Tech Win
According to Care’s calculations, the business win comes ~42 days after the technical win is secured and this PreSales insight gives you the power to predict revenue with accuracy.
During the webinar, Care echoed the feelings of many other PreSales leaders, saying
Wouldn’t it be great to walk out of a forecast call as a VP of PreSales and be able to forecast mathematically for the upcoming quarter’s revenue? If you measure the tech win, you can effectively do this because you have a 7-week foresight for what will close.”
Optimizing for the technical win unlocks the ability to speed up sales cycles. In Hero by Vivun®, we uncover technical win velocity at your organization, and how that changes over time. This is critical data that you need if you want to improve the metric.
This sounds great, but how do you know exactly when you have the tech win? According to Care, the answer is when you have a public declaration from the buyer, it can be written or spoken, but it must be publicly announced. Toby Penn, VP of PreSales at Recorded Future, weighed in via the audience discussion in the Vivun Heroes Slack Community, chatting, “I would add in another marker…you are the ONLY solution. If the prospect tests 3 solutions and all three meet the technical requirements, you may think you have a tech win, but you are far from winning.” Solid point, Toby.
PreSales is your company’s greatest asset—technical ninjas who understand the buyer, know how to prove value, and thus are the secret to transforming your bottom line. These are the folks who should be championing your deals as they’re best equipped to support and guide buyers to successful purchase decisions. “When PreSales gets involved earlier, you can get to the tech win faster,” argues Matt Darrow. “You can build trust and identify gaps earlier. The PreSales Org has the best understanding of the pipeline and what has a chance of successfully closing.”
According to Care, “PreSales is the oil in the Sales engine.” We at Vivun agree with his philosophy wholeheartedly. The need for this critical function shows in the pain that we’ve all felt when we lose a strong contributor in this strategic department—beyond that, we’ve seen how losing a star SE can affect a business’s bottom line. So do your part as a PreSales leader to measure performance, keep your team growing, and give them what they need to get the technical win and smash their targets.