CP14: Podcast with Donal Daly from Altify (TAS Group) about Sales Account Performance
Welcome to the 14th episode of our podcast!
You can download the podcast to your computer or listen to it here on the blog. Click here to subscribe in iTunes.
Martin: Hi, today we are here with Donal Daly from Altify (previously, TAS Group). Hi Donal, who are you and what do you do?
Donal: Hey Martin, nice to be here. Donal Daly, I’m the CEO of the TAS Group. We provide software applications that enables sales people to be more effective in their job every day.
Martin: What did you do before you started this company?
Donal: Well I never really had a proper job. I’ve always worked for myself. This is my fifth software company. So I’m a software guy and I’m a geek, and a nerd, and all those things. So that’s what I do. I’ve been building I suppose software companies for the last 30 years. So that’s what I do.
Martin: Cool. If you go back in time, how did you come up with the business idea of the TAS Group and how did your previous business or interest enable you to perform in that?
Donal: So, I think that when I finished the last company that I had, I ended up doing some consulting work, as you do, helping people with kind of where they were going with their marketing strategies and sales strategies. Given that I had kind of built a number of companies and a number of sales teams over the proceeding, gosh 20 years I guess I started looking at what people were doing to create more effective sales organizations. And I looked at the sales training industries, such as it was. There was not a lot of technology applied and there wasn’t a lot of sustained values delivered. It appeared to me that given that I had spent the previous 20 years in software. That maybe if you could take some of the smart, deep sales methodologies that existed and to make it available to sales people and sales managers to use and measure, then that kind of hypothesis might deliver more value than the traditional approach that was being applied.
Martin: Donal, given that you’ve started and grown five businesses, what keeps you motivated?
Donal: Gosh, I ask myself that question every day. No, I’m kidding. I think, it’s my opinion, if you can find an important problem that lots of people share as urgent, that can make a big difference, then, at the end of the day, help people do their jobs better, I think that’s very gratifying. If you can kind of look at that and help your customers do whatever it is they are trying to do better, I think that’s something that gives a lot of its own return.
Martin: How did you go about starting this company? So at what point in time did you talk to customers? At what point in time did you look on the product, talk to investors, etc.?
Donal: So I was fortunate of having a number of folks who had started with me in the other companies, but in this case, it was another classic software startup. Boot strapped, took a kind of proposition around people that I knew and said: “What do you think of this? Is this worthwhile?” And in many cases, people said: “Well, no. Because if it was, wouldn’t somebody have done it before?” But I suppose we kind of held fast to the vision that we had. And we built an early software application. It might have been four or five of us at the time. TAS software startup, we built our deal maker application. And because we’ve been building kind of enterprise class cloud software for a long period of time before that, we knew how to do that.
So we built it. And then we brought it to a few people in many ways, best market researchers trying to sell what you have. So we sold that to a few folks, and then we sold it to a few people who we didn’t know. So that kind of proved out well. That was kind of the first phase of the journey, you know testing the product, checking the product market fit, seeing whether it’ll deliver some value. And those were the early days, that went as well as we could have hoped.
Martin: And how often do you currently have, well in the past, have doubts about some kind of key assumptions or so that are necessary for growing the business? And how did you manage those kind of situations of doubt?
Donal: That’s a great question. I think sometimes, when we got into this space initially, I guess we felt that it was pretty obvious that people should take smart technology and apply it to deep knowledge in the space we’re in. In that kind of sales methodology sales training space, we went, okay we’ll start doing this and over the next kind of short period of time, other folks who had played in this space who are trying to solve the same problems, they will probably do it as well.
That was a long time coming. So for the first three, four years of our existence, there was nobody else doing this. People were saying, no technology doesn’t have a role to play. So we kind of questioned and wondered you know, why are we this sole activists in this area? So we kind of thought about that, but as we looked at it, looked at the value that our customers were getting and you’re going to wake up in the morning going: “Do you really believe that this delivers value to the customer? And is the customer willing to invest in it?” And that keeps you going.
BUSINESS MODEL OF TAS GROUP
Martin: Donal, let’s talk about the business model of the TAS Group and let’s start with looking at the customer segments. So what types of customers are you serving? So is it something of special industries or is it only the sales function, or is it only a sales function that has specific kind of properties?
Donal: So I think there are two parts to that question. So we sell to, I’ll classify it more as the revenue team rather than the sales team. And by that, I mean of course the sales team, but also the supporting functions. Because marketing are involved and customer service could be involved and sales operations could be involved. So whoever is priority to the go-to-market model of the sales organization. And we are best suited companies who have a reasonably complex sales cycle. If you’re selling widgets, you have a seven days sales cycle, then we’re not the right solution. But if you’re selling a complex product that has maybe some IP involved, where the sales person can actually add some real value and can be a real differentiator, then that’s where we make a difference. And that applies in areas like high end professional services, high end manufacturing technology, telecom, those kind of areas. So it’s enterprise business to business, business that we’re in.
Martin: How do you establish and nurture the customer relationship? What I mean by that is are you talking to the potential end users? Are you talking to the budget owners? Are you talking to the influences within a specific company that you want to sell your product to? How do you approach that?
Donal: I think there are three kind of main personas that we solve problems for.
- So the sales user, I’d like to think that we wake up every day going, how do we make a life of the sales user better? And that means how do we accelerate their paths to revenue.
- Then we try and solve problems for the frontline sales manager. They have a tough job and they have lots of things to do. But at the end of the day, they are only measured by one thing which is the results that they achieve. But at the same time, they’re tasked with achieving metrics around sales presence productivity, forecast accuracy, corporate reporting, all those kind of things. So we try and solve that problem.
- And then the kind of executive sales leader who look at things from kind of a helicopter view, much higher. So they are interested in kind of key performance indicators in the business and how they can have a longer term use.
So we spend a lot of time speaking to each of those personas. I just came back just this weekend from a customer advisory board event that we had in San Francisco, where we get kind of twelve of our customers in a room and we listen to the pain that they have. We share with them the vision of where we think we should go. We had a very collaborative conversation about how do we best invest our resources to maximize the long term return that they can get.
Martin: Donal, you said before that for the first three years or so, you felt very alone in the market. So you were the only company offering this type of software solution for sales organizations. This sounds to me that other competitors entered the market. Another question, what is the unfair advantage that keeps you ahead of those competitors?
Donal: Well I think what’s interesting about, in fairness to the people who I kind of looked at and said, why didn’t they come into the market? I was probably a bit slow in figuring out why they didn’t. But if I think about it, what we do today is a combination of two distinct disciplines:
- One is deep sales methodology.
- And the other is smart software.
So the team that I had, had been building smart software for a long period of time. My first company was NAI. The team that we have built many cloud applications well before it was called cloud and along the way, we acquired the TAS methodology business. So we ended up in this kind of unique situation where we had you know 25 years of methodology expertise and 25 years of smart software expertise.
So as a consequence, when I thought about this a little harder and I figured out, okay, so the methodology people who are schooled on sales training and putting people in a classroom and going through those kind of either paper or fairly manual processes didn’t have the benefit of the decades of software experience. And the software people who knew how to build software didn’t have the methodology expertise. Now we were in the fortunate situation where we had both of those.
And because the first company that we were involved in, the first company I started was NAI and expo systems. And we go, that’s a really cool way of taking knowledge and applying it in context to help your knowledge worker and in this case, that’s the sales person. So I think that’s the unfair advantage that we have right there.
Martin: Okay, cool. How’s the pricing model working and how did you come up with the pricing structure?
Donal: We’re a subscription software business. We very much believe in the subscription economy. We think it’s a long term contract that you enter into with your customer and you earn their trust every month, because they can turn you off.
So we started life as a subscription software company, where everything that we do is focused around the software that we provide which has the kind of embedded knowledge therein. And of course we also provide the appropriate consulting and kind of learning and training services to make the customer successful. Fundamentally, subscription software business with appropriate services to support the customer.
ADVICE FROM DONAL DALY
Martin: Donal, if you look back over the last 30 years or so, where you started and grow those five businesses, what type of learnings can you identify that you think is very applicable to other people starting their first company?
Donal: I don’t know. I guess you’re never as smart as you think you are. And there’s a lot to be learned from other people. I think that if you take care of your employees first, they will take care of your customers. I don’t subscribe to the notion that it’s the job of the CEO to look after the shareholder value. I think it’s the job of the CEO to look after the employee value, who looks after the customer value, which has a consequence to deliver shareholder value. And I think that’s something that’s very sustaining and that people can do.
I think that if the people in your company have a vision of where you’re going as a business, have a sense of purpose for what they’re doing everyday in their job, if you actually care about the outcome for the customer, again I think that’s a very sustainable thing that you can do. But as an entrepreneur, as someone who’s thinking about starting a business, I’ll often say to people, so you should think really hard about why you want to do it. Because it’s much easier to start than stop. And it’s much easier to come up with a smart idea than it is to deliver a total execution and stay with it when things are tough. So I think real belief in what you do and in the value of what you do I think is really important.
Martin: I like the concept of this employee value. How do you measure and optimize this employee value?
Donal: People talk about us sometimes as you know we’re a little bit of an Italian family. Now I’m Irish. But people, Italian families, so people don’t leave. The company is ten years old, and we have a substantial number of people in the company who have been working with us for ten years.
And so the tenure of our employees is really high. I remember having a board advisor conversation maybe three years ago. A new board advisor and he was saying, things will revert to the norm. You will move to the normal attrition rates, you will move to the normal turnover insurance rates. I don’t think so. I know, and it took a couple of years. Later he goes, you know what? You might be right. And as it turned out just before that happened, or between the two conversations we’ve had, one of our guys had left. And I said to him, actually you know what, one of our guys had left. And just yesterday he called and said: “Can I come back?”
Because if there is a true culture of mutual respect across all the employees, then it’s a place where people want to come to and people want to stay. And we think that’s really important.
Martin: And are you only trying to let’s say clean up this kind of culture when you’re hiring people or are you also taking some measures once people are there that you are strengthening this type of culture?
Donal: Yes, so it’s a bit like, we tend to say to people and I’m conscious of the fact that I’m in a recorded entity so I want to not swear. And this is a no BS environment. You know there’s no room for BS. There’s no room for disrespect in your colleagues. There’s no room for any of those things. And it kind of self governs at this point because everyone understands that we don’t do that kind of thing here. I believe in self governs.
SALES ACCOUNT PLANNING FROM DONAL DALY
Martin: Cool, Donal, you’ve wrote a nice book about account planning. Let’s dive in about this. What I would love to know is, how do you get a sales team more productive?
Donal: I often say that if we can think about this for a second that the impact on a customer of a bad buying decision is typically greater than the impact on a sales person of a lost deal, right. So if someone buys the wrong CRM or they buy the wrong bit of machinery for their plant or they do those kind of things, typically the impact on the customer of making that bad decision is typically greater than the impact of the sales person who might lose a deal. And people think about that and actually take it to heart, what happens is they start to think about the impact on their customer. So when they start to do that, then they adopt the buyer perspective, and they think about the things that the buyer actually cares about. And as a consequence, it becomes much more of a valued conversation than it does as a cost conversation.
So what we’re trying to do is we’re trying to put some software in tools and processes and give people the right in their mindset tools, skill set to bring those pieces together to enable the sales person to actually understand what their buyer cares about, understanding the path to closing a deal is much shorter.
Martin: I like this idea of really focusing on the customer value. But the question to me is how do you align this with short term orientation in terms of the sales incentive for sales people?
Donal: So I don’t believe in short term orientation. I believe that at best, you can have spotty success; at worst, you can have disenfranchised customers; and a satisfied customer is your best marketing machine.
So if a sales person cannot honestly say, if I was a customer I would buy from me, if you know what I mean. Then their win rate will be lower. Their average deal cites will be lower. Their sales cycle will be longer and it takes just a few examples of actually you know what? I thought a lot from the customers point of view. And at the end of the day, they didn’t push me on price, they understood the value that I delivered. And instead of having to discount by 20%, I actually had to sell a few more deals.
So it takes a bit of sustained messaging if you like but also good examples and role models. So I don’t think there’s a professional sales person out there who is at the top of their profession, who doesn’t get the fact that looking after the customer actually shortens the sales cycle and actually gets better revenue.
Martin: What are the best practices for sales account planning?
Donal: There are really two reasons why you lose a deal. One is you shouldn’t have been there. Two is you were out sold. So with respect to account planning, it means that I like to kind of think about account as a market place. So in other words, I’m selling into you know galactic corporation under hood, right. And there’s a lot of places within vast accounts that I can sell my solutions and maybe there’s a number of different solutions I can apply. So if I think about where in that business I can best add value with solution A or solution B, and disqualify and defocus from the other areas, then I end up delivering more value to my customer, and getting to a place where this is what I call the kind of mutual value equation. It’s of most value to you and most value to me. Then that’s the place where account planning works.
Martin: So this was the first question, right. So am I at the right place in the company?
Donal: Totally, yes.
Martin: What was the second?
Donal: I guess the second question is, okay one of the… as we kind of think through account planning practice generally just to give you a fuller answer. One is I do need to research my market. I need to think about what’s going on in their customer. Understand what their goals are, what business pressures they are under, what initiatives or projects that might have underway. And as I do that across a larger account like that, then what I need to do is I need to segment my market into the different areas of what we call A, B, C, D kind of segments. And that said my A’s are where I can deliver most value to you and I get most value from. Once I do that, I can work through, what we call a kind of the white space in an account. White spaces are areas where there’s an intersection between maybe divisions in the larger account and products or solutions that we sell.
When I do that exercise, what should happen is, I should come up with a large number of what we call potential opportunities. Potential areas where I can add value and deals that I can sell and I should come up with more than I can handle. At which point what I would then suggest is using a similar process to your segmentation, but this time add opportunity level and try and figure out which of these opportunities that I should focus on next.
Once I do that, I need to look at them and think about: “Okay, that’s kind of my planning process, but now if I want to execute against that process, I need to determine what objectives I’m trying to achieve, what strategies I want to employ to achieve those objectives. And what specific timed actions I’m going to undertake to make it happen.”
So that’s kind of account planning you know in a nutshell from a research through segmentation, through some white space analysis, a bit of prioritization on the opportunities, but then get into the actual execution. And what we found is when people can do that as an account team and kind of collaborate on it, in our case with the cloud application on a team, then their velocity or delivering success to their customer and revenue of the company are accelerated.
Martin: And what questions do you ask yourself if you are talking to somebody in the company and you want to really identify whether you are currently at the right place or at the wrong place, so you don’t waste time talking to a person who will never buy from you?
Donal: Yes, I think it’s kind of a broad question because it is very context dependent. So I was going through that, simply I’d go okay, so here is what I understand. I understand that you have a business problem. Now I’d like to understand what you think the cause of that problem is. And based on my experience of dealing with people like you in several industries, I should be able to suggest to you what those cases might be, if you’re not familiar with them all. Once I understand the problem and the cause of the problem, the next thing I want to understand is from your perspective, what you think the impact is. So what’s the impact on you? And then you come and figure out who else is impacted?
And again because in this situation, I would probably have worked with other customers that are similar in similar industries or with similar problems. I should be able to kind of prompt and suggest and think about, well maybe you’re impacted this way or that way. So maybe these other people are impacted.
And once I understand the problem, the cause and the impact, then it’s a point for me to say: “Okay Martin, so you have a magic wand, now we understand this, what would you like to have next? And what’s your ideal solution?” If there are no barriers, no constraints, what’s your ideal solution? And then that helps me to understand whether we’re aligned in terms of what we think can happen. And I could understand whether the value is like that. And look to, in your case whether you’re applying the resources that you need to do it your end, whether there what we call compelling event – there’s a time in which you need to act before something happens, those kind of things.
Donal: If that’s helpful.
Martin: Definitely. What types of trends do you see in sales organizations? And what type of happenings do you expect over the next five to ten years?
Donal: So some of the trends I see are kind of worrying. I see areas where people are fixated on statistics that they see in the market. I see people are fixated by, this is kind of what I referred to as access of evil right now which is, people were talking about there are some general trends in the market. People say that buyers are 57% or 60% through their buying decision before they contact the supplier. And the other one that worries me is people say, predictive analytics can solve all sales problems. I think both of those are fundamentally flawed, but they have some value at the core. And particularly in business to business sales, I’m seeing people, I suppose in some cases, buying into those myths without thinking it through for their business. In both cases, in those two examples, the stats are true but the stats are based on averages, and businesses across the different spectrum. So I get concerned about some of that and sometimes it requires a bit more critical thought than people are applying.
Martin: So if those are the two problems, what’s the solution then?
Donal: The solution is to enable kind of critical thinking by trying to surface with people knowledge in context of what they’re doing. Because people look at data, people tend to think about, I’ve got a lot of data, I can run some reports, I can do some predictive analytics. I can do some prescription perhaps and the solution in that case is to take a little bit of time thinking about what we will call descriptive analytics, which is what’s the actual data that matters.
There’s like three percent of the world’s data has been analyzed, of which people think one percent is useful. So thinking about what data matters. In the sales world it really comes down to a couple of things. One, the number of qualified deals that you’re working. What’s your win rate? And by win rate, I don’t necessarily mean you win three out of four, so that’s 75%. Because people don’t often think about the different values of those deals. So think about the number of qualified deals, an informed view of your win rate. Thinking about your average deal value and your sales cycle, because at the core, they are the only four things that impact the revenue that you do. So thinking about everything that you do to focus on those four levers, are the things that we think can impact it.
Martin: So this would mean basically once you’ve identified the let’s say four key metrics that are driving the revenue and sales, then you can apply some predictive analytics, for example for improving one of those metrics by looking at the data?
Donal: Yes, I think you can little bit with the data. But there’s a factor that people don’t often bring into it, you know, is that there is a fifth factor to those four, and that’s the sales person.
Martin: Yes, right.
Donal: And sales person A can be very different than sales person B. So we would try to encourage critical thought as you look into those factors. And think about okay, in many cases, it’s similar if you’re dealing in high volume transaction oriented business, I think it’s very similar and you can use a lot of that kind of stuff. But if you’re in high value B2B sales that is measured in hundreds of thousands of dollars, and millions of dollars, then it’s hard to find a sample that is appropriately homogeneous to predict accurately.
Martin: It’s true. Okay, thank you so much for your insights, Donal.
Donal: Thank you very much for taking the time.
Donal: Thanks, Martin, bye bye.
THANKS FOR LISTENING!
Thanks so much for joining our 14th podcast episode!
Have some feedback you’d like to share? Leave a note in the comment section below! If you enjoyed this episode, please share it using the social media buttons you see at the bottom of the post.
Also, please leave an honest review for The Cleverism Podcast on iTunes or on SoundCloud. Ratings and reviews are extremely helpful and greatly appreciated! They do matter in the rankings of the show, and we read each and every one of them.
Special thanks to Donal for joining me this week. Until next time!
In Munich we talked with Nicolas Reis, co-founder and CEO of Altruja, about how he started …
In San Francisco (CA), we meet Founder & CEO of CrowdFlower, Lukas Biewald. Lukas talks about his …