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TOMMY’S TIP: “Be curious about yourself. What I mean by that is understand why you are winning deals; understand why you’re losing deals. If it’s hard for you to understand that, go find someone like me, or Andy, and ask that question and they’ll help you figure it out.”
ANDY’S TIP: “If you’re an SDR, AE, manager, leader, whatever, is embrace the grind. Sales is a grind, and if you out grind people, you’ll usually beat them, and you’ll be very successful, and you’ll become a better person for it.”
THE PODCAST BEGINS HERE
Fred Diamond: Today we’re going to be talking about the concept of bringing rigor back to the performance management practices to get your teams through a down market. Now, we’re doing today’s interview in April of 2023. Gentlemen, we just came out of the pandemic. We’re still, in many ways, still dealing with a lot of the repercussions, hybrid, how are people going to work, how do you interface with your customer, et cetera. There’s some global financial challenges going on, so there’s a lot of challenges going out right now. We’re going to be talking about rhythms, some of the rhythms your sales team can implement, and how you can lead with data as a sales leader.
We got Tommy McNulty, he is the founder and CEO of Rhythm. It’s the first platform dedicated to helping sales leaders scale. We have Andy Bell. He’s with NerdWallet, director of sales, overseeing a team of over 70 people with a nearly nine-figure P&L. Tommy, tell us what it is. Tell us what Rhythm is, and again, you worked at NerdWallet for a while, you led some of the teams, so I’m excited to hear how Andy and his team is implementing some of what you’ve been doing. Give us a little bit of an oversight. You say platform, what exactly does that mean? Give us a little bit of insights into what you’re bringing to the market.
Tommy McNulty: I’ll tell a little story to help conceptualize what this actually is. It’s 2019, and we are preparing for a board meeting that’s going to happen the following day. I get an email from one of the board members directed to me with the CEO of the company copied on the email, which says, “Hey, Tommy. Why is the SDR team 70% of the CAC of our whole company, and what are you doing to drive it down?” I did not know the SDR team was 70% of the CAC, so I clearly did not have a plan to drive it down. I had a bit of an egg on my face.
It was in this moment when I realized that as a sales leader, that if I didn’t get financially fluent around our plan, our planning process, and to simply state it, is there a pile of money left over after all the activities that we do? Not only was I going to wreak havoc on the business, I was going to wreak havoc on people’s lives, because I’d be setting quotas that were unattainable, or doing initiatives that made no sense, and hiring people that we couldn’t afford. I got pretty obsessed with this idea of what would enterprise resource planning, or almost a Workday style product look like for our revenue team to help sales leaders in one click understand their financial plans, and then connect all of their performance management and employee productivity rigor to those plans. You’re not just applauding SDRs for setting meetings when those meetings aren’t converting into revenue, for example, which then comes back to harm the company later on.
What Rhythm does, again, it’s a platform, it pulls out your core financial metrics from your financial plan and your CRM and then it surfaces real-time plays for you on how you can go about increasing ARR, reducing costs, things like that.
Fred Diamond: Andy Bell, so tell us a little bit about NerdWallet and tell us about the team that you manage. Then I’m also interested, again, we talk a lot on the Sales Game Changers Podcast, as you can imagine, about data. We typically interview sales leaders around the globe, and the specific data changes, what’s needed right now, maybe different than what’s needed last week. But there’s some core things obviously that you want to be checking. But I’m curious on what type of data specifically you’re looking for, and then we’ll talk a little bit about how Rhythm has provided some value to you related to that.
Andy Bell: When you say specifically about NerdWallet, kind of what our function is inside of NerdWallet?
Fred Diamond: Briefly tell us about the company. If people were watching TV, there’s a good chance that they’re going to see your commercials. I have. Matter of fact, when Tommy said he’s going to bring you on the show, all of a sudden I started seeing your commercials appear. By the way, JG Wentworth is actually a customer as a partner of the institute, and I frequently see their commercials all the time as well. But anyway, tell us a little about NerdWallet, then what you do specifically, and then let’s talk about data.
Andy Bell: NerdWallet basically acquired our company Fundera. Fundera is a small business lending marketplace where basically we help small businesses get financing for their businesses. My team specifically is comprised of, I’d say about 40 AEs, five managers, another senior manager, me sitting on top of it. Basically their role is to help get as many small business owners access to capital through our marketplace of lenders. These are customers that normally won’t be able to go through a bank, or maybe they need the money a lot quicker than a bank can potentially provide.
Fred Diamond: What exactly do you do within NerdWallet?
Andy Bell: I think to Tommy’s point, with Rhythm, so my role is basically make sure everything is running smoothly, make sure everybody’s marching to the same beat of the drum. I think one thing that’s really hard is as you level up, you get out of the weeds. You don’t really know what’s going on nearly as well as when you’re a rep, or even a frontline manager. One thing that was really hard for me personally, and I think is hard for a lot of more senior leaders, is as you get out of the weeds and you don’t have as much of this anecdotal observations, it’s like, “Okay. What is actually happening in my business?” There’s no shortage of data that you can look at. The issue is typically not that, “Hey, I don’t have enough data. I don’t have the reports.” It’s like, “There are thousands of reports I can pull, which ones are actually the ones that matter, and which are the ones that I need each layer of my team focused on?” To try to tie a bow and hopefully that wasn’t too tangential, my role is basically make sure that everyone understands exactly what’s important to keep moving the business forward in terms of serving more customers, growing our revenue, providing a better customer experience, and just being more efficient overall.
Fred Diamond: Andy makes a really good point is when you do rise in the organization as a leader, what you have access to and what you can really understand, there’s a disconnect. Because things change at the ground level a lot of times, especially over the last couple of years with the challenges that we’ve had related to the global health situations. You’ve looked at a lot of large teams that have directors, managers, all different types of individual contributors, if you will. Can you give us some of your suggestions, again, using some of the Rhythm platform, on how you keep everybody on the same page? Like Andy said, as things begin to spread apart, that’s where the confusion happens, and that’s where a lot of the disconnects begin to affect the direction of the business, at least from the sales perspective.
Tommy McNulty: What a great sales leader does, or a VP of sales, CRO, they can zoom all the way out and then zoom all the way in, and they can do both really, really well. Zooming all the way out, I think we’ve historically thought about this as we’re going to hit these revenue targets, or we’re going to grow this revenue number quarter over quarter, or whatever that looks like, but that’s actually not the entirety of the plan. The revenue is just one part of the plan, and how you get the revenue is also part of the plan. It’s like saying, “I’m going to play a baseball game,” obviously I want to win the baseball game, but how many hits we get, and how we play the field, and who we bat in what order actually matter a whole lot in how we go about winning that game. Zooming all the way out requires you understanding things like margin, understanding what areas of your team are profitable, not profitable, understanding your hierarchy of SDR, AE, manager, director, all those different things. You have to go there first.
The second part of this is then you have to be able to zoom all the way in, and say, “Hey,” AE, manager, whoever it is that you’re talking to, “This is how the work that you do connects to this plan.” In times when we’re all eating and we’re feasting, it’s celebratory, because you can see how your individual activities kinked the curve on that plan. But then when times are not so good, which a lot of companies are experiencing right now, you have transparency and authenticity with that person to understand, “Hey, when I have to make changes, when we’re not bringing in as much money anymore, at least you understand why I need to make these changes. You understand why we need to increase our price,” or things like that, because we’ve been that transparent with you around how this game is being played or how this system actually works.
Fred Diamond: The sports analogy is a good one, of course. In today’s pre-interview, we talked a little bit about baseball, and of course, there’s all these analytics and the overuse of analytics has had to shift the game where they had to put some rules in play to make things more fair. But the reason I’m giving that precursor, Andy, I’m just curious, like Tommy said before, there’s no shortage of data. Every company out there is using either Salesforce, whatever it might be, and various types of CRM systems to really get all the data out there, HubSpot, whatever it might be. How do you ensure that your team is using the data to make solid data informed decisions?
You raised a good point before where you said, as leaders grow in the organization, they may leave where the groundwork is happening, where the battles are actually happening, and may lose sight of what truly might be the most valuable data to look at. I guess two questions there. How do you ensure that your leaders and managers truly make data informed decisions? Then how do you decide as an organization, what do you really need to look at these days to be successful?
Andy Bell: I think there’s a couple of ways I think about it. The first one is, okay, do they actually understand the data? I know that sounds really simple, to Tommy’s point earlier, it’s really important to understand what are the leading indicators. It’s not so much the revenue, but understanding X and Y and Z that lead to the revenue, and make sure are those good, are those bad? Step one is when you’re syncing with your managers or your direct reports, “Hey, look, this is the data that’s important. Do you understand why this is important?” Step one. Step two, “Do you know where to find it?” I want to make sure that when you’re evaluating decisions, you also know where to find it, which is also part of the trouble.
I think the next piece is when you are problem solving, let’s say you’re in a one-on-one or you’re in a team meeting, and a manager is like, “Hey, I think X is broken, I think Y is broken. Are you setting a good example? This ties into my last point, and really challenging them, and saying, “Hey, look, that’s a really good observation. Tell me more about why you think that’s the case. What do you see in the data that also proves that that might be the issue?” Or, “Hey, let’s go look at a report to see if this is broader than just this one rep that you’re trying to problem solve on.”
Then I alluded to it, but the last piece is make sure you’re leading by example. It can be really easy as a leader as you climb and you feel pretty confident, you’re like, “Hey, I’ve seen this problem before. I don’t need to go pull the data.” But if you’re living in anecdotes and not being like, “Hey, this is what’s happening. Here are a couple of anecdotes, and here’s the data that informs that.” If you’re not leading by example, then you shouldn’t expect your team to follow suit.
Fred Diamond: Tommy, I’m curious, again you’ve worked with a lot of companies bringing Rhythm to them to help them obviously perform with more rigor in the sales process. It’s interesting, when people ask me about the Institute for Excellence in Sales, I say we provide in many ways best practices for the art and science of sales, but we really believe it’s a science. But let’s talk about the gut, the art, if you will, back to what Andy just said. When you look at companies and you implement your system and you come on board, but you still see maybe some people who’ve been successful for 20, 30 years doing it a certain way, how do you balance that type of gut/art, if you will, with the rigor and the analytics? Especially as Andy says here, when you get larger, there’s much more information to look at and prove. Talk a little bit about the balance. Do you really focus back to the data if you see too much of the, for lack of a better word, gut decision making process happening?
Tommy McNulty: I think to Andy’s point, part of your job as a leader is you have to create some sort of filtration system on how information flows to you. Because if you wind up making decisions that are entirely based on anecdotes, you’re basically making a decision about what happened yesterday. I’ve been an AE before, I’ve been charged up after a call, and we need to fix this product, we need to change this price. At the end of the day, it’s really just a moment in time reaction to what I’m currently dealing with. If you try to account for everybody doing that at the same time, you’re going to have a bit of a Frankenstein’s monster of a sales organization.
I had this problem. This was a very key developmental area for me when I first started running a sales team, where I would make a lot of these gut instinct, non-evidence backed type of decisions. Sometimes I was right, sometimes I was wrong, but when I was right, I couldn’t explain why I was right, which was also a problem in the executive meeting. I was given this feedback from a coach about five years ago, which was, if I have a gut instinct, write it down. Be able to actually describe what my gut instinct is. It’s a subtle thing, but it really helped me crystallize this is what my gut actually is telling me. It’s actually telling me that we have more area for opportunity in this customer segment of our business. That then allows me to go and test my gut instinct with people more easily. Because I can describe what my gut instinct is versus going and saying, “Hey, call these people.” I have an instinct to go call these people versus, “Hey, I have a hunch that we’re leaving money on the table in this customer segment, here’s why.” Then someone can go and help me prove that right or wrong. Understanding your gut and treating your gut as a test to be run versus a decision to be made, I think is how I would think about it.
Fred Diamond: Andy, you lead a team of, like we mentioned in the intro, nearly 90 people who are in the sales organization, your sales organization. Sales is hard. The reason that we’ve had over two million interactions with the Sales Game Changers Podcast and why we have companies like Hilton, and Salesforce, and Amazon as partners of the Institute for Excellence in Sales is, even when it’s easy, it’s hard as well. What are some of the biggest challenges you’re dealing with right now? It could be related to what we’re talking about now, or it could be related to something that we’re not talking about right now.
Andy Bell: Sales is hard. I think to your point, that’s something that I say all the time. I think it comes up in circumstances, one in hiring. I think in hiring where it’s you need people that really want to be in sales, because sales is very hard. If people love the grind, that’s what you sign up for. To your question of what are the challenges, I think that first one is recognizing that it is hard, and communicating that message. You don’t want to go and tell sales reps in an environment like this where it’s like, “Hey, no guys, it’s actually really easy. Here’s what you need to do.” You have to recognize the reality of the situation and say, “Hey, look, yeah, this is hard.”
We were coming out of a period where frankly things were a lot easier. But it’s harder now and that’s going to require us to do a lot more. Just yesterday we had our kickoff and my manager, our head of sales for the whole organization, he did a really excellent job of talking through that, which is, the analogy he used was, “Hey, we were in calmer waters, we’re heading into choppier. We need to get back to the calmer. Here are the things we’re going to focus on.” To your question, try to pick three things. I like things in threes. I feel like that’s kind of the max. We’re focusing on working harder, working more strategically, and finding ways that we can try to tap into what our advantages are. Then to tie a ball on this, I think the most important thing is whatever things you pick, stick to it, at least for a certain period of time. You need to trust what your hypothesis is and give it enough time to age out and keep beating that message to death. You might find it’s wrong, but you got to get everyone rolling in the same direction and test the hypothesis that you think is going to get you into those calmer waters.
Fred Diamond: Before I ask you both for your final action steps, something people can do right now to take their sales career to the next level, Tommy, give us a little bit of insight in where you’re taking Rhythm. Where do you think it’s going to go? Where are you looking to go? What type of companies should reach out to you that could deploy your systems?
Tommy McNulty: Where we are right now is, you can almost think about us like Credit Karma for your sales system. You might have something like Gong in place that gives you insights on your calls and your transcripts, and things like that. What we do is give you insights at the system level. Can you afford this segment of your team, or are you moving enough deals from X to Y stage, or is your ramp period too short or too long? Really where we focus is companies in that scale phase, we call it the messy middle, when you’ve thrown enough stuff at the wall, you see what sticks, and now you’re looking to turn something into a repeatable process. As Andy said, and you said, sales is hard, but running sales teams is also very hard. It doesn’t really get easier the bigger you get. The more cards that we can add to our decks as sales leaders to help us make decisions, the better. That’s where Rhythm sits. If you’re a company and you’re looking at opportunities to bring rigor back to your performance management process, or find and maximize areas for profit, give us a shout, onrhythm.io.
Fred Diamond: I want to thank you both for the great insights. One thing we like to bring about at the Institute for Excellence in Sales is sales is a profession. Sales is, like we’ve mentioned at least five or six times, the hardest part of the company. We believe rigor, understanding the data, being able to shift, being able to understand where do you go, what is the proper data right now, are things that are critical. I want to applaud you both for giving the insights that way. Andy, why don’t you give us a final thought for people listening to today’s Sales Game Changers Podcast, something they should do right now to take their sales career to the next level?
Andy Bell: I think for my final thought, and thanks for having us on, this might be too simplistic, but I think for anybody in their sales career, if you’re an SDR, AE, manager, leader, whatever, is embrace the grind. Sales is a grind, and if you out grind people, you’ll usually beat them, and you’ll be very successful, and you’ll become a better person for it. Then the second piece of that is, while you are grinding, just get curious. Just be passionately curious, both with your customers, with your peers. If you’re a leader, with your reps. I think anyone who’s trying to level up their sales career, if you stick to those two tenants of working hard and just being passionately curious, you’ll wind up in a very good place.
Fred Diamond: We actually devoted an entire show to curiosity. If you think about it, especially the way you said it, if you’re curious, it’s not about you, it’s about them. Every great sales professional knows what he or she is talking about, but they also know it in the customer’s terms. Tommy, thanks again for being on today’s show, for bringing Andy on the show with you. I appreciate it. Why don’t you give us your final action step as well, something people can do right now to take their sales career to the next level?
Tommy McNulty: When you’re curious, and I want to retweet that, working hard, obviously, and grinding’s important, but being curious is also important. Be curious about yourself. What I mean by that is understand why you are winning deals, understand why you’re losing deals. If it’s hard for you to understand that, I guarantee you, go find someone like me, or Andy, or people that Andy works with, and ask that question and they’ll help you figure it out. If I was running a sales organization and I was in a tough time, and somebody came proactively and was like, “I’m losing deals, but I want to be roaring in the right direction here. Help me figure out how I’m losing and how I can get better.” You very subtly have moved yourself in my mental pile to, “Okay. This is a good person to invest in.” Because my investment in this person is going to go so much further because they’re already doing the hard introspective work. It’s like, would you rather invest in a stock that has the ability to go exponential or that’s just going to stay steady? You want to put your money in something exponential, and showing that inside of your organization, I think it’s a way to stand out.
Fred Diamond: Andy, do you want to comment on that before we wrap up?
Andy Bell: No, I think that’s spot on. To Tommy’s point, what’s the phrase? The hungry mouth gets fed, or the squeaky wheel gets greased. Same idea.
Transcribed by Mariana Badillo