Building a Successful Sales Organization: Insights from Chris Klayko
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Chris Klayko has helped build go-to-market organizations (GTM) at Databricks, SAP, Google Cloud, and UiPath. He has managed sales teams with tens of millions of dollars in ARR, to multiple billions in ARR. Today, as Senior Vice President of Sales at Databricks, Klayko credits his success in part to having a passion for helping to drive business transformations at his customers’ organizations.
During a recent discussion with Dylan Reider and Sonia Damian of Crew Capital, Klayko emphasizes the significance of understanding various roles within the sales process, such as champions, decision-makers, and budget holders. He says that thorough questioning and discovery are crucial for identifying the right contacts within an organization and tailoring the sales approach accordingly, and highlights the value of experimentation and clear communication.
This article delves into key takeaways from the discussion, covering a variety of topics like establishing sales organizations, collaborating with different roles within a customer’s company, and adopting best practices for achieving GTM success.
Initial Steps
After graduating in 2000, on the precipice of the turbulent dot-com bubble era, Klayko’s sales journey began unexpectedly with Interwoven, a California-based content management software solution, even though his initial plans were to find a job in the field of research. What in the beginning involved answering phone calls for a modest annual salary, quickly evolved into cold-calling prospects in New York. This experience served as a masterclass in developing grit and persistence as a salesperson.
From handling phone inquiries to conducting inside sales, Klayko regards this sequence of events as a fortunate twist. It offered him an invaluable opportunity to fully understand the company and effectively promote its product to customers. These lessons were the building blocks of his career. Klayko, sitting in the company’s California offices, was desperately trying to conquer arguably the toughest market in the world – New York.
“I was in the California office at 5:00 AM every day, cold calling the New York area, getting the harshest no’s on the planet. It was arguably one of the best ways to get into sales since inside sales requires grit, and prepares you to sell over the phone. If you can sell over the phone in New York, you can do it anywhere.”
For anyone hoping to build a robust sales team, Klayko’s experiences underscore the importance of starting early in a demanding role. Learning real world skills and immersing oneself into the company’s operations teaches all-important life and business lessons – often the hard way – that are difficult to come by later in life.
Empathy: a cornerstone of success
His personal life has played a major role in how Klayko approaches his career. As a salesman, Klayko exhibited a shark-like “ABC-mentality” (Always Be Closing) – without thinking about much else outside of meeting his quota. Then his wife was diagnosed with cancer, which changed how Klayko viewed his present and future.
“It taught me a lot about the human element and that empathy is a super important skill set.”
Today, Klayko fully appreciates the significance of cultivating strong relationships, both in personal and professional settings. ”I don’t ever underestimate the value of a relationship. I’ll trade revenue over a favor any day because a favor will come back in full.” He emphasizes that the true measure of a person’s impact lies not in their earnings, but in how they treat and support others.
In a business setting, he emphasizes the importance of cultivating strong connections through empathy and regular acknowledgment of team members. He mentions the use of gratitude spreadsheets to acknowledge contributions and foster a positive atmosphere.
Klayko’s personal challenges, combined with his comprehensive understanding of sales, have equipped him to approach business and sales obstacles from diverse perspectives.
Embrace a CEO-as-a-salesperson mentality
Sales leadership is a complex and dynamic field that requires strategic thinking, relationship building, adaptability, and a deep understanding of the market. Founders are their company’s first and most influential salesperson. Klayko suggests that founders embrace this role with enthusiasm, and prepare to sell their vision and product to potential customers, investors, and partners. A founder’s ability to articulate a value proposition can set the tone for the entire sales organization and shape its future success.
Klayko suggests that founders should focus on defining their product-market fit before bringing in a senior salesperson. Only when there’s clarity on this should they build a sales team. “The CEO should be the first salesperson and this will not change even if you bring in a sales team,” says Klayko.
Regardless of the size of the company, the CEO will always be its primary salesperson.
“You may have a sales organization that runs more of your deals, but you’re always going to be selling, whether to candidates to join your company or convincing investors to invest.”
Defining roles and relationships during the sales process
Klayko emphasizes the importance of clearly defining roles and relationships within the sales process. He suggests starting every sales engagement with a thorough discovery process, asking critical questions to understand why the prospect is engaging and what their needs are.
This clarity helps distinguish champions, who can help drive a sales process from within a prospect’s company, from the decision-makers who actually control the budget. This aligns the sales approach accordingly. Klayko advises sales professionals to make the prospect articulate why they are talking to you, which helps identify the true decision-maker and build a strong foundation for the sales process.
It’s essential to accurately identify the roles involved, such as the champion, executive leader, decision-maker, influencer, and users. Reflecting on past experiences, there’s a valuable lesson in acknowledging the mistakes made.
“In some instances, becoming overly comfortable with a champion during changing times, like a recession, can lead to misjudging the decision-making landscape. An example is the shift that we see today from a historical technical CTO buyer to a CFO, who holds the actual budget authority. This illustrates the distinction between executive buyers and influencers and emphasizes the need to navigate these roles meticulously for successful outcomes.”
Guiding the sales journey
The role of a salesperson is not just about closing deals; it’s also about guiding the customer through the sales process effectively. Klayko stresses the significance of creating a structured plan for each deal, collaborating with prospects to develop a mutual close plan, and ensuring alignment on the journey. By maintaining a clear roadmap and holding the customer’s hand throughout the process, sales professionals can increase the likelihood of closing a deal.
“Championing the sales process means becoming a strategic partner to your prospect’s champion. It’s not just about selling a product; it’s about aligning your solution with their business objectives, helping them communicate the value to decision-makers, and ultimately co-creating a solution that addresses their challenges and aspirations,” Klayko says.
Effective compensation plans
Compensation plans play a pivotal role in shaping the behavior of sales teams. Klayko suggests that compensation plans should be designed to encourage desired outcomes. In early-stage startups, where product-market fit might not be fully understood, he recommends starting with a simpler commission structure, such as a percentage-based model. Over time, as the company matures and gains a better understanding of its offerings’ value, more complex plans can be introduced.
“The design of the compensation plan is key to achieving desired results. These outcomes can vary widely, from acquiring new clients and expanding the customer base to prioritizing certain products or focusing on customer success in a particular industry. In the context of enterprise software, it’s common for salespeople’s compensation to be structured as 50-50 plans, a balance between fixed salary and variable incentives tied to performance. In essence, the way you structure your compensation plan significantly influences the actions and goals of your sales team.”
Learning from missteps
Sales leaders and teams should embrace a culture of learning from their mistakes. Klayko recalls instances where deals slipped due to assumptions or changes in the customer’s organization. He advocates conducting post-mortems for such deals, openly discussing what went wrong and why. This approach fosters a learning environment where insights are shared across the team, enabling rapid adaptation and improvement.
Strategic deal qualification
Klayko recommends focusing on meticulous qualification of deals, particularly in assessing the viability of the customer’s budget. In uncertain times, sales professionals should ensure that they are dealing with true decision-makers who can influence the budget approval process.
“Understanding the dynamics between champions and decision-makers is crucial for sales representatives. John McMahon’s book, “The Qualified Sales Leader,” delves into these distinctions. Standardizing definitions and attributes of champions, decision-makers, and other terms within the organization is essential before identification, promoting a unified understanding and effective communication.”
Building a collaborative sales culture
Collaboration and open communication are cornerstones of successful sales organizations. Klayko shares how he learned from a CEO who required weekly insights from all leaders across the company. This practice not only facilitated cross-functional collaboration but also encouraged sharing insights and learning from each other. Encouraging a culture of gratitude and recognition within the team can also help strengthen relationships and foster a positive working environment.
“In the initial collaborative phase, we embraced customer feedback for rapid learning in a new market. This cooperative approach stood out as a valuable early-stage practice. Post-mortems for deals gone awry were another essential strategy, fostering open discussions and a learning mindset. Swift adaptation and prevention underscored the drive for improvement. Expressing gratitude through weekly recognition enhanced team cohesion. Ultimately, learning from mistakes, open failure discussions, and cultivating appreciation drove our team’s rapid evolution.”
Klayko’s insights provide a comprehensive perspective on navigating the complexities of sales leadership. From identifying champions and decision-makers to designing effective compensation plans and learning from mistakes, these strategies can help sales leaders and professionals excel in their roles. By maintaining a clear focus on customer needs, building collaborative relationships, and continuously refining approaches, sales teams can achieve their goals and drive success in any industry.
Chris Klayko has helped build go-to-market organizations (GTM) at Databricks, SAP, Google Cloud, and UiPath. He has managed sales teams with tens of millions of dollars in ARR, to multiple billions in ARR. Today, as Senior Vice President of Sales at Databricks, Klayko credits his success in part to having a passion for helping to drive business transformations at his customers’ organizations.
During a recent discussion with Dylan Reider and Sonia Damian of Crew Capital, Klayko emphasizes the significance of understanding various roles within the sales process, such as champions, decision-makers, and budget holders. He says that thorough questioning and discovery are crucial for identifying the right contacts within an organization and tailoring the sales approach accordingly, and highlights the value of experimentation and clear communication.
This article delves into key takeaways from the discussion, covering a variety of topics like establishing sales organizations, collaborating with different roles within a customer’s company, and adopting best practices for achieving GTM success.
Initial Steps
After graduating in 2000, on the precipice of the turbulent dot-com bubble era, Klayko’s sales journey began unexpectedly with Interwoven, a California-based content management software solution, even though his initial plans were to find a job in the field of research. What in the beginning involved answering phone calls for a modest annual salary, quickly evolved into cold-calling prospects in New York. This experience served as a masterclass in developing grit and persistence as a salesperson.
From handling phone inquiries to conducting inside sales, Klayko regards this sequence of events as a fortunate twist. It offered him an invaluable opportunity to fully understand the company and effectively promote its product to customers. These lessons were the building blocks of his career. Klayko, sitting in the company’s California offices, was desperately trying to conquer arguably the toughest market in the world – New York.
“I was in the California office at 5:00 AM every day, cold calling the New York area, getting the harshest no’s on the planet. It was arguably one of the best ways to get into sales since inside sales requires grit, and prepares you to sell over the phone. If you can sell over the phone in New York, you can do it anywhere.”
For anyone hoping to build a robust sales team, Klayko’s experiences underscore the importance of starting early in a demanding role. Learning real world skills and immersing oneself into the company’s operations teaches all-important life and business lessons – often the hard way – that are difficult to come by later in life.
Empathy: a cornerstone of success
His personal life has played a major role in how Klayko approaches his career. As a salesman, Klayko exhibited a shark-like “ABC-mentality” (Always Be Closing) – without thinking about much else outside of meeting his quota. Then his wife was diagnosed with cancer, which changed how Klayko viewed his present and future.
“It taught me a lot about the human element and that empathy is a super important skill set.”
Today, Klayko fully appreciates the significance of cultivating strong relationships, both in personal and professional settings. ”I don’t ever underestimate the value of a relationship. I’ll trade revenue over a favor any day because a favor will come back in full.” He emphasizes that the true measure of a person’s impact lies not in their earnings, but in how they treat and support others.
In a business setting, he emphasizes the importance of cultivating strong connections through empathy and regular acknowledgment of team members. He mentions the use of gratitude spreadsheets to acknowledge contributions and foster a positive atmosphere.
Klayko’s personal challenges, combined with his comprehensive understanding of sales, have equipped him to approach business and sales obstacles from diverse perspectives.
Embrace a CEO-as-a-salesperson mentality
Sales leadership is a complex and dynamic field that requires strategic thinking, relationship building, adaptability, and a deep understanding of the market. Founders are their company’s first and most influential salesperson. Klayko suggests that founders embrace this role with enthusiasm, and prepare to sell their vision and product to potential customers, investors, and partners. A founder’s ability to articulate a value proposition can set the tone for the entire sales organization and shape its future success.
Klayko suggests that founders should focus on defining their product-market fit before bringing in a senior salesperson. Only when there’s clarity on this should they build a sales team. “The CEO should be the first salesperson and this will not change even if you bring in a sales team,” says Klayko.
Regardless of the size of the company, the CEO will always be its primary salesperson.
“You may have a sales organization that runs more of your deals, but you’re always going to be selling, whether to candidates to join your company or convincing investors to invest.”
Defining roles and relationships during the sales process
Klayko emphasizes the importance of clearly defining roles and relationships within the sales process. He suggests starting every sales engagement with a thorough discovery process, asking critical questions to understand why the prospect is engaging and what their needs are.
This clarity helps distinguish champions, who can help drive a sales process from within a prospect’s company, from the decision-makers who actually control the budget. This aligns the sales approach accordingly. Klayko advises sales professionals to make the prospect articulate why they are talking to you, which helps identify the true decision-maker and build a strong foundation for the sales process.
It’s essential to accurately identify the roles involved, such as the champion, executive leader, decision-maker, influencer, and users. Reflecting on past experiences, there’s a valuable lesson in acknowledging the mistakes made.
“In some instances, becoming overly comfortable with a champion during changing times, like a recession, can lead to misjudging the decision-making landscape. An example is the shift that we see today from a historical technical CTO buyer to a CFO, who holds the actual budget authority. This illustrates the distinction between executive buyers and influencers and emphasizes the need to navigate these roles meticulously for successful outcomes.”
Guiding the sales journey
The role of a salesperson is not just about closing deals; it’s also about guiding the customer through the sales process effectively. Klayko stresses the significance of creating a structured plan for each deal, collaborating with prospects to develop a mutual close plan, and ensuring alignment on the journey. By maintaining a clear roadmap and holding the customer’s hand throughout the process, sales professionals can increase the likelihood of closing a deal.
“Championing the sales process means becoming a strategic partner to your prospect’s champion. It’s not just about selling a product; it’s about aligning your solution with their business objectives, helping them communicate the value to decision-makers, and ultimately co-creating a solution that addresses their challenges and aspirations,” Klayko says.
Effective compensation plans
Compensation plans play a pivotal role in shaping the behavior of sales teams. Klayko suggests that compensation plans should be designed to encourage desired outcomes. In early-stage startups, where product-market fit might not be fully understood, he recommends starting with a simpler commission structure, such as a percentage-based model. Over time, as the company matures and gains a better understanding of its offerings’ value, more complex plans can be introduced.
“The design of the compensation plan is key to achieving desired results. These outcomes can vary widely, from acquiring new clients and expanding the customer base to prioritizing certain products or focusing on customer success in a particular industry. In the context of enterprise software, it’s common for salespeople’s compensation to be structured as 50-50 plans, a balance between fixed salary and variable incentives tied to performance. In essence, the way you structure your compensation plan significantly influences the actions and goals of your sales team.”
Learning from missteps
Sales leaders and teams should embrace a culture of learning from their mistakes. Klayko recalls instances where deals slipped due to assumptions or changes in the customer’s organization. He advocates conducting post-mortems for such deals, openly discussing what went wrong and why. This approach fosters a learning environment where insights are shared across the team, enabling rapid adaptation and improvement.
Strategic deal qualification
Klayko recommends focusing on meticulous qualification of deals, particularly in assessing the viability of the customer’s budget. In uncertain times, sales professionals should ensure that they are dealing with true decision-makers who can influence the budget approval process.
“Understanding the dynamics between champions and decision-makers is crucial for sales representatives. John McMahon’s book, “The Qualified Sales Leader,” delves into these distinctions. Standardizing definitions and attributes of champions, decision-makers, and other terms within the organization is essential before identification, promoting a unified understanding and effective communication.”
Building a collaborative sales culture
Collaboration and open communication are cornerstones of successful sales organizations. Klayko shares how he learned from a CEO who required weekly insights from all leaders across the company. This practice not only facilitated cross-functional collaboration but also encouraged sharing insights and learning from each other. Encouraging a culture of gratitude and recognition within the team can also help strengthen relationships and foster a positive working environment.
“In the initial collaborative phase, we embraced customer feedback for rapid learning in a new market. This cooperative approach stood out as a valuable early-stage practice. Post-mortems for deals gone awry were another essential strategy, fostering open discussions and a learning mindset. Swift adaptation and prevention underscored the drive for improvement. Expressing gratitude through weekly recognition enhanced team cohesion. Ultimately, learning from mistakes, open failure discussions, and cultivating appreciation drove our team’s rapid evolution.”
Klayko’s insights provide a comprehensive perspective on navigating the complexities of sales leadership. From identifying champions and decision-makers to designing effective compensation plans and learning from mistakes, these strategies can help sales leaders and professionals excel in their roles. By maintaining a clear focus on customer needs, building collaborative relationships, and continuously refining approaches, sales teams can achieve their goals and drive success in any industry.