Sales Management Podcast
Cory Bray, 8x author and co-founder of CoachCRM, digs into hot sales management topics.
Sales Management Podcast
100. 7 Modern Topics with Sam Marelich --- First one is how AI has killed the job Ad
Cory and Sam jam on 7 interesting sales/recruiting topics. It's a fun and action-packed conversation.
Welcome to the Sales Management Podcast, your source for actionable sales management strategies and tactics. I'm your host. Coach CRM co-founder Corey Gray. No long intros, no long ads. Let's go. We've got an interesting show today. We've got Sam Merlitzer, who sent me seven topics that he wanted to discuss. I'm not going to name all seven out today, but let's just rip it, Sam, because let's not pick one. Let's just go for all of them.
Speaker 2:Sounds good to me, excited to chat with you again.
Speaker 1:All right, I'm going to do the second one first, because I think it's the funny one how AI has killed the job ad. You're in the recruiting business, so you got some unique perspective into this.
Speaker 2:Yeah, I think what people don't realize, right, if you're thinking about job ads, if you're thinking about recruiting as a general rule, is there are two ways that you can get candidates right. It's the exact same as everything else you can get candidates through inbound or you can get candidates by going outbound. So inbound is job ads and then outbound is you reaching out and finding people, like presumably through LinkedIn. Now, if we are looking for a person to do white collar work, for example, an account executive role, then we're not looking for someone just to be a warm body to put the burgers together. We're looking for someone to do things that are thoughtful. And you know, we're also looking for, like, a very specific subset of skills. If I want someone who has sold deals for $45,000 a year, primarily into HR teams, there's not that many people that have actually got that skill.
Speaker 2:So if we run a job ad right now and I don't care what the economists say you know the labor market, specifically within technology, is a lot weaker than it has been for years. I think everyone in the industry is actually pretty aware of that. So you have a lot of people that are out of work, you have a lot of people that are looking. And then there are a lot of people you know who are, as normal, open to changing for the right opportunity.
Speaker 2:But when you run a job ad, you, you know you kind of fight and this has been the case for years against, you know, just the swarm of people who easy apply. So easy apply is on LinkedIn. It's a one-click application, so it takes five seconds to you know, click and apply to a job and the problem with that is it, you know, kind of makes it into a Tinder-like environment where you log in, you know, you put your job ad up and two, three days later I ran a job ad about 18 months ago and I was looking for an SDR and I put up a job ad and three days later I had 860 applications.
Speaker 1:That's certainly not what my tender looks like. Must be nice to be you.
Speaker 2:Well, let me tell you you here's the problem with that. You know, if you've got 860 applications and you give, you know, I'm actually shocked, cory, I, I'm, I'm guessing what more more than 860?
Speaker 1:I'm not going to answer your question, it's just not what you said yeah, cory is, uh, he's 1200 minimum.
Speaker 2:You know, uh, if he puts, puts his Tinder on there for three days. But yeah, so if you've got 860 applicants and you spend 30 seconds on every single profile, that you see you've just spent 430 minutes and that's seven hours and change. That is a long time and nobody's going to do it.
Speaker 1:Nobody's going to do that, that's just a long time and nobody's going to do it. Nobody's going to do that. That's just not. No no one is going to do it.
Speaker 2:And I think people go on. You know LinkedIn and they get angry. And you know why is no one looking at my profile? You know the truth is, if you're applicant number 310, you probably just didn't get looked at.
Speaker 1:So how is AI impacting this specifically?
Speaker 2:well. So ai, you know, kind of puts this on steroids because people are using ai to supercharge the whole process. Um, you know, they are building, they are building these tools that more or less circumnavigate the traditional kind of. You know you need to have this cover letter or you need to fill out this application and look, the traditional application has a lot to answer for. I think people are rightfully upset with kind of how these things work.
Speaker 1:Refilling out your attachment in the document. So what you're saying is that the problem that they have is that it's creating the ease to submit so many applications that the system is getting overwhelmed.
Speaker 2:That's right, yeah, so I think one of the things that I think people don't realize is you're essentially doing like a DDoS attack on a conventional recruiting funnel, right, it's just too many applications.
Speaker 2:Because, again, if you think about this, if you've got 880 people 850 people, even if 10% of those people are qualified candidates, and you spend 30 minutes talking to each of them, again like you've just spent an entire week, 40 full hours, running first phone screens and then it's too many people to put in front of managers, it's, it's too much volume, it's just too much volume. So, like that, that's the core problem is ai is just, it just makes job ads like entirely unfeasible to run. Now, if you, you know, if you had some sort of real world world, if you had some sort of real world filter, then you know that makes that makes things feasible again, right, if it's hey, we, you know, we need you to apply and then we need you to come downtown meet us in the office on Wednesday, then we can turn those 850 people into 30 and now we're back in the real world.
Speaker 2:But we're going to have to augment that because, frankly, we are just making it too easy to apply.
Speaker 1:Why can't you just plug AI on the other end to do resume screens?
Speaker 2:Well, you can, you just plug AI on the other end to do resume screens. Well, you can, you can right, and I think you're seeing this very nefarious technology come up on the HR side, where you can use AI to phone screen people. You know, and I just think Wait, wait wait.
Speaker 1:So people are doing their first interview with a robot.
Speaker 2:Yes, some companies, yeah. Thing wait, wait, wait, wait, wait. So people are doing their first interview with a robot. Yes, some companies, yeah. If you ever want to feel like you are worth absolutely nothing to a company, I can't think of a better first impression than uh, putting someone through a a robotic phone screen do you think that tender will start doing that too? I don't know, that would be wild, right I?
Speaker 1:mean I don't, yeah, I'm not sure, I I think.
Speaker 2:I think it's all very dystopian, frankly, um, but but yeah, just from a from a employer's point of view, why you would ever want to run a job ad um. You know, about a year and a half ago, the ceo of mercury released the stats for 2022 and it was basically your odds of getting a job through an internal referral were about 10, so it was like nine or ten percent. So, for every um, for every applicant who, or like every 10 or 11 applicants who applied, um, you know, one one got a job now through their recruiters and I'm I'm assuming this is internal recruiters it was about a four percent, um, right, so about one in every 25 candidates. Now, I don't know where they start tracking that. I'm not sure if that was just people that replied to the recruiters or if that's people who did a first phone screen um I would assume like possibly first phone screen or possibly first reply, that kind of tracks with what I've seen.
Speaker 2:Um, so yeah, nine, nine or ten percent with referral, about four percent with with their recruiting team, and then it was one out of every 330 applicants online were getting a job. Oh, wow, yeah. He posted again more recently and this is actually before the latest, like chat gpt tools came out and that number was closer to one in a thousand.
Speaker 1:So I just think so if you're out there clicking buttons, you're probably not going to get anything. All right, let's, I want to own it. Let's, let's hit next topic.
Speaker 2:I think I would cut you out imagine we're on.
Speaker 1:We're on cable news right now. This isn't the free and open internet. Oh, actually, it is the free and open internet. Go ahead and finish your thought and then we'll get to the next one, because we don't have to cut for commercial, like some of those dorks out there I just think it's kind of crazy.
Speaker 2:You know, If you've got Harvard or Stanford or the University of Pennsylvania, they've got a single digit percentage acceptance rate and yet you're about 30x more likely to get into Harvard than you are to get some mediocre SMB accounting executive role by applying online. It's just proof that the entire system that's amazing.
Speaker 1:Okay, and you say point number two, point number two that we're going to talk about today why recruiters are a bad gauge of the job market. That's an odd thing to say.
Speaker 2:Yeah. So I think in terms of you know, the tech downturn, no one has had a worse experience than internal recruiters. You know, internal recruiters, they all got fired when COVID came around and then you know, six months later they were the, like the hottest commodity possible. Everyone wanted to hire as many internal recruiters as they could. Salaries for internal recruiters went up through the roof and they had about 18 good months and then no one has been cut more savagely than internal recruiters. In a lot of cases, like just the entire teams have been dismantled and so external recruiters haven't had it as bad.
Speaker 2:Most of the external recruiters I know are still in the game. You know maybe 20 of them have left. So the market is smaller, um, but compared to just like the all-out slaughter of the internal function, external recruiters are largely here. But A, external recruiters do a lot less in volume than internal recruiters, just in terms of the number of people we hire. And then B, because even if we look at the external capacity, it's probably 20, 30% lower than it was. If we seem like we're busy, then you know busy on the external side is still kind of reflective of a much lower base, that you know. So we're busy against a much lower base. Before, the external recruiters were hiring 80, 100 people, Now it's down to 80 and we'll say, hey, we feel like we're really busy, We'll feel like we're back, but actually we're still down 20%.
Speaker 1:But internal has gone down substantially.
Speaker 2:Yeah, internal is probably in most cases down like 75, 80, 90%.
Speaker 1:And so what's that tell us about the job market?
Speaker 2:I think it is just significantly worse than people want to admit Okay, got it.
Speaker 1:So the point is that just because external recruiters are taking up and busier, that doesn't necessarily mean the job market's any good. It just means that a lot of recruitment capacity has either been eliminated or shifted outside, as opposed to held in-house at some of these companies.
Speaker 2:Exactly, exactly so. Even if external recruiters and internal recruiters are saying, hey, we're a lot busier than we were, that's just off a much lower base than it was like two years ago.
Speaker 1:Love it All right. Point number three what everyone misses about the argument against remote, Enlighten us, sir.
Speaker 2:Yeah. So I think the entire argument against remote. You'll often see this point that people will say, well, hey, it's a lot harder to manage a remote team. Most people aren't using Coach CRM. Most people aren't using coach crm, most people aren't using closed loop for all of their uh, sales, sales team management not yet, not yet, not yet.
Speaker 1:Yeah, let's go.
Speaker 2:Y'all are smart, get with the times but you know, when it, when it comes to um remote work, people often say, well, hey, managers just need to be better, and I think what that is is like it's kind of an inversion of the employee employer relationship, right, the idea that the employer is there to gratify the needs of the employee. Um, it's, it's kind of a weird thing, right. It's traditionally it's been you go to work so that you get paid money. It's not, you know, work comes to you so that your, you know, your Maslow's hierarchy of needs can be fulfilled.
Speaker 1:Yeah, if you go to work, you get money, and then, if you impress the boss and do good enough job, you'll get more money.
Speaker 2:Yes, exactly, but now it's now it's.
Speaker 1:If you now it's, I don't go to work. Work comes to me, and if the boss isn't who I want them to be, then I'm going to quit and go do something else.
Speaker 2:Yeah, we just have this total inversion, right. You can see movies of like.
Speaker 2:I think the starkest example even is is a show like suits and I bring up suits because it's not like suits was premiered a very long time ago, right right it was a decade ago, yeah, about a decade ago, maybe, like 12, 13 years, and in that world, you know, you showed up to work, you showed up on time, you showed up wearing a suit, um, you were expected to work extremely hard.
Speaker 2:The idea of losing your job was genuinely scary. You know, you were scared of your boss, not your boss was scared of you. And we've just seen kind of this total inversion of the conventional employee-employer relationship and I think, look, it's all good and well to say, hey, managers just need to, they need to get with the times, they need to retain me. And that's kind of true in like one of two scenarios. The first one is, you know, in a really employee focused, you know, market which we kind of had in late 2021, early 2022, you know where compensation was going through the roof, where everyone was hiring, where everything was extremely tight, you know where internal recruiters were thriving, frankly, where it was over-employed and quiet.
Speaker 1:Quitting were the phrases right.
Speaker 2:Exactly when companies were talking about. Hey, we should have four-day work weeks and you know all that sort of thing.
Speaker 1:I kept a list. I kept a short list. I'm not real big on the lists. Who's the list guy? I think it was Dana White, I don't know. Somebody says I always keep a list. I'm not a real big list guy, but I keep a list in my head because I have this weird photographic memory, mostly for things that don't matter, and it seems like the biggest proponents of the four-day workweek did not succeed in any of their. I can't name one that was actually successful in that endeavor of the people that I saw really promoting it hard.
Speaker 2:I'm shocked to hear that I'm truly truly shocked.
Speaker 2:But in that kind of employment market, then, yes, you can argue that managers just need to learn. And then the other one right, there was a I saw this example and it was a guy who lives on a yacht and and has lived on a yacht like the last 15 years. But some people are talking about, yeah, that guy is like the technical wizard behind aws and you know, like there is probably a dozen of those guys at Amazon and Microsoft and Facebook and you know, look, if you're that important enough that Bezos says, hey, we can't lose that person, then yes, like they will make an exception for you. I know I'm not talented enough to be afforded that kind of accommodation. I think most of us just need to be a little bit more realistic about what we actually bring to the table.
Speaker 1:Well, I mean, that's the ultimate work from home test, because I think that you know I get a lot of flack from people because I go boating a lot. I leave the country a lot. I'm currently do I say where I'm at? I'm in Costa Rica now and I was in El Salvador last week. I'm going to Mexico next week, and when I go boating, guess what I do? I take my computer and I write, or I write jokes, or I write code, or I write books. I do lots of things, and then when I'm in these countries last night I worked until midnight and I was up for a 7 am call. It's not glamorous, and the guy that lives on a yacht probably sits in there and hammers code, goes to meetings and then might have a scotch into a backflip at 4 pm, who knows. But it's not this glamorous party lifestyle that people are living, that do this remote stuff for the most part, and so I think that's one of the hilarious things that people miss from this whole conversation. Yeah, absolutely.
Speaker 2:And so I think that's one of the hilarious things that people miss from this whole conversation. Yeah, absolutely. I think you know, at the end of the day, look, corey, you can do whatever you want because you work for yourself. And you know, I'm the same I work for myself and that's a lifestyle twist that I've made.
Speaker 2:And you know if you're an employee and you're very angry about what I've said, like there is a very simple solution. You either need to get so good that they will make the exception for you or start your own business. There's not really much outside of that if you don't want to kind of fall into line frankly.
Speaker 1:Yeah, you can just complain and have stress levels that are excessively high.
Speaker 2:I mean, that is the majority kind of coping solution.
Speaker 1:Everybody loves a complainer. Okay, next point. You said what the return to profitability types are missing. These return to profitability types. They're always fun. They come out of the woodwork every time there's recession.
Speaker 2:I think you see this in tech as well, like, particularly, there's recession. I think you see this in tech as well, like particularly. And the way I think about this is you have a lot of people and they are bootstrapped. And I think a lot of bootstrap people have a very big chip on their shoulder when they look at the venture capital funded you know, uh companies, because they think, hey, you're gonna have this money. You get all of this sweet publicity. I've been eating ramen noodles for the last three years. I haven't paid myself anything and you just kind of get to go top of the pops.
Speaker 2:And I've made the argument before that I think starting a business and raising venture capital is the closest equivalent to winning the lottery, but it's actually better because it is socially acceptable. And what I mean by that is you know, if you win the lottery, if you think about what are the things that you can do, well, you can. You know you can buy a nice car, you can buy a Ferrari, you can buy, you know, a nice house in a great part of town and, um, you can travel the world. Now you can do other things, but I would say those are the big things for a lot of people. But if you think about running a venture-backed company, well, you know you can't buy a ferrari, but you could probably take your customers to a ferrari track day, which is you know it's not good but it's not too far off.
Speaker 2:Now you can't buy a house, but you can rent office space in the hottest neighborhood you know in your town or city. And then you know you can't go on holiday anywhere you want in the world, but you can go and visit customers anywhere you want in the world or you can go to relevant conferences anywhere you want in the world or you can go to relevant conferences anywhere you want in the world and, I think, nicely as well. You know everyone knows that you're kind of a success and you're high status and, and you know, wealthy if not just on paper, but not in a way that people can come and ask you for money. You know your mom will be proud of you. In many, I think it brings a lot of the benefits of winning the lottery without actually having to win the lottery, and I think frankly, that's why people are a little bit angry about it.
Speaker 2:I was thinking about this and what I think the return to profitability people don't get is that you know the market only cares about profitability for a little while. Right, the market really cares about growth and most of the profitability. People are not good at delivering high growth. So the moment, you know, the moment that the market cleans up, people are going to be focused on growth again.
Speaker 2:The way I think about the American economy and I think the reason the American economy is the greatest economy in the world and I think it always will be as long as they keep doing this is no one ever learns their lesson. Every single bubble is followed by another bubble in a different sector, in a different format. As soon as consumers get cash again, they don't really start saving. People, just start buying jet skis again. So you know, you kind of scare the Americans for 10 minutes with a bit of a downturn and then businesses go back to making capital expenditure and customers go back to buying big TVs and new cars. Fantastic, and I just wouldn't bet against that being the way that people operate.
Speaker 1:Well, yeah, tvs aren't even expensive anymore.
Speaker 2:Right, yeah, so you've got to find something else.
Speaker 1:So we're all going to end up like James Gerritsen. Do you know who James Gerritsen is? No, oh, you'd know him if you saw him. He's the guy from tiger king, the jet ski guy oh, exactly, exactly right um yeah, well, that's end up like him living the dream yeah, living the dream, just cruising in the jet ski.
Speaker 1:They really jet skied him out on that show. That was wild, okay and Okay. So the return to profitability, yeah, I think that. Look the value of. If we're talking about the value of a stock, the value of an equity, it's the discounted value of future cash flows, that's all it is. Yep. Well, future cash flows are positive at some point. But if you can build an international distribution network and then flip it to become profitable, that's going to be a heck of a lot bigger scale anyways than it is if you're going to build something that's continuously profitable, because that's what working capital is expensive and you cannot grow profitably in many cases. It's just mathematic. Anybody that says you can grow profitably continuously doesn't know how to do math or they don't know business, one or the other, because working capital is a real thing and even if you're profitable air quotes profitable you still got to layer on a ton of debt if you're going to grow fast profitably.
Speaker 2:So this is not in one of the topics that I sent you, but it is very similar to to this topic and related. The way I've been thinking about b2b sales and and where I think people miss is the entire point of b2b sales is that it is building out your distribution network, right, so you know. To give. To give an example, um, I was recently in sp and I was in Cartagena, which is a little town in Spain of like 200,000 people. I wouldn't necessarily recommend going there. It's fine, but it's nothing special.
Speaker 1:Glowing review.
Speaker 2:Yeah, I mean it was fine, but it wasn't great.
Speaker 1:So Cartagena Colombia better than Cartagena Spain.
Speaker 2:Oh look, I need to go to colombia, but my suspicion is probably yes, okay, um, but I was leaving I was leaving cartagena right, so I was uh renting a car and I rented a car through avis and I think the the point that I would make is what made that incredible is the fact that Avis, you know, they have a location in Houston and they have a location in New York and they have a location in Cartagena and they had a location, think, in Valencia or Bilbao, where I was going right, which is like that's the whole point of the business, like that's 95% of the business. You know, I was Googling this because I was curious. So the biggestbucks in the world is in chicago, actually, ironically, like pretty close to the hq of mcdonald's, but the biggest mcdonald's in the world is down in orlando, and if you think about either of those locations, you know we can't go to. I'm in new york, you're in. Uh, we're like um who knows puerto rico, uh, where, like um who knows puerto rico? Yes, you're in, I'm always somewhere else. He's on his john mccaffey, uh, adventure yeah, I'm about to invent antivirus software but for for both of us.
Speaker 2:We could go and have a starbucks today, we could go to mcdonald's for dinner, but neither of us can go to that location today. We're just like without getting on a plane. And if you think about the global value of you know, that single store, the biggest store, it is a rounding error on a rounding error on a rounding error. It's so insignificant it wouldn't make a difference if it didn't show up. The whole point of mcdonald's is that there is a mcdonald's close to you when you are hungry, you know if you like to take a slight detour there. If you look at something like um union square hospitality, which is, you know, this collection of restaurants, uh, in new york city, and you know it includes a couple of like three michelin star restaurants. Well, the guy who started that also started shake shack. And guess where they're making all of the money from shake shack?
Speaker 1:because they can turn that into? Well, yeah, because they can you know I like started shake shack as a michelin star three star chef.
Speaker 2:That's amazing okay I think it's Danny Meyer, yeah, danny Meyer, and he is. Yeah, he's the founder and executive chairman of Union Square Hospitality. I'm just Googling this now. Let's have a look at how much. Please tell me he also started, denny's. I mean Shake Shack's got a market capitalization of $4.26 billion. Wow, 12,000 employees as of 2023, according to Google. But you know you could never scale up a three Michelin star restaurant like that.
Speaker 1:No.
Speaker 2:And what I think people miss about sales is look, marketing. You can actually be like a 10x lever. You can have a video that goes super viral or you can have a linkedin post that goes massively viral and does a huge amount of work for you. If you get shouted out on the joe joe rogan podcast or hell even on like the acquired podcast and the b2b world, you know that that is going to be more effective than 100 different other activities. Yeah, but sales just doesn't scale very well. Like someone who hits 200 to plan, we say they're a great salesperson.
Speaker 1:You know it's not someone who did a thousand percent no, no, it's like baseball you can only hit a grand, you can only hit a grand slam. And there are some sales. There are some people that can sell massive things, especially if you're doing hardware, especially if you're doing multi-year stuff. So yeah, that's true, if you go sell Google, some big I don't know single sign-on infrastructure type thing, that'll be a big deal. But for the most part.
Speaker 2:And the thing about the google piece as well that makes it kind of complicated is to do a 50 million dollar deal with google or to do 100 million dollar deal with google. Your product has to be so far down the line, you have to be so advanced in terms of what you're doing, um, so so yeah, the way I think about sales is you know, this is not.
Speaker 2:it is not this 10 X thing. It's not like hiring a 10 X engineer or 10 X marketer. Right, you know you're? You're really just adding a ton of distribution, you're just adding a ton of capacity.
Speaker 1:It's like it's like a truck right Flatbed truck to deliver stuff. Okay, Very good. Next topic Will software go the same way as the telecom industry? Postcom bubble.
Speaker 2:So somebody's been reading mark andreessen tweets over the last two days yeah, so well, I I've thought about this, I've I have thought about this a few times. But if you look at telecom, right, there was this massive bubble in the 90s, collapsed around the same time as the um, as the dot-com bubble. And the thing that is kind of interesting about the telecom industry is if you look at the people that work in telecom, it's essentially that entire industry was just frozen in the amber. So everyone who works in telecoms is relatively old. You know that in their late 40s, that are in their 50s, that are in their early 60s, there is not a lot of young talent in these telecom industries. So my, I don't think software is like that, because, you know, I think telecom just kind of by its nature is the sort of thing where I'm not saying it's a monopoly, but it lends itself nicely to consolidation.
Speaker 1:Yeah, Historically it has been a monopoly.
Speaker 2:Right and it's pretty hard to compete with the largest players in town, whereas I think software is kind of the opposite. I think you know constantly, you're you're able to use new technology and, frankly, you kind of have the advantage of using this year's technology as opposed to the technology infrastructure of 15 years ago.
Speaker 1:Well, in software you can, and I again, I don't know that much about telecom, but in software it seems like you don't ever have to own infrastructure. In telecom, you actually have to own infrastructure or one of your competitors owns it, so you're leasing it from one of your competitors, which is a slippery slope.
Speaker 2:Yeah, I think, to make an argument, I think if you were to look at Salesforce, right, one of the difficulties of working at Salesforce from a technical point of view is there's a code base that was started 25 years ago and a lot has changed in the last 25 years, and if we were to start a direct copy of Salesforce today, you would probably make very different technical choices that reflect the changes of 25 years of technical innovation. But really, what you're competing with when you're competing with salesforce is the brand name and the distribution capacity, right, and so, um, I I think that, like that's the argument for software, is the fact that essentially, you know, product becomes its own liability in a way, does actually keep the industry renewing, which is, I think, a good thing.
Speaker 1:Yeah, well, it's interesting. So I saw a post the other day on LinkedIn from the. Uh, what, what company was she with? And she was a co-founder of? Um, what's the thing that does the? It's like Calendly. Oh, chili Piper.
Speaker 1:Oh yep, yep. So she wrote something about how it was unethical for this procurement team to insist that, hey, if we're going to do business with you, you've got to do business with us. That's basically what it was, and it was funny because I was reading that and I said, all right, well, if the procurement team so I'm selling a product to a customer and the customer's procurement team comes back to me and says, hey, corey, we'll only buy your product if you buy our product, okay, well, all that tells me is that the procurement team views that product as a commodity. Right, because otherwise there would be well A and if they're actually going to hold to that, again, it could just be a negotiating tactic. It could be one where that's what they're asking, but if they're actually making that an ultimatum, all that tells me is the products I'm selling is a commodity and I got some product issues that are coming up. That's my take on it.
Speaker 2:Well, I think my take on this is pretty similar. I'd go a slightly different way. I think the question you have to ask is what is the game that we're playing? Are you Chili Piper and do you care about new bookings? Is that what you need to show? Do you care about revenue? Does your customer care about how much they're spending or do they care about other things? I think one of the things that in B2B, we like to pretend that everything is about the bottom line.
Speaker 1:But let's be real, like oh it hardly ever is no, because nobody's nobody's gonna get promoted, because they save ten thousand dollars a year on chili piper right, and so I had a.
Speaker 2:I had a tweet that I put out recently, which was if you look at the and again this gets back to distribution. If you look at the and again this gets back to distribution. If you look at Slack versus Microsoft Teams, you know Slack started a few years before Microsoft Teams. They had an advantage and then Microsoft Teams just bundled it and then, with Office 365, and you know, they ended up getting like 10x the install base and now Slack actually sued Microsoft against this and they forced them to unbundle. But I made this point that you know, look, having the best product is not, is not the mode that you think it is like it is distribution. And someone commented yeah, but you know, look at the arr. And my point is like who cares?
Speaker 2:yeah right, like if you're microsoft, you don't care, you don't care about a marginal hundred million dollars. And again, right it's. I think this is the thing that this woman, you know, I think she's just kind of missing the forest for the trees, um like does who cares? If someone thinks it's unethical, you, you know, are you breaking the law? That's a different question.
Speaker 1:I think it's a great move. I think it's such a phenomenal move, and IBM's been doing it since the 50s. This is not a new thing. It's not anything that we all haven't worked through at some point. It's we do business with people that do business with us, and so if I'm trying to sell you something and I really want you to buy it, but I won't buy what you do, even though I use your competitor well, that's not. I don't think that's a good or bad thing, but it's an interesting thing, it's not nothing, and I mean it's not nothing, it's worth the conversation.
Speaker 2:If you look at how Microsoft operate, how Oracle operate I think you could probably make the argument how IBM operate, I think how Salesforce is gearing up to operate. They buy all of these products With Oracle. They'll give you basically everything but the database for free.
Speaker 1:Yeah.
Speaker 2:So if you're selling a competitor to a product that oracle bought but they don't really care about, then you need to be significantly better. Yeah, because the oracle rep will give you, like, will give your customer, your competitor, for free because they want to sell them the database at full list price and, and I think. If you don't recognize that reality, it's just time to grow up.
Speaker 1:Just grow up, okay, next point the current state of sales compensation. Where are we at?
Speaker 2:I think we're down 20% of all-time highs. It doesn't seem to have gone up at all, but it's down about 20%. Sdr comp hasn't moved in about five years. Um, it seems to be holding pretty steady like look it might be up about 10 over over a five-year period um but chicken is up 40 over a 10-year period right yeah, yeah, exactly like being an sdr used to be a really great job as a college grad in terms of comp and in terms of the lifestyle.
Speaker 2:Now I think it is just more or less the same as any other job. It's really eroded in terms of pricing power.
Speaker 1:Got it. What about the rest of the sales stack?
Speaker 2:As I said, I think we're more or less down 20%. And I'll give you an example. You know enterprise AEs. I think you're looking somewhere between 250 and 300. Strategic AE is like 300 to 350. Mid-market AE is like 160 to 200. All of those numbers would have been 20% higher on the high end in 2021.
Speaker 1:Do you think people are working hard right now?
Speaker 2:I'm not sure. I'm not sure. I think a lot of people are checked out. I think a lot of people are running side hustles.
Speaker 1:Are they making any money off these side hustles or is it just entertainment? That's what I want to know, because I know a couple of guys that make some money off side hustles. I know a lot of people that don't make anything and it seems like everyone. I know who is a genius. I'm a real estate investor. Three or four years ago sold all their real estate.
Speaker 2:I think a very, very small percent are doing very well and I think most people I think it is just fun yeah I think it's the same thing. When you run a business, you get to do a lot of stuff. That is, it feels like it's halfway between work and halfway between fun. I mean, I think you could say this right now we're having a, you know we're having a conversation. I can say it's work.
Speaker 2:It does speak cold calling people it does be it does be, you know, doing act, I would say, like actual work in a sense, and that this is work, but you know, I think it it falls into the important but not urgent kind of category. I think you can really mislead yourself in that category. I was thinking about this recently If you think about what is the highest and best use of your time and thinking about this specifically within the context of running a small business and trying to build out your marketing, and I think that youtube is the number one place to to build your marketing, because youtube is a search engine and you want people to spend time watching your videos and to, frankly, essentially inherit your philosophy and way of thinking about the product or about the solution and the space that you occupy. So working on youtube is a very good, very high leverage use of your marketing time, whereas writing tweets is a very bad use of your time, in that a tweet has a shelf life of about 30 minutes and so, look, I have bought on customers via Twitter. It is ROI positive, I think, as a channel for me.
Speaker 2:But if I'm thinking about my day, I should start with YouTube. I should think about what are the other big rocks that I'm doing, if should think about what are the other big rocks that I'm doing, if you think about, like that analogy of here are the big rocks, here are like the pebbles, here's the sand. Youtube, you know, in that case should be the rock, and then Twitter should be the sand at the end. And I think it's the same thing with social selling. I think some people have done very well with social selling, aka posting on LinkedIn, but I think it comes once you've actually done your important things for the day.
Speaker 1:Yeah, and I think it only really works If you're talking about posting. It really only works if your target market is wide distributed. If you're a mid-market account executive that covers Florida, it's probably a pretty silly thing to do.
Speaker 2:I think it's the sort of thing that it works, but you need to have quite a long time horizon and I just think most people don't have that much that long of a time horizon.
Speaker 1:I would agree with that. Okay, Last topic international outsourcing versus US-based salespeople. You're an international feller based salespeople.
Speaker 2:You're an international feller. Yep, I'm from, originally from, new Zealand. I am currently in New York. I actually exciting I am about to apply for my US citizenship, so I've been here long enough that I can do that, which is cool, and I have a thick enough accent that it is almost a barrier A barrier to get citizenship. No, no, just to get to doing well in sales.
Speaker 1:Your accent's not that thick.
Speaker 2:I've also been here for eight and a half years. When I moved over it was a lot thicker, but that is, I would say, the primary argument against outsourcing is people do not want to speak to people with thick accents, particularly in America.
Speaker 1:What if you could clean the accent?
Speaker 2:that's a very interesting.
Speaker 1:That's a very interesting world that we're starting to walk because you can't yes or if I'm not sure if you can, but I know we are well, I know you can because I saw a demo from two different companies that do it, so you can take an accent that you could make somebody that sounds like you sound like me, right, and that's, that's the thing. And then, if we wanted to sell in louisiana, we could make me sound like thibodeau yeah, I, I know that.
Speaker 2:I know that text been coming for a while, so I think that's that is something that is being um, that is being cleaned up. Um, I think the honest argument against doing this is is there leverage for you being in person as part of your sales cycle, in which case you want to hire? You know you want to hire in territory? Um, at the end of the day, sales is always fighting against the buy button. So 100 years ago, people went door to door selling magazines and selling insurance.
Speaker 1:Let's just talk about tech sales. What percentage of tech sale meetings do you think happen in person? One, maybe two.
Speaker 2:Maybe 5%, maybe I'm being generous, generous.
Speaker 1:I think five percent is very generous because even the people that are in the field, they're still doing zoom meetings from the house a lot, right, not like they're out banging doors every day yeah, I think it's.
Speaker 2:I think to some degree, if we kind of loop back to that jaw bad piece, I think the future is frankly going to involve being more in person, otherwise it is going to be outsourced.
Speaker 1:Yeah, I'll take the in-person sales all day long. I would much prefer to be in front of a whiteboard. My close rate goes through the roof if I get in your conference room but at the same time if I can close four deals in a week and not be there.
Speaker 1:My business is different than a lot of people's because I own a business where I have to be responsible for a product development and sales and client delivery and admin and obviously we have other people that do a lot of these stuff but a lot of these things. But I'll touch all of them. Well, yeah, it's kind of hard to do product development on the road, if anybody was. If anybody's curious why Corey is talking about product development, you haven't heard yet not real public about what we're working on. But shoot me a note free stuff at coach CRMcom. Free stuff at coach CRMcom. Flip you over our coaching course, which isn't what I'm talking about, and maybe a teaser to something big that's coming. Don't talk about it, sam. I know what you know what it is. Very few people know about this.
Speaker 2:Hundreds of people. It's exciting. Yeah, it's very exciting.
Speaker 1:I'm excited, okay. So the idea, though, is, if you can, if the sales are done remotely and accents can be created, so the perception of Americans is that it's acceptable, whatever that means, then we can be 100% non-offensive. We can take that and make it a globalist I don't want to say globalist. What's the guy's name?
Speaker 2:The guy with the WES approved.
Speaker 1:Yeah, what's the guy's name, the guy with the WES approved. Yeah, yeah, yeah.
Speaker 2:What's his name? Is it Klaus Schwab?
Speaker 1:Yeah, klaus Schwab, when I say globalist, I don't mean Klaus Schwab, I mean people sitting in other countries doing the work. We can have globalization when it comes to inside sales. Because, yeah, if you're against outsourcing sales, you're saying one of a few things. A, people's IQs are lower in other countries, which, statistically, some yes, some no, but they're not substantially lower. It's not like they're a different species of people. They're people and people's IQs hover around a certain range. And, yeah, some of it depends on nourishment and how they're brought up. Sure, whatever. But if you look at many countries, they're never more than 10 or 15 points below what we'd have here. And also, we're not talking nuclear engineering jobs here.
Speaker 1:Okay, so you take the accent piece, you take the IQ piece, take the accent piece. You can wash that out. You take. Are they willing to work hard? Yes, if you've ever traveled internationally, you know people work a heck of a lot harder there in many countries than they do in the US. And then, finally, are they willing to work hours that are beyond what they, you know we would typically work? Answer that yes Too. Oh, by the way, all the people that serve you dinners and clocking the movies and imported drinks, they all are too in the U? S and they're making you know, whatever they're making, they're willing to do that job.
Speaker 1:So I don't understand why somebody wouldn't outsource.
Speaker 2:Where I think the outsourcing question is kind of interesting to me is if you think about a lot of the countries that people are traditionally outsourcing to. You know a lot of it's India. India has a horrific time zone difference to the U? S. Then you've got you know people have gone to Ukraine. A lot People are going to Poland. A lot Seen people go out of Lebanon. I think one of the arguments against it is why do we keep going after people in active war zones, which is kind of crazy.
Speaker 1:Got a good price.
Speaker 2:Got a good price of crazy. Got a good price. Got a good price um. But where I'm curious to see? I think the most obvious next frontier and I'm curious to see how it unfolds is actually europe, because europeans are so much cheaper than americans. It's just a question of getting around the labor laws it's the lawyers are horrible.
Speaker 1:Why would you do that to yourself?
Speaker 2:exactly so. If europe liberal, liberalizes their labor laws, then I think, because I think, if you look at, say, south america, or if you look at the philippines, or if you look at um south africa, you look at india or south africa. I mean, how big are those talent pools, how deep are they and how you know, how strip mind have they been? I'm not sure. I'm not sure.
Speaker 1:Um yeah, but I'll tell you a thing. I'll tell you one thing, man, if you're, if you're hiring your whole sales team from cal state, chico, then how deep do they need to be?
Speaker 2:That's a pretty good point. And again right, the appeal of Cal State Chico is that they are local, it is that you can get them in the field, it is that you can get them meeting customers. Yeah.
Speaker 1:And so I think yeah.
Speaker 2:I think the argument against and I would you know, if we look at an SDR organization, I think there are two ways of playing this and I don't think there is an objective right and an objective wrong, but it's just two different strategies. If you view your SDR team as a low cost source of booked meetings, then outsourcing makes total sense because it is half the price probably more than half the price in terms of your saving. But if you view them as your next set of account executives and future enterprise account executives and sales leaders, then it probably does still make sense to hire them local. So I think we're just going into a very interesting world in terms of how these things play out.
Speaker 1:Interesting. All right, man. Well, that was our seven topics. Fun to chat. That was good. Yeah, I don't know. I'm all. I had a mess around and people can give me feedback if you want to, and if we should summarize them at the top or just have it be nuggets to see where we end up going with this. Sam, how can folks reach out to you?
Speaker 2:So on all platforms, I'm Sam Maralich M-A-R-E-L-I-C-H, mostly on Twitter, mostly on LinkedIn. I've got a YouTube. My company is NextVenture yournextventureco.
Speaker 1:Love it company is next venture, your next ventureco. Love it, sam. Thanks for joining us and everybody else. We'll see you next time on sales management podcast.