Dr. Howard Dover: The Economy, Tech, and Education Triple Threat

Hey everyone, welcome back to Make It Happen Mondays, where we talk about sales, business, entrepreneurship, personal growth, mental health, and everything in between with guests who I truly respect and I think make a positive impact on the world around us. And you are about to get your MBA in macroeconomics, microeconomics, and sales all at the same time with my conversation with my good friend, Dr. Howard Dover, who is the director of the Center for Special Sales and Sales Coaching at the University of Texas at Dallas. And Dr. Dover's been on the podcast a few times, as a matter of fact, and he always brings incredible insights. And in this one, we get into it because there is so much happening in the world right now that is impacting sales and the future of this profession.

We talk about the technology trends and what ChatGPT is doing to the profession. We talk about the education side and how what we're doing in universities, but also how companies are failing sales professionals by avoiding the basics and trying to solve the problem with technology and with more bodies, quite frankly, and how that's all coming to roost right now. So we go all in on these various topics to try to uncover how to get through this. And the good news is there is some light at the end of the tunnel if you give a shit. So let's get into it. I promise you, you'll get some value out of this conversation. Let's make it happen. What's happening, make it happen, family? Big shout out to our partners today, Gong, Vidyard, and Chili Piper.

Gong's data is more than valuable. It's cornerstone in any organization looking to collect the data that's going to tell them where they can improve and where they need to spend their time making changes. Vidyard makes it easy for people to use videos anywhere. No matter whether you're sending videos in email or on social media, posting them somewhere, or sending them in a DM, Vidyard has got you covered. Our friends at Chili Piper are so much fun to be around. They make it easy for people to get on your calendar. And every sales rep has got to have this function locked in. It's one of the most important things we can do as a seller. How can I get you on my calendar easily? Chili Piper can make that happen for you.

Be sure that you're checking out all these great tools. And now, let's pass it over to John to find out who's joining him today. See you soon, everybody. Mr. Dover, welcome back to the Make It Happen Monday podcast. Man, do we have a lot to catch up on, my friend. Yes, we do. It's good to see you. I missed my opportunity, so did you. I didn't send you a t-shirt, and I have my Make It Happen downstairs, and I didn't wear it today. So, that just means we'll have to do another, and I'll get you that shirt. But I do have mine, thank you, and I said the next time we do this, and then I didn't fall through, man. No worries. We'll do it again. Don't worry. Look, for everybody listening right now, I'm not going to have Dover go through his background because you should know it, but just check him out, Dr.

Howard Dover, on LinkedIn. He is at the University of Texas at Dallas, Director of Center for Sales. What is it? Professional Sales and Sales Coach? Is that what the actual title is? Professional Sales, yep. Yeah, and really leads one of the top sales schools in the country, which is why I love it because I've been on a crusade to try to elevate the profession from the ground level, you know, all the way back to my kid's book, but colleges need this education because it should not be the default profession, but, you know, too many times it is. So, thanks for coming back on, and I'm really looking forward to this conversation. Yeah, what a time to talk, huh? I mean, we were talking, even right before this, you said, so, you know, like, yeah, I've never seen it so fucking weird in this industry's tech and SaaS in general, and I haven't.

I mean, I've been doing this for 27, 28 years now, and the amount of variables that are going on right now in the condensed period of time is mind-numbing, and I don't know about you, but I mean, look, we both were around when the internet came out, and that kind of evolved, and then when DSL, you know, took over from dial-up, and that was pretty- You just really gated us, man. Actually, well, shit, everybody knows I'm old, so screw it, right? But, I mean, you know, and then there was COVID, but quite frankly, you know, there was major things that would happen every three to five years, and you can kind of expect it. Ever since COVID, it almost feels like things are happening on such an accelerated pace, and I'm wondering if you're seeing the same thing just from a macroeconomic, but also microeconomic standpoint.

Well, I think we have three pretty amazing converging factors hitting us at one time. Number one is we have the first interest rate-raising environment in our lifetime. I mean, I remember it in the 70s when I was too young to really process it. I mean, my mom and dad were upset all the time because things were expensive and said, hey, you got to live with that ugly shirt I bought you, but that's all I remember. So, in our lifetime, for most of us, this is the first time we're seeing a quick interest rate, you know, aggressive Fed move environment. So, that's the first thing. The second thing is we're seeing quantum leaps in tech. And then the third item that we're seeing is kind of this, it's tough to articulate it, but for many, many years, we've over-rotated, over-invested on efficiency versus effectiveness, and we've been able to get away with it.

And so, that's coming due. So, we get three major items coming to a head simultaneously, which is causing a bit of a tsunami. I'd say. And what we're going to do in this conversation, just to let everybody know, we're going to paint the picture of the mess that we're in right now, and it's going to probably look pretty dark, but then we're going to talk on the other side about what we can do about it because there are opportunities here. And I do think that for the people who are paying attention, there's a lot of opportunity and a lot of potential to really make a difference and, you know, create an awesome career here. But, I mean, with what I'm seeing right now, and this is, we talked about right before we got on, but my thesis on this whole thing is over the past 10 years in SaaS, we've been able to get away with, like you said, just throwing technology, try to make things efficient.

And because it's been such an aggressively grow-at-all-cost environment with VCs dumping money into it, you have all these kids who, you know, we've been trying to solve the problem with tech, okay, and bodies, and it didn't necessarily matter. I mean, you look at the statistics of how many reps actually hit quota these days and it's going down. So, with all this technology, we've actually become less efficient in a lot of ways. And in my opinion, and I wrote this post about, you know, two weeks ago, we've lost sight of the fundamentals in sales, right? Like, these reps can get away with just, you know, blasting out template emails, going, droning through demos, leveraging SCs, massive discounts, and they've had this inflated sense of, hey, I'm good at what I do, right?

And, mind you, all these point solutions have sprouted up, right? Where you have platforms that have features that are good, but then you have a point solution that is much, not much better, maybe 20, 30% better, and it was okay. You know, let's use Sales Loft and Gong, right? Sales Loft has call recording, but in the past 10 years, it was like, you know what, we'll do Sales Loft and Gong because we like the Gong call recorder better. And that feature itself is something I can, I don't mind spending the extra money for. So, now, when everything collapses and we're in a down economy, everybody goes back to platform, right? These point solutions are no longer as needed or they're no, the luxury they can't have anymore.

And so, now you have reps who have very little fundamentals in sales, have been trying to solve the problem of technology and efficiency, selling stuff that most people don't want anymore or are downsizing. And you have, to your point, the tsunami effect. And then you throw in the banking scenario and the interest rates, and it's just this, to your point, like just a massive, massive mess. Well, you know, John, almost every other field, when you put this amount of technology into play, has huge performance differentials. And yet, here in sales, we have deployed more technology, we've deployed more enable, we've deployed more training, and yet we're worse off. By the way, we were worse off before the tsunami hit, pre-pandemic.

We're already struggling with the ability to perform, even though we increase the training, we increase the enablement, we increase the machinery. And that's why I wrote that book on the paradox, because it's a paradox. Why? Every other field, when you put this kind of investment in technology, has a huge payoff in productivity. We didn't. We actually doubled, tripled. Actually, this statistic is mind-blowing, John. Pre-pandemic, we were 13 times the number of SDRs that we were five years before that. So, at the same time that we deployed all this technology, we ramped up aggregate. In aggregate, as a field, we 13xed the number of people doing the job, and yet technology increased our capacity by 10 to 100 times to do the same job.

That's crazy. That's where we were, which was unsustainable. But here's where it worked. Because we were a little incestuous, not a little, we were very incestuous, everybody was doing it, so everybody was buying each other's stuff. And everybody was willing to try each other's stuff, because at the end of the day, what we were building was not businesses that helped our customer. We were buying businesses to be sold, and they were sold to the next venture capital round. So, we were really only playing to the VCs and the eventual acquisition, whoever was going to acquire us. So, we were building a company as a product. And when we did that, it really didn't matter whether we generated revenue.

It's just that we generated enough to create the interest. For example, for SalesLoft, for Gong, it was, hey, can I be interesting enough? Actually, a better examples course, right? Can I be interesting enough so that Zoom buys me? And Zoom did, right? Zoom bought them and incorporated them into the portfolio. So, you know, this is where we were, and so the issue is, and I've been on a lot of different calls, is this going to end? And I think that's the wrong question. We're in the middle of a correction. This isn't 06, 07. That was a housing bubble. For the tech sector, this is a SaaS bubble that has popped. There is no fuel to keep the engine moving. So, now, all of a sudden, we're in a brand new phase that doesn't have venture capital chasing down companies because there are risk-free places to put your money right now that most companies...

So, two trend lines that are very interesting in the venture capital space. Number one, sorry to mention a competitor, but I have to because he just did something. But Jocko put out a beautiful piece on December 22nd, wrote a nice paper that described kind of the end of the SaaS era and said, hey, the venture capital funding index for SaaS has dropped off 90% in Q3 and Q4 of last year. And he said by Q2 of this year that most people would become aware and unable, unable to be able to get the next round of funding. What's worse is most of those contracts that were signed pre-COVID for three-year deals and two-year deals are all coming up for renewal. Nobody has funding. So, even the install base you have is not going to renew.

So, right now, we should be, and he predicts, and I think we're seeing it, a downward spiral in seats, funding. And so, revenue and investments are both falling off the cliff. So, naturally, we should see an implosion of the field. I mean, it sounds horrible to describe it just as, in definitive terms, that we are in a classic bubble pop. We had a mania of investment, which means we had a bubble that was unsustainable. And I was telling you off the air, there's an amazing book. It's very hard to read, but all of you are welcome to go read it. It's called Manias, Panics, and Crashes. And it was written after the 07-08 crash, and it tried to go back and say, hey, was this any different than any other major market crash that we've had in the history of the world economies?

And the answer was no. Actually, we could see it. And so, this has all the signs of a classic mania, which means that you have this over-investment in something that isn't sustainable and doesn't make a whole lot of sense. Right. And then, at some point, it just breaks down, and it's like a house of cards that falls apart. And so, we're in that house of cards falling apart phase right now, which is called the crash. So, we're in a crash that was preceded by a panic, which was the banking crisis, was that event that actually popped the bubble a little bit. But actually, that was preceded by the venture capital pullout, which was, once again, it's the Fed that actually caused the panic. And this was due to inflation, which, if you want to go back even further, we're getting very macroeconomic-y.

But the fiscal and the monetary stimulus was so massive during the pandemic that we were going to end up with inflation, but we'll get off that. That's for economics. But that's exactly right now. Yeah, it's relevant. There was so much money in the market that they had to... It was inevitable that inflation was going to rise. Yeah, inevitable. And this balance... Look, I don't understand macroeconomics at the level of why inflation and employment are tied to each other. Maybe you could educate me on that a little bit, but why if we keep increasing... Why it's a good thing to increase inflation so we can suppress the job market so that people don't have as much money to spend? I don't really understand why...

I don't know that anybody wants to increase inflation, so that'd be the first thing. I think the issue was that politicians, both Trump and Biden, they pushed too much fiscal policy. They put too much money in the marketplace. Trump was doing it to get reelected. The economy didn't need the money then. Biden was taking his opportunity to reshape the economy in the U.S. market. The combination of both was way too much fiscal stimulus into the marketplace where it wasn't needed. So if you have too much money chasing too few goods, the only thing that can happen is the price has to go up, right? There's too much money chasing the same goods. Now, the problem is that the Fed was also at the same time expanding its monetary policy sheet.

So it went... It had $4 million in quantitative easing. It went to just... I think it was about $8 trillion. That was... I said... I was going to say $1 million. That's not a lot. Yeah, sorry. So they had about $4 trillion. They went to $8 trillion. So they... Basically, that means they printed dollars, right? They printed more dollars. So now you have two sources of dollars hitting the market simultaneously. The Fed is generating more revenue with dollars in the marketplace. And then the federal government is spending more dollars in the marketplace. So we have just a flood of dollars. I mean, most... I mean, Economics 101 would say, okay, same amount of goods in the economy, but there's double the amount of money in the economy, which isn't the case.

But if we double the amount, the only thing that could happen is prices doubled because the money is chasing the same goods. The only way this works is that you... So the idea to stimulate the economy is, hey, things are going a little bit slow. So we're going to put out some money to then buy some goods so that people go back to work. But if you do that too much, you end up with inflation, which is what we ended up with. And it was a one-two punch, right? You had the Fed doing its work, but you had the politicians wanting to say, me too. I'm helping out. What's really kind of weird... And we're actually going to do a briefing with a banker next week at our leadership summit. And that may not time right with this.

So you could cut that out if you need to. But we're bringing a banker in because it really doesn't make a lot of sense. The Fed actually hasn't reduced the amount of dollars, even those cutting interest rates. So it's raising those interest rates up to make credit less available. And credit is more expensive. So that's slowing down the economy. But what's interesting to me, John, is two things. Fiscal stimulus is still going full board. So the federal government is still pushing out those trillions upon trillions. It wasn't just one time. It's multiple times that we've had the current political environment in Washington spending fiscal money. That means the government's just spending money. It's a little bit like a drunken sailor right now.

And so it's couched in the concept of reshaping or retransforming the economy. I'm not going to get into the political side. I'm in the fiscal side. So we're spending money still. But the Fed hasn't reduced the dollars. It's still sitting at 7.8, I think 7.5 trillion. So they haven't really backed off. The monetary is still floating around and the fiscal is still pushing and the interest rates. So that's why we've got exactly what we've got. We've got these rising interest rates. But yet we have inflation still going because there's still too much money chasing too few goods, not enough workers. Supply chain still kind of gummed up. Meanwhile, the tech sector can't get any money because now interest rates have jacked up.

And all of a sudden investors are going, well, I can actually get a pretty safe return if I just go buy bonds. If you don't know about iBonds, everybody, go check them out. They're pretty amazing. If you're not maxing out your iBonds every year, I found out about that. I was so ignorant about it. I found out about it with a high inflation and it matches inflation for about 10,000 a year for each person in your household. And why would I put it anywhere else? I got nine and a half percent last year. Insane. Which was equal to of inflation plus a small little multiplier, right? So people found another place to put their money. All of a sudden venture capital doesn't have the money. That's where we're at, John.

Those are the technical aspects. I'm not giving you the deep dive because I'm not an economist by trade. I'm an economist trained who's actually selling, which is so oxymoronic. Which is why I think you have a unique perspective on this. And so, you know, let's talk about the industry and then let's talk about the individual. Okay. You know, for the industry here, bike, it's not bottomed out. I think we both agree that this is going to be an ugly year at best. One to round two at best. And I want to say focus on the tech and the SaaS because I do think there's a trickle-down effect of the rest of the economy because it is interesting right now that you're seeing, you know, I mean, a friend of mine was like, you know, went out to dinner last night, a really expensive restaurant.

You know, it's on a Tuesday night and it's packed, right? So, so it's almost like everybody's not acting like the sky is falling. And I always say that the SaaS or the tech industry is almost like the canary in the coal mine, right? Because the trickle-down effect that it has on other industries is not going to go unnoticed. And we're watching stuff, you know, let's add this to the equation as far as you said, just the hyper evolution of technology at this point with tools like ChatGPT and those type of things that I think a lot of people are ignorant to outside of tech and SaaS. So, but let's focus on this industry. Where does that leave these companies who have grown up in this environment?

I mean, what do they need to do right now outside of focusing on profitability as much as possible? But there's a balance here, right? Because if they cut sales, if they cut their sales teams, if they cut investing and training, then they're not going to grow. So, they'll maybe be a little bit more or less unprofitable, if you will, but they won't be able to grow. And it's in a brutal market right now trying to get people to pay attention to you. I mean, I'm even having, you know, the CEO is so bettered by JBSales and John Barrows calling out to people who, and I've built a reputation over the years with however many followers that I have, it's even hard for me to get, you know, an executive to have a conversation with me about spending any money.

So, what do we need to do right now as businesses to try to get through this and survive through this? Well, I think we have to look at a couple of things. Number one, are you a nice-to-have or are you a need-to-have? I think in the world that we lived before this, nice-to-haves got to play. Need-to-haves didn't, yeah. So, first off, are you a nice-to-have or are you a need-to-have? That's the first thing I'd be asking myself. Second thing, I kind of love the work that Matt Dixon put out. What a timely thing to put out there right now. You really have to be able to assess very deeply, is the organization capable of making a decision? Just, you know, do they have... I don't want to go back to BANT because, you know, that's a very...

It's a bad place. But I almost want to think about BANT 2.0 a little bit right now is to say, listen, if they don't have the money, they don't have the money. So, you really got to look at, and are they capable of actually making a decision? And some people just aren't. I think there's a lot of new work around personality profiles and how they kind of work with each other and their capability of actually being able to make a decision. And then, if I would go down to the individual level, because I know a lot of people watch your podcast, right? And they're probably going, hey, what do I do? And I think, first off, you have to be a disruptor in this market. You have to be counter-cyclical. You've got to upgrade your skill.

You've got to be the person who says, I know what everybody else is doing, so I'm going to pattern interrupt. I'm going to be different. And I'm going to be... I'm going to have to develop my skills. So, you're going to have to invest in selling in the way that it always had to be done. Not the way you've gotten away with it up until this point. Whether you're an organization... So, the best way I would describe this, John, is you probably don't have the right people on the bus if you're a company. So, you have to make one of two choices. Number one, you have to get other people on the bus. Or number two, you better train the current people on the bus to be the right people on the bus. Because the likelihood you have the right people on the bus right now is very, very low.

Yeah. And that's why we're seeing all these layoffs. And because I think that's what a lot of people... You know, because again, you could get away with a bloated... I mean, we talked about this. I can't... You know, I would watch companies who have, you know, their ACV is $50,000. But yet, their CAC, their cost of acquisition is through the roof. Because they have 100,000 OTE SDR making cold calls, $200,000, $300,000 AE taking the droning through a demo, a $200,000 SE joining three calls later, and then, you know, offering massive discounts that pretty much make it unprofitable regardless of the cost of that sale. So, like, they were... That used to be sustainable. That was sustainable, wasn't it?

It was. That's the weirdest thing, John, is that it used to be sustainable because venture capital would invest in that as long as they would get a profit out. Yep. And profit didn't matter, right? I mean, it was growth and then they would flip it and whatever. So, that always... I never understood that. Like, I never understood a company like Uber who could be worth whatever, $20, $50 billion and still not be profitable. I'm like, how in the fuck? Like, I'm not an econ major here, but that doesn't make any sense to me in any way, shape, or form. Well, I'm not going to go for that one. So, let's talk now, though, because let's stay on the individual because what... And I want to understand what you think are fundamentals these days, and I want to base it on this because I think a lot of, for instance, my fundamentals in sales came from just purely face-to-face interactions, being in the office, being in the bullpen, meeting with people, going to networking events.

And I was trained on some techniques and stuff like that, but a lot of it was the school of hard knocks, right? Because I was just immersed in communicating with people. And so, I could read body language when somebody didn't get my pitch. I realized when I sent that email, because I didn't have these massive cadence tools, when I wasn't getting a response from it, like, okay, I should probably change something here. I would make cold calls and I would get told, you know, that was stupid and hang up on me. And now, you know, so I think I developed fundamentals almost despite the lack of education, the lack of all these things. Now, we have all these trainings and all these technology, but then we have these kids coming out of school going into a virtual world without the bullpens, in many cases, without...

They don't go to networking events anymore. They don't, you know, they don't sit and see and feel what sales is. So, I'm curious from your perspective, what do you think the fundamentals are at a pure base level and then how do we teach or implement those into a group of people that have skipped so many steps? Well, I think the first fundamental challenge in sales is to realize that you really don't matter to your buyer until you... Yeah, they don't care about you. They don't care about you. It's, you know, to perfectly... I'm going to go to an academic setting just so I don't offend all the salespeople, but there's relevance here. So, by the way, inevitably when I do this exercise, I'm sure you've done something similar as I say, so I'm sitting down in Galveston, Texas with all the fundraisers for all the universities.

The president's office asked me to go down and do something with all these fundraisers. I said, all right, I'll go down and do this. So, I do this workshop and I say, all right, I want you to map the customer journey to a donation to your university. And it's so funny because it doesn't really matter. Whatever I say, journey map this. What they end up coming up with is the assault path that I'm going to take to the customer because the customer is going to show up on my campus and, well, they're going to be so excited that they showed up on the campus and then they're going to react to my email. Then they're going to come to this event and then they're going to get this and then they're going to get that and then they're going to give me money.

And it didn't matter what they all explained. I let them all explain. I leaned into whatever they're going to say and I said, I'm sorry, everybody. When I wake up in the morning, the last thing I'm thinking about is where I went to school. I'm worried about, you know, I had, I had a grandson 48 hours ago. Okay. Congrats. The number one thought in my head is that my daughter is being discharged from the hospital today and I was babysitting my other grandson while my, my daughter was having a baby. And now I'm worried about how I'm going to grade this. And then I'm going to worry about how to write, then I'm worrying about that my, I got to mow my lawn. I got to rake up some leaves. I got to write, my dog probably needs a walk and then, oh yeah, I need a budget.

And these are the things that are in my life. I don't think about Brigham Young University when I wake up in the morning and say, gee, I think I should write a check. Yeah. Right. Kind of in close. So, so this is the thing that in sales, right? In sales, we say, if we ask somebody to do a touch point map or a buying journey, we ask them to do a buyer's journey, right? The customer's journey or the buyer's journey. Inevitably, we, we immediately assume we're relevant, John. And, and what is the reality in our, in our addressable market? If we were to guesstimate, you and I guesstimate what percentage of our addressable market is actually in active search or problem recognition that I could solve or that the problem could be solved.

So there there's the issue of what's the percentage that actually realized the problem exists. And then what percentage are in active search? I'm going to go with below 10%. That's, that's, yeah. So, so we design most of our outreach with the assumption that 90 to 100% of the market is, understands what we're about to say to them. Instead, 90% of who we're going to talk to hasn't a clue what we're about to talk to them about. So we start off in an irrelevant space. Then if we get into, into active processes, right? So if, if I'm in an active decision-making process, we also fail to recognize that that's, that's a, that's kind of a internal bombshell to be able to get a purchase decision. And I have a lot of complexity I have to go through.

I have a lot of personalities I have to convince. I have to get a lot of consensus around a concept. And that also is lost on the average salesperson who says, well, they said they're interesting and they're working internally. Great. Yeah. Well, it's, it's, it's challenger. It's jobs to be done. It's, it's all these things that are going on in the complexity world. So I think we have problems at the two levels. Number one, outreach is so tone deaf. And then as you just defined, right? I do a dummy demo, right? Well, okay. But are you helping them buy? Right. Are you helping them buy? That's the thing. Are you being relevant? Are you helping them buy? Those are the skills we actually did a paper with LinkedIn.

This was something that I did with Karen Piesker was the primary author out of Toronto there at Ryerson university. And we connected with LinkedIn. We looked at data across the world and said, what's the number one skill that is needed in the modern economy? This was pre COVID when we pulled it and the number one skill was analytical skill. The ability to think, take information, analyze, and act upon it. Number one skill needed in sales. Now ask me what percentage of our salespeople own that skill? Yeah. Well, unfortunately, when Gardner did a research study many years before that, it was 1%. I hope it's a little bit better now. So we have a fundamental differentiation between what is needed by the customer and what we have as people.

That's why I'm saying we're at a moment where we really got to analyze. If I'm a leader, if I'm a senior leader, I really have to ask the question, that release by Benahoff, I'm probably going to screw up the statistic, but I thought the statistic was that less than 50% of his people were generating 80% of the revenue. Was that? Yep. It's around those numbers. I thought it was like 37 or 40. My first question is, knowing Benahoff, I mean, you and I have been the dream force for years, right? I mean, we know the Ohana and everybody. That's not a very Ohana statement. Nope. So why would Benahoff say, I'm going to go out in public and I'm going to say this about my family? It's because he knows he's going to have to cut.

It's because it's true. And this is what I actually did a post on that. And it was funny because it was quote unquote leaked, right? Whenever from an internal call. And it was effectively saying like people who work from home and newer reps are less productive. And everybody was all up in arms about it. Like there was, I saw so many, Oh, like, how dare he? I'm like, do you think that's his opinion? Like, I guarantee you that Benioff has a button that he pushes that says how much more productive. And he didn't say, are you better or worse than they were last year? He said, are they more productive? That is a quantifiable fact that he knows. And so I told everybody, I'm like, look, I'm not going to give Benioff a pass here for being a billionaire and cutting jobs when he could have probably saved himself and he made some bad decisions as a business.

I'm not going to give him a pass for that. Okay. But if you think, if you're the one getting pissed off about him, you know, telling people that you were on, if you're thinking that was about you, it was about you because I promise you the people who were productive and, and still got laid off, they understood because they knew 10 of their sale that their teammates were showing up on Zooms in their PJs without their cameras on and going out golfing in the afternoons when they could. Now you might've been there grinding and doing your, you know, working your ass off, but that didn't piss you off when you said it because you knew it was true. Yeah. And that's, so it's a, I think that's the challenge, John.

I think we're in this rude awakening world and, and, um, I think we're in this world in which you're going to need skill. Yeah. And, and SDR doing the SDR motion, doing the AE motion didn't necessarily give you the skill to do what's required today. And that's that, that, you know, better for me to say it because I don't have a business that it depends on that because people would be mad at you. But the challenge that we ran into is we really had this perception that the SDR model, I don't, I don't dislike the model. I just don't think it's sustainable. It was never sustainable. It really never worked. It's this idea that we take our least experienced person and have them contact the most important people and represent our brand.

And we somehow use this as a way to onboard people and eventually make them AEs. Well, the skill it takes to get a meeting has nothing to do with the skill of having a meeting. There are two different concepts. And so if you're going to tell me the division of labor is what we're working towards, and this is in the, I wrote, I write this in the book very definitively with economic arguments to say, well, then you should keep the SDR in the SDR role for five to eight years because they're right, they're getting really, really good. The whole idea of the economy is a scale and the division of labor is you cut that down so they get really, really good at that task. And so you get efficiencies. Well, the efficiencies never get played out to the firm because we either promote the person or they leave us.

And we know this. We never get the efficiencies. So, and then this idea that we do that to promote them to AE, well, that's like promoting the top salesperson into a manager, which we do as well. All the time. What's up, everybody? I know you're enjoying this conversation. John does a great job with genuine curiosity on these episodes and our guests consistently bring the heap. We want to take a moment here and let you know that you've got an opportunity, an opportunity to become better than you were yesterday. And you can do so by gaining access to all of JB Sales content. All of their training tips, techniques, tactics, and takeaways can be yours for $1 a day. $365 for the year gets you annual access to everything, including our private Slack channel for members only, which you get access to all of us directly 100% of the time, 24 hours a day.

And then at the same time, you're going to get access to our bi-weekly Ask Me Anything sessions where you can bring real deals to the table and get the help that you need where you need it. This is very, very important. Sales reps that invest in themselves are often found at the tops of their leaderboards. Join us today and get the help you need to become the seller that you deserve to be. That URL, one more time, is joinjbsales.com. Let's get back to the show with JB and our guest for this week. I've been preaching this for a while because I think it was Tim over at Alation and this model of, I think, you know, there is something and people hate me for saying this too, but I think the SDR role has its place, right?

Just for one reason and one reason only. It's the same reason I talk about cold calling, right? People say, oh, dude, nobody cold called, nobody cold called, you know, but the reason I still think cold calling is important is twofold. One is it's a marketing thing, right? It's a touch point, right? You leave a positive impression. You leave a voicemail. That voicemail might lead to them looking at your email. And so if you think about just impressions from a marketing standpoint, I think there's a value there for cold calling itself. But also, I think it's an important part of a sales rep's development is to get in and get the ever living shit kicked out of them for a little while because there is a grit factor here in sales.

And if you do not have grit, you're not going to make it long term in any way, shape or form. So it's almost like a trial by fire where can you take 99 no's out of 100 and keep coming back for more? There is value in that to me, right? But to your point, it is such a small sliver of the sales process that then we take those kids after a year or whatever it is, and we dump them into full cycle sales. And if you're not a company like Salesforce, where you have the segmentation of enterprise, mid-market, SMB, and even VSB, very small businesses. When an SDR goes to that environment and then closes to SVB, you know, very small business, okay, that's actually, all right, you can figure that out. It's small cycle closes, right?

And then you can graduate up. That's all right. And then you can kind of graduate up, right? But most companies don't have the amount of customers to allow that to happen. So they put these SDRs into mid-market or enterprise AE roles, and now they have to do full cycle sales, and they fail miserably. And so the concept or that Elation and a few others I've heard is you do an SDR, get, you know, see if they can cut their teeth, probably roll that under marketing and operations. But then instead of promoting them to an AE, you put them to an AM, right? An account manager or a customer success. And what you do is they then learn how to close because now it's cross-sell, upsells, and renewals, but it's in a safe environment, right?

So it's, you don't have to hardcore close. It's not a quota every single month. And they learn use cases. They learn what the client really, how their client really uses the product and what they were sold and what they were using. And so what happens when you close a crappy client and then have to deal with it? So there's empathy there. There's use cases. There's knowledge. And then you can stay there if you want because you might like that. But then after that role, then you move to an AE. And now you're empowered with the ability to prospect, the ability to close, and empathy for the customer. So this is a, it's kind of a mature market company. But at our last summit, the VP of sales for Linux Corporation actually laid out a mind-blowing concept.

So they have a graduate sales academy. So you go into the sales academy for, I believe it's six to nine months. I don't remember the timeframe because it moves around, but you come out of that. And you used to come out into inside sales or you'd be in the parts store. And she said, no, from now on, you come out of the graduate sales school. The first job you have is customer onboarding. They don't have customer success. They have customer onboarding. So you take this client that the territory manager sold, and you do everything you can to get that customer completely immersed into the company and getting all the value they need. You make sure that they connect them to all the assets. And because that ingrains this value of saying, why do people buy from us?

And what's our value proposition? And what matters to a customer? And then after you successfully onboard several customers and you get good at it, then she's going to yank you out of there because she doesn't want you to stay. Now, if you want to stay, you can stay, but pretty much we're going to now have you go customer facing for the first time. You can choose to go inside sales and try to go generate revenue, or you can go over to the parts stores and start servicing customers who are not on contract and try to bring that right. There's two ways to bring in customers. And I just looked at her and I said, you're a genius. Yep. That's smart, right? It breeds longevity. It reduces the churn rate of sales because the churn rate of sales, I mean, SDR churn rate is off the charts, but then the SDR to AE transition falls off the map because, you know, again, if you've been able to survive with these cadences and blasting out and doing, you know, just basically, you know, robot work, which is why they're all getting replaced by robots.

And then you put them into that environment where they actually have to close now. And they're like, whoa, whoa, whoa, whoa, whoa, I don't like this. I'm out of here. That's why I don't know. I don't know if you're, I heard a stat a long time ago. Maybe you can help me out on this one is that like three out of four people that get into sales every single year, get out, right? Because it's that tough of a profession and they get smoked on it. I don't know if that is true, but I can see why. I don't know either. But so this, this, this creates the better question and this comes back to the right people on the bus. Yeah. So the thing is we've, we've really all the way back to Annika Seeley's book on, on sales 2.0, right.

When she created the Oracle direct group, she posited in it. And Annika is just, you know, she's a smart woman, great woman, did great work and love that book, but she posited this question that you can take, go to colleges, hire intelligent people, and they'll learn how to do the job, right? I mean, they'll learn how to do the job because they're, they're smart enough to figure out after they've, if they've failed enough, they'll start iterating and they'll start figuring out and then you can train them and it'll all work. Um, given the fact that there's over 250 sales programs around the country now, I'm sorry, why would you just go to any university now? Why would, why would you do that? You, when you can choose 250 universities that kids intentionally say, Hey, you know, I think I'm going to go into the same called sales.

And I actually want to figure out how to be good at that. Yep. Get the right people on the bus. Yeah. Get the right people on the bus because you're going to have. So what I would say to most companies is if you're going to downsize, you better right size because if it, which, what you're doing with your downsizing is you're saying, I got the wrong people on the bus because at the end of the day, if you had the right people on the bus, you wouldn't need to downsize because you'd be generating revenue. You need a constant source, a continual renewable source of sales, train, productive talent. Either you create that in house, um, by having programs like with John Barrows, right? Or, or somebody else out there, you, you have internal or you have external processes where you can take people, generate them into sales, train people, or you go to the sources where they university sales or experience.

There's, there's an interesting study by Florida state that says that's a little dangerous. When you take the experienced salesperson against the college trained salesperson, who would you estimate, John, and be honest with me, who would you estimate from day one, who does better? I mean, logic says that the experienced sales rep would do better. You are correct. You are correct. Yes. However, at two years out, 18 months out to there's a crossover or two years out, there's a crossover. It depends on whether it's B2B or B2C. At the three year out, it's two X to three X differential. So wrong people on the bus. Cause we hire the people who've been doing it. Yeah. It's a learning curve. Yep. Absolutely.

Right. Salesperson who's been always doing it the way that they've always been doing it is either going to be static and or slightly inclined. The sales trained student is on a, is on a constant learning trajectory. They want to be coached. They want to learn. And in many cases, they're learning the most modern concepts. They're not stuck in what didn't work. They're stuck in what is being invented. And so that's kind of interesting. And what's possible, right? And so, yeah, look, uh, I mean, I'd love to keep going on this, but talk to a little bit about, before we wrap up, talk a little bit about this book, why you wrote it, um, what's, what's in it and why, why people should read it today.

Well, I think what I was looking at is, uh, as technology, I was talking earlier, most industries, when we deploy this amount of technology, we have massive productivity gains. And you and I went to the same conferences back, you know, seven, eight, nine years ago. So we get these companies that would come out and talk about point solutions or even comprehensive solutions and say, Hey, in the test case, we had an eight X performance bump. We had a 10 X performance bump. And so to me, I would say, well, okay, if I can get an eight X or 10 X performance bump, then I should reduce the amount of head count. Right. But instead we didn't reduce the amount of head count. We actually increase it by 13 times.

So I said, wait a minute, this doesn't make sense. There's something going on here. And so I started realizing there were two types of companies and really there's two types of salespeople, but let's start with the two types of companies. The classic sales machine, which does incremental change, does a little bit better and automates. They automate for the purpose of efficiency. They never focus on effectiveness. And then there's the companies that start with effectiveness and then deploy efficiency. Now, the percentage of those companies is below 5% and they are ridiculously high performing companies. Let me give you an example, kind of a big company. Went over to Southwest Airlines and talked to them about working with our program.

And to be honest with you, John, they don't need me, which is really depressing because, you know, they retain almost all their salespeople. And I asked them, I said, so in the next year, how many openings are you going to have? Now they have about 100 to 300 salespeople over there, depending on what division you're looking at. Entry-level positions, though, sitting in the 100 below 100 space. And I said, how many salespeople are you going to need in the next year? And they looked at me and they said, I think three. And I said, okay, and why are you going to need the three of them? I said, well, we got a couple that we think we're going to move into a different sales role. So we're going to promote them.

And so we're going to have a couple openings. And then we think we're going to add one headcount. And they said, and how's performance going? Oh, we're growing. We're growing great. We're hitting our numbers. We have a great trajectory. We're expanding our sales. And that's a world-class sales organization. Now, this is kind of freaky cool. You ready for this? So I'm sitting in the sales floor right over on the other side. There's the analytics team that's supporting the sales floor that's actually doing all the operations research and literally looking at the machinery and trying to figure out how to make them more productive. Listen, that's, I'm going for effectiveness and I'm going for efficiency simultaneously.

And this circles all the way back to fundamentals and then leveraging technology to expand those fundamentals versus leveraging technology and missing the fundamentals. It's the exact same thing. We tried to over-index on efficiency and we forgot about effectiveness. Yes. And effectiveness to me is those fundamentals that we need to get back to. And we need to get back to, and you phrased it in a lot of different ways. I call it the give a shit factor. You have to give a shit about your career, about the clients that you talk to, about everything that you do. And you have to be genuine about that care. Otherwise, it doesn't work. And that's where I think a lot of people are right now is that they, A, don't give a shit.

And they've been under this false sense of security that this technology has been able to do. You know, that they're the reason they've been successful, not the technology, not the thing that they're selling. And now a lot of them are starting to have that crisis of conscience here to realize that, uh-oh, I might have skipped a few too many steps here. So given that 90% plus of the market is sitting in a classic machine that's following up at the moment, you have to do, if you're an individual or an organization, you have to make the following decision. Number one is I either need to hire sales disruptors who know how to move in the modern economy, or I need to become one. And that's, that's the thing.

And if you do, you'll break that paradox. If you don't, you're living in the sales innovation paradox. And that's why I wrote the book, because it didn't make sense to me, John. And I tried, tried to understand it and flush it out and then say, how do we become disruptors? So. Yeah. Awesome. All right, my friend. Well, we got to finish things up here and, uh, you still there? There we go. Um, cool. So tell people where they can find the book, they'll, they're where they can connect with you and everything else. Amazon's the place for the book and, um, LinkedIn is the best place to connect to me. And I'm not past my 30,000. Unlike, I think people like you that are just way too popular. You can follow me or connect to me.

And if you'd like, uh, we can sit down with organizations. We can take a look at your, are you, are you more classic or are you more modern? And where are your opportunities to kind of right-size this and get it in the right place? Because right now it isn't about letting go people. It's about finding the right people who can operate in this economy. You got to invest or you're not going to be around. No, you're not. So. All right, Jack. Good to talk to you. Thank you as always, Mr. Dover and, uh, everybody out there. Hopefully this got you to think, hopefully it didn't freak you out too much. Hopefully it didn't freak you out too much. There is, there is hope for people who care. There is hope for people who, who evolve and are agile in this market.

You just got to stop going through the motions. And so look, no matter how bad do you think your day is going or do you think it went, uh, go out there and make somebody smile today. Cause, um, no matter how bad it is, you can make somebody smile today. You know, you had a good day in the world needs a lot more of that right now. So thank you all for listening and I will see you on the other side. Thank you so much for your time today and listening to the podcast. I hope you enjoyed the conversation as much as I did with your support and our incredible guests. We're one of the top sales podcasts in the industry with over a million downloads. And I can't thank you enough to keep the momentum going.

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