Finding a great Vice President of Sales is a critical ingredient for success for any B2B SaaS software company. Whether it’s your first, or you’ve hired multiple VP of sales, you’ll rarely make a more important decision. What to look for in a GREAT VP of sales…
The primary responsibility of the VP of sales to is to lead and direct a sales team to meet or exceed sales revenue and profitability objectives while staying within budget. The role involves strategic planning, managing people, selling, leveraging technology and improving processes. The role in a SaaS software company is compensated with a salary plus a variable commission tied to the attainment of business goals. A vice president of sales is a key member of the senior management team.
Strategy and Metrics
The VP of sales helps create and executes the organizations go-to-market and operational strategies to achieve the sales plan. They participate with the executive team in developing the strategy for the enterprise. They establish KPI’s such as revenue versus plan, average deal size, pipeline close rate and length of the sales cycle as ways to monitor success. The VP must anticipate and respond to trends and changes in company sales performance. They develop and manage the budget of the sales department.
The VP sets the professional tone of the sales organization. They hire, supervise, develop and mentor sales managers and indirectly, through sales managers, the sales representatives. They are responsible for sales quotas, compensation plans and performance improvement initiatives including the use of sales enablement technology. The VP sets the tone expecting each sales manager and sales rep to create and present a written business plan identifying their income, quota, and personal plan including the tactics necessary for achieving their plan. Quarterly business reviews are conducted so pivots and adjustments can be made to keep the department on target. Nothing creates positive sales moral like the consistent achievement and over-achievement of sales targets.
The VP of sales manages and directly participates in sales negotiations, attends customer presentations and helps close deals. They develop a relationship with large high-profile customers. The VP oversees and helps develop sales proposals and requests for proposals and information (RFPs & RFIs) including a business case in support of the full purchase price of the company solution. The VP ensures that sellers are effective at communicating the company value proposition including the metrics-based customer case study stories. Great VPs of sales partner with marketing to develop effective business development and a lead generation program to ensure a steady stream of leads flow to sellers. Sellers who have access to high-performing sales collateral with automated deliver at just the right time in the sales cycle is a sign you have a very high performing VP of sales.
Technology and Continuous Improvement
The VP of sales improves the effectiveness of their sales organization and enhances productivity and efficiency. Adoption of technology is a key metric for success. The customer relationship management CRM system should be leveraged for planning and execution, not as a system simply gathering sale exhaust (events that that happened last week or last month). IT is the VP of sales friend as they work to automate process and eliminate manual tasks which slow sellers down. Customer satisfaction is critical. Establishing a sales and organizational culture where EVERYONE understands how the enterprise creates value for the customer, and that each customer must receive the assistance they need to achieve the business case and promises they made to their organization, to get the purchase approved. SaaS organizations have lower barriers to secure new customers. And customers have lower barriers to cancel. Ensuring the business case and promised made are achieved is the way to ensure renewal and opportunities for upselling and cross selling.
A VP must have seven to 10 years of experience in a business-to-business sales leadership role, five years or more of direct selling experience and at least two years of experience establishing process and execution within sales technology. Two years of experience working with a management team including the C-level is preferred. A business major with undergraduate degree is a minimal requirement with a master degree being a bonus. They must possess outstanding leadership, communications and interpersonal skills. The VP of sales has to possess expertise in sales strategy, methodology, strategic planning and execution.
Compensation varies based on the size of the SaaS organization, number sales managers, sellers, geography, regions and countries. A SaaS VP of sales salary ranges from $125,000 to $225,000 with total compensation of $250,000 to $450,000 at plan. The best compensations plans provide a 50/50 ratio between fixed and variable compensation at plan, with an opportunity for significant additional compensation if plan objectives are crushed!