Selling Against Tech Giants: The Sumo Logic Sales Formula With Steve Fitz

Episode Summary

How does a tech startup claim its rightful place among the ranks of goliath competitors? The team at Sumo Logic knows that it can’t just ram its head against 800-pound gorillas in the marketplace, so it devised ways to enter customer accounts from the “sides.” The company’s Chief Revenue Officer, Steve Fitz is here on the show to explain how Sumo Logic combines a bottom-up sales motion with a top-down sales approach. He also talks about how to break down demand generation between sales and marketing, how to create real customer-centricity with your customer, and how to find the best sales candidates for your firm. Possessing over 25 years of experience in sales leadership, Steve throws in a few nuggets of valuable sales wisdom that you wouldn’t want to miss.

Selling Against Tech Giants: The Sumo Logic Sales Formula With Steve Fitz

On this episode, I had the pleasure of speaking with Steve Fitz, an incredible Sales Executive with several years of experience. He formerly held sales leadership roles at EMC, Avaya, and MapR Technologies. Now, Steve is CRO of Sumo Logic, where he’s led that go-to-market organization since 2016, and in 2020, had the pleasure of taking the company public. In this episode, we discuss how Steve and his team do pipeline prosecution, the balance he has set between sales and marketing, what being customer-centric truly means for a SaaS company, and what he looks for in a great sales candidate. I hope you find this episode as interesting and as valuable as I did.

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Steve, thanks for joining us.

It’s good to see you again.

I’m excited to have this conversation with you. There are tons of learnings that we can explore. I want to first set the stage by giving us a little bit about your background. What are the sales roles you’ve had prior to being CRO of Sumo Logic? You even have some international experience as well.

I started my sales quite early. I was a co-op student first for this company called EMC. That went into a full-time role where I got exposed to early sub-200 employee environment and culture, people, sales DNA. From there, you graduated, and you sat down with the Yemen EMC, which was Roger Marino, and he picked the city you go to. I was fortunate enough to go to New York City. I remember Roger telling me, “If you can sell in New York City, you can sell anywhere.” I spent a long time at EMC in my career and had an opportunity.

If we go through 9/11, I was running a big business for EMC in New York Metro and had an opportunity for my boss at the time to do something different. We chose to move to Asia to do something outside of your comfort zone. We did that for about four and a half years and probably learned there more in four and a half years than I did my prior twenty. We repatriated back to the West Coast and stayed with EMC for a while. We did some things outside both small and larger. I did a private equity thing at a company called Avaya, and then I got into the big data world with one of the Hadoop players, and then I joined Sumo several years ago.

What are some of the experiences that helped define your success in sales?

It’s a people business. Sales is not a forgiving environment. You have to have grit and a positive attitude in sales, probably more than a lot of other professions. The highs are high, the lows are low, and you got to feed off other people. Whether that’s a customer engagement or an employee engagement, there’s an outcome. One of the most important things I love is seeing people be successful, seeing sales reps get their first deal, get the first logo, get a large win. That is so personally rewarding to me in terms of that and where it’s going to take them, not miss, maybe not in the next quarter, but in their career and how that helps them along that journey.

One of the things I want to dive into is how you run your sales team. I’ve heard in previous readings, you call it your process pipeline prosecution. I haven’t personally heard that before. Why do you call it that? How much rigor do you put around each stage of your pipeline review?

The prosecution thing gets a lot of comments, but if you look at one of the definitions of prosecution, it’s a continuation of an action with a view to its completion. If you look about prosecution, the pipe’s good, but some pipe’s not good, some pipe is good. You want to get completion on that, whether it’s a close-won good side, or not an opportunity, not a good fit, might be a loss in that regard. For us, it’s the rigor of looking at pipe, but moving pipe through the different stages across that spectrum as it relates to first engaging with the customer that might do Sumo Logic free download on our website.

That grows into a multimillion-dollar ARR customer. If you look across that journey, you have to look at the different stages and understand why the conversion works across those stages and always refine your process there. We spend a lot on probably stage 2 to stage 4 for us. That’s where it gets to engagement, appeal, see POV type of an environment. Those are the important parts of us, it’s the sales leadership, but also the marketing aspect of how you nurture a customer as well across that spectrum, because we’re not trying to touch one person, we’re touching many across that customer environment.

It almost puts a mindset that this is going to be continuously iterated on and evaluated and modified based on the results you’re seeing. When you look at the top of the funnel, how do you have that responsibility broken down between sales and marketing?

We spent a lot of time on this from sales marketing, sales operations, sales strategy on that side. We’ve done this for the last several years now. The expectation is 50% comes from the marketing, which we call the demand gen side of the house, that’s both inbound, outbound, event-based marketing. Fifty percent comes from the rep itself. That’s the rep on outbound, but also the partner environment and ecosystem that creates. On a macro level, we’ve achieved that for the last several quarters in terms of the 50/50.

If you get down to the details, not every rep’s going to get inbound downloads website and such. You have to work and refine that. Back to your point, you have to constantly iterate what works and then find out what doesn’t work. The pandemic is a good example. We stopped doing shows. We got 30%, 40% of our demand gen lead pipe from shows, now you’re doing that in a virtual world. Candidly, the quality of the pipe now is better than it was from the show side, because if you’re at a show, you’re picking up a name and its conversation, now it’s more contextual.

You want to grab the Sumo Logic little toy if you’re at the show.

Was that a qualified lead? I picked the little trinket or tchotchke up. Rarely it is, therefore, it shows more awareness. If you look at the events that you’re doing now, the virtual world, it’s much more contextual. It allows for a bit more of the nurturing aspect of what matters to the person on the other end, in this case, the video.

Have you seen that 50/50 ratio between marketing sales change as a result of it? Looking for different ways to augment from the demand gen side, and you’ve been able to maintain that ratio.

We’ve been able to maintain it. We’ve been conscious of digital investment since the pandemic, we’re actively moving dollars from shows to more digital campaigns and nurtures in that regard. What we’ve seen is the importance of digitals front and center in terms of the way that you find people, interact with people, nurture people across that spectrum.

What’s the cadence you have from a leadership perspective between sales and marketing? What type of dialogue do you keep? What are the usual objectives of those conversations?

Healthy candor, a lot of inspection in terms of our process. We try not to take anecdotal feedback. We get into data that drives better decisions, better ideas, better outputs. We’ve implemented things, outreach campaigns that we put in front of our SDRs and our sellers to, “How do I reach a prospect?” HubSpot would tell you it would take 17X to even reach somebody. You can’t do something 1, 2, or 3 times and expect a response on the other side. You have to make your messaging a lot more contextual today in terms of finding that problem that they have, or hopefully, I’m covering there is a problem because maybe there isn’t and therefore, I shouldn’t be there now.

I need to put you on the back burner, put that on hold for now. Back to your question, we have weekly stand-ups, sales, and marketing, and we do deeper dives. I go through the example we talked about with pipeline prosecution. That’s part of our rigor of trying to understand what works and what doesn’t work. If it’s not working, then we figure out the elements of, “Let’s try these three things to enhance it.” We get better conversion rates across that spectrum.

One of the things I consistently hear from CROs is a challenge with talent. We are in a tough talent market, very competitive. Can you tell us how you evaluate great talent? Oftentimes, it’s quite expensive to make the wrong hire. What do you look for in a candidate and strategies around recruiting?

We spent a lot of time on us, even at the board level, because if you look at it, the enterprise seller cost of a bad hire there is $1.5 million. You’re paying for your recruiting time, your interviewing time, and everything upfront. We do an assessment for candidates upfront and that assessment says, “Do they fit into this culture, this environment? Are they going to thrive here?” There are signals that say, “This person is high here and maybe a little bit questionable there.” The hiring manager in this case to probe a little deeper in terms of where that synergy sits with are fitting into our culture. Are they going to thrive here? We’re very much a collaborative culture, a learning culture. We expect that from our individuals. We’re not looking for mercenaries in that regard.

Specifically, as it relates to candidates, I look for a couple of things. Attitude, effort, intellectual curiosity, grit. Have they been knocked down and been able to get back up and show that across their career and their experience in their careers? Do they tap into other people for help? I don’t want to say I have to hire somebody that taps into their manager. You want to build it like I can go to somebody in marketing, I can go to somebody in engineering. They can network across that spectrum, not only internally, but externally as well.

The partner side of it is so important as well. That ecosystem that you create is such a big bow wave of energy, as well as exposure for you. You have to look at ways to leverage that as well. Those are the things we look at. We’re constantly iterating on how we find people that fit into the culture and then choose to be here, but love being here as well. Part of that is, personally for me, being in the office, which hasn’t been a benefit. We’re always looking at ways to try to recreate that energy culture in a virtual world as well.

What are some of those ways that you try to create that energy?

Making it small groups, making it one-on-one. Candidly, it’s taking stuff off video and putting one-to-one phone conversation. I feel like in this video world, we’ve lost the value of one-on-one conversations in some regards. Checking into them, because there’s a lot of downtimes that we all have personally during the pandemic. In some ways that’s not healthy because you have too much thinking time. Are you all right at home? We have employees that are sitting at home in their apartment in San Francisco that is a little isolated. We have employees that are sitting at home with their younger kids trying to homeschool. That’s not an easy environment for anybody. You have to be empathetic and conscious of that and supportive of it, and we are, but I can’t live in their world. I have to be able to be supportive of that environment and show them the positive.

The mind left in solidarity can go in some odd places.

It’s a tougher thing. I’ve been on this bandwagon, believe it or not, of meditation and the benefit of that a couple of times a day to center yourself. What we’ve been in, there’s no difference from a Wednesday to a Sunday.

One thing you mentioned, and I love your perspective on this, is being customer-centric. It’s spoken a lot in the industry, but to you, what does customer centricity mean? How do you project that when you’re out the field talking to customers?

In the SaaS world, especially that customer experience is the end-all winning environment for any platform or solution. You sell a solution, but if you don’t enable engage, educate, and create value across that spectrum, then that renewal is not going to happen. I can vote you off the island in a year from now. If you do that right, correlating value for the platform or solution we’re selling to the customer on the other end, I’m solving your business problem and helping you out. I’m providing you better unit economics by licensing, or in our case, tearing, I can earn my right to get there. We’re all naive to think that that doesn’t exist unless you do it.

Customer experience is somebody on the other side of the table that understands that and values it and agrees with it. We do a lot of things that correlate, match, and test value in that regard. We got triggers in our system that say, “That customer is a readiness regard that doesn’t make sense. You’ve got to unpack it and try and see how we course correct that.” The things that we can’t change in a customer environment is leadership changes, and then somebody comes in from another company and they have another purview or way of doing things. What you can change is the value you deliver with the platform that you entered the business with, in that respect. I believe customer experience is everything in SaaS. It’s about things like platform availability and making sure that customers understand your platform availability versus others in the market. We take that for granted sometimes, and we don’t translate that value to the customer on the other side.

One of the things you built at Sumo Logic to help be customer-centric is this business value office. Can you explain what that is, what that team does and how it engages with the customer?

This was several years back now, we looked at this from a couple of different successful SaaS companies. It goes back to what we were talking about, in SaaS you’re up for reelection. You have to have a value creation early in the cycle in a pre-sales environment and post-sales. You can’t back to a customer nine months after you sold them and say, “You’re ready to renew.” You have to have those conversations along that way. In SaaS, I don’t know what the number is, $250,000, $500,000, it gets to another level of spend. You get C level that then challenges that spent, and you have to be able to correlate the value you’re delivering, why it matters, why your platform matters.

We coexist with a lot of our competitors in many of our customers now. We have to be able to articulate why Sumo versus what could be the legacy normal course in that regard. It’s an important part of our sales methodology because we require the sales intelligence portal as part of every opportunity. Our conversion rate for reps that do that is 2.5X that of a normal rep. You go back to your sales reps that aren’t doing it like, “Is there a reason why you’re not doing it?” I get 2.5X better conversion rate if I do this, it helps us qualify in, qualify out, and catches us with blind spots which exist in every company.

Can you describe a little bit about the sales intelligence portal? What’s it helped do with the sales rep and the customer?

It captures our value selling methodology. It’s one place. It’s the value office in that regard because it’s what we call a business value assessment. We have a VBA light, which you can do on a spreadsheet as a customer. I can give you the tools to do that, and you can do it yourself. We have a VBA heavy which we have then a conversation, a set of questions and an interview with the customer in that regard. All that data sits in a repository that I can tap into, other executives across Sumo can tap into to understand the customer’s journey in that regard, understand their experience, understand the value, and then pick those value statements out and use those across that customer spectrum in terms of, if I’m on the phone with you and you’re the CIO of XYZ company, I can leverage that and that data to have an intelligent conversation about what we’re doing for you and test out why it matters.

Is it up to the sales rep to decide whether they use the VBA light or the VBA heavy based on the customer opportunity? How does that work?

It’s a little bit of that. We try and do all of them heavy, but you’re never going to get the time from the customer in that way. Part of the thing is we give this back to the customer. We’re not doing it. We’re giving it back to you. It’s transparent in that regard. That’s helpful. We partnered with an outside firm on that to make it a little bit more independent from that perspective because it’s not all Sumo, there’s an independent factor help validating that from a value standpoint.

One of the things Sumo did, and we see this with a lot of startups, is create a better technology, but it has to remove an established vendor that’s already in the market. What were some of the strategies that worked to compete against some of those established vendors in the market coming in as a new player to have those CEOs and technology leaders take the risk with your solution? What resonated?

As you go upstream into the enterprise, you’ve got to be cognizant, you find the pain. Whether my spend is too high with this competitor, they want an alternative. That alternative might be because I’m spending too much money with them and I don’t think I’m getting the value for it back to the value equation, or, “I’m moving to the public cloud and I need a different architecture to be able to do this.” That for us is a forcing function. We’re a multi-tenant platform that sits in a public cloud and arguably can do things at scale that most cannot. That’s our key differentiator, but does that matter to you? It might matter to you for your digital assets, your customer-facing assets now, and therefore we can co-exist in your environment.

If you look at the 800-pound gorillas that you compete against in the marketplace, we typically don’t go into the front door. The front door is a rip and replace of a competitor. The side door is like, “I got a new digital banking app that I’m spinning up. I want to be able to do this, but I need to do it quick, fast, and I need to scale it because I’m going to bring in 5,000 customers a month for one, and I’m going to go with 50 in month three.” That’s where we shine. We work our way into the other side of the house because they see the benefits of it, the ease of use and everything else. When you’re competing with an established vendor, they have the relationships, the skill, the expertise and the know-how inside the enterprise. You find a way in that solves a problem that’s not being solved now. That’s not always evident, but in this world of public cloud transformation and digital transformation, it is happening. It’s our market and our opportunity.

One of the things with Sumo is you do have that downloaded bottoms-up approach as well. You’ve built out a robust enterprise sales motion. How do you blend the two? What are the demarcation lines? How do you manage those two kinds of motions? What we see, as companies scale, whether they started bottoms up, eventually they have both and they have to blend them at some point. How do you blend those motions?

We’ve spent a lot of time on that. We call it Sumo Logic Free. We need to nurture there. We’re nurturing that a little bit different now than we were in the past because we want to handhold those customers. I was reviewing a customer. They were a downloaded customer from 2017 that started off with a $1,000 download that’s $500,000 ARR now. I’m not saying every customer does that, but it’s a great story of the benefit of nurture and taking them across that journey. We didn’t go to $1,000 to $500,000 overnight. We did it over time. We segment a commercial mid-market on employees $1,000 and below, and then $1,000 and above is our enterprise. We subsegment enterprise as well.

It’s a different touch across many of those. You find your mid-market customers the security observability decision and our experience are more of a consolidated decision. The enterprise is quite different. It’s siloed. Along that journey, it’s different touchpoints, making sure from our own side that we’re not just touching one part or one function, but making it broader. Helping the customer along that because a lot of customers are getting bombarded with, “I can solve everything for you.” Not everybody can, and I’m not saying Sumo can either, but you have to educate the customer along that spectrum as well.

One of the beautiful things about your tool, it creates optionality because you have multiple personas that could potentially be interested in the technology. I would imagine that also might cause some confusion for the sales rep on, “Where should I focus my attention?” What are the signals that you help to guide the sales rep on what persona they should be targeting or sequencing?

We use some modern tech to help them out on that. We use ones that help look under the covers of a prospect and what are they looking for in the environment now. They’re searching for something on compliance. They want to spin up something on SOC. They need an observability solution. They’re looking at a public cloud architecture. Therefore, it helps you find what I would consider the problem or the thing they’re looking for, and then the personas underneath that are quite different. The security side, it’s the CSO stack. In that regard, it might be the SOC team or the compliance team underneath it. Across the observability side, it’s quite different. It’s an SRE, it’s a dev-ops practitioner, it might be somebody that’s taking on cloud operations. You have to know where to choose, where are you going to spend your time across that, and where the customer is out on that spectrum? I might have platforms that are sufficient for what I’m doing, how do we find our way in there to solve that problem now and then broaden our exposure?

I want to also talk about knowing what you know now, you came into Sumo at an interesting time and scaled that organization from a go-to-market side. If you were going to start as Sumo again, day one, put yourself back in those shoes, what advice would you give yourself?

Move faster on people and initiatives. The people side of it, we’ve built that out of the last several quarters since I’ve been here, but you always move faster on talent in that regard. That’s part of it. The whole digital nurture piece that we talked about, I would have taken on earlier, and candidly, I’d go back to the customer experience world. I probably would have invested in that earlier as well. That wasn’t necessarily evident coming in the door and the importance of that from a renewal retention experience measure from a customer standpoint as it is now. That’s clear to me, but it wasn’t evident then of what we needed to do.

If you look forward, how do you see technology sales changing in the future if at all? If you look ahead, where do you see those trends going?

More modern prospecting tools to make the conversations more contextual. The outreach is much more contextual helping people find each other along that spectrum versus me cold calling you randomly. I can scrape the web now and know who’s in the market for my solutions. It’s the message to you to bring you to the table, and at least for me, to share how I could potentially solve that solution and maybe find out if there is a vision that’s there along that spectrum. Modern prospecting in many regards is something that you have to adapt. The modern seller needs to be a lot more technical.

I started my career, and I didn’t come from an engineering technical background. Now, you have to constantly learn and adapt to new tech. You look at Kubernetes, Kubernetes is mainstream now. You look back several years ago, I don’t think Kubernetes was a word people would commonly use or understand, as an example. Those are the things you got to jump on the new stuff, understand it. How do I connect with a person on the other side? I got to talk his language or their language and understand that. It puts on the seller because you’ve got to learn a lot more and you got to be a lot more agile. You got to be very much a learning initiative and mindset in terms of that.

Characteristic to look for in the higher, innate curiosity, a willingness to learn. I like to end this show by asking one quirky question. I’ve heard from other CEOs in the portfolio that you are a prolific CrossFit athlete. I wanted to ask you on the days that you do cheat, what is your favorite cheat meal?

I’ve been doing CrossFit for several years, and I’ve taken a pause on it. Anybody’s done CrossFit, I’ve done thousands of WODs and love it because of the camaraderie that it brings to a competitive environment. WODs aren’t easy, they’re tough. You do them together and all you do is you finish. That’s the beauty of it. Doing it at 5:30 AM, what is it, me versus the pillow? That’s the challenge you have. I love it for that reason. I don’t love it because my back has many war stories about those throwing the weights around and doing burpees and everything else. As it comes to desserts, I’m not a big dessert person, if you look at ice cream flavors, I’d probably have to say chocolate. It might sound a little bland, but I’d go with chocolate.

You go with what you know is good. There’s something in that as well because you start your day by already creating a win in your environment.

The mindset’s the most important thing for any athlete, any successful person. You start your day with a positive, mindset and positive experience, then it sets up the entire day. Days that I work out I know are days better than when I don’t, and I don’t eat ice cream first thing in the morning.

Steve, I want to thank you for your time. This has been a great discussion. If people want to get in touch with you, I’m sure they can find you on LinkedIn. Thank you so much for your time, Steve, and I look forward to continuing to watch the journey there at Sumo and the business you’re building.

I appreciate Sapphire’s help along that journey too. You have been incredible for us.

Thanks, Steve.