Chris Degnan (Snowflake): Leading Your Sales Team Through The Downturn

November 22, 2022

With funding having slowed, hiring frozen, and budgets cut, SaaS sales leaders are on the hunt for advice for how to navigate the challenging macroeconomic environment.

This is especially true for sales leaders. We saw a decade-long bull market, culminating in record-breaking demand for SaaS products in 2020 and 2021. But the tides have turned seemingly overnight. Buyers have hit the brakes, forcing sellers to adjust to a much slower pace.

Chris Degnan, chief revenue officer at Snowflake, has been leading the company’s sales organization for nine years. A SaaS sales legend, he’s helped grow the business from $0 to $1B+ ARR. He recently joined Blake Bartlett on the BUILD podcast to share his advice for sales leaders in a recessionary environment. He touches on what it’s like to help reps approach prospects and customers in addition to learning how to lead teams differently today.

Becoming a student of what you sell

Although technology sales have shifted dramatically in the last twenty years, COVID was truly the nail in the coffin for old-school strategies like taking prospects out for dinner or golf.

These days, in order to win, Chris encourages his sales rep to “become students of what they sell.” That means staying up-to-date with the product offerings and its use cases, but it also means staying curious in conversations with prospects—and always looking out for new pain points your technology can target.

In a modern B2B SaaS environment, with more competitive pressure than ever, Chris shared the following tips:

  1. Understand the technology, specifically where your solution fits and where it doesn’t.
  2. Know your customer’s business and target specific pain points.
  3. Identify and emphasize new ways to save money or time.
  4. Treat a customer’s time as precious and aim to add value in every interaction.

It’s the combination of these four things that can make a sales rep stand out from the crowd, and ultimately reach that breakthrough point with a prospect.

“It’s really, really important for my sales team, for me, for all sellers to really make sure that you’re adding value—that you understand the technology or the product that you represent,” said Chris. “Otherwise, you’re just some glorified meeting organizer—that’s not what you want to be.”

He described a conversation he had with a longtime Snowflake customer who had been using the product for six years. When he asked them how they used Snowflake today, Chris learned that they were going about processes in the same way since they were onboarded six years ago. They hadn’t implemented any of the recent features that would allow them to accomplish their goals faster and for less money. It’s no surprise that the customer was delighted to hear this.

Instead of assuming that the customer was up to speed on everything Snowflake had to offer, Chris engaged the customer with curiosity. He was able to provide immediate and meaningful value in the way of saved time and cost.

Although the customer’s contract size took a hit, Chris believes that this choice will pay off in the long run, as he earned deep credibility as a seller.

Chris assured that in these situations, your effort and knowledge doesn’t go unnoticed by customers.

“They appreciate that, and they’ll give you an opportunity to earn more business in the future for sure, because you built this trusting relationship,” said Chris.

Leading at the team level: Encourage reps to do more with less

In the past few years, we’ve seen new SaaS companies enter the scene with huge hyped-up valuations. Although hefty funding rounds come with plenty of benefits, early-stage companies may lose that push to work scrappy and find creative ways to win with limited resources.

According to Chris, the first way to conserve resources—whether you’re in Series A or you’re a publicly traded company— is to never hire blindly. No number of sales reps could solve a problem that’s ultimately due to a lack of product-market fit. Sales leaders should be asking the tough questions to ensure that they’re targeting the right customer base to allow their sales teams to be successful, not just throwing more people at the problem.

Leaders need to constantly be measuring productivity, said Chris. It can be anything from how a specific territory is performing to how many reps are hitting quota.

At Snowflake, pipeline generation is an expectation for Chris’s reps. He emphasized the importance of leaders to not only set goals or encourage reps to set goals for themselves, but to hold them accountable. For example, if they say they’re going to go on eight sales calls and three net new business meetings a week, ensure that they’re able to follow through by measuring them weekly.

Leading at the rep level: Show discipline and plan ahead

In Chris’s eyes, a great sales rep approaches their week with discipline. They can set goals and meet them, but also be able to look ahead to next week.

Even if you have a super successful week on paper—maybe you’ve exceeded your goal for number of sales calls and business meetings—you haven’t succeeded unless you’ve taken time to look ahead to next week.

The more time you spend engaging clients, the less time you have for prospecting. But you need to invest time in prospecting to continue to be a successful seller down the line. Carving out time to plan ahead means that a rep’s productivity will be able to stay consistent week-to-week, meaning they won’t have one super successful week at the expense of the next.

Chris reminds his reps to look for opportunities with existing customers. Use these accounts as a way to hit your pipeline generation quotas for the week. You can have two or three new business meetings with current customers, and it’s an excellent way to establish new champions. Especially given recent rounds of tech layoffs, building up usage of your product in an account is a great way to make sure that your product continues being used even if a power user leaves the company.

Leading at the deal level: Keep your eye on the horizon

Understand how your customer ranks the hierarchy of business value. Reps should structure their pitches according to this order:

  1. Does using this product increase revenue?
  2. Does this product drive cost savings?
  3. Does using this product save people in my company time?
  4. Do I have a personal preference for this product over an alternative?

Many times, sellers might pitch inverse order, starting with why users prefer their product over the alternatives and ending with how it drives revenue. In a downturn such as this, starting with revenue and hard-dollar cost savings, then layering in time savings and personal preference as the icing on the cake can be the true differentiator to help you stand out from competitors and close deals.

With budgets sinking and uncertainty on the rise, your sales org may be seeing smaller ACVs (annual contract value) than you have historically. This doesn’t mean your reps should fire lower-budget prospects and tell them to reach out when the budget comes through in the future.

“The way I’ve always approached it with Snowflake is, ‘we’re not here to be your enterprise platform from day one. We’re going to help you solve a very specific business case,’” Chris explained.

Want to grow bigger? Start small.

Starting small is the key for creating the foundation that allows an account to scale. While you may be used to 200K deal sizes, if a customer can only work with 50K, take the smaller deal but target a very specific, high-impact pain point. It’s likely you’ll see the customer come back for more. You might win another 50K deal, then another, then one more—until you get to that 200K deal size. It just takes patience and a willingness to close a series of smaller deals to get there.

Treat that first deal as a way to get your foot in the door and make every interaction with sales an extremely positive experience.

Chris gave the example of how Snowflake helped out customers in the travel and hospitality industry during the pandemic. “We rolled over their unused usage because we knew that they were in a tough time and we were empathetic to their challenges,” he shared.

“If you show value, especially in tough times to your customers, they’ll be tremendous advocates for you,” Chris said.

And this advocacy pays off in the long run.

How to prepare for 2023

Chris’s advice for his sales reps—to always be looking ahead to the next week—applies to sales leaders at the quarter-level. Especially as we approach Q4, it’s important to stress the importance of planning ahead.

“Q4 is always magical, typically speaking, in a sales organization if you have a decent product,” said Chris. “And the hardest part is getting people to focus on Q1 in Q4.”

In action, it means asking sales leaders to look a quarter out. Not only does Chris ask leaders for their forecast for Q4, but also for Q1. Chris recommended that leaders start by evaluating how business is doing now and forecast accurately.

Given the downturn, it’s important to leave room to evaluate if quotas need to be adjusted for the macroeconomic environment. That being said, Chris believes that top sales talent will always be able to succeed. He doesn’t shy away from holding his reps to a high standard even in challenging times.

“The company needs successful people,” Chris emphasized, “And my advice is just again, go do your job, [and] be a student of what you sell.”

Contributing Writer

Mikaela is contributing writer at OpenView. She specializes in writing articles for VC and product-led SaaS startups, and is dedicated to creating content that is both educational and unique.