How The Harris Consulting Group Built a Boutique Sales Consulting Practice Serving SaaS Leaders (Interview with Richard Harris)

Introduction and Background

Nathan Latka

00:00Hello, My guest today is Richard Harris. He is teaching reps how to earn the right to ask questions, which questions to ask, and when to do it as the primary growth driver behind his NEAT Selling methodology. Twenty plus years of experience, he's got clients that include Gainsight, Google Cloud, SalesLoft, and others. He brings a liberal arts degree in school of life to sales. He's been a full cycle account executive, SDR sales manager, director of sales. You

00:24name it, he's done it. Richard, you ready to take us to the top?

Richard Harris

00:26>> Thank you. That was the long end. I hate my introductions.

Nathan Latka

00:29No. Mean, good.

Richard Harris

00:30>> I mean,

Nathan Latka

00:31I have to caveat this by saying I get consultants asking me all the time to come on the show because they sell to SaaS and I always say no. The reason I dug deeper on you is because I've interviewed a lot of the founders that you've worked with and I know some of their sales motions and they're sometimes unique or different. So if you're sort of the whisperer for this kind of thing, said, you know what?

00:50We're gonna have Richard on. So thanks for coming on.

Richard's Reaction to Being on the Show

Richard Harris

00:52>> I appreciate it, man. Like, I I I know I'm not probably your normal guest, so thank you so much. I I really am flattered to be here.

Getting In Early With Gainsight

Nathan Latka

00:59When do you usually get involved with SaaS companies? Can you

01:03talk maybe about Gainsight? How early do you get involved typically?

Richard Harris

01:07>> Gainsight is a really fun story. Will give you the short version. I had one client in Austin. It It was my first client. I was using a Yahoo email address. I am flying back from Austin my first week. I sit down on the plane next to this guy literally in suede shoes and jeans and a blazer and it is Nick Mehta from Gainsight. This is eleven years ago, twelve years, no, years ago, nine years ago and

01:29>> they had 15 employees, right? He and I had this amazing conversation. We got shushed by the flight attendant twice and we were sober. We were not drinking at all. We were just having a good time and the biggest mistake I made in that deal is I should have taken options. But that's... So that is an instance where I got in really early to build... 2011. Right? Other... 2011?

01:55>> That again, Nathan?

Nathan Latka

01:56When did you start with Gainsight, 2011?

Richard Harris

01:58>> Yeah, I think so. Right around the time they were founded. Right? So... No. It's probably 2013 because I've been doing this nine years ish. So it was right after I started doing this.

Nathan Latka

02:08Okay. Great. And what did it look like? I mean, how did Nick engage you? Was it a retainer? Were you actually a full time employee? What did it look like?

Richard Harris

02:14>> No, it was a retainer engagement for about thirty days where I came in and really built out process and trained the whole team. Really got the concept early of that everybody sells, even the accounting department, right? Like how you treat your vendors matters. And the content I teach is very tactical. So if I am teaching, I do want to get into a pitch, but if I am teaching certain tactical things, it always becomes relevant no matter

02:41>> the role, sales, SDR, customer success.

Nathan Latka

02:43Got it. And so what did Nick pay you for that thirty day trial?

Richard Harris

02:46>> I am sorry?

Nathan Latka

02:47What did Nick pay you for that thirty day trial back in 2013?

Richard Harris

02:50>> What did they pay me?

Nathan Latka

02:52Yeah.

Richard Harris

02:53>> A healthy 5 figures.

Current Engagement Model and Pricing

Nathan Latka

02:55Okay. Healthy 5 figures. So does it stop or do people continue working with you typically?

Richard Harris

02:59>> Yeah. No. It's a it's a great question. It's very different now, because of COVID. It used to be the traditional show up, do a day of training, maybe one or two coaching sessions. Because of COVID, we shifted to a five week training and reinforcement model. I'm conscious of sounding pitchy, so please stop me, Nathan. I will. Where we spend the first week doing two hours a day, four days in a row, so like Monday through Thursday

03:23>> we do two hours, which allows for micro learning, greater reinforcement,

03:28>> greater retention. Then for the next four weeks, I do once a week meetings with both the managers and then once a week meetings with the sales team so that it now is a much different engagement. With Gainsight, was totally different because they wanted me on-site listening to calls. It was a completely different game. They were my second client. Thank you so much to Nick for taking a shot on a guy with a Yahoo email address in

03:52>> the day. So that's what it looks like now because now it's always been but now I've built out the reinforcement piece.

Nathan Latka

03:59And so what does that monthly cost now? You know, during COVID, what are customers paying you on average?

Richard Harris

04:04>> For something like that, it's around 18, give or take.

Nathan Latka

04:07800 a month?

Richard Harris

04:08>> Yeah, for the five week program. And so... And and I don't charge by the hour and I don't charge by the head. So like if you got a, you know, if you got a team of 20, I mean, it's the same as if you got a team of 10.

Nathan Latka

04:21Yep.

Richard Harris

04:21>> Right?

Nathan Latka

04:22And are these all SaaS teams or you go across industries?

Richard Harris

04:25>> Mostly SaaS. It's mostly SaaS. It's not all. Some of the Fortune companies are different.

04:31>> Google was Google Cloud, it was like their AWS service. Kind of SaaS, but kind of not. Visa was literally their corporate cards, right? How do they go and sell a corporate card to Delta Airlines or those kinds of places? But 90% of my clients are SaaS related.

Client Capacity and Business Philosophy

Nathan Latka

04:51And how many clients are you working with today?

Richard Harris

04:54>> I usually take on about two to three per month. I can capacity more because of the way I revamp the program. They are shorter days and I do have to travel. Anything more than about five clients in a month, is a lot, at least for me, I can do more. I just, you know, at some point I don't need to grind that hard.

Nathan Latka

05:15Yeah, yeah. Five clients...

Richard Harris

05:17>> I startup, right? Like I am not trying to go public. Am not trying to do those things. I have built a really nice healthy business that is more than a lifestyle business. But, I love the fact that I'm home for my kids every day and all those kinds of things.

Nathan Latka

05:30So five coaching clients at any time sort of paying, call it two brand per month. Again, that's a great business for yourself. You're doing a lot of thought leadership too. Now, you've done this since 2013. Obviously, your model changes over time.

Richard Harris

05:44>> There are a

Nathan Latka

05:45lot of folks in this space. My first sales book was Neil Rackham's SPIN Selling back in the day, and there are a lot of new sales books coming out all the time. Have you put out sort of any books? Like, tell me more about what NEAT means.

NEAT Selling and the Book in Progress

Richard Harris

05:55>> Oh, yeah. Thank you for asking me. I'm in the process of writing it. You know, I have been for about two years and I got lazy about it, but now I've actually committed to it. There's a great service out there that I found that really guides you through, like, nine steps.

Nathan Latka

06:08That would look in a box?

Richard Harris

06:09>> Yeah. Kind of. Yeah.

Nathan Latka

06:10It's... I mean, it is not kind.

Richard Harris

06:12>> It is a book, book in a box. And so

06:14>> I need that leverage. I need that piece because otherwise, I'll just get distracted. So I'm super open about things. I'm very focused on mental health and I have ADHD. So if I don't have parameters around me, makes things a little bit harder.

Hire the Closer First, Build the Process Later

Nathan Latka

06:30Yeah. Let's talk about Gainsight because again, Nick has come on many times. So last time he was on the show was back in late twenty nineteen. He talked about flirting with a $70,000,000 run rate. He talked about 700 customers. They'd obviously raised and they've raised a bunch of money, but his team size was 700. And I asked him how many quota carrying sales reps do you have? And he said 22. And I also then looked up

06:55what the past reps were on LinkedIn. In other words, ones that were at Gainsight now are not at Gainsight anymore. There were 36. So there's a lot of sort of churn in the sales team. The annual quota target he told me was $800,000 for those quota carrying reps. Write down this system for me. Where do you think it scales? Where does it break? Should other people copy this?

Richard Harris

07:15>> Yeah. So I think that the answer to that is everything is an experiment in the first two years in sales. Right? There is no here's the playbook for everybody. Right? Because you have to figure out what product market fit. You don't have product market fit or 10 or 20 customers. I just learned this yesterday from a VC in Austin and I really thought it was interesting. 20 customers, you got a baseline. You got to get to

07:41>> 50 to really decide if you got the right market fit. And he was talking in a very specific niche so that you know obviously there's a little bit of difference there. So what I think the key piece is bringing on that closer first. You need to bring in the closer who knows how to do it without the process being built. That's the question you're asking me. And yeah, you do want a sales process, but not super

08:05>> early on, not with your first, second, or third rep. Maybe by the time you get to your second or third, you start to figure out what your first process is, and even then I call it a process hypothesis because it's going to change. I can assure you that what Nick put together way back when I was there and we talked about creating the stages is probably very different than what it is now. And as an early

08:28>> stage founder and even a mid stage or even Nick, you should be looking to break it. What do we need to do? And the key thing that I'm always trying to encourage companies to do is break it so that the experience is better for your customers, right? Going back to your customers and saying, Hey, you're a great customer. You came through our process. What did we mess up in the process? What could we have done better?

08:50>> What did we not deliver soon enough to you? And so that's the first thing. The second thing

08:57>> is you need to understand when you're going to go after enterprise, what that means. Enterprise is not SDR teams and stuff like that. You've got to understand how they choose to evaluate something, how they evaluate it, what procurement looks like, what secure infosec looks like, it's a whole other enterprise world. Richard, probably answered the question. That was a lot of answers to what it Yeah, that okay.

Nathan Latka

09:20When you joined, Gainsight was founded in 2012, so you joined in 2013, which was about a year in. What was size of the team at that point? Do remember?

Richard Harris

09:26>> I mean, it was 15 people in the company.

Nathan Latka

09:29And how many sales reps?

Richard Harris

09:30>> I want to say there was one to two sales reps plus Nick, and Nick was learning how to sell at that stage.

Should Founders Do the First Million in Sales

Nathan Latka

09:37So this is a big question. Should founders do the first million dollars of sales themselves or should the founder bring in the first sales rep?

Richard Harris

09:46>> Yeah. 1000%. Founders need to do the first part of sales. I don't know if it needs to be a number like a million, like it depends on sort of what the... They need to do it so they can understand the motion at the early stage, right? At the pre series A or series A level. So founders absolutely have to do it. What founders also have to do is they got to realize that their reps are never

10:10>> going to be able to close at their ratio in most cases because they are the founder. They walk into the room and Nathan is like, this is the founder. I've got rapport with Nick. If something breaks, I'm calling Nick.

Nathan Latka

10:22Yep.

Richard Harris

10:22>> Right? Like that's the whole thing. And so many founders and CEOs forget that piece and particularly technical founders. Technical founders who aren't used to carrying a bag and carrying a quota, they feel pressures in different ways, but it's not the same. And they forget this,

10:41>> that they're buying the founder as much as they're buying the service.

Nathan Latka

10:45Mhmm. Yep. Okay. That makes good sense. Now, when...

Hiring the First Sales Rep

Nathan Latka

10:50Does that first sales hire always get promoted to essentially the head of sales, the VP of sales?

Richard Harris

10:56>> No. I don't think you should. Let me rephrase that. I don't think that's what you're looking for. You're looking for the first salesperson who wants to come in. You need to give them good equity, not bogus, here's a thousand shares or 10,000 shares. You need to give that first rep equity. And you do need to have the conversation with them about, do you want to be in leadership? Do you want to be in management? But it's

11:22>> certainly never a promise. What I do tell people to do is hire the aspirational rep, hire the director of sales who doesn't mind going down and building, taking a step back and being a rep, but also has a chip on their shoulder to get promoted. To go and hire the VP of sales, and I see this all the time, I go see people hire VPs of Sales from places like Oracle or some other big company as

11:49>> their first rep, the biggest challenge, the biggest reason they don't work out is because they haven't actually built something from the bottom up. They haven't built process from the bottom up. They have never built a sales playbook and a sales script. Like it has been so long since they have been in the trenches that that is often what I see happen. So I want you to go find the person and give them the shot they deserve

12:09>> because their current company has bought into some, you know, I don't know if I can curse, but they bought into some false belief system that, oh, we need a title. We need a pedigree.

ACV Thresholds for Inside Sales

Nathan Latka

12:20So... Got it. For, say, SaaS companies exclusively, what ACV is too low to have an inside sales rep on it? There's not enough margin to pay commission.

Richard Harris

12:30>> Well, if you define inside sales as an SDR...

Nathan Latka

12:34Someone that's making... That has a quota target that's making a commission.

Richard Harris

12:37>> Well, so SDR appointment setter is different than an inside sales rep. Look, I can, you know, I would easily hire inside sales over outside sales any day of the week. I've always been in inside sales. I've never been a a windshield warrior and I thought it was

Nathan Latka

12:51Wait, Richard. Sorry.

Richard Harris

12:52>> Yeah. Yeah.

Nathan Latka

12:53The the the question is, there's a price point that is too low to put human touch on it, whether it's an SDR, an AE, Oh,

Richard Harris

12:59>> I see what you're whatever whatever you wanna call it. Yeah. I think it's my guess is it's in that less than $3.99 a month range, right, or $3.99 a year might be the right... It really just depends, right?

Nathan Latka

13:14How would you make that work? If someone is listening right now and they're trying to learn from you, they sell a price it's $500 per year, how can they put touch on that and how to be profitable with the sales rep? That's all about it.

Richard Harris

13:23>> So to me... So I don't swim in this pond, right? A lot of clients, I don't have these clients. My guess is that's a self serve model. Whatever that product or service is,

13:33>> it's That's most my question.

Nathan Latka

13:35So how does the price point need to be where it's not a self serve model? They can make the non self serve model work.

Richard Harris

13:43>> I

13:46>> it's got to be a couple $100 a month. It's got to get to $2,500 a year for it to be worthy of some level of touch. And there's a difference between certain levels of touch versus a closing role. I also think too that if it's a technical product, then

14:08>> those technical people don't really want to talk to salespeople in general. So depends on what you're building.

SaaS Clients He Has Worked With

Nathan Latka

14:14DevOps motion, yeah. Can you name a SaaS company you're working with today?

Richard Harris

14:19>> Yeah, can name several of them. I worked with Achievers in the last year, I've worked with a company called Force Therapeutics all of this quarter, which is doing some cool stuff in the medical field. I have worked with JFrog, I am working with a couple other, I mean there is more, but I...

Expansion Revenue: AE vs CSM Responsibility

Nathan Latka

14:41Focusing on JFrog for a second, one of the major valuation drivers of SaaS at scale is their ability to drive net revenue retention above 131.48% which means there has to be a motion to drive expansion revenue. If I'm paying you to coach me, are you telling me to have my account executives manage expansion after the sale or is that the CSM rep?

Richard Harris

15:04>> I'm going to defer to Nick on that question.

15:08>> It's whoever is comfortable doing it and where their strength is. There are plenty of customer success people who don't want to grow revenue and sell, and that's okay. Part of the challenge with customer success is they've been fed a false belief system that sales is bad. So that's the first narrative you've got to get over. It also depends on where you want your team going after net new business. You're going to have some AEs who are

15:33>> great at net new business, you're going have some who are account managers. And that's what I've seen in the last couple of years. You have AEs who go after a net new, you have account managers who focus on growth and expansion, and then you even have customer success which is a little bit more about onboarding. As we have seen, the sales motion keeps getting specialized. Now, you have to be a certain level and a certain type

15:57>> of expense to have that account manager between sales and customer success because you also don't want to make your experience for your customer bad either with like who the hell am I supposed to talk to.

Group vs Individual Quotas for Expansion

Nathan Latka

16:07Yeah, last question here. On driving that expansion revenue regardless of which function group is responsible for driving it, are you doing a group quota on a group target or individual quotas just like the initial sales rep?

Richard Harris

16:18>> I think it's both. I think there is value in supporting each other and getting away from that old school, I'm not going share my practices with you. And I think there's value in giving an individual quota so that people can feel something.

Nathan Latka

16:32I'm looking for your opinion though based off the data set you have. I know there's value in both, but I I won't... You have any... You must have a... Do you have a strong opinion here?

Richard Harris

16:40>> Yeah. My strong opinion is this is both. Like...

Nathan Latka

16:42And so how would you structure it?

16:44If there's a team listening right now that has 30 sales or that's the 30 account managers that are in charge of driving expansion revenue, how would you structure individual quotas plus group quota tied to expansion targets?

Richard Harris

16:54>> Yeah, so I think you have to look at it by role. So customer success might get a smaller individual piece and a bigger team piece, whereas the account manager might get a bigger individual piece and a smaller team piece. Right? I also I also think that this is that part where... And I don't think people do it nearly enough, is that there should always be a a smidge of equity into this goal. Right? Like, the more

17:19>> you give back to your team and they feel like they have ownership of the organization, the longer they're gonna stay, which is a whole other issue that we talked about in terms of retention.

Nathan Latka

17:30Yeah. I mean, so is it a good or bad thing that Nick has churned through 36 sales reps?

Richard Harris

17:34>> I think it's fine. And in this many years, yeah. Are you kidding? That's actually low. Right? Statistically, I see about one in three reps actually making it on a regular basis. So I don't think that that's bad at all.

Famous Five Rapid Fire

Nathan Latka

17:46Yeah. Alright, good stuff Richard. Let's wrap up here with the famous five. Number one, favorite business book?

Richard Harris

17:51>> Favorite business book? Lately has been Greenlights by Matthew McConaughey.

Nathan Latka

17:57Number two, is there a CEO you're following or studying?

Richard Harris

18:02>> Not really. The reason is because I'm writing something, I'm very conscious of what I absorb these days because I want to make sure that I write something that's authentic and don't accidentally borrow something.

Nathan Latka

18:13Number three, what's your favorite online tool for building your consulting business?

Richard Harris

18:17>> For building my consulting business, it has probably been Instapage lately.

Nathan Latka

18:21Number four, how many hours of sleep do get every night?

Richard Harris

18:25>> Eight, nine.

Nathan Latka

18:26And what is your situation, married, single, kids?

Richard Harris

18:29>> Married, two kids, 12 And and how old are you? I'm 52.

18:34>> 52. Last question.

What Richard Wishes He Knew at 20

Nathan Latka

18:35What's something you wish you knew when you were 20?

Richard Harris

18:38>> To shut the fuck up and listen to people. Like, take advice. I was a school Gen X... I was a Gen Xer who always thought I knew what was going to happen and how to do it, which sounds very millennial ish, but Gen X was worse at it. Because we were latchkey kids, we were forced to figure it out on our own, which is a different belief system than millennials who have access to data that I

Nathan Latka

19:00>> didn't have.

19:00Guys, Harris Consulting Group bought in 2013. Our second customer was Gainsight. They got into Gainsight when the company was only doing $100, $200 a year in revenue. Helped Nick sell, help his first two sales rep sell today. He works with anywhere between four and five customers per month. The customers pay caught $2 per month. He does about $10 a month in consulting revenue against servicing these spaces, consulting on everything related to the sales motion, especially in

19:22SaaS. Things that expansion revenue target should be more of a group deal on the CSM side and more of an individual deal on the AM side. It's a trend. It's a hot topic right now. We'll see what happens. But, Richard, thanks for taking us to the top.

Richard Harris

19:32>> Nathan, thank you so much for being here. I appreciate for for having me on. Sorry. I'm used to doing my podcast, but thank you.

Nathan Latka

19:38Thanks.

19:40One more thing before you go. We have a brand new show every Thursday at 1PM Central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on, three hungry buyers, they try and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU, CAC, LTV, you name it, they share it. And the buyers try and make a deal live. It is fun to watch every Thursday, 1PM

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20:47that at nathanlatka.com/slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty minutes. Feel free to let me know what you thought about this episode. And if you enjoyed it, click the thumbs up. We get a lot of haters that are mad at how aggressive I am on these shows, but I do it so that we can all learn. We have to counter those people. We gotta

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21:12See you.