Build a Scalable B2B Sales Process from Scratch with Andy Racic

Welcome to the B2B Growth Blueprint podcast, where we talk with entrepreneurs, founders, and leaders at B2B services, tech, and SaaS companies to learn the systems and processes they've used to create success for their business. We'll also learn from marketing and sales experts to provide insights to help you grow your business. I'm your host, Mark Osborne, and the podcast is brought to you by Modern Revenue Strategies and their 10x ROI B2B Growth Guarantee. Schedule a free diagnostic call to learn the fastest path to double your B2B revenues in just 90 days. Hello and welcome to another episode of the B2B Growth Blueprint Podcast. I'm your host, Mark Osborne, and today I'm very excited to welcome my guest, Andy Raczak. Andy's the owner and founder of RACIC Recruiting. They're a boutique headhunting firm focused on tech sales roles across the US. He has 14 years of experience as a quota-carrying salesperson across small businesses, medium market, and enterprise, primarily as an AE. He's got startup sales leadership experience owning profit and loss statements for sales reporting to the CEO of a $10 million annual revenue software company, which was then acquired. He's also the author of Your Definitive Sales Career Guide. So, Andy, welcome to the show.

Mark, hey, thanks for having me. Hello, everybody.

So, I'm really looking forward to this. You and I have had a couple of great conversations on some of these topics. But before we dive into those topics, why don't you tell us your story a little bit? How did you get into marketing and sales? And then, how did you get into running your own firm?

Yeah, yeah, yeah. Um, I'll, I'll give maybe a little bit more detail, but this is the, the story I tell. Um, I was born and raised, um, youngest of 5 to a single mother who was a teacher. So, uh, the classic, didn't have a lot of money growing up, so money became pretty important to me. Uh, went to school, studied physics for the most part, uh, because I didn't really have a sense of a career path at that point. Um, took a generic job out of college. 3 years later, one of my buddies, who got into sales leadership was like, hey, you're kind of wasting your time. You should get into sales. Like, you'd be good at it. And like, I had the classic response of everyone who's never done sales. Like, ugh, like you think of like the used car salesman. You're like, Right. I'm not like greasy or gross like that. Like, I don't think that would be— and he, thankfully, he educated me and taught me about what sales actually is. A couple months later, I packed up my life, moved to Houston, and got into sales. So started in sales in 2011. At the time, I was in recruitment advertisement working for Hearst, which owns the Houston Chronicle, the largest newspaper in Houston. And then during that time, one of my prospects, Michael Page Recruiting Firm, said, hey, we don't want to buy advertising from you. We're all set on that, like, from a corporate level, but we want you to work for us. And that was the first time in my career I'd ever had someone headhunt me or try to, like, poach me. And I thought it over for a while and talked to some mentors, and eventually they're like, hey, like, At least, at least hear them out. You never know. So I listened to them for a while and I was like, well, I really like this because what I don't like about sales is sometimes when you sell an advertising package, it doesn't work right. Like they don't get the results they want. And, you know, I was doing everything I could on my end to ensure success and like, but that's advertising, doesn't always work. Whereas what I liked about recruitment was, at least for the most part, the way I work is it's contingent. You only pay someone if you're successful and that person lasts through a guarantee period. So you, you feel a lot more confident that you're delivering value and Therefore, the revenue is more closely aligned with what you like. Did that for four years, helped them grow their business in Houston, helped them grow their business in LA. At the end of that, I started recruiting tech salespeople, and I was like, "Whoa, these these comp packages are pretty nice." Maybe maybe I'm in the wrong business. So I chased the money. So went into HR and HCM tech sales with one of the largest players there. From there, went into the startup world. So worked for a forty employee company, which is where I ended up. according to the CEO, worked for a variety of large and small software companies. And towards the end of it, I was like, oh no, I was chasing the money. But especially as we're aware of these days, actual quota attainment is somewhere around like 30, 40% according to RepView.

Right.

So it was a grass is greener kind of situation. And so last year I spent some time thinking like, what jobs have I really liked the most? What have I been good at? What kind of fills me up as I'm doing the work? And it's not updating Salesforce for 3 different levels of management to, you know, verify that a deal is alive or dead. It's actually doing the work, working with people and kind of helping them, coaching them, advising them on both the candidate side and the client side and making good fits from there. Like that, that really jazzes me up. So, uh, hung my shingle last year and have been actively recruiting in the space ever since. That's awesome.

That's awesome. So you have a really, you Interesting perspective because you've done so many aspects of the job, both from actually selling to working for recruitment agencies to doing it in-house. And so, you have a much better perspective than most people have. I'm curious, as you work with clients, what's the sort of biggest misconception that they have when they come to you and they're like, we got to hire our new star seller? And they think that, you know, they have a certain thing in mind that may not be the thing that's what they really need. Talk to us a little bit about that.

Yeah. So first, it's going to depend on the background of the person that I'm speaking with, whether or not they come from sales or were closely associated with it or not, or if they're more on the kind of technical founder kind of side of things that thankfully they haven't had to see how the sausage is made. So for sellers and former sellers, it's usually a much more straightforward— you can kind of talk shop with them. For folks that haven't been in that space, it can require a bit of education because just like me before I got into sales, a lot of us have preconceived notions or we remember the one guy at the dealership that screwed us out of something when we were too naive to do better. So there is some amount of reeducation there and Especially in the sales, the tricky, the tricky thing about hiring salespeople is that salespeople are the best at selling themselves because it's the subject that they're most familiar with. It's a story that they've told more than anything else. It's like, you know, kind of a stand-up comic's, you know, their tight 10. They've got that down. But if you ask them to do 30 minutes when they're only prepared for 10, you're going to start to see them stumble a little bit. So teaching people how to interview and questions to ask that you can't really prepare for necessarily is a big important piece of educating interviewers and hiring leaders in how to avoid common pitfalls of hiring.

That's interesting. Well, so tell me if you've seen this scenario before. I oftentimes will see that, you know, a founder will start a company and they, you know, they've got a Rolodex because they worked in the industry for a while. And so they can get some clients and they start to grow, but then that growth starts to stall out, and very often they're like looking for an easy solution. They're like, I'm just going to hire a sales leader, uh, and then he'll be exactly like me, or she will be exactly like me, and so we'll double our revenues, uh, in the next year. Does that work out from your experience? Talk to me about what you see there.

Oh man, what a softball. Um, I have yet to see that work out. Um, and there's, there's a couple of problems with that. One, um, selling to your network is always different than selling to anyone else cold.

That's right.

For all of the reasons, right? They don't know you, they don't trust you, they don't know you from Adam, and suddenly you have to compete in a way that you didn't have to before. 2, another thing that's hard for some founders to understand is that once the person has the title sales, you can, you can dress it up and make it as fancy as you want, business development consultant, whatever you wanna say that makes it not sound like sales. Once they have that role, the prospect, the potential client, They don't trust them nearly as much as they do as the person whose title says founder, because it's like you don't have control. You are someone else's coin-operated, you know, charismatic robot that's trying to get me to part with my money. And that's just fair buyers beware, because unfortunately, you know, snake oil salesmen have been around for I don't even know how long. So there's that. And then the other piece is cold pipeline generation, creating demand from people who have never heard from you before. Is wildly different than sending out a couple of emails, a couple of texts, and bumping into people from wherever you typically see them. It's a different animal, and they're both important, but doing one is not like the other. So, and also one last thing, not only will they not trust the seller because they're a seller, not the owner, but they can't sell like the owner does. And I don't just mean because of the trust that's built in there, but also when the owner says We have this, or this is coming in three months. Even if it's vaporware and like they're just putting on the roadmap that second in their mind, people will believe that. Whereas if a rep can't show them the money, so to speak, they can't show them, hey, yes, the software does, the product does A, B, and C. Here's how it does it. You just don't believe them that much. So there's just so many things that you'd expect. Oh, we're just gonna hire another me, have more bandwidth because there's two of us now that just do not pan out that way. Unfortunately.

So I have some ideas on this too. But, you know, to save those founders from making that mistake, what are the things that they should think about that will sort of save them from that being a hiring mistake of just having this naive idea of, well, I'll just hire a good salesperson and then we'll double our revenues? What should they do instead?

Well, there's a lot of ways to skin this catfish. One, look at what demand you actually have right now. Do you have any inbound demand at all? And what amount of name brand recognition do you honestly have in the market? Everyone says they're the only one that does something. Everyone says they're a category leader. If everyone says that, it can't be true. There are, of course, the 0 to 1 situations where you are creating a category, but more often than not, you're creating a nuance or a change within a category. So be honest with yourself and find good peers that you can trust and trust you that will give you honest feedback and have them give you what they think about that. So just level set your own expectations as much as is possible as a CEO, which you have to be kind of crazy to be a CEO. Respect, but you just have to. And then from there, get really, really granular around the job design. Because you need to understand we're not just looking to add X amount of clients or logos or break into new sectors. It's here is the stage of our company in the lifecycle where we're at. We are X, you know, $100,000 or $1 million in annual revenue or ARR or whatever it is. We're trying to go to this. We do or do not have this amount of investor capital with these expectations tied to it. Our category is this crowded or this confusing. This is what our buyer's experience is like. This is what their landscape is like. And then look for someone that has done something like that similarly, that has the track record of working in that kind of environment. Because if you try to pull someone from whatever the big brand competitors in your space are, the publicly traded companies that everyone knows their name, they're not gonna be able to produce this. They're probably not gonna be able to produce the same results unless they were there from the beginning. And if they were, then why would they come to your small company? Which maybe that maybe there's reasons, but you got to think through all of these things. So getting really clear and as honest with yourself about where, as you can, about where your company actually is and the real opportunity for the right person, and then getting super, super granular on what the right person is and what track record should they have to be a fit and actually come in and add value.

Yeah, that's so true. And one of the things that we see is there's this misconception in the mind of people that haven't done sales, as you described, whether they're a technical founder or just more of an entrepreneur, where they think of sales as an event. Like, you go make the pitch and then like you close the deal. But sales is really a process. And we actually see that there's 3 steps to that process. There's the lead generation kind of aspect of it, which you oftentimes think of as marketing. But a lot of early-stage companies are like, the salesperson will go find those leads for me, right? Like, that's part of what they do. So, that's one part of it. Then there's the nurturing part of it because 95% of your market isn't in market at any time. So when you first find that lead, now you gotta develop relationship with them. You gotta nurture 'em. You gotta agitate that need over a long period of time. And then you gotta get into the actual presenting of the value proposition, helping them through the change management of deciding to solve this, navigating their contracting process, whatever it is. But there's 3 discrete sections, each of which has their own process. And if you're out there hunting for a salesperson that can do all 3, like that unicorn hunting is very expensive because the people that can do all 3 are really hard to find. So, that makes them very valuable. Not only that, you really can't scale if that's your designed job is to do all these things because You can only find so many unicorns that can do that. Whereas instead, if you create a process that takes some of it and a process that takes some of it and a process that takes some of it, then you can find someone that can run some processes instead of be good at all 3 of these things.

Yeah, 100%. And I mean, yeah, those magical AEs, they do exist. And when you have them, treat them like gold and pay them more than you think is fair. But they're driving ARR for your business, which is building potentially generational wealth for you. While they're getting a good quick hit off of the deals they're closing, try and, try and keep them around. The trouble with building a business like that, if you're able to find them and keep them happy for long enough, is that once they walk out the door, you're back to square one.

Right.

And, you know, as much as you might want to say that you have the best mousetrap, there are other mousetraps, and people build relationships with the person that found them, nurtured them, articulated their problem and they trusted with not only their business but their change and their money and their revenue. And the money for a lot of companies is secondary to the risk of the change management. So once you can put yourself in as a trusted consultant, once an AE or salesperson does that, as a business owner, you then have a risk of what happens if this person walks out the door and they take their book of business with them. And yeah, sure, you'll put in non-competes, non-solicitations, but Eventually those things will expire or, or those relationships might sour. So if I'm a business owner, I am segmenting up those silos like you outlined, or very similar to that, so that one, it's easier to hire people for each role. And those are different roles, right? The guy that's going to cold call for 3 hours a day or more, that's not the guy that's, you know, working strategic deals and networking with 15, 25 different stakeholders in a business to close a deal. They can be, but those are unicorns. It's a lot easier to find, you're good at this, you're good at this, you're good at this, work together, than putting that all on one person where you're paying them more than you want to and they walk out the door and you're like, oh, was I the CEO or were they the CEO?

That's right. So you made a statement when we were chatting earlier talking about job design, which was, you know, everything should be as simple as possible, but no simpler. And I really love that because I think it captures, you know, really well this idea of building the right processes. Talk to us a little bit about how you coach your clients and companies on how they should design the role that is likely to be successful. And what are the things that you see in a job design that actually lead to success for companies?

Yeah. Yeah. So, taking that quote, which I love, and then also marrying that with, I think it's Stephen Covey, begin with the end in mind. Yeah, what's the goal, right? So if we're designing a process flow and you're going to slot a salesperson into this box within your business, sure, you're going to give them X amount of money and salary and benefits and all that kind of stuff. But what are you going to expect out of them, right? What do you need this person to deliver on whatever timeframe? And then make sure you're resourcing them with whatever they need input-wise. Obviously, a salary that they can live on, probably. I mean, 1099 rules exist, maybe tools and tech depending on what kind of space they're selling into. But fundamentally, you're looking at it, it's going to cost about this much for me to bring this person on board. It's going to cost about this much for them— me to give them the resources that they need. And that could be tools, that could be training, that could be people supporting them, whatever it is. And then I require this person to deliver X over whatever timeframe that is. And X should be some KPI that makes them profitable for your business, along with all the tools and resources that you're also assigning them, which sounds like really straightforward math. But sit there and actually go through that process and then realize, okay, this is what I require as a minimum, and then this is a nice, nice to have. And then from there you can start doing quota math. You can start figuring out pipeline, like pipeline that they need, all that kind of stuff. You can work backwards from there, but just start with the end in mind. You know, I'd need a salesperson deliver me one deal a month and a million bucks a year in ARR. Great. If they're doing that and they're not causing you any sort of like legal issues, pay them whatever makes sense for your business depending on your margins. And then everything else is a nice to have. And granted, there's a lot of nice to haves that will vary from role to role. There's some that are general, you know, you kind of want to see in almost all sales roles, but figure out exactly what you need. Those are your requirements. Everything else is a nice to have. And then work backwards from there to figure out, you know, how to hire the right person.

That's so right. Well, and that quota math that you talked about, one of the things that I see companies, and even, you know, very large, you know, $100 million plus companies that I've worked with, is they get lazy when it comes to sort of the account management piece of what is the actual quota this person is likely to hit. And because they sort of want Well, we say we want to hit this much in revenue for this division or this product or whatever. And so, if we've got 10 people, let's just divide it by 10. And well, cut up the number of accounts evenly. Give them 10 each. There's 100 accounts. But that's not a key to success. And winners want to play a winnable game. And so, you could have 10 of the greatest salespeople. But if you set 5 of them up to fail, they're going to walk out the door and take with them your chance of hitting quota. Whereas if you just took the time to do some of that account planning and that quota math, there's a lot more opportunity for success, not only for them, but for the company to hit their objectives.

Yeah, and there's, there's a lot of hidden cost to not doing that correctly, because if you do it correctly and most of your reps are hitting quota or exceeding it, they're happy. They're not looking to make a change. Making a change, especially as a salesperson, sucks because you're starting from, you know, square one and you're rebuilding it pipeline and territory, you're building your brand, uh, internal with the company. It's, it's something that we all want to avoid whenever possible. Um, so if you do the, the opposite of that, you know, give people good territories where they can be successful, um, give them reasonable comp plans that align with their incentive and your needs, um, not only will they stick around and deliver money for you, but when it comes time to recruit and grow the team, you have a good brand. Your Glassdoor, your Indeed, it doesn't look bad because you didn't Do the right thing, or you were you know because because you did your own your work properly that will pay dividends. So recruiting people, which is an expensive thing. I mean, like companies ideally should never have to use external recruiters because we're not cheap. But you you will have people organically coming to your company, and not only that, but your top performers won't refer like C players, right? They'll refer B and A players, which is what you want. So it becomes. either a vicious cycle or a virtuous circle, depending on your inputs and how you're controlling that.

Yeah, I love that phrase, the vicious cycle or virtuous circle. And so that kind of takes us to, you know, another aspect where you've got a lot of insight. And you use the phrase that I also love when we were talking before of, you know, if you want better questions or if you want better answers, ask better questions. And thinking about, you know, sort of the interview process and how you design That to be successful and find the type of people that are going to be successful in a role. What type of guidance do you give, you know, companies as they think about how to recruit the right people, how to identify the right people when they're talking to them?

Yeah. Um, after, if you do a basic screening, which probably isn't even what, you know, the, the leaders who might be listening to this call would do, like what your recruiters and talent associates would be doing after you do the basic screening of do they look like they might be able to do the job? The questions you wanna ask are questions where people need to give you stories that they can't make up on the fly.

Okay.

And I mean, most people are honest. A lot of people are honest. Most people, I think, are fundamentally honest. But when it comes to trying to get a new job, and also unfortunately for companies hiring, people bend the truth. So you wanna build an interview process where the questions you're asking make it hard for people to try to Make up a story on the spot. So questions like, did you achieve quota? I mean, sure, if you say no to that, you're probably out of the interview process for most companies because most companies only want people that hit quota, which is its own problem, but we can park that. But questions like, okay, what was quota? All right, how do you perform against it? And then you're doing second, third level questions. Okay, how many opportunities did you close? How many opportunities did you have to lose to get there? Walk me through how you generated those opportunities. What was the What was the most complicated deal you closed in your last role? Walk me through that story. And people can tell stories that they lived. It's hard for people to think up stories on the fly to fit a criteria of a question that they may not have considered before. So, getting, getting good at that and sussing out the people that actually did achieve what they said they did in their resume versus the people that made it up because they need a new job is super important because I mean, look, salaries are— is for 99% of business, salary is the biggest expense that the business has. And then salary on a bad salesperson who's supposed to be a pretty straightforward, I pay you X, you give me X plus Y investment, that is bad money if you're not making those hires correctly. So getting really good and bulletproof, as bulletproof as you can on your interview process is important. And then again, while it's, it's nice to not have to work with agency recruiters, one of the nice things about working with someone like me is while my fee might be high, there's a guarantee period. So if that person shows up and they're not a fit, um, you're not out any money. You're out some time, which is a cost.

Right.

Um, you're not out any money. Whereas if you hire someone and then you're like, oh, well, we hired them, we invested all this time in training, and 2 months in they're clearly not ramped or they're not a fit for this job. They, I think they might have lied about what they did. Like, That's a tough spot to be in.

Yeah. Well, not only that, but there's also the cultural impact of hiring people and then they come in, they meet everybody, and oftentimes salespeople have big personalities. And so, that may or may not be a fit for your culture, but it definitely makes an impact. And then, if they leave but everyone loved them, but they weren't any good at their job, like that's a real bummer. for everybody. And obviously, your insight on how to get at that truth is what makes you so valuable to your clients. That's a really interesting perspective there. I'm curious. So, a question that I oftentimes see debated is hiring for domain experience versus hiring for sales expertise. And I see people all the time that, well, I want to hire someone that's done exactly what I want to do for exactly You know, or exactly what I'm doing, you know, in the exact industry that I'm doing it with the exact types of customers. Like, I want them to bring the Rolodex that they can just, you know, open up and call all their, their old customers and bring them over versus, you know, more of a, well, I want to hire someone that's got a process that they've delivered against that they, you know, know works that, you know, they maybe they've worked in a couple different industries or maybe not just in my industry. How do you Guide, you know, leaders at companies in thinking about the best way to hire there?

Yeah. Unless your company is mind-bogglingly niche, the first category isn't very helpful. And yeah, it's great to look at—

Hiring for the Rolodex is not that helpful.

Yeah. Thank you for clarifying. Because one, If you're hiring them for the Rolodex and you expect them to bring the Rolodex, what's again, what's the risk of them leaving and taking the Rolodex when the next person comes calling? And I'm sorry to say it, but your company is not the best thing since sliced bread. It's probably hopefully amazing. But look, they left other companies before. They're going to leave your company eventually, probably odds are. So you need to hire both for the beginning, the middle, and also the end. Right? So you need to account for that risk. And the other piece is, if they're that amazing because they fit that perfectly, why are they actually looking for your company? And maybe it actually makes sense because, hey, you're, you're more upmarket and enterprise than where they're at right now, but it's not too big of a reach for them. So like that, that's a good progression and arc for them. But then at that point, again, they're not that much of a fit if they're, if they're actually getting something out of that versus just going from Perfect slot here to perfect slot here. You gotta, you gotta be careful in evaluating those. The other piece is, if you do something long enough, you kind of get bored of it. So not everyone wants to be an AE for their entire career because carrying a quota is exhausting and doing all this work is tough. So at a certain point, you naturally want to move, grow, progress, change. At least a lot of people do. So you gotta be careful about hiring people that have done it because just because they have done it. Doesn't mean they're gonna do it again. I mean, look at all pro sports. Eventually those championship teams, they fade because if nothing else, the guys get old or the people get old. But also like the fire can go out a little bit. So I skew heavily towards the second option, finding the person that has the process, has the sales chops, because sales is both an art and a science. It's becoming more and more of a science, especially with all the AI and tech that we have analyzing all of the data.

Yeah.

So finding someone that truly understands that, appreciates that for the profession that it is, and as a craftsman or craftswoman is, is super valuable. And I mean, yeah, like the Rolodex is valuable. I'm not going to discount that, but that only goes so far. You can fire the person after they sell their entire Rolodex, like sell through it. That's an option.

Right.

But what you want is someone that has the grit and tenacity to do the job. And learning a new industry is not hard. You should be able to download someone on your industry if you know it. In less than four hours, right? Like it's it's not that complicated. And I mean, I imagine for most of the folks that are listening to this, we're in software or tech sales. Like it's generally a smart or intelligent group. Like you can become a quick study, especially with the help of ChatGPT or something like that, on an industry real fast. So it's not hard to—I mean—fake it till you make it, so to speak. You don't pretend to be an expert that you're not, but it's not hard to figure out a new space. But the rest of sales is fundamentally the same. Right? Find someone, see if they're in market, identify the real problem, identify the real problem. After that, figure out who the blockers are, put together a compelling value proposition, and then don't screw it up from there, which is highly simplified, but it's transferable across all domains.

That's right.

The only thing where I would kind of caveat that is geographic markets where someone hasn't sold to, say, like the Middle East, or they haven't sold to China. It's like, I'm sure business is done very cultural where it's like, yeah, I would not be a good hire for that because I don't know how the hell to do that. Sorry for the language. Yeah. So that's probably the caveat there.

That's really a good perspective. I agree with that a lot. I always say, you know, a Rolodex runs out, a system never does. And so like that, and I also think it's kind of unethical to hire someone with the premise of, well, once our Rolodex runs out, I'll kick them out the door anyway. So, but you're obviously an expert in a lot of these topics that I'm passionate about, and you are too. We could talk all day, but I got to be mindful of your time. So, you know, for folks that are listening and, you know, at that place where they're trying to scale and they're like, oh, maybe it's not as simple as I thought to just hire a salesperson and have them be exactly like me, who are the types of folks that you work with and what are the types of benefits they get from working with you?

Yeah, on the client side, I am working with, in some super small cases, you know, owners and CEOs of small businesses, but typically VP sales, CRO, something like that. I mean, they get my expertise as someone that's been in the trenches. I've got the war stories. I've seen good, bad, ugly, and hilarious as a salesperson. And most agency recruiters out there, especially at the big boxes, They're 22, 23-year-olds. It's their first or second sales job. They don't really get it yet. And no offense, I was that guy a long time ago. But they, they don't have the lived experience of really understanding and knowing how to screen for people. Whereas I do, because I've, again, I've lived it, I've breathed it. So, you know, I've got a bit of a keener eye and a better way to suss out some BS than I think some other folks out there. And I'm happy to talk shop about this stuff all day long. People only pay me when they hire from me. So. I'm a decent sounding board here and there on some strategy.

That's awesome. So for folks that are looking to get some of that insight on their strategy and bounce some ideas off you, what's the best way to get in touch?

LinkedIn, probably. I am one of very few Racics running around. So Andy Racic, you will find me. Racic Recruiting is my website where you can find plenty of contact information as well. I am omnichannel and I'm pretty easy to find.

Awesome. Well, Andy, thank you so much for taking the time to join us today.

Yeah, Mark, appreciate the time. Thank you.

Talk to you soon. Thank you for joining this episode of the B2B Growth Blueprint podcast. We hope you've gained insights to grow your business. If you enjoyed this discussion, please rate, comment, like on your favorite platform, and share to others who will find it useful. Do you know a CEO, founder, or leader at an early-stage B2B service tech, or SaaS company who would like to be a guest and share their story, send us a note. Let's schedule a conversation.