Starting his sales career at ADP, Paul Melchiorre went on to executive leadership positions at SAP, Ariba, iPipeline, and Anaplan. He has over 35 years in the enterprise software space and a unique perspective on what it takes today for Selling the Cloud. In this episode of The Convenience Economy, Paul makes it very clear that the changes that he believes began 10 years in enterprise software sales have really accelerated recently with COVID and WFH and those companies that are not able to change likely will not survive. And a big part of this change is having a way to build trust in a different way. Less socially derived, more value driven.
Sales has been changing for 10 years. Buyers no longer expect sales people to be the primary source of information about a company and its products. To remain successful, Chief Revenue Officers must adapt and help their team and company adapt. One of the first steps is to admit sales does not have control of the process and therefore, help the buyer as much as possible so that the company is in the pole position when the buyer is ready to buy. While sales is not in control, the steps associated with a typical sale are still happening, just without the sales person!
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Greg Dickinson: Paul, welcome to the convenience economy podcast.
Paul Melchiorre: Thank you. Thank you. I appreciate the invitation I know all about the convenience economy is Nicole has been ordering rapidly over this list, especially six months and we have our new best friends is Vince the FedEx guy.Tony is our ups guy. Allison is our gal from Amazon and they're almost part of our family now.
Greg Dickinson: That's right man, whatever the convenience economy, we do things now that are easy, right? None of that. Not that hard stuff. But in in full transparency to our audience here in this podcast, Paul, was my boss actually my boss's boss back at Ariba in the late 90s. And clearly, he was a good leader and a good because we're still friends today. So just make everyone your transparency there. Paul, we all in 30 years of your career, right things have been changing. They've been changing for a while, for a ton of reasons, right? In the convenience economy, we really are focusing on this fact that buyers right, the people that we're selling to have changed, they control more and more the buyers journey, and they're, they're not as dependent on sales as they used to be. And really interesting timing. And congratulations to you. Paul. Paul released a book yesterday calling selling the cloud. Congratulations on that. Paul, before we get started the podcast, tell everyone about yourself. And then hey, let's give a little bit of a plug for the book, because I read it last night. And I think it's phenomenal. And everyone should pick up a copy.
Paul Melchiorre: Well, thank you, Greg, we appreciate that. And the support? Well, you know, I'd go way back, you know, 35 plus years in enterprise software starting at ADP, and then early SAP days. And then you and I were fortunate enough to meet in the late 90s at Ariba and what a ride that was for both of us, you know, then recently I pipeline and then, you know, just last year leaving anaplan after taking the public for four years. So it's been 35 plus years, in enterprise software. And then, you know, this time last year, I decided I was going to make a career move and, you know, get into venture and private equity. And I've been working at Stripes in New York City, working with young entrepreneurs and, you know, exciting portfolio companies. And I look at it as my way of giving back and working with these firms, and also making money at the same time. So it's been a lot of fun.
Greg Dickinson: Good, good, good. Yeah, solid, you I mean, it's really got to be great place to be right to be able to see all the inventive ideas that are coming forward today. Right? And kind of you think about this book, what was the genesis like you wrote a book, I know, personally, cuz I wrote a book, it's hard as heck, right? It's a lot of work. And, you know, you can't procrastinate, you got to, you got to continue to put out content every day. So eventually, the book gets, you know, more than two pages long. So what was the genesis for that? And can I expose you already, so that you're thinking there and, you know, kind of tell us a quick summary of the book?
Paul Melchiorre: Yeah, you know, my mom's been telling me to write a book for about 15 years. And, you know, I just not the book type, I mean, it's just not in my profile. I'm a storyteller, in a lot of ways, you've seen me on stage. And, you know, I kind of, you know, always wait for the movie, if you will, to come out. But at this time, kind of interim, this time last year at a little bit of health challenges, and then I left anaplan and prior to going back full time, at this little window of opportunity to kind of, you know, think back. And my co author, Mark Petruzi had kind of been bugging me for the last year or two, since we reconnected, in kind of came up with the concept of, Hey, we should write a book, you have all this product experience, I have all this consulting experience, it really is a collaborative effort, as we all know, you know, between sales and service to sell complex, you know, products and services, you know, in the b2b world, especially large enterprises in, you know, I looked around, there's a million books on sales process, and all these other things, you know, related to the, you know, sales methodologies. And the last thing I wanted to do is develop another method or process. And so I figured, Look, I know so many people, that you and I both know, and especially people like Eileen, who we work with, you know, back in the earlier Ariba days, who kind of almost invented the concept of customer success. And then we get Maria Martinez, who, you know, kind of perfected it at Salesforce is now running Cisco, guys like Jim Steele, who are called legendary in the industry, as well as many others. And let's get their feedback and see what they think. And putting it all together. It was really just, I learned a lot, you know, so what it does me kind of talking about my personal experiences over 35 years, but getting all that experience from some of the Titans if we, as we call them in the book. It just I learned so much in writing the book, it was really rewarding and I think it's really going to be a great play book if you will, for anyone, not only in b2b enterprise sales, but I think really in selling anything today.
Greg Dickinson: Yeah, yeah, I enjoyed it. I think it's very, very practical and you know, and along the lines of storytelling for the audience, I gotta tell you, buddy, so Paul invited me out fishing one time and we went to an efficient and big tournament. And you know, you're out in this boat and you're fishing and it's your turn to get up, you grab the reel and you're working your tail off during this tuna in and the rule was he who touches the rod first must leave the rod because otherwise you get disqualified if someone helps you. Well, the funny part of the story is, it was really exciting for the first three or four or five, but after that, it was like, okay, Paul, let someone else go I'm exhausted like, like this is work now catching these huge tunas. So to this day, I remember that, that that trip, we took in the fact that you know, tuna fishing looks easy, but man once you find a spot that he could call that the hot dog or something, and we fished for hours in that one spot, and it was it was exhilarating. But man, was it exhausting?
Paul Melchiorre: Yeah, unfortunately, we came in fourth place, which was just out of the money. But it was a lot of fun. And we enjoyed that fish for sure. Yeah. But I do remember it a lot of fun.
Greg Dickinson: So let's get in. So in chapter five, right, I love this quote in your book you talk about "Don't be stymied by a set in stone process, instead be open to working alongside your customer. Today's buyers are advanced. They know more about your product your competitors than ever before. We no longer we salespeople are no longer the educator armed with information", Paul, that's a big change. Right? I mean, if you think back to the 90s, when we work together, the salespeople had all the information right back when Oh, RMS days procure to pay spend management, we had every bit of information in the buyer was dependent on ours. I think what you're saying there is That's no longer the case things have changed.
Paul Melchiorre: You know, Greg, it's been changing, right? I mean, it's accelerating. Obviously. Now it's more pronounced, but it's been changing for a decade. And never forget, I was invited by gearheart, one of our Titans who run selling power at one of his conferences, I think was sales 2.0. And I was still at Ariba I came in and my presentation was buyer 2.0. And I think you could still see it on some green YouTube video. It's out there. But everyone was shocked when I was saying exactly what you just described. And obviously, coming from Ariba, we had a precursor to the changing ways buyers operated. And we obviously helped educate them with our technologies. But it's been going on for quite a while where, you know, salespeople who are providing information are probably less required and will be less required because information is so available, you know, when a salesperson gets to meet the buyer. Finally, I could probably bet that more buyers know about the company more about the company than the seller does. Right. It's just it's amazing because your figure, the sales reps probably knew, maybe doesn't really know much about what they're selling yet. And then they're going into a buyer who has all this information, whether it's in an Ariba system or over the web, or all this data about all the providers that Gartner reports, everything, it just the buyers are just smarter now they're more advanced. And, you know, forget, I don't call it a selling process anymore, right? Because the sellers don't have control of that process, like we used to in the past was a lot easier. Yeah, the buyers own that process. And if you don't think that's the case, you can read all these sales process books, and you know, all these, you know, fancy sales books, but the reality is, you know, it's it's the buyer who has the money and buys so Yeah, yep, you better be prepared for a new way and really an existing way of doing it. that's now being accelerated.
Greg Dickinson: Yeah, yeah. I mean, I couldn't agree more. Right. And later in the book right later in the chapter, you talk about this idea of trust right? And that's a really good question. You spend all day talking about that, right? Because if the buyers journey is in your book, you talk about 57% of the sales cycle is complete before they talk to sales. Heck, that number is as big as 70%, according to Gartner and Forrester. But let's not argue over the number. The fact is that buyers are doing more and more on their own without sales, right? And the book you talk about, which would you rather have a salesperson that shows up with a brochure, or one that adds value so that sales establishes trust. We call it here, at Omedym, digital trust, right? Because that buyer for the first 60% of the journey is digital, like they're on their own. Talk to me a little bit about that trust, Paul, because, you know, it's not what you and I talked about back in 1999. When we owned the sales cycle, and we owned the influence and every gate the buyer went through, we were able to give them more information and so forth. So talk about that digital trust that trusted has to has to be established, maybe just in a different way.
Paul Melchiorre: Yeah, I think if you look at the book, a lot of components of sales have been the same. Maybe since the beginning of sales. Which is the beginning of time, right? But some of those things like trust, evolve and are delivered in a very different way. So if you're selling a multi million dollar a year contract, you're not going to sell it to somebody who doesn't trust you or your company, it's just not gonna happen. Now, back in the day, establishing trust was a little different, you built a relationship over time, you had social relationships with with your prospects and customers, you took them to golf, you did events, you did all these things that over an elongated period of time, you were able to develop a trusted relationship, we talk all about the trusted advisor, and Charlie green, etc, is a great Titan in this area. However, as you just mentioned, you know, Greg, this digital trust is really the next normal on how you need to build trust, because, you know, people just don't, especially today, they can't meet face to face, they can't go to dinner, they can't go golfing, they can't do all these events. So they have to find other more creative ways to build that trust. And a lot of times, you actually build that trust before you ever meet somebody face to face. I mean, I got a great example of the last six months, you know, in the PE and venture world, you know, we did a number of investments where we never met the entrepreneurs, other than on zoom calls, and through the new normal or next normal way of doing things, yet, we were able to build trust, you know, on both sides, you know, through these new digital technologies. And if and if you can't figure that out, now, you're going to really be left behind. And I always say a lot of the folks that don't know how to operate in this digital world are not going to be able to figure out ways to develop that trust. And so I think there's great opportunities and new creative ways and tools out there that will help you differentiate your products and services and build trust. And if the sales teams aren't figuring that out, they're going to be left way behind.
Greg Dickinson: Yeah, yeah, I couldn't agree more. When you think about, you know, we, you and I talk offline about this consumerization right of our consumer world, how it's moving more in business, think about, you know, as a person, your patterns of habit, right? The the vendor, the store, the the the sole proprietor that gives you information helps you with, you know, pick out the right flowers, etc, etc. When it comes time to buy something, you naturally right, you've established that trust, you're going to go to them first, you may not buy from them 100%, but that they're in the game, right? You're going to trust them with that next, you know, next purchase. I think, you know, that's kind of a self service, right? Paul's out doing things on his own. We I'd love to get your opinion of this, we hear a lot when I talk to sales leaders saying well, geez, if I let the buyer control the journey, and I let the buyer do more things on their own, I and I live in a digital world where I'm, you know, giving them demos online, or on the sales presentation in video format, etc. I'm gonna lose control. And I always say what control? You don't have it already. You're not going to lose it. You don't even have it. What's your thought on that, Paul?
Paul Melchiorre: Well, I think I said it earlier, like fire 2.0, I got to go dig that up. But I know this was at least eight, nine years ago, this was still at Ariba when I gave this presentation at the selling conference. And I literally had a number of they weren't called CR O's back then. But heads of sales and sales leaders come to me and like, What are you talking about, and I'm not saying I'm a visionary in this area, but it was pretty clear that this momentum was going in this direction. And you know, you don't have control of the sales process, right? You don't have you know, in fact, you have less control with all the partners involved and integration partners, Alliance partners that are in these accounts and have these relationships, the buyer has control. So if the buyer is going to have control up, say what is 50 7070, whatever percentage that you know, the experts come up with, that's a lot of you know, activity that you don't have control over whether you like it or not. So the first thing you have to do is zero is admit you don't have control that process, right, and you're not going to change the buying process, right. So no matter how many books you read on sales processes and methodologies, it is what it is. So 57 to 70% is already defined for you. And that's the rules, you better figure out how to build the trust relationships, educate the buyer do the right things in that first 57 to 70% of the sales cycle, where you might be eliminated before we even get a chance to play. Yeah, and do the best or in that digital era, if we will, and do the things are necessary to get you in a pole position. So when the real selling starts, at a much later stage in the sales process as we know it today. You want to make sure you're better positioned than for the CROs that don't get that you know they're not going to be CR O's for long.
Greg Dickinson: Yeah, yeah, yeah, cuz I think I think today, right, a CEO or a CR o or anyone needs to be asking the question if the buyer because I was asked this question, right? If the buyer is doing 50% or 67% on their own, where are they doing this work? Who is influencing that person who's whatever What what how are they being influenced during that journey? And I think what you're saying is, you better find a way digitally, to provide them with, you know, as yext says, right, our friends, David netsky, and Jim Steele and yext saying authentic answers to their questions.
Paul Melchiorre: Yep. Yep, the process is really the same as it's been in since the beginning of time. It's just, you know, a different medium, right. So in a different approach. So you know, you can't skip the steps, it's just some of the steps are already done for you. And if you're not involved in those steps in a proactive way, building that trust building that authenticity, then you're going to be left way behind. And so I think you're going to see a lot of disruption in companies that can't make this transition, you're going to see a lot of disruption in sales leaders that, you know, haven't figured this out. And I think you're going to see the ideal candidate profile for selling in a complex environment. It's changing, and it's going to continue to change. Yeah,
Greg Dickinson: Yeah. Yeah, I read a study the other day from there's a company out of Boston, price intelligently that does some really good SaaS research analytics. And they, they said that CAC costs, right, customer acquisition costs are up 70% in the last five years, that's terrible, right. But making it even worse, as customers willingness to pay is down 30%. So you think of that chasm, Paul, is more expensive to sell than ever before I 70% is almost double. And then what you get for that sale is less, that's a chasm that just can't be, you know, can't be solved. And I think that's what you're referring to, is this, this new way of thinking?
Paul Melchiorre: Well, what's going to happen, Greg, it's fortunately, today, the stock market is rewarding, you know, top line revenue growth. And you know, that's just the model, and everyone's working within that model. And so therefore, if you have a very high cost of acquisition, as long as you're growing on a percentage that wall street is comfortable with, you know, it hides a lot of sins. But there is going to be a time and I think you and I both lived through 2001 and 2008. And, you know, now I think we're gonna see, over time, the companies that are capital efficient, that have a good CAC ratio, are going to eventually be rewarded in the long run. And you're going to have to figure that model out, you can't keep losing money at high rates, just because you're overspending on the front end of the business, because you've got a high growth rate, right, and you can always go out and get money at ridiculous valuation. So I think there will be a kind of normalization and the tide will come out. And you'll see the companies that are efficient on the front end of the business who have figured out this digital way of selling this hybrid approach, if you will, yep. And ones that haven't are going to have very high cost, low margins, and eventually, it'll be unsuccessful.
Greg Dickinson: Yeah, yeah. Because you really what you're talking about is, is how do you tie a buyers journey with a sales cycle? Right, you got to they're not separate and distinct. They need to be brought together and if you bring them together, right, that reduces friction less friction less cost.
Paul Melchiorre: Yeah, the better you bring it together to better chance you have a winning
Greg Dickinson: Yep, yep. Hey, so Paul, great book. I bought a copy for my son he works at your alma mater ADP,
Paul Melchiorre: so great.
Greg Dickinson: Hey, listen, man, I you know it all the a lot of the best guys I've ever worked with, you know, you asked where do you start, and ADP is like the first name that comes out of the mouth. And you know who I'm talking about all of our friends at Ariba, like, six out of 10 of the top five sales reps are all from ADP. So you know, I encouraged him to go go learn son, go learn work, your tail off.
Paul Melchiorre: Army training type facility, right? You learn the hard way. And they're still one of the few companies that that train sales people in, you know, a way and maybe old school in some ways, but you do come out of that boot camp, you know, more resilient with a lot of grit, all the things we talked about in the book that are critical to forming what you know, a professional salesperson that really needs to be and, you know, I think your son's don't going to be doing a good job if he's got that baseline. And especially if you read the book,
Greg Dickinson: And listen, and you got that, you know, you got you still remember roll calls, right?
Paul Melchiorre: So it is it was it was not fun when you didn't have anything. That's right.
Greg Dickinson: I remember those stories so Paul, but there's a lot of young people right there enter the provision of sales. So as a person that spent, you know, your entire career enterprise selling and driving value and making sure customers were successful, right. That's one of the reasons you're still doing what you're doing is because you're constantly are making sure that your customers are getting the value. There is a few cool stories about that, you know, in the book, what advice would you have for young professionals entering sales today?
Paul Melchiorre: Yeah, I think you know, it's a profession, right. And you know, it's always been a profession and you have to treat it as such. And so, I think if you're a young person coming into the business today, it really is all about learning and understanding and getting a better feel for what It is your customer needs. And at the end of the day, you know, it does require hard work, you know, you have to be trained, you have to learn, you have to be self motivated in sometimes. And you have to be a little smarter in figuring out the new way, especially, that's evolving and how to get the customers. So I would say for the young folks, it's not a profession for the, you know, ones are expecting quick results and just, you know, going to be on top right away, it's, it's a slog, it's a hard profession, it's rewarding, if you're successful, and it's really depressing. If you're not, it's, it's a, it's not for everyone, you know, I just say that, you know, but you know, I always say, give it a try, because it's a very rewarding profession. You know, I've had the luxury of traveling around the world of meeting some amazing people. And some of these customers that I sold 10, 15, 20 years ago, they continue to buy from you, or they become very good personal friends. And, you know, that's, that's one of the few professions I think that you can meet so many different folks, whether it's digitally or in person today, and build relationships that last not only at the company you're selling to, but those relationships last, from company to company to company, I think you and I remember, there was a few earlier Ariba customers that, you know, we had sold sap to years ago, and then we call the back, Hey, you know what, we got this new thing called, you know, Ariba, we sold them that and, you know, we just would take people from company to company. And so these are companies and people that we have 10, 15, 20 year relationships with? Yeah, oh, I think if you're young, and get into the profession, don't be discouraged early, because it's gonna be tough, be resilient. Stick with it. It's an absolutely phenomenal career. And I think you can not only, you know, make good money, but really enjoy what you're doing.
Greg Dickinson: Yeah, I agree. So, so those So Paul, let's close with you telling the audience that you know where to find the book. Right. And because I think, you know, as a young professional, you I think what was really telling about the book, as I read it was, you know, it kind of you didn't get into the sales process and the metrics and make 12 calls a day. Here's the 14 objection, handling things. And listen, what two years right, what you said is practical, more character stuff in there. And I think it's, you know, I think anyone entering this field, like you said, it's not easy. I think it's rewarding, because as you said, right, as long as you believe in what you're selling, you're not really selling, what you're doing is you're helping, you're helping that, you know that that that other business, get value and solve their problems. So where can people find the book so they can all you know, learn from what you and your co author wrote about?
Paul Melchiorre: Yeah, you know, like anything else, you just go to Amazon and Google selling the cloud or look at selling the cloud. And you could buy the Kindle version, or the paperback version at Amazon, and then we're working on, you know, getting the hardcover copy for those who want to buy it in bulk, or you don't want to sign copies. So really excited to be part of this. And, you know, I think, you know, I'd love to be on these kind of sessions in the future with you, Greg. Sounds like you're up to a lot of great stuff. And it's always fun and always a pleasure to to get back in touch with you and talk about things that we've done in the past. And so get everyone on there to Amazon and buy selling.
Greg Dickinson: Alright, so I already got my endorsement as well, what the heck, that's worth it, Paul. Thanks, again, and we'll talk to you soon.
Paul Melchiorre: All right, Greg. Thank you and good luck and all the best.
Transcribed by https://otter.ai