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The OT cybersecurity market is going through a huge growth period, primarily driven by the fact that there are legacy and unfamiliar assets within the industrial environments that are being connected to the other parts of enterprise networks. And that’s creating an expanded threat landscape
Mal actors are finding ways to now attack these industrial environments, which means that they can exploit more money from shutting down operations, for example, shutting down the production of food.
Simon shares that this period of hypergrowth presents a significant challenge in qualifying and prioritizing his RevOps efforts and his team’s focus. There are very few organizations that can service the demand and compete in the OT cybersecurity space. If Simon isn’t prioritizing and focusing his organization’s sales efficiency in the right way with the right accounts and customers and selling on business value for them, then customers are going to go somewhere else.
Simon shares his biggest challenge in revenue operations is to make sure that they have the right activity to ensure a successful pipeline progression of finding a lead, taking them through nurturing cycles, and ultimately getting them into a sales accepted lead so that the salesperson can start the work. So, this key activity ensures the right activity is started at least nine months prior.
At the same time, trying to find talent for that type of volume of growth is really difficult. So, he has a large volume of open positions that he’s trying to fill, which messes with sales efficiency planning. So if he doesn’t get somebody coming in at the right time, he can miss the numbers pretty quickly. However, he saves on the cost because they’re not coming on board, but ultimately there’s an LTV cap ratio measure, which means that you want at least $2 for every $1 that you’re spending.
Simon shares that obviously the board doesn’t expect any margin of error, but he has to plan for the fact that he’s going to guarantee the board’s return. That means that he works on a 20% variable margin of error because if he doesn’t get a salesperson on the date that he planned on the budget when that person should come in, he needs to make sure that he’s got the right pipeline available for that person to attract the right talent. He also needs to make sure that he doesn’t starve the existing salesperson in the region, if he’s expanding or creating a new market, for example. And therefore, that could be delayed. If it gets delayed by two months and he can’t find the right talent, then that’s almost 20% on the return.
He then needs to either hire ahead of the curve or attract the talent ahead of the curve to make sure that he minimizes the impact of when that person starts, making sure they have the right pipeline cover and yield, and making sure that they go through the ramping process to be fully ramped so that they can execute on that pipeline.
It’s a balancing act, but it’s also a momentum activity that they’ve got to keep all the plates spinning at the same time across their channel, their pipe, their marketing operations teams, their finance teams from the cost, but also the sales performance and efficiency.
We asked Simon if he has a Plan B running in parallel to offset the risk that he might not get the right person on board at the right time. Simon shares that there’s always a parallel plan to make sure they de-risk as much as possible, which could involve doubling down on certain partners and channel activities.
Claroty is 100 percent channel-focused as a business. Because of their technology, they don’t focus on services. It really drives a high service demand for their partners. Their partners are also attracted to invest in their capability to identify, pitch, and position their technology. Simon says that he always works on a 10x multiplier. So whatever resources he’s holding, he wants his channels certified to the exact same quality within his channel ecosystem. So on that 10x multiplier, he has a coverage of people that can execute on their own.
We asked Simon about the support required by channel partners who are peak performers compared to those who have a low return on investment. Simon shares that ultimately they focus the 15 to 20% of their partners that are fully capable of pitching, influencing, convincing, and converting on their own. They require low touch. You don’t always get the right ASP out of that because you can’t determine the enterprise sales approach and effectively your beholden to that partner and how they sell and or how your product is integrated into the sales strategy.
Then you step down into the additional 30 to 40% of partners where they can identify and influence. They just can’t be convinced because they don’t understand the business value as strong as your own organization. So in that case, you need the enterprise sales rep to be able to deliver a strong business value message. And in most cases, you need a solution architect also to get the technical verification of validation done with the client. Simon argues that it’s still a lighter touch than the rest, which can identify an opportunity, they have an understanding of what it takes to influence but probably not the right relationship level, because OT cyber security is slightly different at the moment because of the convergence that’s going on.
Claroty runs a straightforward MEDDPICC process methodology, where the P doesn’t stand for the paper process. It stands for partners. So they would drive the influence, the convince, and the business value cycle. And then when they get to the sort of requirement stage, they identify what sort of partner the client’s looking for. And then they bring a partner in. So that has a lot of higher value to their partners, which is why they operate really well. And they’ve got a really awesome partner community and network.
We asked Simon what SKO 2022 looks like for his sales team compared to SKO 2021. He shares that last year it was a global virtual event that lasted over five days. It was a pretty awesome event with virtual breakout rooms, but next year it will be fully physical. They have been working really hard on finding the right location and identifying the most lenient conditions around COVID in that country. They’ve got a country, location, and their agenda locked. They expect to have about 200 people and it will be great to get everyone together. His team is expecting that about 90% will actually attend the sales kickoff.
His marketing team is also looking into more physical events because they find that the richness of the lead that comes out of a physical event is far greater than from a virtual event. But that means that in some countries, especially in Asia, where there are still restrictions on volumes of people gathering, they’ve got to do more round table type activities or more conference-style events in some of the Western countries.
It’s a challenge for the marketing team to make sure they build the right relationships. So they have acknowledged that it’s a strange world still and we’re getting back to normal as much as possible, but there are still certain areas of restrictions. There are also certain cultural dynamics, which makes it difficult for people that aren’t vaccinated. Simon thinks that they’re going to have to live with that for at least a couple of years.
We asked Simon about finding the right talent for his revenue operations team and getting new hires ramped and onboarded effectively. What efficiencies has he implemented since joining Claroty? Simon shares that over a year ago, he was the Chief Revenue Officer for NTT cybersecurity business globally. And that was a services-led organization with security control partners as part of the overall solution for their customers. But they still focused very heavily on enablement and education. And you have to do that across a broad spectrum of IT security controls in that world.
Coming into Claroty, which is a very specific OT cybersecurity technology company, the enablement and education strategy was e-learning through videos. The first thing Simon did was hire someone that he worked with previously to build the VMware sales, professional, and certified technical professional when they were both living the VMware hyper-growth days in the virtualization journey.
She came in looked at their academy and enablement and made it an interactive certification program and training event for their partners with a lot more structure. It’s a lot more interactive and very broad. That level of training enablement is a key focus for him because if he can get people operating under the same process, methodology, consistency, then ultimately he gets more predictability.
They use this training program with Claroty’s partner ecosystem. He gets more scale coverage by having partners at the same level, using the same materials. So, they continue to focus on this.
Simon also shares that CROs would need to focus on the market that they’re going after. What are the personas, which countries, which vertical? Focus on your exact targets. Motivation is critical from a compensation perspective, but there are two motivation points – intrinsic and extrinsic. Extrinsic motivation is, how much commission they earn, bonuses, etc. Intrinsic motivation is how much time you put into training them, upskilling, and up-leveling them as well as how they feel about the platform, simplifying it, taking the noise and the challenge out of a sales role.
And that intrinsic motivator is also a key component of the Claroty academy and making sure that they feel like it’s as simple as it can be. And it’s going to take them on a journey of being a better individual, more interested individual, which means that they’re more attractive to their sales clients and have better discussions with the customers and prospects.
Simon explains that for his RevOps team, sales enablement is two-fold. One, there’s the training around having a sales capability, technical capabilities, there’s also expanding capabilities around support services and what our partners can build out of support. And then also now around SOC. So as more and more industrial organizations connect their OT environments into the SOC environments, they’ve got to train them on how to consume and contextualize the alerts out of the OT. So it’s a broad spectrum of training.
So the onboarding training is a completely separate focus, which is how do you use the tools? Who do you go to? What are the business steps that need to go through for everything on a customer lifecycle such as how they attract someone and then how do they nurture them? How do they convert them? How do they further the customer journey by turning them into an adopter, ambassador, and the business systems, tools and processes, and functions that support that? So there’s a whole internal onboarding training approach too.
Simon shares that ‘momentum’ was his big takeaway over the last year. There are so many different levers and dynamics for a revenue officer, whether it’s tech alliances, partners, customers, sales, revenue, marketing, and people – everything’s in the mix to maintain the momentum and make sure that all of those things are not left behind to support revenue growth. As long as you’ve got all of those things, marching at the same speed, you can always build on that momentum. If you don’t march at the same speed, then you’ve got problems. You’re always then dropping in, jumping out like a bee in a honey pot, flying around all over the place.
When the structure of your momentum is stable and consistent, you can start to scale the speed of that momentum. That would be his big takeaway, especially in the hyper-growth market for a chief revenue officer.