Chris Degnan is the Chief Revenue Officer of Snowflake. He joined Snowflake as their first ever salesperson, while the other 15 first employees/founders were focused entirely on building the Snowflake product.
He’s been with Snowflake now for 9 years.
Just some more background – if you listen to other podcasts interviewing Chris Degnan – this guy knows to hustle, he knows the grind. This is exactly the kind of Chief Revenue Officer and sales leader I want at a company.
Lifting this from Legends of Sales and Marketing podcast site (Legends of Sales and Marketing: Chris Degnan | People.ai):
While always a hard worker, Chris stumbled into sales. Shortly after graduating from college, Chris found himself in a management training program at Franklin Temple. In one of his rotations, he got a taste of sales. “I enjoyed educating people. Once I realized that seasoned salespeople made quite a bit of money, I was sold.”
An opportunity at an early online advertising platform confirmed for Chris that sales was his destiny. He then became the first sales rep at a start-up called Covalent, where he survived several rounds of layoffs – again, due to his grit.
“I grinded it out and made 100 phone calls a day.” In fact, Chris’ perseverance landed the company a meeting with the CTO of CNET.
“I learned that you don’t have to be the most talented salesperson; you just have to outwork everybody else.”Chris embraced that same mindset and approach while an account rep at Informatica and EMC. At Informatica, he combed through every customer contract looking for upsell opportunities. At EMC, he found creative ways to meet the boss’ demand that he secure 15 face-to-face meetings every week.
I finally took the time recently, to listen to a November 2022 podcast (https://www.youtube.com/watch?v=aQiMSrINL5k) with Chris Degnan.
This podcast was specifically about how to sell during a recession - a perfect topic given the macroeconomic problems in B2B sales for the past year.
Some of the highlights - lots and lots of emphasis on selling Snowflake to tie its product to customers’ revenue. I feel like I’ve beat this to death in prior posts - in my mind, this is what separates Snowflake from the Datadogs and Crowdstrikes of the world. Delivering ‘cost savings’ or ‘ROI’ for observability or cybersecurity, is NOT as good as selling something that increases the customers’ own sales.
Chris Degnan even points out later on, that CIOs are incentivized to ‘have a seat at the big boy table’ - because CIOs try to justify their own existence every day, as CIO budgets are purely a cost for a company - so if CIOs realize they can use Snowflake to bring revenue to their company - it’s a win.
Also - he makes a nice mention toward Databricks trying to bait Snowflake into a ‘race to the bottom’ as a commodity!
Host:
Let’s talk deeper about business value, like what do you have to show ? Obviously everybody knows like, yeah you got to make the business case, yeah you gotta prove ROI, but like what does that look like in practice, and what does that look like
today in sort of a more difficult economic environment?Chris Degnan:
Well you know, one of the things that I’ve noticed in just the evolution here at snowflake is, you know, we started off as a cloud data warehouse, now we’re the Data Cloud rather than being just the data warehouse.
I was always just focused on selling on an ROI, like we run our queries faster and cheaper than the next vendor. And there, that’s a race to zero, in that you’re selling a commodity.I sold for eight years at EMC for data storage, and it’s like it was the same thing, and that’s why I left because I felt like I was selling a used car at some level.
And now, what I spend a lot of my time doing, is I talk to VPs of sales, I talk to CFOs, I talk to CEOs of Fortune 100 companies because what we’re doing a better job of now is tying data to revenue, and new revenue streams. So in analyzing business in all sorts of stuff like that, yes, the cost savings is important in this day and age, and sure like you need to show that because you’re going to have you know, people in procurement that are going to hold you accountable to that.
But on the flip side if you can then find a way that you can tie yourself to revenue, especially in this economy, then geez, it’s a way easier and better sale, and by the way, when procurement comes and beats you down and you’ve shown the business on the actual tie to revenue and how you’re going to do that, they’re kind of like they’re held hostage, because the business is saying to procurement: you service me, it’s not the way other way around.
There’s always you know, exceptions to that rule, but for the most part, you know, if you can find revenue and associate your service product, whatever it is, to that revenue, you’re differentiating yourself.Again it goes back to what we started off, be true to what you sell, and then understand how to pivot in the conversation to then, say, well geez have you thought about, so snowflake has a data marketplace and customers have data.
Have you ever thought about selling this data set? Well no, I have not.
Well you know we have all these people like hedge funds who buy data sets, and so that’s a lot of times what I spend time talking to customers about, and it’s awesome and that’s because all of a sudden you take someone who’s part of a cost, you know, in infrastructure like a CIO who typically spends their days justifying their existence, and all of a sudden, if you can take them and tie them to revenue, they have a seat at the big boy table and that’s pretty helpful for them in their careers.Host: Yeah that emphasis on revenue as being the most powerful business value driver is super key.
Chris Degnan:
Yeah I think um, you know we have, we have a competitor to Snowflake who’s obsessed with us [Databricks], and what they do is they say ‘Snowflake’s really expensive’ - whether it’s true or not - they just kind of make it up, and so a CFO is like ‘well geez, Snowflake’s becoming kind of my, one of my most expensive things on the list’ - and then they say well, ‘we’re open source, Snowflake’s not open source’ - so they kind of play those cards against us, and it’s like you know, that goes down to personal preference - like you know you’re basically fighting a religious war of open source versus not open source - and then it’s like okay, you’re gonna go build something, and by the way if you’re the CFO, you have some customized stuff, well guess what happens when that person or that group of people leave, because they will leave, and sure enough you’ll have some challenges ahead - so I think you know it goes down to, if you can tie yourself to revenue - this is why, you know to be honest with you, this is why I like doing this job now versus nine years ago. You know Snowflake’s been super successful, it’s been an awesome ride for me, I need something to get me up every day and get excited, otherwise I just wouldn’t do it. And I think talking to people about driving business value, driving revenue for them, is something that gets me excited.And again I don’t want to go: I can play the cost game, I can play the personal preference game - because that’s what my competitor wants to do and bring me down there. But really what I see is really around tying myself to revenue it is so differentiated and that’s when the relationship changes with the customer.
Later in the podcast, Chris Degnan fleshes out the sales culture at Snowflake. The mindset he describes is music to my ears, as a shareholder: bad macroeconomics is no excuse to fail.
Chris Degnan:
…from a sales leader perspective, you evaluate the performance of the team. And you know sometimes you have a sales rep who says well, they’re going to use the macro economic environment in telling you that they can’t be successful. And unfortunately, that’s not true, for them.
So you know, the thing that I’d say, is like you’re going to meet plenty of people in your life that are going to say, they have a bunch of problems in life because their parents were mean to them. And you can do one of two things: you can say ‘well, geez your parents - that’s awful, and you know you can blame your parents for your lack of success.’ Or you can say, ‘I’m going to use that as ammunition to go work harder, and be better, and be a better person - whatever it is’, and I think that’s the way that I view life in general and I think that’s the way I view, you know, being on the job.In particular in this type of environment, is you know, there’s going to be a lot of things that are going to affect your ability to be successful, but really if you get up every day, what you got to go do well if you’re a sales manager, is making sure that you have reps that are getting up - they’re prospecting, they’re doing the things that they have to do.
So when I was at Snowflake day one, I had no boss, and I’m sitting there saying, well geez, what am I going to go do?
Well I’m going to go on eight sales calls a week. I’m gonna go make sure that I have three to four net new business meetings. I’m gonna make sure that I send a weekly activity report to the entire company - which I did and some of the engineers still have those emails.
And by the way, that’s how you should you should hold your team accountable, if you’re a sales leader in this environment, is if they’re going on one to two sales calls a week - guess what? You have the wrong person in the job, period, full stop. Like you cannot be successful if you’re going on one to two sales calls a week. And you have to measure that, so if you are a sales leader and you’re not holding your team accountable, you’re not measuring them on a weekly basis, you’ll fail.And you know entitlement or other things will come into play, they’ll say: ‘well I’m not successful because….’
Well, you’re not successful, because you’re not doing your job, and that’s what it comes down to. And you have to be ruthless about that.And that’s the hard part about it, is we’re all humans, we all have empathy, I hope, and being an empathetic leader you can listen, you can understand, but you also know that - as my CEO now says, he goes, he said to me: ‘Look, do you think the board is my friend? They’re not my friend. They’ve hired me to make money for shareholders’. And that’s how you have to view it.
We can have friends, we can have friends at work, but at the end of the day, we have to do our jobs.
And that’s really what I expect of my sales leaders.
And the second that I start to have to do their job for them – they’re in the wrong job - they’re in the wrong job - so that’s what it comes down to for me.You know, early days of snowflake, we had one sales rep down in Southern California, and I’d go down to have meetings with him, and he’s a super nice guy, and I would go down and have meetings with him. And we’d have like one meeting and we’d sit in a coffee shop for half the day and then I’m like, what the **** am I doing here? And then like the guy who was his sales manager comes to me and says, ‘hey I’m gonna put two more sales reps in SoCal’ and I’m like, oh my gosh, like this guy, do you think we have the territory to do that? He’s like ‘yes’ and sure enough, we put two guys in there, and they did the job.
They got up every day, they made the dials, they got in the first calls, and then sure enough this other guy was like ‘oh, oh they’re doing their job’ and sure enough, he wasn’t successful.
Because it’s hard to do that every single day. The grind of doing that every single day is hard. And some people don’t want to hold themselves accountable, or don’t want to do the hard thing. And so you know what? You know I’d rather work at a company that is not going to give me free lunch every day, rather they save money and have my stock worth more.
A lot of people are like: ‘I want to work at a place that’s like, you know, has slides and popsicles and balloons everywhere’ and it’s like you know what, that’s great, but I’m not in this to have fun, but really to make money.
There is no sense of entitlement or blaming failure on anyone else but yourself at Snowflake. Even he, after 9 years and as one of the first employees at Snowflake - has ZERO sense of entitlement - he keeps his employment contract as the CRO on a 90 day basis!! He feels the need to fight to keep his job - to be the best - day in and day out.
And that’s what you have to kind of do and again it goes back to.
You were entitled to nothing. Nine years on this job, I’m entitled to nothing. And I am owed nothing.
And I have to get up every single day, and do my job, and if I’m not doing my job - I told my CEO - I told him this recently - I said if I’m not doing my job. You don’t even have to fire me. You can just say, Chris, you know, maybe you should leave. And I’ll leave on my own volition, because that is how I feel.
I own being successful.In this job, I’m on a 90-day contract to keep my job. Every quarter. And that’s how I view it.
Later in the podcast, it was mentioned that Snowflake didn’t do as well as they should have for Q1 of last year. The CRO says it’s imperative to always keep looking ahead and never rest on your laurels - he prefers to induce a sense of ‘anxiety and panic’ that drive the sales leaders constantly.
Chris Degnan:
You can have a great Q4, like Q4 is like, always magical, typically speaking, in a sales organization, if you have a decent product. And the hardest part is getting people to focus on Q1, in Q4. And having the discipline. And you know, candidly, there’s territories that Snowflake, that didn’t do that last year, that paid the price this year. And so I think you kind of have to say, okay yeah, I’m gonna have a big Q4, but I’m also gonna then start looking at Q1.
And so as a sales leader, I’m now measuring, I’m not only asking myself, my sales leaders to give me a forecast for Q4, I’m asking them to give me a forecast for Q1. And I do that religiously every quarter, so that I’m always asking people to look a quarter out, because all of a sudden, I want them to have a little bit of anxiety and panic around that stuff.
So these are some of the things that I think in in this day and age, you need to always be worried about tomorrow, and if you’re just saying, ‘hey - high-fiving yourself, saying I’ve caught this big deal’ - well what about your paycheck next month? The next quarter? Next year? You like making money, that’s why you’re in sales. Well then keep doing that, keep doing what you’re doing.
More about the sales culture at Snowflake:
Chris Degnan:
You have to hold yourself accountable. And you know my CEO Frank Slootman always talks about passengers and drivers. And he doesn’t want any passengers here at Snowflake. And I think you should consider yourself, if you want to be successful in life, yeah it’s great to be a part of a successful company - Frank’s been part of you know three very successful companies in Data Domain, Service Now and Snowflake - but so one of the things that he does which I totally appreciate, is he makes fast decisions, that are tough decisions. But he holds people accountable, which then raises everyone else’s game, and I think that’s the thing that I appreciate about the culture that he built. I’ve always had that philosophy but I didn’t have someone teaching it to me and now that it’s like kind of ingrained in me, it’s like yeah man, if someone’s not doing their job and they’re managing up to me all the time, they shouldn’t be here. And I think that’s the way I view it. Come here, do a job and hold yourself accountable. You know I’m gonna pay attention to the outputs, and if the outputs aren’t there, then yeah I got to make some changes, and I think that’s the same thing on you. Every single day, whatever you’re doing, just be the best. And if you’re not doing it, quit your job, go do another job, because maybe you don’t like it. But you know you’re doing yourself a disservice by just being a passenger on a successful company.
Why is the NRR always been so high at Snowflake – especially early on in the company? Part of the reason is their sales strategy. The CRO said that Snowflake’s goal at first wasn’t to be the entire enterprise platform for a customer on precisely day one. It was always about starting on a very, very specific business use case – the sales machine at Snowflake will first identify something that is valuable to the customer, and tie it to the Snowflake product. That can certainly start off small, whether it’s 20K, 300K of spend - and it’ll eventually grow to millions of dollars in the future:
Chris Degnan:
…I didn’t come in and say I want to replace your Redshift. I didn’t come in and say I want to replace your Teradata. I said, this is a very specific problem you have, let’s solve that problem. Let me show you what we can do. And that’s how we’ve grown as a company. And that’s really how you should approach it in this type of environment. You know you can get greedy and you can say I want this big commission check, which certainly we all want that, but I think at the end of the day, if you show value and especially in tough times to your customers, then they’ll be tremendous advocates for you.
Finally, I didn’t put much of the granular things on sales in this post but if you listen to the entire podcast, the CRO does talk about the grittier details on how he sells in a recession. For example:
Chris Degnan:
You don’t have to go have two to three net new business meetings in two to
three net new companies. You can have two to three ret new business meetings in your existing account base to find new use cases to establish new champions - because as we know, things change quite rapidly.
I’m sure we’ll see layoffs in this economy, and we’re starting to hear about them, and it’s like geez, like you need to not just rely on one champion in an account - you need to spread your wings in that account - otherwise you’re going to be in trouble when that champion gets laid off, or they take a new job or whatever, so I think you know the thing that goes back to is you know you know have discipline in your week to figure out what are you going to need to do to get to the next week, and how are you going to have eight business meetings - not like partner meetings. Partner meetings don’t count. Customer facing meetings - how are you going to do that and what are you going to do? Like what prospecting things do you have to do - look through your lead list, look through your account list, you know, get on LinkedIn, send people LinkedIn notes - like these are all things that I did.
I would go through Indeed, the job board, and look for people that were hiring Redshift engineers and specifically target those people in a given city, and say ‘I understand you you’re using Redshift, here’s the problems that some of the customers have – boom - so like that that’s how I attacked my kind of weekly cadence.