Building a Sales Organization with Craig Klein

by | Jun 1, 2022

Get to know SalesNexus founder and CEO Craig Klein as he shares his journey in the sales and marketing world with Alex Guz on the Revenue Engine Podcast.

Craig details how he ventured into the world of sales, the mistakes he made early on as an entrepreneur, and the lessons he learned the hard way as a sales manager, all of which eventually propelled him into launching his own CRM and Marketing business. Today he shares his wisdom with the budding entrepreneurs of the University of Houston, and spills some of the secrets he learned along the way in building a sales organization in this podcast.

Alex: How did you get started? What were the first stages of your career?

Craig: Even going back before my career, my stepdad was a salesperson. He’s a manufacturer’s rep and he worked from the home. So as a kid, I just saw him working all the time, being a salesperson. And I saw that he loved working with people, but I also saw that he had a tremendous amount of flexibility in his schedule. He was a hunter and a fisher. After he had achieved some pretty good success, he basically worked Tuesday through Thursday. Then he had long weekends to go hunting and fishing. 

Once I got out of college and got into the working world, I graduated as an engineer. I went to work at NASA, for a NASA subcontractor as an electrical engineer. That was cool. It was when they were sending up the space shuttle, like every six months there was another mission going up. So it was really exciting in that regard. But the work itself, as an engineer, just didn’t work for me. 

So, I started looking for something new and I found a sales job selling carwash controllers. When you go to the carwash, the one with the tunnel. Your car’s moving through there, this is the computer that tells the different brushes and sprayers to turn on at the right time. That was my first sales gig. 

The owner of that company was great. He taught me a ton about sales, about good old fashioned cold calling tactics. How to be successful in cold calling. I learned a lot and I was very successful at that. 

And then a friend of mine was starting a software company in the energy business. At the time I was working from home and offered to help them with doing some sales, just kinda on the side. Wow, these guys had created this super cool software that all these oil exploration companies really wanted. I talked to some of them and I heard the interest that they had in it. I got really fired up about that. And the next thing you know, I’m their VP of sales. We grew that business, hired salespeople. And then I had to learn how to manage salespeople. That was a real eye-opener.

Since then, what’s really been the funnest challenge for me to work on with customers is when you have a company that’s growing and either the owner, or maybe their first salesperson is now trying to build a sales organization. And that transition is just so difficult to make successfully that I love working with companies that are at that moment in their growth, because there’s so much I can do to help them. 

Most of it’s not rocket science. It’s just kind of counterintuitive things you have to learn the hard way. 

Alex: SalesNexus, your company, was established in 2002. I think that’s about the same time Salesforce started. So how did you come up with this idea?

Craig: Back then, Salesforce was brand new. Most people didn’t even know who they were. The big 10 ton gorilla in the sales software industry was ACT!. I had used it for 10 plus years, I think at that point. And we were running our sales team using it, in the energy business that I was in at the time. And it was great. It was really a great tool for a salesperson. But, the bigger your organization got, the less awesome it was. In terms of the management capabilities and integration with other tools and things like that. 

And so I had gotten to that point where I was getting a little frustrated with it. And Salesforce had just come out. It’s all in the cloud. Now we don’t have to sync databases and all this stuff that was kind of a nightmare with ACT! So we tried it, we tried to move our sales team to Salesforce and it was a train wreck.

I’m not trying to blame it all on Salesforce by any stretch. A lot of it was just… we didn’t know how to make that transition. That’s not easy to do. Some of it was limitations that Salesforce had. 

The company I was working for at the time, they were acquired. So I had a little bit of a windfall as a small shareholder in the company. And I said,

“You know what, I’m going to build a better mousetrap. I’m going to build a Salesforce that’s easier for a sales person to use, but has the management capabilities.” 

And at the time, our real vision was to mobilize it. To make it accessible on a mobile device; which, you have to remember, this is back before there were iPhones. There were just Blackberries, and Palm Treo was the cool thing at the time. 

Alex: What were the biggest challenges when you started? 

Craig: Well, first of all, here I am a sales manager. I was mildly accomplished as a sales leader, but I didn’t know anything about running a business, or in our case, running a software development organization.

So there’s a tremendous amount of learning there. I made a few mistakes, learned the hard way. But once we had the product ready to sell, we had to learn a lot about the best ways to demo software. Because again, this was a long time ago, things like Zoom and stuff like that, weren’t as common as they are by any stretch.

Then very quickly we started to realize that we could build with Google Ads and things like that. We could build a pretty good and consistent flow of incoming leads. People that already had a recognized need for a product like ours, these were mildly qualified leads. But we needed a system to manage those leads because they weren’t always ready to buy today.

Buying a software solution like this for your business is not, it’s not the kind of thing that people regularly do. People don’t wake up in the morning and say, “Wow, I can’t wait to go out and buy a CRM!” right? So they might have the idea that they need to start looking, but they might also just decide NOT to decide, for six months, or a year at a time. 

So we really needed all those leads that we were paying to acquire through Google. We needed a way to really nurture them and maintain the relationship with them so that when they finally decided to make a purchase, we were still on their list.  

Alex: Over the years how do you see SalesNexus develop into what it is right now?

Craig: The big difference between us and almost all of our direct competitors is that we are not venture funded. We had a little bit of friends and family money in the beginning that helped us get started, but ever since then, we’ve been growing organically.

What that has meant over the years is that we’ve been able to take a different approach than our competitors do to the relationship with the customer. So in a big business with millions of dollars in capital invested in it, you really don’t have any choice but to acquire customers at the most rapid rate that you possibly can, no matter what. Even if they don’t stay customers very long, you’ve got to show that you’re adding those users. Maybe that makes sense to some people, but it never did to me. 

To me, the most important thing was when we’ve engaged with a customer, we want to make sure they’re successful with the tool. That’s one of the most important outcomes to me is that, six months down the road, I want to call them back and ask them, ‘How’s it going?’ And they need to be telling me, ‘Oh my God, our sales are up 10%, 20%, 50%!’ And if they’re not, then we’re doing something wrong.

So we were able to build our organization that way. SalesNexus support, our help desk has always just been in a whole different league than most of our competitors. That’s always been a real point of pride. And our customers love it, of course. But the bottom line is our customers stay with us, last time we measured it, which was about a year ago.

Our customers stay with us four times as long as they stay with Salesforce on average. 

That’s because we’re helping them get it right in the beginning, and once they get it right, they don’t want to change. It’s working. 

Alex: How did you find your ideal client persona?

Craig: We’re the tool for a medium sized sales team. It’s probably not the best solution for you if you just started your business as just you, trying to sell your product or service. There’s probably simpler things because you don’t really need all the management stuff.

If you though are trying to grow your sales organization to that next level, where you’re hiring your first sales team, maybe hiring your first sales manager. Maybe you got five salespeople on the team, maybe up to 50 or a hundred, that size of business – we’re a great solution for that size business, because with our tool, you don’t need three or four different tools that you bolt together.

Even in the Salesforce world, or really almost all of our competitors, they have all these different modules that you can license individually. However, they’re really separate products that they’ve acquired through acquisitions that they’ve kind of bolted them together. But they don’t really share data. That means you’ve got to have somebody on your IT staff to sit there and make sure it’s all working all the time. And it breaks sometimes, and that stops your whole sales funnel from working. In a smaller business, number one, you just don’t have that IT guy. You don’t have the resources for that guy to sit there babysitting and that stuff all day. 

Alex: Your tool includes a CRM, but also it combines a very robust email and SMS platform. On a basic level, how does it all work? 

Craig: Well, we do all of that. SMS marketing and email marketing services, as well as the sales and sales pipeline and relationship management. But we now also offer list building and list cleansing services. 

We learned that we needed to nurture our leads. So we built that for ourselves first, and then we added it into product to sell it. Then we learned, you really need to really grow. We need to be able to build our lists and sometimes acquire lists. Doing cold outreach to a cold list, that’s pretty risky stuff if you don’t know what you’re doing, you can get yourself into trouble really fast there. So we have learned the hard way, how to do that and make it work.

When we decided, ‘Okay, now we want to help our customers do this.’ We knew that we couldn’t expect them to become experts like we have. So we wanted to build it into the product so that it took care of it for them. Now the way it works is, you know, if you said to me, ‘Hey, I want to talk to all the chief revenue officers of companies in this industry…’ We can get you that list with their email address, phone numbers, social links, and everything. And this is the important part: our system automatically does a validation of all the emails as you load it in. So that you’re not going to have a bunch of invalid addresses.

We also find what’s called a spam trap. We’re going to filter all that trash out of your email list so that when you start sending it’s as clean as possible. And then let’s say you put them on an automated drip campaign to send them an email, once a week for the next 10 weeks.. If the system sees thatI loaded 10,000 email addresses, and there’s maybe 20% or 30% of them that after maybe three or four emails into that drip campaign, they haven’t opened or clicked on it. Well, we’re just going to stop sending to those guys. Because if you don’t do that, then you’re going to get yourself in spam trouble, you know, and your emails won’t be showing up in anybody’s inbox.

So we have marketing automation software in our system that automates all of that. It just makes life so much easier. Every step that I just walked through, using most tools, someone has to sit there and manage the list and worry about all that stuff one thing at a time – which is a nightmare. It’s very time-consuming. 

Alex: What is the role of SMS in B2B?

Craig: Number one, there’s a legal aspect. There are laws about who you can text and when, and there are pretty substantial fines if you violate those lines. Now it’s even getting to the point where it’s not just different laws in different countries, but it’s different laws in different states in the United States. So you gotta be careful about SMS. It’s the same thing with email. It’s just with emails, the laws are much more liberal, so you’re much less likely to get yourself in trouble. 

In a B2B world, you’re interested in a long-term relationship with the customer. A customer who says no to you today, could still be a customer two years from now. So you don’t want to turn them off with your communication style. 

In most cases in the B2B world, what we see working is you use B2B email campaigns to do the initial cold outreach and just kind of identify who are the people that have shown some kind of interest in what we’re sending them. And then those people, you can start switching to SMS marketing

And so a really simple example of that would be a free download, like a white paper or maybe a video that’s kind of some educational content, it’s not really a sales pitch or anything. So I used that in my email campaign, featuring that in my campaign. Anybody that downloads that, they’re basically raising their hand and telling me, ‘I got a problem that you can solve.’ Now, once you’ve identified that person, you want to try and get an appointment set with them normally, or maybe get them to go to your site and convert, or sign up for something. Then, you can use a text message for that call to action.

So they download the free content from an email, and then some time later, they’re going to get a text message saying, “Hey, we noticed you downloaded the so-and-so. We hope you enjoyed it. We’d love to have your feedback. And Hey, if you’d like to learn more, click here to set an appointment.” Or something like that. In the B2B world, that works almost every time it’s tried.

Another way that it’s really valuable is when you’ve got a lead that’s gotten pretty deep into your funnel, and they go cold on you. Send them a text message. You’re going to find out, because they’re going to respond. Sometimes it’s just, “Hey, I’m getting your messages.I’m super busy. Call me in a week.” But at least now, you know. 

Alex: What are your thoughts on key differences between demand generation and lead generation?

Craig: In my mind, demand generation is making the customer want what you have. Lead generation is a step further into the funnel. In other words, I could run a TV ad that millions of people are seeing. It might get a hundred thousand people excited about the product that I offer. However, not all 100,000 of those people are going to jump on the phone or go to my website and say, “Hey, how do I buy one?” Maybe 10,000 are actually wanting to buy right now.

That’s where lead generation comes in. How do I identify those 10,000 people? Because when we’re talking about salespeople, the key is you do not want to give a list of a hundred thousand people that saw a TV ad and click to download some free thing to your sales people, because they’re going to spend all this time chasing all these people who really aren’t ready to buy.

You use your lead generation campaign to filter that down to a shorter list of people that are showing they’ve done something that indicates there’s actual interest and intent to do something. 

Alex: What is your approach to organizing the sales and marketing teams so they can be effective and connect to customers more easily?

Craig: There’s a lot of methodologies that have gotten popular over the last 5 or 10 years, and I’ve never really fully bought into any of them. I kind of think that every business needs a slightly different structure of their sales team. 

Maybe the structure of the team and the roles of the people in the team needs to be nuanced based on the marketing channel of the lead, number one. Number two, based on industry perhaps, some kind of vertical market. Therefore you want to train to, and hire to those specific customers. To me, fundamentally as a sales manager, the best sales person that I can hire, even if they’ve actually never been a salesperson, if they got the raw talent and can be trained and they’ve lived in the world of my customer, they can really communicate and connect with my customers. That guy is golden. You can be taught to do a lot of things, and connect with my customers. Ultimately, that’s the secret to a long-term relationship.

Alex: So, let’s say for somebody who is just starting their sales organization. When they’re ready to expand and maybe to hire their first sales manager. How much process has to be in place for this person to be successful, if not right away, but in a reasonable time?

Craig: That’s a great question. It applies to everything in business. It’s not just sales, everyone wrestles with the same question. There’s this thing that I’ve been doing for a few years, and I’ve gotten pretty good at it, and I’m doing so much of it that I need some help. So I’m thinking I need to hire somebody else to take that process over for me. How do I take what I’ve been doing, and turn it into a process that someone else can follow just like a recipe in a cookbook? 

Number one, that ain’t easy. It is very difficult to do because it’s so impossible for us to be objective about our own selves. So to answer your question, I would say:

You can never have enough process. You will never have enough process. 

So you have to try and put it on paper and make it step-by-step. But sometimes you need to hire for the process. What I’ve seen, some of my customers do really well is at that stage when they’re hiring their first sales manager, is they bring in a sales manager who has been a sales manager in some other industry, and has the vision of the process. And they come in and create the process for them. 

Because as the owner of the business, a lot of times, it’s really hard to even know what the heck the process is because so many things seem so instinctive. Sometimes you can hire a guy who just gets processing. Someone who can help you codify it if you will. In a perfect world though, before you even start that hiring process, you should try to figure out what your process is. And of course, there’s consultants that you can bring in that can help you do that. 

Alex: You also teach at Wolff Center for Entrepreneurship at the University of Houston. What are the biggest lessons you’re trying to teach your students and share with them? 

Craig: That’s a really fascinating institution. I went to school a long time ago and there weren’t entrepreneurship curricula within colleges at that time. I wish there had been because I learned so many things the hard way in my business. What’s just amazing about the Wolff Center for Entrepreneurship at the U of H, they are teaching those guys how to navigate all of those things that most business owners learn the hard way. They’re coming out of college, they already have the tools. 

It’s really an amazing program. They bring in all these just heavy hitter experts to work directly with the students. They’re connecting them with VCs to help them get funding for their business ideas. So to me, I’m just lucky to be there. I’m just happy to be there to see the magic that’s happening there. What they do is they pair us mentors up with an individual student. And so our job is to just kinda be there with them as they go through the process, and support them in their unique needs, along the way. 

One of the coolest things that you get to be involved in is they go to the engineering colleges and the science colleges within the University of Houston, and they ask all the scientists and engineers (the professors), “What technologies have you developed and patented, but not yet commercialized?” Then they put together this portfolio of uncommercialized intellectual property and they bring it to these entrepreneurship students, and they let them select a technology. Basically that’s like their senior project, trying to commercialize this intellectual property that’s already been patented and everything.

So you see them go from the ground up. Okay, we’ve got this product. You don’t have any manufacturing process. We don’t have any marketing. No marketing strategy. And they have to figure all that out. My role is to just kind of help them ask the right questions.

Alex: You just got funded, what now?

Craig: Well, keeping within the sales and marketing part of that question. Let’s assume we’ve got a product to sell, or at least a target market that we’ve identified.

To me, you want to start engaging with the community, engaging with your audience. Define who your audience is, and figure out where they live, where they hang out. Start being in those places, start figuring out how to engage them in things that are interesting to them. Not necessarily engaging them in your business or your product, but just be part of their lives and becoming kind of a trusted resource to them. Branding yourself with them essentially.

Envision all the steps in the funnel and we’re going to start building them out. One layer at a time, from the top down, not from the bottom up. We’re not going to start with: ‘Who’s our first customer?’ And ‘How are we going to meet our revenue goals this month?’ We’re going to start with: ‘How do we engage the entire universe of all of our potential customers and build a relationship with them?’ And then start making it easy for them to do business with us.

Alex: Who are your mentors, and what is the best advice they’ve given you?

Craig: Howard London helped me start SalesNexus. He was kind of a consultant to me at the time. He’s part of this really cool organization here in Houston called The Silver Foxes. It’s all retired executives who mentor business owners. He was a great mentor in my early days. He really helped me navigate some of the big decisions. 

More recently, some of the folks that I’ve met at the U of H and the Center for Entrepreneurship. Dave Cook in particular, who is the executive director of the program. He’s just a genius marketer himself, and he’s just a tremendous resource. I’m always bouncing things off of him and he’s just full of great advice and always willing to help. He’s just one of those guys that you could ask to come help you change your tire and he’d be there for you. You could ask him how to start a business, or how to raise money and he’ll help you do that too.

Alex: Any sort of advice that sticks out?

Craig: We have toyed with the idea of targeting specific verticals and really going all in on a particular vertical over the years.

That’s something that I have asked a lot of people about. In fact, I forgot to mention somebody else earlier. Robin Stanaland, she’s been a mentor to me for a long time. I sat down one day and had that conversation with her about verticals. She’s really the one that helped me see the importance of seeing the overall audience and how you’re going to build that relationship with them.

It helped us realize that we were building relationships with a much broader audience of people by bringing all the expertise and experience that we have as a team in sales management and marketing and so on. And that, that was really our secret sauce. So we really doubled down on that rather than focusing in on a specific vertical, and I think that’s paid off well.