#013 Scaling Sales Success with Henning Schwinum
Unleashing Growth with Fractional Sales Leadership
Guest & Host
Henning Schwinum & Steven Morell
Welcome to Speak Revenue, the podcast where we emphasize that revenue is not just a goal; it's a result. In this show, we shift our focus from the output to the inputs. We engage in conversations with sales leaders and entrepreneurs about their remarkable journeys. Our mission? To uncover the true root causes of success. In this episode of Speak Revenue, host Steven Morell dives deep into the world of scaling sales success with his guest, Henning Schwinum. Henning, the founder of Vendufx, shares his insights and expertise in the realm of fractional sales leadership. Together, they explore the challenges founders face when it comes to sales, the critical role of fractional executives, and the art of matching the right talent with the right opportunity. Discover how Henning's unique approach and his perfect match system are helping companies achieve their revenue goals. If you're a founder looking to scale your sales efforts or interested in the world of fractional leadership, this episode is a must-listen.
October 5th, 2023
Steven Morell: Welcome to our new episode of Speak Revenue. Remember, revenue is not a goal. It's a result, but a result of what In this show, we turn our eyes from the output towards the input. We speak with sales and revenue leaders and entrepreneurs about their journeys. Join us on our quest to uncover and learn the root causes of success. Let's unpack what works for them and what didn't. Today with my guest:Henning Schwinum, I'm so happy to have you on my show. Thanks for coming.
Henning Schwinum: Thank you, Steven, for having me. Pleasure to be here.
Steven Morell: It's an honor we know each other from multiple occasions. Not everybody in my audience knows you just yet. We want to change this real quick, threefold question. Who are you? What do you do? For whom do you do this? And. Why are you so successful?
Henning Schwinum: Let's start with the last part that I often say that's in the eye of the beholder. That's really not for me to judge. People think of themselves as successful all the time. But let's start at the beginning. I'm Henning Shino. I live in California on the central coast. I started a business called Vendux about four years ago. And our job is to bring sales leadership into companies who have a need for that particular service, for that particular talent. And while we do some recruiting, executive recruiting as well, most of our assignments are fractional sales leadership placements, where we bring in a fractional sales leader. That business has grown over the last four years. And part of why I think I'm successful is the fact that I bring sales leadership experience to the table. I've done sales, I've had sales leadership roles for the last 25 years, and while I am, I. Have while I continue to sell. That's what I'm doing today. I'm working with both sales leaders and founders every day in bringing the right people together to create success. And I believe the fact that I am a sales leadership practitioner helps me in that particular role.
Steven Morell: So it's a little bit, you ate so much of your own dog food that now you know how it's supposed to taste.
Henning Schwinum: I know enough to ask the right questions. The thing about sales and sales leadership to me is that it's different. For different types of products in different markets. So in my own career I've had like most sales leaders exposure to a couple of those scenarios. I started selling chemicals in the US then I sold them. Professional services globally, then I sold SaaS globally and now I'm selling recruiting or executive placement services in the us.
Steven Morell: Clearly been the block. Clearly the block. Describe to me how you pick your clients today? We always try to be very tactical and hands-on in this podcast. You place executive sales leaders in executive roles, this is . For me, one of the most complex business models there is because you have a two-sided marketplace, you need great executives that you can place and you need to have great companies with great executive roles where you can place them in. So how do you get started?
Henning Schwinum: It's a chicken and egg question, and you obviously start with building a roster of executives that was our starting point. Four years ago. We didn't start with an assignment. We started by contacting fractional executives that are out there and adding them to our roster. And that's what you do. By managing expectations. Every executive that joined back in August or September of 2019 knew that we were just getting out of the blocks and that they shouldn't be expecting our call for an assignment right away. And, once we have built a roster, we then turn around and start pursuing clients and building opportunities. And ever since it has been something that has driven in balance over the years. At this point, today we have over 650 executives pre-vetted on the roster. So for us at this point actively Engaging and adding to that roster is something that we're no longer doing. We're getting most of our new executives through referrals, through introductions, through the web, through communities. The harder part is finding assignment opportunities, selling the fractional sales leadership placement. That is definitely the harder job at hand.
Steven Morell: How do you do this? Who are you, I, I cannot even start to think . Who do you talk to? The CEOs?
Henning Schwinum: First of all, it is always the founder, owner or CEO of a business that makes a decision about bringing in a senior executive to lead the sales or commercialization efforts of a company. The question is, do you cold call? Do you call up every CEO in the US and you say, Hey, Do you need a fractional sales leader? I don't think that's how it works, or at least in my experience, that is not a winning tactic in sales because I. For one, you don't know if there is even a need or even a problem on the sales side. And secondly, the fractional model is a particular model that applies at a time when the full-time resource is either not needed or cannot be afforded. So we're talking Now, we're narrowing the ICP to smaller clients companies between zero and maybe 30 or 40 million in revenue. That's our target audience and
Steven Morell: That's a wide range having zero or 40 million. I think most listeners who don't have 40 million but are closer to zero can relate. That's a wide range. What does that mean in maturity? Is this? Pre-revenue pre-pro. Market fit. Seed series A. Where is your sweet spot here?
Henning Schwinum: It goes all the way to a late series A, maybe an early series B. Once an AVC or private equity financed startup gets to a full series B, they have shown the ability to scale. They have a team in place, they have a full-time sales leader in place. What, what needs to happen when you, when I say I target zero to 40 million, is you have to segment it out because a company that has 30 or 40 million in revenue for them, our executive is not the first one that they bring in. It's not the one that takes over from the founder at in. In those scenarios, they've built a successful business, but often now they're branching out and they're building a new line of business. We have a great example where an environmental consulting company, Developed a SaaS product and now needed somebody to lead those SaaS sales efforts with the expertise. The other scenario is one where it's a. Where we're facing a founder led sales effort. Either it is the founder truly selling him or herself, or it is a founder leading a small sales team. And then we bring in a fractional sales leader, and that individual is often the first of their kind. The first. Professionals coming in and beginning to build out those efforts with the mission to build upon what's there and create a scalable model, a playbook, a team that can truly scale the business.
Steven Morell: Now hands on. How do I, it sounds to me like this is a timing problem. You need to find, it's clear who you need to talk to, but you need to talk to them at the right moment when they realize, let's talk about founder sales, when they realize my amateurishness. Founders sales early motions are coming to, are reaching a maximum of capacity. Now I need a pro to step in and at least coach me what to do differently. How do you filter I'm thinking like ZoomInfo, Apollo, how do you filter for this moment? What are the signals?
Henning Schwinum: Yeah, so we've experimented quite a bit with signals or triggers for this, right? Is. An investment, a trigger. When a company receives seed funding or series A funding, is that a trigger? Is the fact that they put a posting out and say we're looking for a VP of sales, is that a trigger? Is the fact that they fire people, that they let people go? Is that a trigger? Or, speaking of ZoomInfo is the fact that a founder searches on Google and says, my sales team sucks. What should I do? Is that a trigger? So we've found that in some instances they are triggers, but it's too small a number to really base a. Go to market effort on one or several of those triggers. So our strategy has been to use content marketing to founders. So we're connecting directly to a lot of founders. I'm connected on LinkedIn to 21,000 individuals. At this point, probably 15 to 18,000 founders. We have a mailing list for a weekly newsletter that is 47,000. People are strong, most of them are founders, so we continuously feed content.
Steven Morell: How did you… I'm gonna interrupt you because this is very interesting. How did you build a list of 47,000 founders and e and equals?
Henning Schwinum: That's a great question. The best answer is a lot of scrambling and the fact that I'm a founder myself, right? I'm not a sales rep or an AE connecting with a founder. I'm a founder and. All my outreach is, Hey, I'm Henning. I'm a founder. I'd love to connect with you, and I'm not trying to sell them anything. At that point, I'm merely trying to connect. And we do that on LinkedIn, through email, through networking, through events, through virtual and in-person events. Networking groups. All of these channels give us an opportunity to connect to founders. And it's never about selling anything. It's always about creating a founder to founder connection. And even the content that we send out isn't content that is meant to sell. We're not saying, Hey, have you thought about a fractional executive? What we're doing is we're feeding content about best practices in sales, best practices in leadership. And we talk a little bit about the advantages of the fractional model as a whole, not about us as Ven as a provider. And those messages seem to resonate because as a result, most of our business is inbound. We feed content out and then we get contacted and quite literally there are founders who come and say, Henning, I've been on your mailing list and reading your newsletter for the last year. Thank you. Valuable content, I think you can help us.
Steven Morell: Yes. Yes. Somebody told me a while ago, elite Magnet is a complete solution to a very narrow prob problem. And that resonated with me because I was thinking about how gong approached that. We all know Gong is a software that records . Zoom meetings and then analyze the meeting. Now, if you're a sales leader and your calendars are empty, What do you need to go for? You have a different problem. So what they basically did is they flooded the market with all kinds of tools called email templates, called calling templates. Whatever helps you to fill your calendar because once you have filled calendars, then you need to analyze conversations. And it seems to me that your newsletter It's doing the same thing. It's educating and helping your founders to even get into a position where, BA now I'm here. Now I need a sales leader. Let's call Henning. He got me here.
Henning Schwinum: Yeah, and let me piggyback on the phrase you Yeah, used earlier, right? A narrow problem because that's exactly what it is. It has to be a founder, owner, or CEO with a problem in sales that is willing to admit to it and willing to do something about it. Because if they are not interested or don't even recognize the problem, then there's nothing I can do. They would not consider bringing in additional talent or new skills by way of a fractional executive.
Steven Morell: Talk to me. Real quick, just an overview. It seems you are basing your approach heavily on producing quality content, the newsletter. You mentioned LinkedIn and I, I know that you're posting quality content to LinkedIn. How do you manage the content production process? . D And what is the weight, how much work goes into the newsletter and how much work goes into LinkedIn?
Henning Schwinum: So the, there is repurposing of content, so between LinkedIn and the newsletter and a couple of other places like on our website, we share the content or we repurpose the content. So as far as content creation goes it is down to Maybe three pieces of content a week that we need to create. There is myself who's engaged with this. We had over the years marketing support, marketing interns, helping with that. My business partner, Andrew Miller and my co-founder Tim Kelly, they're both content producers as well. And then we invite others. In the industry to also share their content on our platform as, as far as it's valuable to our target audience. And so probably once or twice a month we have guest authors that we feature.
Steven Morell: Yeah, that makes a lot of sense. Now, let's, and that, I think that paints for the listeners and the viewers a pretty good picture of how you get the one side of the market. Now give us a better understanding of how you identify ? Intro and place candidates into those empty seats.
Henning Schwinum: I really appreciate that question because that to me is the heart And the key to a successful engagement and to creating value for clients. It is not about bringing in someone with a prescribed method. It is not about bringing someone in that has been a VP of sales somewhere. It's truly about identifying. Someone that could raise their hand and say, I've done exactly before, what you founders are now setting out to accomplish. Let's paint a picture here. It's a founder who's done a few sales himself, but now needs to build a sales team at a million dollars. But they don't really have a process or a playbook or a tech stack. Their messaging is really Dr. It's founder messaging, it's not sales rep messaging. And so they really need somebody to come in and build out this whole ecosystem. And then you have circumstances that I would label that as What makes someone like that and it's, having done this before, grown a business from a million to whatever the goal is, 3 million, 5 million writing a playbook for a business like that, having sold the same kind of product. I think that's important. I wouldn't stand here and say I'm an expert in selling CPG products through retail. That's not my forte. I've never done that before. But if you ask me about selling SaaS or professional services, I can talk about that. 'cause that's, I've done that before. So you create a list or We create a list of criteria. That is all asking the question, what will make somebody in this scenario successful? The criteria That I try to avoid is something that you find often in job descriptions, which is to be a team player rockstar. A team. These are meaningless labels that you won't find anybody saying hey, I team sucks and I'm a B player. Nobody says that about themselves, so it's meaningless to ask for it. I want tangible, measurable criteria. And then we go and take these criteria and use a piece of software that we've built and match it against our roster. And our roster is pre-vetted. We've onboarded every single one of them in a conversation. We know a great deal about them. We've uncovered in detail their contribution in the different roles that they've had. And all of it leads us, leads our software then to identify really the one, maybe the two executives that, that we call a perfect match against those criteria. They check all the boxes. We make sure that they're available, that they're interested in this role. We make the introduction and in an ideal state, when the company moves fast and the founder moves fast, within a week or two, that executive can start in the role. And that's our process. We call it the perfect match system. And it's centered around a piece of software we developed. And white glove service on both sides. I don't believe that you fill executive roles by going to an online marketplace and filtering through people there, or some of the other methods that are out there. I believe you do need to have white glove service on the executive side and on the client side and to the client side. One quick note, because of The state of mind that clients have when they come to us. When they have a problem in sales, they want to do something about it. are not necessarily thinking about bringing in a fractional executive. They're just thinking about finding a solution to their problem. And part of what we do on white glove on that side is to scope the assignment and to work with the client on what would Success looks like and how can a fraction executive achieve success in that role?
Steven Morell: Let me ask you, give us an example, illustrate this a little bit for the audience. What does such a problem look like? It sounds like they come up with a problem and then by trying to solve it, they learn, I need a fractional, or I need a VP sales, or I need a CRO or something.
Henning Schwinum: Yeah.
Steven Morell: Describe that, that discovery journey for us.
Henning Schwinum: Yeah. So the problem itself can be different, there are different variations. There are founders who say, I've never done this before. I need somebody, I need a commercial Co-Founder, Somebody with that expertise. Then you have founders and we encounter founders who have hired and fired reps before and at some point they realize it's not just the reps. I and I'm Feel very strongly about the fact that every rep that gets hired and fired isn't necessarily a rep problem. It's a leadership problem. Because guess who, who, interviewed, who hired, who trained, who coached that individual. And it's often the lack of structure, the lack of a process of proper messaging that makes a sales rep unsuccessful in addition to unreasonable expectations. Founders realize that and they need the professional to help them with that in that scenario. And then we have founders who have a sales team that has gotten them to a certain revenue level, but now there are plateauing and they're realizing that they need a new skill set to come in to help those reps advance, often You can sell the first couple of iterations of your product or win the first couple of clients by virtue of passion by virtue of being persistent, by virtue of being new and catching the early adopters. But if you want broader adoption and larger sales, it has to be a truly scalable process. And so the executive that comes into a scenario like this, Is one that also needs to understand how to devise a process and a playbook that is successful doing it. But they also need to know how to coach reps. Sometimes coach them out and bring new ones in, but coach those reps. And we've done placements, for example, where founders realized that their team didn't have the right skills in doing enterprise type sales. They didn't know how to manage over 12 months. 10 different contacts and 10 different conversations where it's never about asking for the sale. It's always about asking what's the next step? Who else do I need to talk to? Very, so that's a particular skill set that…
Steven Morell: Let me ask you, your company has been around for four years. I heard you've got roughly 600 people on your roster. How many placements did you do in the ballpark in those four years? That?
Henning Schwinum: I do, and at the same time, the more important number for me so you know, what is a KPI for me as the owner of Vendux is how many assignments do we run actively today? Because the way our business model works, only those are generating revenue today. We're not…
Steven Morell: So how many are you running?
Henning Schwinum: Like an exec.? Now we're running 22 or 23 assignments with executives.
Steven Morell: That's a lot. That at least sounds like a lot of parallel moving parts. Let me ask you something that I ask every guest on my show. I. If you could send a message with my time machine, a postcard to the five years younger handing, and you can only write on it hanging, don't do this one thing. What would be the thing that you would warn your younger self of not doing or doing totally different.
Henning Schwinum: The thing that I would write down for me is And five years ago is a good timeframe to do something new sooner. Do not stick around too long in something that is existing. And so looking, and that is true for My, myself five years ago, but really my entire career I've had what I would label a pretty stable career with, 15 years in one company, 11 in the next six in the next, and now four with this venture and it in each case, looking back at it, I should have left sooner. I should have said, I've done my duties here, I wanna move on. And I say this because I deal with a lot of executives in their careers as I place them into assignments. And I find that a lot of the executives have a tremendous variety of experiences. whereas mine is limited to four companies, and I wish I would've made the move sooner. It would've given me a little broader experience. Doesn't know, doesn't mean I would've been better at what I'm doing today, but I certainly would've had a broader skill set and a broader set of experience to look back to.
Steven Morell: Now you will be surprised. That's actually a time travel postcard. I'm not delivering for the first time. In different words, in a little bit different settings, but it seems to me that's a typical regret of successful entrepreneurs that arrive at a point where they think, I could have been successful earlier if I just had, would have dared to do this. That's a great sign. If that's the postcard. You're doing great. Alright, everyone, that brings us to the end of this episode of Speak Revenue. I want to thank our guest heading for joining us today and sharing his wonderful and valuable insights. A huge shout out to all our listeners. Your support means the world to us. Please remember to check our website: speakrevenue.com for a full transcript and additional resources. And if you enjoyed the show, please leave us a review on Apple Podcast, Google podcast, or wherever you go for your listening needs. It really helps to get the words out. Also follow us on LinkedIn, Instagram, and YouTube. We'll be back soon with another great guest. Until then, stay curious, keep listening, and stay safe. See you soon. Thanks.