IS THE NEXT GENERATION SALES MODEL HERE? …...Management 2.0 Segmentation and Coverage 2.1 Account...
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2018 ©2018 Gainsight. All Rights Reserved. IS THE NEXT GENERATION SALES MODEL HERE? NOPE. NOT YET. The Dream of Moving Revenue Generation From Heroic Events to a Process Is Still In It’s Infancy at Most Companies J.B. Wood TSIA ©2018 Gainsight. All Rights Reserved.
Transcript of IS THE NEXT GENERATION SALES MODEL HERE? …...Management 2.0 Segmentation and Coverage 2.1 Account...
2018©2018 Gainsight. All Rights Reserved.
IS THE NEXT GENERATION SALES MODEL HERE? NOPE. NOT YET.
The Dream of Moving Revenue Generation From Heroic Events to a Process Is Still In
It’s Infancy at Most Companies J.B. Wood
TSIA
©2018 Gainsight. All Rights Reserved.
www.tsia.com
What Is The Least Innovated Business Function
Over The Last 30 Years?
SALES
www.tsia.com
Why Now?
1. We Sell Subscription, Not Assets2. What Sells Are Business Outcomes,
Not Features3. The Existence of the FULLY FORMED
Customer Success Organization
www.tsia.com
The 3 Promises of the Customer Success Function
ROI
Monetized Customer Success
Fiscal Metrics
Efficient Sales Costs
www.tsia.com
Are We Truly FULLY FORMED Customer Success Organizations Today?
ROI
Monetized Customer Success
Fiscal Metrics
Efficient Sales Costs Retention rate etc…
49% of companies doing this✓
✓?
www.tsia.com
Land Refresh
SigningDay
Year3
EscalationFor MajorAccounts
Sales: 1964 – 2010
Single Revenue Events
www.tsia.com
Sales Management Lived Horizon 1 Metrics
• # Reps• Average Deals Per Rep Per Month• Average Sales Price• Gross Margin Per Deal• Attrition Rate• Ramp Time• Win Rate• Pipeline Value• Total Quarterly Bookings
“Hit the Number!”
www.tsia.com
Average Marketing and Sales Cost
22%
www.tsia.com
Land Adopt Expand Renew
SigningDay
Year1-3
EscalationFor MajorAccounts
XaaS Company Sales: 2010 - 2018
Multiple Revenue Moments
www.tsia.com
SaaS Company Sales Management Also Living Mostly Horizon 1 Metrics
• # Reps• Average Deals Per Rep Per Month• ACV/TCV• Gross Margin Per Deal• Attrition Rate• Ramp Time• Total Monthly ARR• Pipeline Value• Renewal Rate• Total ARR
“Hit the Number!”
New
www.tsia.com
Average SaaS Marketing and Sales Cost
37%
www.tsia.com
Cost of Marketing
Cost of Sales
Cost of Customer Success
Cost of Expand
Specialists
Cost of Renewal
SpecialistsNew Cost of S&M
Old Costs…Plus New Costs
www.tsia.com
Profitability Under Pressure
The Price of Enterprise Technology
Is Going Down
A Profitable Business Model
The Cost of Selling
Enterprise Technology Is
Going UP
www.tsia.com
LAER is the Accepted New Model
A New Revenue Lifecycle
Renew
Land Adopt Expand Renew
REQUIRES A NEW SET OF METRICS, MEASURES, PROCESSES AND BEHAVIORS
CAC CEC CRC
www.tsia.com
92% of Senior-most Sales Executives Interviewed by TSIA Acknowledged a Need to Significantly Adapt Their Customer
Engagement Model In the Next 12-24 Months
That Means Only 8% Are Happy With The Way It Is Today
Q1 2018
But It’s More Talk Than Large-Scale Action
www.tsia.com
TSIA LAER Maturity Model
Current State of Sales Organizations in Leading Technology Companies
STAGE 1Transactional Sales
STAGE 2LAER Experiment
STAGE 3LAER Effective
STAGE 4LAER Efficient
www.tsia.com
TSIA LAER Maturity Model
STAGE 1Transactional Sales
STAGE 2LAER Experiment
STAGE 3LAER Effective
STAGE 4LAER Efficient
www.tsia.com
• Fewer Than 10% Of Large Tech Companies Have Moved Beyond The Experimentation Stage With A Truly New And Different Sales and Customer Success Model
• Fewer Than 20% of SaaS Companies Have S&M Costs That Are Sustainable Over the Long Term
TSIA Assertion
www.tsia.com
42%50%
17%8%
58%
25% 25%
50%
33%
8%17%
8% 8%
Offers
Segm
enta
tion
Capac
ity
Chann
el
Skills
deve
lopm
ent
Man
agem
ent d
evelo
pmen
t
Compe
nsat
ion
Opera
ting
mod
el
Sales o
pera
tions
Analyt
ics
Lead
Gen
erat
ion
Social
Med
ia
Compe
titive
Stra
tegy
Mature the LAER Model
Sales and Service Teams Able to Sell and Deliver Business OutcomesWhich Customers Get
What Experience?
Lots of Focus Areas Targeted For Performance Improvement
This Is NOT a 6 Month Exercise!
There Is Acceptance That You Can No Longer Fix Performance Just By
Hiring More People
www.tsia.com
The Current Focus of Your Sales Leadership?
HORIZON 1 HORIZON 2
Making the number
“How do we Land more new business in new logo and existing accounts?”
Account Revenue Optimization
Catch the next wave
“Customer Engagement Model has to change to optimize revenue growth over 2-3 years”
Revenue Lifecycle Management and Outcome-Based Selling
What are the hot topics for you in Product, Subscription and Services Selling?
What is of specific interest to you? (Structure, Business Case, KPIs, Functional relationships)
www.tsia.com
Who Has Responsibility For Designing the Revised Model? What Will Cause It to Move Beyond Experimentation?
What is the internal catalyst/business case that actually
forces the change?
Who has responsibility for
designing the revised model?
How do we increase and/or
upskill touchpoints without increasing
sales costs?
What are the impacts on the organizational
structure?
Who are theexperts we need and how do we integrate them?
4
• Many sales leaders too busy with Horizon 1– even at pure SaaS companies.• CRO and CCO are “SaaS-y” concepts still not truly embraced or empowered at most large
enterprise tech companies. Sales is still controlling its own siloed destiny.• Leadership teams ‘working together’ on the problems is not a strategy that is keeping up
with the challenge.
www.tsia.com
AnswerCEO
Chief Sales Officer
Chief Revenue Officer
Chief Customer Officer
Head of Services
Entire Leadership Team
Regional Leaders
Unclear Ownership
Question
Who Owns the Design of the Next Generation of Outcome-Focused Customer Engagement Model at Your Company?
www.tsia.com
Account Revenue Optimization
CustomerSuccess
Expand Selling
Services Revenue Generation
Optimize Revenue Across the Customer Lifecycle
Optimization Services Line of Business
FieldServices
Professional Services
Support Services
Education Services
Managed Services
Land Adopt Expand Renew
A New Revenue Lifecycle
TSIA’s Portfolio Framework | ARO Rationalization
www.tsia.com
Account Revenue Optimization
CustomerSuccess
Expand Selling
Services Revenue Generation
Optimize Revenue Across the Customer Lifecycle
Optimization Services Line of Business
FieldServices
Professional Services
Support Services
Education Services
Managed Services
Land Adopt Expand Renew
A New Revenue Lifecycle
TSIA’s Portfolio Framework | ARO Rationalization
XaaS Sales
TSIA Adding a 9th Research Practice to Study the Next Generation Sales Model
www.tsia.com
We Will Study 28 Sales Practices That We Think Will Change
1.0 GTM Strategy and
Financial Performance
1.1 GTM Strategy and
Goals
1.2 Sales Strategy and
Goals
1.3 Organizational
Structure
1.4 Sales Performance Management
2.0 Segmentation and Coverage
2.1 Account Segmentation
2.2 Channel Segmentation
2.3 Offer Segmentation
2.4 Buyer Personas
3.0 Selling
3.1 Supplier Led Sales
Model
3.2 Risk Assessment
for XaaS
3.3 Selling Outcomes
3.4 Selling Analytics
4.0 Account Management
4.1 LAER Processes
4.2 LAER Metrics
5.0 Sales Operations
5.1 Compensation
5.2 Forecasting
5.3 Offer Training
5.4 Talent Management
5.5 Sales Tools
6.0 Marketing Interface
6.1 Services Rollout
6.2 Customer Experience
7.0 Success and Services
Interface
7.1 Pre-Sales Roles
7.1 Pre-Sales Cost Model
7.2 Post-Sales
Interface to Sales
8.0 Partner Management
8.1 Partner Alignment and Enablement
8.2 Partner Evaluation
and Certification
8.3 Partner Conflict
Management
www.tsia.com
Sales Is ‘Next Up’ for Transformation
The Bottom Line
LAER EFFICIENT
www.tsia.com
Is Customer Success FULLY FORMED At Your Company?
ROI
Monetized Customer Success
Fiscal Metrics
Efficient Sales Costs
The 3 ROIsof Customer Success
2018©2018 Gainsight. All Rights Reserved. 2018©2018 Gainsight. All Rights Reserved.
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