Main Insight Event 2016 · PDF fileVP Product Marketing 16.10-16.30 Coffee break ... Bosch...

Main Insight Event 2016

“Driving Successful Sales In Software Companies: From Theory to Practice’’

Sales strategy, sales operations, sales improvement tools and practical case example.

Paleisstraat 6, 2514JA, Den Haag

Tel: +31 (0)70 324 3433

www.main.nl

Timetable

Chairman of the day: Pieter van Bodegraven (Partner Main Capital)

14.30-15.00 Welcoming reception

15.00-15.10 Opening Main CapitalCharly Zwemstra Managing Partner

15.10-15.40 Achieving Sales Excellence Simon Kucher & PartnersHayri Culum Sr. Director Benelux

15.40-16.10Using Sales Improvement Tools to accelerate Sales Performance

XactlyErik Charles VP Product Marketing

16.10-16.30 Coffee break

16.30-17.00Portfolio company: Selling Complex Technology

SofonJohan Wolthuis Director Sales & Marketing

17.00-17.30Scaling from 10m to 100m in revenues. Best practices in setting up efficient Sales Operations

AchieversGreg Brown Chief Revenue Officer

17.30-19.00 Networking drinks

Annual industry seminar on key industry topics:

Why Main Insight Event?

Partnerships (2014)

Marketing Automation (2015)

Sales Effectiveness (2016)

Internationalization (2011)

Delivery Models (2012)

Technology (2013)

Transfer of knowledge, network & capital

Main Capital Partners: Business Units

Founded in 2003 EUR 150 million under management

Offices The Hague and Dusseldorf

12 investment professionals

Private Equity Mezzanine finance Debt and M&A advisory

17 portfolio companies in Benelux & Germany.

Investment mode of Main Capital IV

Founded in 2014

Based in Amsterdam

6 investment professionals

Investments of around € 50 million in 10 - 15 loans in the next 2,5 years

5 Mezzanine loans provided thus far

Founded in 1997

Advises and supports management teams and entrepreneurs of SME’s

M&A, arrangement of debt/ equity, and management buy-outs

Added Value Main Capital

Growth Capital and Management Buy-outs

Focus on recurring SaaS based business models and share experience

transformation

Improve reporting & governance structure

Buy & Build strategies: Proprietary and high-quality add-on leads

Events: Main software 50, Main CTO event and Main Insight event

Large network of relations CustomersPartners

Strategic/Financial buyers

Market research and knowledge

Entry

EUR 3m - 20m revenue

Profitable

Strong management team

Strong competitive market position in growth segment

Smaller local players interested

Exit

EUR 20 - 50m revenue, also through add-ons

EBITDA margin >25%

Growth recurring revenue level

Internationalized

Improved operating processes

International strategic and financial players interested

Internationalization and partnership strategies

Bringing companies to a higher league

Main Capital Portfolio

Current portfolio companies

Former portfolio companies

Highlights since Last Main Insight Event 2015

6 new hires in PE and Mezzanine team

Main Capital Partners OrganizationStrategy and deal making activities

4 New Investments Roxit Group Ymor b+m Informatik (DE) Denit

2 Add-on Acquisitions

2 Exits

Mutual agreements on substantial International SaaS investments in June

Great proprietary dealflow in DACH and Benelux

Vision Waves to IFS Zetacom to Gilde Healthcare

Green Valley for Roxit Group Daarwin (DE) for Regas

German team in place;August 1st the office in Düsseldorf will be

operational

Launch of Main Capital V in 2017

Establish U.S. presence in 2017/2018 to support our European portfolio

companies to create access to partners and know-how for U.S. market

Interesting facts of Software Sales (1)

Field Sales 41%

Inside Sales21%

Internet Sales5%

Partner Sales 5%

Mixed 28%

Primary Mode of Distribution

Source: Pacific Crest Securities (2015)

41% of all companies deploy Field Sales as their primary model of sales

Fact 1.Primary model of Software Salesremains Field Sales

Field sales (=direct sales) remain the mostpopular way to sell software.

A mixed sales model is the second mostimportant model.

Only 5% of software companies usedchannel sales as their primary sales model.

Fact 2.Sales & Marketing is main cost driver in software companies

27% of OPEX is spend on Sales & Marketingand mainly relates to personnel.

Cost split between Sales vs Marketing is:Sales 71% and 29% Marketing.

From revenue to EBITDA: SaaS cost drivers

27% of OPEX is spend on Sales & Marketing

Sales71%

Marketing29%

COGS21%

Sales & Marketing

27%R&D 19%

General & Administrative

13%

Other Expenses

3%

EBITDA 17%

Total Cost Structure

Interesting facts of Software Sales (2)

Source: Pacific Crest Securities (2015)

Sales & Marketing

27%

Fact 3.Importance of Upselling for acceleratingrevenue growth

The larger the company, the higher thepercentage of New ACV* that comes fromUpsells

Largest companies realize >30% of new ACVfrom Upsells.

Also, fastest growing companies tend torely more on Upselling.

Fact 4.Large ACV deals have longer contract periods

Median ACV deal for all SaaS softwarecompanies is USD 21k.

Large ACV deals of 100K have contractperiods of 2-3 years and more, whichincreases the stability and valuation of thecompany significantly.

11%15% 14%

17%21%

16%

32%28%

0%

5%

10%

15%

20%

25%

30%

35%

% o

f N

e A

CV

fro

m U

pse

lls

Business Size (Revenue)

Median = 16%

*ACV = Annual Contracted Value

Fact 5 + Main Capital VisionIncreased emphasis on sales operations

KPI and data driven

Sales effectiveness tools

Timetable













www.simon-kucher.com

How to profitably grow in SaaS?

Achieving Sales Excellence

Amsterdam, May 2016

Hayri Culum

Amsterdam office

Barbara Strozzilaan 380

1083 HN Amsterdam

The Netherlands

Tel. +31 20 75312 53

[email protected]

Source: Simon-Kucher & Partners

Simon-Kucher & Partners:

Worldwide marketing, pricing and sales experts

Strategy

> 400

Sales

> 500

Marketing

> 500

Pricing

> 1,000

Growth and competitive

strategies

Product portfolio

(re-)design

Pricing excellence

Customer value management

Sales channel and sales force

optimization

Global presence

Best consultancy in marketing and sales

>1,000 projects in the last 3 years

AmsterdamBarcelona

BonnBrusselsCologne

CopenhagenFrankfurtIstanbulLondon

Luxembourg

Madrid MilanMunichParisWarsawViennaZurich

TorontoBoston

New YorkSan Francisco

São Paulo

Santiago

Dubai

Beijing

Tokyo

Singapore

Sydney

31 offices worldwide, 900 employees

Atlanta

World leader in giving

advice to companies on how

to price their products

The pricing strategy

specialists

The world’s leading

pricing consultancy

The influence of

Simon-Kucher on the

prices we pay for just about

everything is staggering

BusinessWeek The Economist

William PoundstoneThe Wall Street Journal

World leader in pricing

1 Simon-Kucher & Partners

2 Boston Consulting Group

3 McKinsey & Company

manager magazine

TopLine

Power®

Achieving Sales Excellence 12

Selected references from Simon-Kucher project experience; confidentiality agreements prevent us from naming many other major partners

We advise industry leaders from all sectors

Automotive Consumer & Retail

Alfa Romeo

Audi

BMW

Daimler

Fiat

Kia

Maserati

Michelin

Mercedes-

Benz

Porsche

Renault

Toyota

Volvo

VW

Adidas

Bol.com

Beiersdorf

Coca Cola

Ferrero

FrieslandCampina

Haribo

Henkel

MediaMarkt

Nestlé

Nikon

Office Depot

Pepsico

Warner Music

Company

Energy & Utilities Technology & Software

BP/Aral

Castrol

E.ON

Essent

EVN

Liquigas

Mainova

natGAS

Nordex

Orlen

RheinEnergie

RWE

Shell

Tank & Rast

Yello

Citrix

Fujitsu

Intel

Intuit

Kronos

Microsoft

Novell

Panasonic

Philips

RSA Security

SAP

Semikron

Sony Ericsson

TomTom

Financial Services Telecommunications & Media

Allianz

American Express

ANWB

AXA

Barclays

BNP Paribas

Citi

Credit Suisse

Deutsche Bank

GE Capital

Generali

HSBC

RBS

Virgin Money

Western Union

Betfair

Deutsche

Telekom

LinkedIn

PayPal

KPN

Skype

Sanoma Media

T-Mobile

Vodafone

The Economist

Group

Wolters Kluwer

Xbox Live

Travel & Hospitality Manufacturing & Logistics

Accor

British Airways

Center Parcs

Europcar

Hilton

Lufthansa

Navigon

Thalys

Thomas Cook

Travelport

TUI

Virgn Holidays

Bosch

Caterpillar

De Post

DHL Express

Honeywell

La Poste

Osram

Parcelforce

Siemens

Swiss Post

Tetra Pak

TNT


13


We have deep experience in (SaaS) software

Vertical software

specialists

ERP/B2B

specialistsSMB focus

Select PE/VC relationships

PE / VC relationships

Achieving Sales Excellence 14

Establish and

enhance value

selling culture,

skills and tools

Top sales excellence challenges growing SaaS players face

Markets Customers Channels

Strategy

TaskPrioritize target

markets

Define target

customers

Optimize

channel mix

Structure Processes Resources

Set-Up

Align structure

to strategy

Ensure

systematic and

consistent

execution

Optimize

resource

allocation

Customers Capabilities Governance

Execution

Enhance

customer

engagement

Develop the

sales team

further

Provide

effective

guidance

Actions

Result Optimal market

focus and

product/ service

portfolio

Optimal

segment focus

and offer

menu

Effectiveness

and efficiency

optimized

channel mix and

fencing

Optimal

organizational

alignment with

strategy and

processes

Effective and

consistent

decision making

Optimized

resource

allocation by

channel,

customer and

task

Effective

customer

relationship

management

and ROI

enhancement

Right

capabilities and

winning culture

Effective sales

guidance and

corrective action

in case of target

deviations

Create

customer

development

plans incl.

cross- and up-

selling

Build suite of

sales tools

Build and

leverage

customer

intelligence incl.

CRM tools

Define effective

training

curriculums and

career paths

Recruit the right

talent

Define optimal

sales KPIs and

set individual

targets

Establish

meaningful

sales

controlling and

reporting

Assess

structural

alternatives

to fit strategy

and capability

Optimize sales

models

according to

market profiles

Define roles &

responsibilities

Create

state-of-the-

art sales

processes

from quote to

cash

Assign clear

ownership and

ensure effective

collaboration

Provide

effective

process

support tools

Define resource

needs

Derive

necessary

skillsets /

partner

requirements

Optimize

resource

allocation by

territory /

customer

Define channel

requirements

and select the

right partners

Decide on

channel mix

and mitigate

channel

conflicts

Segment the

customer base

Assess external

opportunity and

internal

capability

Prioritize

segments

Customize

offerings to

segments

Map the

markets

Assess external

opportunity and

internal

capability

Prioritize

markets

Define offerings

Identify most

effective routes

to customer

segments

Create

state-of-the-

art sales

processes

from quote to

cash

Segment the

customer base

1 2

Optimize time

allocation

3

Create

effective

compensation

schemes


15

Achieving sales excellence as a growing SaaS player

Market segment prioritization

Packaging and offer strategy

Sales force sizing, alignment & compensation

1

2

3


16





1

2

3


17


Create meaningful segments to provide a basis for a

differentiated portfolio, sales and pricing approach

Relative importance of attribute Size of customer segment

0%

5%

10%

15%

20%

25%

30%

35%

40%

Completenessof solution

Customerservice

Integration Datasecurity

Implementation speed

Uptime Price

Want price only

Want no risk

Want it now

Want the best

% of sales

23%

9%

39%

29%

Simon-Kucher

Software Example

1


18





1

2

3


19

CIO add-on


Segment-specific packaging creates entry level

offers without sacrificing deal size

Buyer 1

Buyer 3

Buyer 2

Entry Packages Upsell Options

Package 1

Package 2

Enterprise

License

Package 3

Package 4

Package 5

+ Analytics

CIO add-on

Platform:

Basic

Module 1

Module …

Module n

Simon-Kucher

SaaS Example

2


20

Optimized portfolio structure using quantitative

research boosts footprint


Simon-Kucher

HCM SaaS Example

Results in one year

Additional 45% new

logo growth

From 400 to 1200 new

logo customers

New implementation

partners contracted due

to booming business

2


21

11$ - 0.5$

Please create your favorite pizza!

Source: Levin et al. 2002; n (group1)=59; n (group2)=56; 12 toppings available

Use vote out instead of vote in

Group 1: vote in Group 2: vote out

2.71 5.29Ø number of

ingredients

For each removed

topping

Additional toppings

$6.35 $7.65Ø price

5$ + 0.5$

2


22





1

2

3


23


Improve sales force excellence by optimizing sizing,

alignment & compensation

Sizing Structure Alignment Hiring

Skills &

training

Communication Compensation Attrition

Check if sales reps have

the right skills to achieve

sales objectives

Check if compensation

plan incites enthusiasm

and rewards sales rep

performance

Check if roles,

responsibilities and sales

goals are clearly

communicated to sales

reps

Check reasons for attrition,

and identify if high or low

achievement sales

representatives are leaving

and reasons for leaving

Check for potential

imbalances in terms of

opportunities and

workload between

territories

Check to see if sales

force is the right size to

achieve sales objectives

Check if sales force has

the right structure, roles

and responsibilities to


Check if hiring is done with

sales objectives in mind

and a detailed career path

is in place

3


24


Improve sales force excellence by optimizing…

… alignment

Identify potential imbalances

between territories

… compensation

Evaluate compensation plan

balance between motivation

and compensation

… sizing

Assess sales force size to


3

3a 3b 3c


25

Simon-Kucher sales force sizing methodology

Estimate ROI for additional sales

Assess time misallocations and

resulting time constraints

Estimate additional selling time

needed to close revenue gaps

A

C D

Assess perceived workload and

underlying reasonsB

3a



26

Output example: Many sales reps spend too

much time on non-selling activities

31%40%

57%

29%

30%

19%

40%30%

24%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Generalists Specialists 1 Specialists 2

Direct selling Indirect selling Non-selling

Time allocation according to selling and non-selling activities per sales rep type

75% = Industry

benchmark

Project Example

3a

∼1.5 months

more than

industry

average per

year



27

Simon-Kucher sales force alignment methodology

Assess territories balance in terms of

sales potential and/or workload

Assess if territories are balanced in

terms of account prioritization groups

Identify suboptimal sales reps'

locations in territories

A

C D

Compare current alignment with

optimal alignment B

3b



28

Solution example: By adding 6 new territories a

more balanced opportunity distribution is created

Current alignment (50 territories) New alignment (56 territories)

Accounts

Opportunity

Mapping

# accounts per territory:

Avg.Min. Max.

60 106 198

Range of total aggregated account

opportunity per territory:

Min:

0.69x

Max:

1.41xAvg. opp.

# accounts per territory:

Avg.Min. Max.

75 95 127

Range of total aggregated account

opportunity per territory:

Min:

0.94x

Max:

1.15xAvg. opp.

Project Example

3b



29

Simon-Kucher sales force compensation

assessment methodology

Assess compensation mix and levels

compared to best practices

Understand if reps feel motivated

towards superior performance

Identify current incentives paid for

performance vs. paid for market potential

A

C D

Understand distribution and range of

commission pay-outsB

3c



30

Depending on where a company is in the business lifecycle, different sales force considerations apply.

Start-up Decay

Sustaining

Decline

Growth

slow downGrowing

Sales force size:

Revenue

Years

Medium

territories

Large

territories

Sales force downsizingSales force upsizing

Small

territories

Quota based

commission

Commissions

paid from $1

No incentive,

part of base salary

Large

territories

Medium

territories

Single product

responsibilityMultiple product responsibility

Territory alignment:

Incentive scheme:

Product deployment:

Quota w accelerators/

decelerators

Conceptual

Sales force optimization should go hand in hand with

changes in the business lifecycle

3



31





1

2

3


32

What makes a sales excellence

project a success?


OK – Let’s wrap up with a few final tips and tricks


33


Key ingredients for a successful Sales Excellence

project

Overview

Develop a practical and ‘down to earth’ playbook

as a basis for capability development

Make it tangible and provide a playbook with practical

tools, solutions and best practices to work on daily sales

capability improvements

Co-create with sales champions

Select sales champions, to ensure we leverage the best

practices and ensure buy-in

Ensure early success stories: deliver quick wins

We need to work on early successes as a vehicle to

propagate the sales improvement

A

B

C


34


Develop a practical and ‘down to earth’ playbook

Project example

A

Detailed growth strategy

Pricing and discount structure

Differentiated sales approach

To-be sales processes

Sales capability development approach

KPI framework and incentive scheme

Detailed roll-out preparation

Based on assessment of horizontal and vertical growth

opportunities with existing and potential customers

Based on detailed simulation including escalation scheme

Based on customer segmentation with the goal to maximize

acquisition time and conversion at KAM

Validated to-be sales processes on activity level including roles

and timing

Approach for capability development of local sales organizations

KPI framework for monitoring of implemented initiatives

including variable incentive scheme for sales force

Based on prioritization of improvement initiatives including sales

training/coaching


35


Co-create with sales champions

Sales champions selection Advantages of selecting sales champions

The best practices are taken as a

basis for overall capability

development

The best practices are developed in

cooperation with the best performers

Buy-in from the organization is

eased in the process of spreading

out the resulting solutions

+

+

"WORKHORSES" "CHAMPIONS"

"SURPLUS" "TOUGH NUTS"

Have a key role in

the implementation

phase

Continue to

convince

Involved only if

necessary

Involved in the

operational

aspects of the

implementation

Leadership potential-

-

B


36


Ensure early success stories

Possible quick-win

Tool to systematically

align gut-feel

The Simon-Kucher Sales Excellence universe will be brought to the table, to benchmark

client’s performance and provide ready-to-use input for quick results

Possible quick-win

Short term sales process

improvements

Possible quick-win

Identification of white spots

for growth

Revenue growth Process improvementPricing optimization

C


37

Our most common project approaches

Determine differences in customer behaviors & key drivers of willingness-to-pay

Classify distinct and actionable segments

Design packaging, pricing, & messaging to align w/ segments

Drive conversion & upsell:

Facilitate product & needs discovery

Ease product selection

Create call to action

Utilize consumer psychology

Create structured discounting process, checks & balances

Improve value selling and negotiation skills

Design effective incentives & controls

Provide value-selling tools

Evaluate competitive positioning,

identify white spaces

Prioritize target markets &

channels

Develop new offerings

Customer Segmentation

Evaluate alternative pricing models

Identify optimal price metrics and contract structures

Test & measure acceptance of new models

Monetization / Price Model

Strategy

Online Sales Dialog

Maximize customer lifetime value

with packaging & pricing by…

Driving customer acquisition

Exploiting differences in customer needs & value

Encouraging up-sell & cross-sell

Packaging Strategy

Sales Force Effectiveness Growth Strategy

Apply learnings from >1,000 studies where multiple research methods were used to triangulate willingness-to-pay

Adapt proven structured interview and survey techniques, including tradeoff / conjoint methods

Price level optimization

(Subs, License, …)

Use systematic process to

identify opportunities to drive

profit, revenue, and sub. growth

Quantify and prioritize business

cases

Align on roadmap for tactical

implementation & value capture

Opportunity

Assessment & Roadmap

Source: Simon-Kucher & PartnersAchieving Sales Excellence

38


Any questions?


39

Timetable













©2015 Xactly Corporation. All rights reserved. 42

©2016 Xactly Corporation. All rights reserved.

Leading provider of cloud-based incentive compensation

solutions for employee and sales performance management

Company founded in 2005

More than 870 customers worldwide

More than 450 employees

Locations in San Jose, Denver, Washington D.C., UK, and

India

Recognized as a leader in Sales Performance Management by

Gartner for 3 years running

Company Overview

* As of 1/31/15

Automate Motivate Optimize

BUILDING AND MOTIVATING A MODERN SALES TEAM

Xactly Insights™: Unique and Growing Empirical Data Set

11 Yearsof Data from a

Cross Section of

Industries

Anonymized

and

Aggregated

2 BillionTransactions

per Month

$16 Billionin Incentive

Payments in the

Last Two Years

Business Case Impact

Optimize

COMPAREUse industry benchmarks to reveal the truth about how comp

plans stack up compared to peer companies. Pay

competitively!

PERFORMANCEDiscover how reps perform compared to the rest of the

industry.

ATTRACT AND RETAINLearn how incentives are tied to attracting and retaining top

sales performers.

Xactly Insights: Who is on your sales team?

Women’s average total compensation equals 83% of the men.

83%

Sales Performance

Quota attainment by women

Quota attainment by men

67%

70%

Source: Xactly Insights™Xactly Confidential Information

Xactly Corporation is not obligated to develop; and does not guarantee delivery, of any software with the features and functionality discussed in the product roadmap included herein. All future features and functionality are unspecified and delivered on a when-and-if-available basis.


Automate

MITIGATE ERRORSSignificantly reduce costly errors associated with

manual processes.

REDUCE ADMINAlleviate pressure on resource constrained

compensation team and allow them to be more

strategic.

REDUCE RISKEnable traceability, audit, forecast, accruals and single

source of truth for data.

>85% of businesses use spreadsheets or

homegrown systems to calculate incentives

$800B paid annually to sales

people in the U.S. alone

Significant error rates

associated with spreadsheets

Nearly 30 million sales people

in the U.S. and E.U.

The Current Paradigm Results In

Lost productivity due to lack

of visibility and rep shadow

accounting

Rep turnover due to lack of

trust in the system


Motivate

MOBILEKeep reps engaged with their incentives in real-time.

ALIGNMENTEnsure your incentives align with your business goals

and improve rep quota attainment.

REDUCE SHADOW ACCOUNTINGBy eliminating reps’ mistrust in their commissions

system, they can spend more time selling.

Gallup: State of the Global Workplace Report (Worldwide)

Engaged

Not Engaged

Actively Disengaged

63%

13%

24%

Gallup Global Survey of the Workplace Employee Engagement is at risk!

© 2016 Xactly. All rights reserved. Proprietary and Confidential.

Locke et al:

Incentives drove a 30% productivity increase

Stajkovic & Luthans:

Incentives drove a 17% performance increase

Condly et al:

Incentives drove a 22% gain in performance

(average of 64 studies)

MOTIVATION: INCENTIVES WORK

VARIABLE PAY AS A % OF SALARY IN THE EU

63% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55%

Industry and services

Mining and quarrying

Manufacturing

Electricity, gas and water supply

Construction

Wholesale and retail trade; Repair Services

Hotels and restaurants

Transport, storage and communication

Financial intermediation

Real estate, renting and business activities

SAAS AND SOFTWARE: HOW MUCH PAY IS AT RISK

53% 50% 52% 50%

47% 50% 48% 50%

Saas (SMB) SaaS (LE) Software (SMB) Software (LE)

Base Salary Target Variable

Provide feedback& guidance

Contests& gamification

Show them wherethey stand

MOTIVATING PERFORMANCE

GETTING STARTED ON BUILDING A COMP PLAN

Compared to our peers:

Do we attract and retain top sales talent?

Do we pay competitively?

Does our pay align with business goals?

How much do we spend to attain quota?

What percentage of our reps make quota?

Do our reps respond to SPIFs and bonuses?

Do our reps perform better or worse?

“By 2017, 15% of

organizations will use

crowdsourced benchmarks

to design their incentive

compensation plans.”

YOU NEED TO UNDERSTAND THE DEAL CYCLE

• You will see spikes in revenue for whatever the measurement period is.

• Combine monthly and quarterly goals with the annual numbers to help smooth the revenue cycle.

0%

5%

10%

15%

20%

25%

1 2 3 4 5 6 78

910

1112

RE-THINK YOUR QUOTA ATTAINMENT GOALS

65%74%

62%72%

Saas (SMB) Saas (LE) Software (SMB) Software (LE)

COSTS MONEYO v e r - C o m p l i c a t i n g

1

2

3

4

5Quota Attainment vs Measures on a plan

Team Credit ing 25% pay 20 or more

VP NA

Area Director

West

Regional

Manager West

Area DirectorEast

Regional Manager East

Acct Manager

1

Acct Manager

2

Acct Manager

3

Acct Manager

4

VP SC’s

Director

SC West

SC Manager

West

Director

SC East

SC Manager

East

SC 1 SC 2 SC 3 SC 4

COSTS MONEYO V E R C R E D I T I N G

TURNOVER IS COMING

BUILDING THE HUNTER PLAN

Conduct a salary survey to set target pay.

How much of the target pay should be variable?

Pick metrics to base rewards on

that meet corporate goals, focusing

on the most important one.

Build in accelerators to ensure continuous stretch

targets

Calculate how much you’ll spend as a % of sales if

everyone makes quota, or if half make 200% and

half make nothing.

USING FARMER’S FOR FUN AND PROFIT

Make sure you know what line items in a transaction reflect

the appropriate renewal and up-sell revenue the Farmer

owns.

Don’t assign quota based on things the Farmer

does not control. How much will the Farmer make

if the renewal rate stays the same?

What periods should you track? If all of renewals

are at year-end, a monthly quota does not make sense.

Is there room for customer abuse?!

Calculate total payouts as a percent of total renewals at

different renewal levels – worth the cost?

Incent the Right Behaviors

Tactic

al

Stra

teg

ic

“Our users love Xactly, they love the interface, they love the ability to get information on their mobile devices, and the ability to produce results with a much higher level of accuracy.”

“Now we have the ability to scale phenomenally over what we used to do, so my requirement to devote future resources to this has been incredibly minimized.”

FINAL CHECKLIST

Motivate in the now: real-time visibility and easily accessible data access.

Tailor incentives based on team roles. Balance individual rewards with team

recognition. Leverage numerous forms of variable

compensation including commissions, bonuses, MBO’s, contests, and SPIFs.

Use analytics to identify the behavior that is being “rewarded.”

Pay early, pay often, pay accurately.

Erik W. CharlesVice President, Product MarketingXactly Corporationt: 01 949 439 3555w: xactlycorp.come: [email protected]: @erikchaz

Timetable













Main Capital

Create Business Value with Complex Technology

Johan Wolthuis

Philips Healthcare Manufactures systems for

imaging, radiation oncology and patient

monitoring as well as providing information

management and resuscitation products

4000 employees and distributors use Sofon as

Global Catalogue & Quoting platform integrated

with Salesforce and SAP on Microsoft Azure

Cloud (started 2016)

About Philips Healthcare

What did we solve at Philips Healthcare

• From Products to Solution for their customers

• Flexible System to adjust to rapid changing Market

Requirements

• High quality output to Customer

• Relevant information in the right place, at the right

time to the right person

• Stable Product Catalogue for Sales, Flexible for

Supply chain, Correct for ordering from Factory

• 5 Minutes to create initial Commercial Quote

• Multi level Approval Process for technical

validation and margin control

CUSTOMER CENTRICITY IS A STRATEGY

CUSTOMER CENTRICITY AFFECTS ALL ASPECTS OF A BUSINESS

CUSTOMER CENTRICITY IS THE ULTIMATE WEAPON

TO BEAT COMPETITION

WHAT IS OUR DEFINITION OF

WINNING?

• WIN TRUST• MEET AND BEAT EXPECTATIONS

• BE IN CHARGE OF THE SALES PROCESS• SPEED UP THE SALES CYCLE

• SET THE DECISION MAKING CRITERIA• OUR USP’S IN THE LEAD

LISTENING IS EASY

…IF YOU KNOW WHAT YOU WANT TO FIND OUT

Start with a clean Sofon Business Model

Result the Sofon Business Model

PROBLEMATICIMPORTANT

Opportunities

Winners

Non-issues

Expected

CONCLUSION ONE

NOT DELIVERING AN EXPECTEDPISSES OFFA CUSTOMER

CONCLUSION TWO

ONE CAN LOSE A CASEBY NOT FULFILLING ONE SINGLE EXPECTED

CONCLUSION THREE


ONE CAN KILL A COMPETITORBY LEAVING ANUNEXPECTED EXPECTED

CONCLUSION FOUR


ONE CANNOT LEAVETIME BOMBS IF ONEDOES NOT HAVE THE GUTSTO GO IN FIRST

CONCLUSION FIVE

LEADERS GO FIRST


THINK ABOUTTURNING

USP’S INTOTIME BOMBSFOR COMPETITION

THERE IS NO EXCUSE FOR BEING BORING

NON-ISSUES CAN KILL A DEAL

IT IS ALL ABOUT PSYCHOLOGY

GRABTHEGOLDFISH

People will not read all the tekst that is on your slides. They will get lost andyou will loose their attentions and as such you will loose them. You are notpresentening to impress people with a few hundred words on each and everyslide. When people want to read, they will take a book, I guess. What is yourpupose? Do you want your audience to read each and every word on yourslide? Than waht do you do? Shut up? How long? Do you wait for the signs? Or do you read each and every word yourself? What do you try to tell youraudience by doing so? That you think that they can not read? Do you want them to think that they are idiots? Maybe you may consider that pictures maysay more than a thousand words? And that by speaking he words that are noton the slide you might have a conversation? Talking about conversations? Do you talk to your friends making use of long and extensive tekst that you have written on a piece of paper to help the conversation? I cannot believe that. We simply cannot listen and read at the same time. Make a choice. No, you do not have to make a choice. There is no choice. You are presenting. That is, bydefinition: speaking. Hence, your audience is there to listen. Audience. Youcan highlight your message by a few words, not necessarely those that youspeak, and you can illustrate the things you are talking about using pictures, but please do ever never write too many wordson each slide unless you want to make the simple statement that too many words never do whatever youwanted to prove. Like we do on this slide. By the way there is no bottle of champagne waiting for those that are able to read this text while listening towhat I am saying as this is not a contest.

HELP THEM SEE WHAT YOU ARE SAYING

NEVERCOMPLICATE

AVOID TOO MANY OPTIONS

• Customer centricity• Disruptiveness• Define the winners• Dialogue• Support the customer in

buying, not selling

Timetable













Change The Way

The World Works

Scaling from 10M to 100M

Greg Brown

Chief Revenue Officer

Agenda

Background

Organization Structure

Sales Leadership

Field Operations (Sales Ops)

– Customer Retention

– Lead Generation

– Compensation

– Forecasting

– Reporting

– Sales Productivity Tools

My Background

• Professional Highlights

– 16 years of Senior Sales

leadership in SaaS companies

– 2 Acquisitions – WebEx & Achievers

– Scaling is where my expertise

and passion lies

• Personal Highlights

– Married 10 years, 2 sons

– Lived in Netherlands for 3 years

– Collegiate athlete

Employee Recognition Platform (SaaS)

• Sequoia Funded

• Acquired by Blackhawk in June 2015

• Approaching 100M in revenue

• 220 employees (Sales/Services - 90 emp.)

• Offices in North America / UK

• Sell to mid-to-large enterprises (1000+ emp.)

• Average Annual Contract Value

– Mid-market - $225,000

– Enterprise - $540,000

Direct

Inside Sales

Customer

Success

EMEA /APAC

Channel

Integrators

Outsource

Emerging

Markets

Platform

Ecosystem

Core Market Focus Geographic Expansion Global Coverage

Go-To-Market Evolution

Organizational Evolution

Get Off The Ground

Cover The Market

Align to Client Drivers

Establish foundation

Validate Product/Mkt fit

2-3 self-sustaining reps

1st Line build out

Rapid sales deployment

Territory & Account

Customer Success

Develop Partner Ecosystem

Install v New

Small v Large

Emerging markets

Vertical specialization

• Never stretch 1st line span of control – critical to scale

• Establish Customer Success team early….retention is imperative

• Global standards critical, even as you scale into emerging markets

• Ongoing training and development is key

Sales/Services Organization Structure

Solutions Consultants

Sales Development

Account

Executives

Professional

Services

Channels /

Alliances

Customer Success

Managers

1st Line Management

2nd Line Management

Field Operations

Americas EMEA APAC LTAM

Organization Chart

CRO

VP Sales

(West)

VP Sales

(East)

VP Professional

Services

VP Customer

Success

Director

Sales Development

Senior Director

Alliances

Director Field

Operations

8 Sales Reps 8 Sales Reps 2 Managers

13 Employees

5 Managers

28 Employees

8 Reps3 Solutions

Consultants

5 Operations

Staff

Core Tenants in Sales Leadership

• Clear vision and strategy

• Create a “team-first” culture

• Pay for performance

• Right People on the Bus

Critical Traits:

- Drive

- Curiosity

- Integrity

- Track record of excellence

o Business

o Life (Sports)

- Likeability

- Compassion

Staffing Ratios

Varies based on Deal Sizes and Lifecycle Stage

Achievers Target Ratios

Job Function Ratio

1st Line Sales/CS Managers 1 to every 7 sales reps

2nd Line Sales/CS Managers 1 to every 5 1st line managers

Channel Reps 1 to every 15 sales reps

Sales Development 1 to every 2 sales reps

Customer Success (Acct Management) 1 to every 10 accounts

Solutions Consultants 1 to every 5 sales reps

Professional Services 1 to every 7 implementation reps

Sales/Services Ops 5 to support 90 employees

Sales Capacity Model

Key Model Assumptions

Assumption Description

Ramp 6-to-9-month Ramp Term

Employee Attrition 20% Annual Attrition Rate

Attainment Ramp 0-90 Days (0%) 90-180 Days (25%) 180 – up (100%)

Customer Retention 5% Annual Churn Rate / 2.5 yrs. average contract length

Quota per Position Enterprise. = ($1.2-1.7M), Mid-Market ($700k-1M)

Increase in Quota 5% Annual Increase in Quota

International Expansion NA-East/West/Central, EMEA, APAC, LATAM

Analyze performance and test your assumptions:

Example (deal velocity):

Examine the period of time

deals spend in each stage

of pipeline

Example (performance):

Analyze the conversion

percentage of your high

and low performing reps

Example (customer/emp.

retention): Track turnover

rates and lost logos

• Planning

• Forecast & Pipeline

Mgmt.

• Commissions, Quotas,

Account & Territory

deployment ongoing

• 1st line support to Sales

• Complex deal structuring

• Deal approval

• Non-standard

evaluations / margin

analysis

• ROI Support

• Tied heavily to CRO,

CFO, Legal

• Analytics tools

• Standard field reporting

• Sales analysis

• Pipeline, White Space,

Hiring, Productivity

• Sales Planning

• Finance / FP&A

alignment

• Lead to Opportunity

• Process & tools

• Campaign effectiveness

• Sales execution

Operations Deal Structuring Sales Analytics Demand / Inside

Enablement Renewals Operations Quote / Order Management

• Sales Foundation / On Boarding

• Sales Methodology & Process

• On-going talent development

• E-Learning / Curriculum

• Field communications

• Leadership Development

• Renewal management

• Risk analysis

• Quotation, negotiation support

• Process, contract administration

• ‘Quote To Provisioning’

• Quotation process & systems

• Order Management

Field Operations (Sales Ops)

Critical Function - Gets More Complex as You Scale

Data from Field Ops Fuels Decisions

• Inside Sales productivity

– Meetings → Pipeline → Closed Business

– Calls/Emails

• % Sales by day of month/quarter

• % Reps achieving goal

• Pipeline velocity (stage duration)

• Lead-to-Opportunity conversion ratios

• Pipeline coverage ratios

• % New Business v. Upsell

• Customer Retention

Churn’s Impact on Revenue Growth

Hypothetical SaaS Company

• $50k in MRR

• 50 customers at $1k ARR each• $1250 in CAC, Sales Efficiency of 0.8

• Growing 15% m/m

Sales and Marketing Spend Required to Double Revenue

Lead Generation

Key Performance Metrics for Sales Development Team

Rank NameMeetings

Booked

Meetings

Completed

Opportunities

Created

ACV$ in Pipe

from SDR

Meetings

1 SDR A 45 39 22 $8.8M

2 SDR B 43 37 20 $8.1M

3 SDR C 39 33 18 $7.2M

4 SDR D 38 30 15 $6.3M

5 SDR E 31 26 12 $4.8M

SDR Goals:

• Meetings Completed – 34/quarter (40% of variable)

• Opportunities Created – 17/quarter (60% of variable)

Marketing – responsible for 65% of leads

Sales – responsible for 35% of leads

Sales Compensation

Drivers of the Business

Quota Set expectations based on title

Draws Provide early relief; motivation

OTE Set based on position; equal to base pay

Rates & Accelerators OTE/Quota; accelerator/decelerator model

Fast Starts Speed up productivity; incent early deals

New Logos Increase footprint; award the “Hunters”

Large Deals Drive large transactions; create patient reps

Multi-Year Agreements Improves retention and increases predictability

Multi-Year Payments Helps cash flow in early stages of growth

Selling At/Near List Implement Grants of Authority; sell on value

Services Bookings Expand portfolio; drive additional revenue resources

Payout Rates

No Cap on Commission!

0 - 60% of Annual Quota attainment = .50

61 - 80% of Annual Quota attainment = .80

81 - 100% of Annual Quota attainment = 1.00

101% - 125% of Annual Quota attainment = 1.25

126% - 150% of Annual Quota attainment = 1.50

151%+ of Annual Quota attainment = 1.75

• Trued up as the Salesperson reaches a new tier up to 100%

• Accelerators only apply to business closed above 100% of Quota

• Commissions paid monthly

Forecast Discipline

Productivity Technologies

• Salesforce

- Sales Cloud (CRM)

- Service Cloud (Customer Services / Support)

• InsideView (Sales Prospecting)

• LinkedIn Sales Navigator (Sales Prospecting)

• Outreach i.o. (Sales Prospecting)

• Marketo (Marketing Automation)

• Litmus (Learning Management – Customer Training)

• Exactly (Compensation)

• Birst (Analytics)

• Clarizen (Project Management)

• Netsuite (Finance)

Key Take-Away’s

• Start with 2-3 Entrepreneurial Sales Reps

• 1st line Management is Critical (don’t stretch them)

• Hire Customer Success early

• Invest in Sales Operations

• Pay for Performance (no cap on commission)

• Leverage Technology to Drive Productivity

Thank You

Q&A

Appendix

Weighted Forecast Approach

Example: $100K ACV opportunity with ABC company Unweighted Weighted

Stage 0 (0%) Qualify $100K $-

Stage 1 (20%) Teach $100K $20,000

Stage 2 (40%) Tailor $100K $40,000

Stage 3 (60%) Validate $100K $60,000

Stage 4 (80%) Justify $100K $80,000

Stage 5 (90%) Contract $100K $90,000

Stage 6 (100%) Closed – Won $100K $100,000

Stage 7 (0%) Closed – Lost $100K $-

Stage 8 (0%) Closed – No Decision $100K $-

Pipeline Coverage Goals:

• Total Pipeline – 3x plan

• Weighted Pipeline – 1.2-1.5x plan

Consistently track days in each stage to uncover velocity issues

Forecast Stage Weighting Description Milestones Required to Move to Next Stage

1 Qualify (Lead) 0% A suspect opportunity uncovered by MKTG,

SDR or Sales Rep. Possible interest but not

qualified or accepted.

• Meeting with prospect set by SDR

• SDR to create opportunity

• AE has initial call and qualifies.

2 Teach (Educate) 20% Educate the customer by providing unique

perspective using customer stories. Shape

customers thinking about their needs.

• AE defines evaluation process

• Determines key business drivers

3 Tailor (Demo) 40% Sales team provides a demo to influencers

and/or decision makers. Tailor for resonance.

• Champion confirms budget and need.

• Buying/decision process confirmed

• Business case quantified

4 Validate (Vendor

of choice)

60% Been down selected to final group of vendors

being considered.

• Implementation Date confirmed

• Business Case validated

• Verbal commitment from executive

• Contract review meeting scheduled

5 Justify (Verbal) 80% Verbally agreed to business terms. Moving to

legal review. Decision is final and no risk that

the deal will be closed. Implementation and

Security review process initiated.

• Completed implementation meeting

• Contract signoff process confirmed

• Security review complete

• Redlines received and no show stoppers

6 Contract

(Redlines)

90% Legal redlines received and do not see any

major issues. ProServ has met with customer

and signed off on implementation

requirements and schedule.

• Implementation team assigned and

schedule confirmed

• Contract signed

7 Closed Won 100% Contract is signed and all paperwork

submitted.

• Agreement and order submitted to Sales

Ops and signed by Finance

8 Closed Lost 0% Lost the deal to a competitor • Document reason and competitor

9 Closed

No Decision

0% Deal has died. Customer has decided to stay

with the status quo.

• Document reason

Performance Metrics Q1-15 Q2-15 Q3-15 Q4-15 Q1-16

Total Contract Value Attainment

Total Managed (ACV, Renewal, PS)

Net New ACV Attainment

Sales Quota Achievement

Q/Q Growth

Y/Y Growth

Cumulative Total Customers (Net)

New Customers

Competitive Win Rate

ACV Existing Customer % to Net New

Cumulative ACV Renewal Attainment

Renewal %

Churned Customers

Sales Reps On-Board

Average Productivity per Sales Rep

Sales Rep Annualized Attrition Rate

Total Annualized Attrition Rate

CAC Ratio (Customer Acquisition Cost)

Gross Margin

Timetable













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