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okay so SAS is boats a growing sector and an increasingly competitive sector developing and implementing an effective sales strategy is crucial for success a focus on developing relationships rather than simply selling a product is pivotal for Annie says SAS company let's learn how to build a successful sales approach for your SAS business in conversation with Ron Miller of TechCrunch please welcome the chief marketing officer of CommVault Chris repeal and the founder of yes were Matti bellows thank you come on [Music] you forgetting how bright those lights are man good afternoon everyone I'm Ron Miller I write about the enterprise for TechCrunch and we're gonna talk about sass and sales today so as you walk as you probably know assess change the way we think about buying and selling software instead of a license we buy subscriptions and this model brings with it an ability to opt out of a deal which is a pretty powerful thing and that's changing the relationship between buyer and seller forcing more of a partnership it means company and customer have to work more closely together instead of dictating or even bullying the customer into deals they may not need or want it also has implications for the way you compensate the salespeople so how do you sell in this in this new world and why is it different that's what we're going to talk about here today I'm gonna let these two guys very briefly introduce themselves and then we'll jump into some questions when it's tech Chris okay sure so hi everybody I'm Chris Powell I'm from combo I'm sir the the old company in the group it's 20 years data software company and we do working with companies of all sizes really to work through backup and recovery challenges policy management challenges and then bring all the data sources together to serve them up for different needs I'm Matthew bellows I'm the founder of yes we're any yes we're users out there yeah thank you yes where is software for sales people we help sales people communicate better with customers and prospects and we've been doing this for about eight years I started as a SAS business and still are so let's get started I interviewed Salesforce co-ceo Keith block a couple of years ago and he had this to say about the SAS model and other companies who are putting the perpetual license world they can sell a lot of software up front charge maintenance and you don't get a lot of innovation for that and the risk is really on the customer whereas in our model it's a joint success model so how does this play out for your companies and you know SAS in general and how things are so you want to start crystal you want to start Mathieu I mean I think that's a good characterization of the partnership between the customer the prospect there's not only just the business model which is changing the relationship between the salesperson and the prospect but also the fact that information is freely available that RIT your reputation sticks we view much longer now all pushes towards more power to the customer and therefore more importance for a salesperson to be authentic and genuine and honest and a long-term partner for success as opposed to a transactional sort of guy and I think for us we we look at SAS as an opportunity to really fundamentally change the game we're our kind of software to has tend to lend itself to more of a technical sale and then shifting to a SAS model for us is something that allows us to focus more on the delivery of it the what is the outcome the customers are looking to get because you're no longer delivering a product you're delivering a service and it's a it's a great shift for our company in terms of the way that we're working with customers all over the world because it's so many of the implementations would be a little bit victim to the complexities of the actual implementation so working with customers now more about what the outcomes are and and as the updates are coming they're much more readily available to them as you find yourself particularly your company in this hybrid between you know license software and subscription software how does that what kind of impact does that have on the sales team and how you compensate them and how they sell and it doesn't require like a training level that if they were used to selling the license how does that change it's a complete shift the the sales organization that the first question I think we had to ask ourselves and it's it's still a work in progress is sort of what what do you what are you looking for in your sales organization what are you looking for in an ideal salesperson and it's a very different situation often versus someone who is selling perpetual licenses and getting into a situation where you're now selling a service so we we sort of have discussions internally about whether it's experience or grit you know what do you what are you looking for and what we're finding is that grit is incredibly valuable and perhaps more valuable than experience experience comes with a bit of baggage and you want the grit of someone who comes in there willing they know they're willing to do what it takes they've got the right EQ versus someone who's coming in doing more of a technical sale and they understand the art of communicating and that that doesn't necessarily need to come with a lot of experience if those are the key things we need to get so I mean you obviously you've been selling fast from the beginning but we were talking about it earlier this there was a story in the New York Times in 2013 this was a long time ago now but when he was an early stage startup he was having trouble with sales which is kind of ironic since he's selling sales success software so can you talk a little bit about how like building that sales team and what kind of things and challenges you faced as a start-up even though you were assessed companies selling that kind of software yeah sure I mean we probably don't have enough time to go through all just say that whether we're working with a brand new startup who's just implementing yes we're for there one or two or three person sales team or you know the CRO of a publicly held company like Twitter or Yelp or whatever salespeople are always changing stuff they're always trying to find out a new angle they're always moving territories always changing a training program or changing their comp structure so for those of you who have read all the blog post about how you just got to get a repeatable scalable model then pour money on top of it like that is not true you need to actually continue to iterate and make up stuff and try different experiments with your sales program and that's kind of the thing that that our software and other people software it tries to enable is basically getting the data from your activities and seeing what works and doing more of that so when you when you look back to that time period that 2013 time period when you were having you know problems with your sales team what did what did you learn from that that you can give you you know like for your sales team they can give to your customers and say look we face this and this is how we overcame it yes so I mean for the very early stages I think one one of the mistakes I made early very early on was when I got the board approval to hire our first sales team I was the first sales person for us where and then I hired this kid straight out of college who like blew up and was amazing and closed box on his own and stuff like that and it was sort of like oh this is great this is ready to go and I went on a hired eight other sales reps and it was way too many and so the big thing I I coached people just building their team for the first time is really goes sort of two by two by two by two and incrementally higher even though you never know is that the market or the person at least with that sort of slower incremental sales build you get more feedback and have more time to correct as opposed to going in and hiring a big team all at once yeah I imagine part of what what we're working through right now is it's a shift in the audience the the the question that we're asking as we go to market with and and shift our model from direct indirect or from into a SAS model is who's the economic buyer and I think that we're we're trying to be in this rapid failure sort of fast failure and learn from the changes that are occurring because it's it's different as we're delivering this so you know I don't know what you guys are doing I'll be honest but the SAS model often uses a freemium approach or at least a free trial approach and then you know a tiered subscription level based off of that so how do you and then once that you do that you'd go into kind of a lend and expand approach right yeah so how is that work for you and white assess companies use this methodology to kind of move across the larger organization like kind of start with the individual user and then our department and then kind of spread out from there kind of have the evangelist inside the company yes I mean there's two basic models one is the top-down approach and one it's the Bottoms Up approach bottoms up is more emblematic from Dropbox and slack and lots of companies that go in and win the hearts and minds of the end-user and then say now let's expand out and that's what yes where does so we we distribute software to the end-user salespeople we try to make them more productive give them a good experience help them close more deals and then when we get a critical mass at a company we say we call into the VP of Sales and we say hey 5e or 50 people or 50 or 500 people already use this here's why and the reason why that's been helpful for us is that it sort of pre qualifies a lot and as an old enterprise sales guy myself the last thing I want to do is spend my time talking to reps or customers that can't use our software don't want to use our software aren't interested in our software and the bottoms-up approach sort of gets rid of all that noise and just lets us focus on the companies where it's already working so we were talking about this earlier what you call the spray-and-pray approach right when you just send out emails yeah hope that somebody buys because you're trying to scale fast but somebody who actually wants to use your software is gonna be more valuable and can be you know approached because they've already downloaded the software started using it exactly exactly right so so for those of you who are just starting your businesses getting going you know you sort of faced with a dilemma which is like I want to grow really fast and the one one approach to that is like what we call spray-and-pray by a big list last outit on the emails hopefully some people respond if they don't keep blasting them out and that is a short-term successful strategy with a medium-term disaster it burns your brand as a sales person who's that organization you're ruining your reputation potentially for the rest of your life and obviously in Europe it's illegal what we advocate for for our customers is something we call authentic at scale which is use technology to have genuine authentic communications with customers and prospects in a way that shows that you're actually paying attention to who they are and you're recognizing what they need and what they're interested in and what you can offer or or not but do it at a scale that actually helps you build a business so that's the binary choice that I think most startups are faced with and you can go either way but authentic at scale is what we advocate for so so as you start to develop your gear SAS model how does all of this begin to play out in terms of how you approach your sales methodology yeah I think when when you're in a situation such as combo and you have your traditional model and you're and you're making the shift what well we're working through is really the the choices you have in terms of integrating SAS and trying to shift the entire company to it versus the opposite extreme which is sort of ring fencing off a group within it that can bring some of this DNA into the company and also looking at the metrics and ensuring that there's a great phrase someone I used to work for that you would call ego metrics and so you don't want eco metrics when you're doing this kind of a shift and sometimes when you have people that are shifting to the as a service model within our organization they start to trying to measure things that prove that they can do it versus maybe the right things to measure so we're we're finding that ring-fencing this off and almost treating it as a start up within the company treating it financially in that respect almost using using the role of rule of 40 that for those not familiar with the rule of 40 is you want your your your growth and your profitability to equal 40 I'm not sure and so we're we're trying to say there's a high part but we're trying to use those things as well right because like enabling the SAS approach to work as a product level decision as well absolutely yeah the I mean for our company when you realize this tremendous shift we're doing and this is a this is a shift we've resisted frankly for quite some time right we are our economic money model was humming along quite well thank you very much but then when the consultants come in and explain that 30 percent of your market is going to be moving the SAS in the next couple of years you realize out of necessity that you better wake up and start to change and that's that's what's been driving us and then you start to look at the the product that needs to change and then you quickly realize it's not a product anymore it's a service and you look at the the audience the shifts that occur and the audience needs to be someone who can be an economic buyer but also a user then you look at the models that you need to apply whether it's a high-touch model or a little touch model some combination of it and then you look at the metrics all of these things across the organization need to be re-examined and and looked at again and the marketing model for my area of responsibility is a fundamental change in skill set and in thinking for the company so the free tier is good in that it kind of built scale especially first startup early on or even for you know an established company that's trying to establish themselves as a service now but the preach it has to at some point translate into sales and I know early on you had great three-tier numbers and not very good translation numbers so for people out here who what you know startups and just sort of starting out how do you begin to get your sales team to use that three-tier model to make that conversion into a you know actual paying customers which is of course the goal of the company not just to get users and maybe I couldn't hear the question how do you get the salespeople to use the freemium but yeah how do they how do they use the freemium model to drive that that because the idea isn't simply to get users right the idea is to get paying customers right and if you're having trouble doing that how do you kind of make that conversion to - yes customer yeah well it's interesting at the in the early days right there was very little competition for what we were doing so we were getting a lot of inbound interest from companies that just heard about yes we're and they were like I gotta try this thing a lot of good word of mouth from the very very early adopter kind of companies now the market is more mature we've probably crossed the chasm in terms of technology adoption curve and we're into the early majority and those companies you know they think about things differently they they have a different buying process and so at the end of the day what it turns out to be is if the end users like your product and if the salespeople help if we're helping the salespeople make more money then we've got a business so my first business plan for yes where as I explained to our early stage investors was we make software that helps salespeople make more money and they'll give us some of it and that was sort of still what we're doing playsets so there's always a traditional kind of tension between marketing and sales right and I'm wondering if there's differences in in that once you start to go to a small office exacerbates the problem if it limits the problem like every what have you found in terms of how people market this stuff and how the salespeople take that marketing and momentum and begin to move that to a sale when is the ideal for our company it's a it's a great advancement it's a chance to really hit the reset button a little bit in that relationship between a lot of the sales organization the marketing organization where you draw the line between marketing and sales I think we all know has been shifting and changed and the the customer ultimately doesn't see the line and that's the biggest problem that a lot of companies have and when your enterprise software and you're able to sort of draw those lines internally you're not necessarily delivering the best customer experience and when you're delivering a service and you have those lines you need to manage it much more carefully I think your free trial example is a perfect example of where where sales and marketing start to become much more intertwined the the marketing process online starts to resemble the sell selling process so where these lines are and the selling motion or the buying motion is really very intertwined so we're we're finding that the discussions have gotten much tighter as we're doing them and where you draw the line I'm not even sure I know know where that line is anymore because it needs to be completely in sync I mean across our customer base you see in various organizations with different responsibilities sometimes the appointment centers are within the marketing group sometimes they're within the sales group sometimes you have sales people or sales organizations being able to buy media in some cases so so the everyone's experimenting with different things I don't think there's an answer to this yet I think the good news is that compared to where we were 21 years ago when I started in software they're much more combined and and also they're much more data-driven so both groups are now much more focused on what actually works as opposed to what my hypothesis was or what worked for me and my last company so both those cases are focused on getting the company successful which is the right direction to go how it actually breaks out a new organization is going to be based on your customer profile probably well I think what's most important with that is the is it works out to the metrics it's theirs you're an enterprise software and so many enterprise software companies find themselves and the ridiculous debate of what is the lead all these discussions that we just need to get past and I think with the SAS model a lot of this one of the primary success measures is truly stepping back and understanding what you're in a measure what matters which again for folks out there who are reading blog posts and getting your company started it's harder than it looks yeah when you read like the thing about hard or whatever it's hard to know what makes a good lead and you have to keep revising it we just did a big data science project to try to figure out of the 2,000 leads that closed in the last 18 months which were good leads and we had a data scientist work on this problem for three months to figure it out because it's not obvious what a good lead is actually so don't don't I mean you're gonna be frustrated but know that everyone else is frustrated with you well that sort of leads me to my last question which is what key piece of advice do you have for these folks out here who are just starting on this journey of building a South sales team that was sort of your answer but right and I love that answer I think that the as we look at the keys of of the sales success model I'll go back to sort of the first piece that I said which is grit finding the sales folks who really understand what it's going to take to completely shift our way of thinking folks who understand a value sale versus a product sale and that's a big shift for us for our company it's there's a lot of people that we have that understand the product sale but not the service sale and it's a big change anything add and I think the most important thing is just to get your motivations right be clear about why you're doing this because it's a long slog and the clearer you can be about why you're doing this project the more effective you can be when you're talking to other people about why they should do it - all right thanks very much let's give these guys again [Applause]