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Revenue Builders
Scaling Success: Revenue Growth and AI in Sales with John Schoenstein
01:05:50
In this episode of the Revenue Builders Podcast, our hosts John Kaplan and John McMahon are joined by John Schoenstein, the CRO of Customer.io. The discussion dives into Schoenstein's extensive experience in scaling companies from startup stages to large enterprises, touching on key topics like repeatable revenue systems, the importance of talent, and sales rep productivity. The conversation also explores the integration and impact of AI on sales processes, how to create effective revenue systems at various growth stages, and the cultural and operational shifts necessary for scaling. Schoenstein emphasizes the significance of data, training, and customer-centric approaches in driving successful sales teams. The discussion offers valuable insights for B2B sales leaders looking to understand and implement strategies for scalable and efficient growth. ADDITIONAL RESOURCES Connect with John Schoenstein: https://www.linkedin.com/in/john-schoenstein/ Learn more about Customer.io: ww...
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- [00:05]
A
Welcome to the Revenue Builders Podcast, a weekly show featuring B2B sales leaders and executives. Hosted by five time CRO John McMahon and Force Management Co founder John Kaplan, the show goes behind the scenes with the people who have been there, done.
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B
That and seen the results.
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A
If you enjoy our content, please subscribe, rate and review the show to help us reach more people. Revenue Builders is brought to you by Force Management. We help companies improve sales performance, executing the growth strategy at the point of sale. Find us@force management.com Enjoy today's episode welcome to today's episode of the Revenue Builders Podcast. I'm John Kaplan and I'm joined by John McMahon, author of the Qualified Sales Leader. Today we have a special guest for you, John Schoenstein. John is the CRO of Customer IO and Customer IO is a data driven AI powered customer engagement platform that enables businesses to create personal and automated omnichannel messaging journeys. John oversees the worldwide sales, revenue operations, customer success, tech support, strategic partners and professional services organizations and is a key member on the executive leadership team, team driving culture and operations. Prior to customer IO, John was CRO at Sprout Social where he drove 350 million in annual revenue. He was also the CRO at Survey Monkey where he led the go to market teams from startup to IPO and grew the sales assisted revenue from 10 million to 220 million. John has also led large global go to market teams at Adobe, Amazon, Microsoft and Oracle. He advises companies like Wistia and Bitly and several other companies. And so we're incredibly excited to have him with us today with this incredible, very successful background. Let's listen in. So John, it's so great to have you on. You've had like such a fascinating journey from Oracle to Adobe, you know, scaling startups like Survey Monkey through ipo. We want to tap into that incredible background that you have and I thought, you know, one of the first places we'd start was like the topic of, you know, scaling companies several times over. So you know, when, when you think about repeatable revenue systems and I think that's the word you, the words you use, repeatable revenue systems. How do you think about those at the different growth stages that you've been through? Because you've been through all of them. What are some of your thoughts on that?
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B
Yeah, no, great, great question John. Thank you. So you know, having worked at some larger organizations and then kind of some, some other organizations that are just getting off the ground and getting going, it's, it's very true. Like there's, there's going to be a lot of activities and systems and the process that you might use for helping a company go from say 10 million to 50 million or 100 million and then maybe 100 to 500 million is probably going to be a very different type of organization as you're operating at scale like that. What I would say is there's a few things that are kind of consistent across all those. Maybe could start with that. Yeah, you know, I think talent for sure, it matters at every size of company. Right. No matter what. I think you want to make sure you've got a really strong talent pool. You want to make sure your frontline managers are super strong and inspiring your reps, especially at a smaller organization where you might have to be pretty scrappy and you really have to kind of bring the best out of your reps and, and often show them how to get there. Because if you might be working at a smaller organization, you could be working with a more junior, let's say, or less experienced sales organization, sales team of reps that kind of need to be shown how to do it. And you're often going to be very involved in all the, all the deals at a, at a smaller organization. Certainly your frontline managers are going to be. But as you scale, as you get, let's say past 30, 40, 50 million and closer to 100 million and beyond you obviously you really want to make sure that now you're operating in a way that does scale where your managers aren't having to be in every single deal and you know, kind of giving those all of that kind of deal by deal focus to help make sure that, that those deals get closed. You want to make sure that your frontline managers are really enabling that your sales reps to operate at scale and be a lot more independent. So I think that talent is super important. You want to make sure you're hiring intelligent people want to make. I, I tend to like people who are competitive and operate with a sense of urgency. People who aren't going to just wait around and you know, let the, let the customer sort of manage the conversation. It's, it's be a little bit more driven by, by the sales rep. If people who are coachable and certainly curious and want to learn more about the customer, what makes them tick, why are they looking for a solution, that sort of thing. So I'd say talent matters at all levels. Customer centricity.
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A
Let's stay, let's stay on talent for just a second and a couple of thoughts are running through my mind. Here. So for those core attributes that you said for kind of like sales leaders and sellers, you have competitiveness, coachability. Johnny talks a lot about, Johnny Mac talks a lot about adaptability. What's interesting for me is I get a lot of questions, John, and you have a great background to answer this. Do they get nuanced at the dip? So a startup level versus a scale level and can it be the same person? So I have people, it's a debate. I have people that will tell me, you cannot have the same reps that were startups and then go into scale mode. You can't have the same CRO and you're a walking audition for that. You've been the CRO and the startup and scalability. What are your thoughts on if somebody says what are the nuances you have to think about in the differences at those different stages?
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B
Yeah, great question. It is a great debate, right, Because I, I've definitely seen a few CROs and, and sales leaders who've, who've been able to operate at a pretty high level in startup mode and then also at scalability mode. But I've also seen a lot who really prefer to specialize in, in one or the other. And that's okay.
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C
That's great.
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B
I, I think when it comes to sales reps, I would say about 50%, maybe, maybe, maybe even less than that can make the jump from startup mode to scalability mode. You really have to want that. Like you have to want to grow your sales career. You have to sort of aspire to wanting to be where the company is going to be in two or three years. Because often what gets you going is in, in, in that startup mode when the company's smaller, you, you may have a, you may be working at a company that's very PLG driven, right, where you're getting a lot of inbound leads and those sales reps are just feeding off of the inbound. Feeding off of the inbound. And that's how they build their pipeline. Like they get 90 to 100% of their, their pipe built by inbound. That doesn't work as you scale, right? At a certain point, like that might be part of your pipe, that might become 50%, might become 25% of your pipeline over time. But you've got to want to become an outbound rep. I think if you're going to scale up, if you're going to, you have to own your territory, right? And you can't own your territory if you're depending completely on, on the marketing team driving inbound leads for you, especially as the company grows, that gets diluted, right, because you're adding more people. Inbound gets spread out. So those reps really have to want to make that pivot from being an inbound rep to being an excellent inbound rep. But also managing your outbound, working with BDRs to, to build outbound, probably working with partners. You might be working with a partner organization if there's a partner referral program, those kind of things. But that takes a unique type of person. Not everybody wants to do that. Like a lot of sales reps I've seen are great at inbound. They've been very successful. They made a bunch of money that way. And as soon as the company gets to say 70, 80 million and it starts to pivot to moving outbound up market, those inbound reps, they might start, you know, updating their LinkedIn and looking for the next place where they can be a really good inbound rep. Johnny.
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A
What'S your experience with that? I mean.
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C
Well, like Johnny said, you know, I think those people that don't want to go from inbound to outbound, typically it's their, that's their ability to be coached and adapt to this changing environment. A lot of people don't want to, they don't want to be coached. They, they don't want to adapt. They know what their strengths are, they know what their weaknesses are. They're actually comfortable with it, comfortable in their skin. Sometimes those people are very mercurial. They're there for, especially in the early stages. You can see the people that say like listen, this is a transaction. I do deals, you pay me money. And then you know, when it starts to get about more process oriented and more teamwork, you know, I'm out because I'm an individual, I'm a hired gun. And sometimes you can hire those people but you have to know what you're getting yourself into. And then it goes down to re this the big thing where you see the dividing line is also resources. In a real startup, you know, up till even like 50 million, like John said, there's not many resources. You're on your own. And if you're not willing to roll your sleeves up and get your fingers dirty then, and do five jobs instead of one job, you're not going to make it. But if you're, and then as it gets to become a bigger company and you're 100 to 500, there's a lot more resources to help you and, and then some people are more comfortable with that and not rolling their sleeves up and doing five jobs.
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A
Love that.
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C
Those are some. Some like, of what happens when. That I've seen.
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A
For me, what you guys are talking about for me is like a big one. For me, it's like pipeline generation. And that is a skill set that every rep has to have. I don't care if it's. You got. You got a lot of inbound leads and you have to turn them into, you know, active leads and turn them into, you know, a territory and. But like, for me, it's that skill set of the rigor behind building a pipeline. Now the difference is how much the company's involved with that versus how much you're involved with it. But everybody listening, no matter where you are, you are going to be held accountable someday in your sales career for pipeline generation, also for sales leaders. Like, I'm very leery when I hear sales leaders. You know, hey, tell me three things you like about your current situation. Tell me three things that are causing you pause. And when the top one of the top three things is the number of leads that are coming in, it just gives me a stomachache a little bit. And then the last thing I'll say on it is this, this mentality, this cultural mentality of. And this is a serious one for me. Patriots versus mercenaries. What Johnny Mac was just talking about was this, you know, sometimes we. We can build off of people that are, especially in startups that are people that have the ability to take leads, to do in front of the customer. They know that they don't have total product fit or whatever it is, they have to get information back from a customer. And they're. Sometimes those people can be very transactional. They're like, you pay me, I go out and do this. You pay me. And they're not always mercenaries, but they tend to be a little bit more mercenaries. Meaning if the product doesn't ultimately work, the comp plans, you can't play them, what you need to pay them. You know, they pack up their crap and they go somewhere else. Versus a patriot, the, you know, patriot mentality. And I'm not saying one is better than the other, but I've always been more comfortable in organizations where the culture was building. Patriots, you know, those people, they go home, you know, and they break up their furniture and they melt down the, you know, they melt down the metal to make bullets. Have you experienced that, John? And you're like. And can you look for that in the talent piece? Like where people are going to fall and how do you find it?
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B
Yeah, wow, that's. I love that kind of Patriots versus mercenaries. And what's interesting is I, I think you only need a couple patriots, right? Because it, that people see that and that, that can really drive a. Behavior and kind of a culture at a, within a sales organization. It's, it's hard to hire for that. I think, you know, it's, it's, it's not easy to see that right out of the gate. I, I think often when you, you know, you'll see some traits, things like people played competitive sports in a team sport environment, right. Might have been the captain of a team or something like that. There are often people with sort of leadership qualities. And if you can suss that out in the, in the hiring process, that's, that's kind of what I try to look for. I tend to be a lot like you, Cap. I like, I like having patriots on the team it there. These are people who are going to go to war with you, right? These are people who are going to go to battle when it's hard, when you're down a little bit in a quarter, you've got a gap to cover, you know, who you can call on, who's going to be, who's going to dig in and as opposed to, you know, somebody saying, well, I hit my number, I'm good, I'll talk to you next quarter. That kind of thing. You want to talk to you. I think you want people, especially at that smaller stage mode, to really, you want a few people who are going to, you know, really go to battle with you that, you know, you can count on, and that tends to inspire those who work for them and those around them. And it's, it kind of breeds this sort of, I think, kind of a winning culture.
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A
I agree. And I think for me, the last thing I'll say on patriotism is it's not blind patriotism, especially for Gen X, Gen Z. I'm not sure exactly which gen we're in. We're in, you know, a lot of blends there. But what I find is, and Johnny Mac and I talk about this a lot is when you find leaders that begin with why and they can inspire people to believe that what they do is going to matter. So the product's got to matter, the value proposition's got to matter, the solutions got to matter, the culture of the company's got to matter because there's not a lot of Patriots. You know, Patriots evolve. People just don't go into companies saying, hey, I'm willing to take bullets and you Know, bash down my. My house and find things for the company. They're not going to do that. And that's not what I meant by. That's not what I mean by patriotism. You have to. If you're leading and you have somebody that kind of thrives in that environment, they have very high expectations of what's in it for us to be patriots. Does that make sense?
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B
100%. 100%. Like, that's core to it for sure. Yeah. Absolutely agree, Johnny.
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A
Anything else, Johnny Mack, anything else on.
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What'S in it for us? Typically comes from leadership, where, you know, at the end of the day, I always think that people want to be proud. Proud of the organization they work in, proud of the product they sell, proud of the team around them, proud of their counterparts. But pride, the precursor to pride is winning. You got to help me win.
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A
Yeah.
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C
And the precursor to winning is helping is to train and develop me. So you're training me, you're developing me. I see that I'm transforming. I start to win, I start to develop some sort of pride. Pride that I never even had in myself, thinking that I could sell a product like this and get to this level. Yeah. And now I'm proud of the team I'm around, how they helped me get there, my leader, the product. And when you get people and to have a sense of pride, pretty hard to break up that culture. Pretty hard to get them to leave. They. They be there and they can smell it. The recruits can smell that sense of pride when they walk in the office, even.
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B
Yeah, Doc, just double down on that, man. I completely agree. Pride, once you get to that point, like, you've got something special, it's a place people want to be, and it's a place people don't want to leave. Right. And. And it's one of those situations where I always kind of talk about, like, if you can go home and have dinner with your family and, you know, talk to your. Your. Your partner and your kids, and if you have kids and. And be able to talk about what you do in a. In a way that makes you like that, that kind of lifts the conversation up. Like, that's the level of pride that I think we strive to. To build in our culture as well. Once you get to that point, it's hard to break it up.
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C
It is.
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A
So John McMahon is talking about systems or. Sorry, John is. John Schoenstein is talking about systems that help get us there. Let's talk a little bit about programmatically. McMahon's talking about, you know, Things that have to evident belief has to be in the culture and belief comes from evidence and evidence comes from how we're winning, why we're winning, winning. What our value proposition is, what our differentiation is, what our qualification is, who our ICP is. How do you, and you're an expert John, and putting in these repeatable revenue systems, how do you begin to layer that in at the different stages and do you have an idea of what comes first or how to get it in place? Because you know you don't have in the startup you, you don't have a lot of resources to, to help you get there. And then when you scale you got, everybody's got an opinion on what it should be and sometimes that could, you know, that's a, that's a detractor sometimes. What are your thoughts?
- [19:40]
B
I love it. It's a great question. This is the stuff that, I mean it's, it's fun man. I mean it's, I would say kind of something like this as you're starting out. Let's say you're a 5, 10 million dollar company, things are really scrappy as John mentioned, there's not a lot of resources. You're probably going deal by deal. The CRO who may only have a team of you know, eight or ten reps that are, you know, working deals, you're probably in most of the deals, you're probably involved in closing those deals. That's exciting, it's fun, it's hard. And as you evolve, I think some things that are really critical I think for helping you make that next move in scaling the company is I would say a common way to communicate common language so that everybody's trained and enabled to run the sales process. Key sales plays the same way in a very repeatable way. I think icp, you mentioned it earlier John, super critical, like gotta nail that ICP and then you gotta stick with it. Right? Like I think that what happens sometimes is I've seen this happen actually where at especially smaller companies reps might be saying I want to be the one to bring in the first million dollar deal. I'm like no, how about we go win 20 50k deals? Like that's, let's get into a repeatable business that really nails the, the icp, right. And so I think, and you know there's also kind of that sort of where you're going with this John, I think is a little bit around kind of the revenue or the deals you can take down now as you're, as you're growing and Scaling versus putting in those, those more systematic processes and, and more, you know, build a more programmatic kind of organization. I think it's, it's tricky because you got to do both, right? It's, you gotta, you gotta be able to kind of focus on bringing in today's deals and ideally they're, they're pretty dialed into the ICP once you've nailed that. But you gotta be careful not to just chase deals that are for today and not focus on building out systems and procedures and processes because you gotta be focusing on the future as well. So if you're only working on today's deals, you're kind of creating this treadmill that's going to burn out reps. You got to train them at the same time, enable them to be ready for the next phase, which might just be six months from then by the way. It's not like it's necessarily going to be five years in the future. So you got to sort of be laying that train track and driving the train as you're, as you're going. I kind of probably put in sort of a 70, 30 split there where I probably focused in that smaller scale up mode. 70% of my time on making sure we're hitting the quarterly number and 30% of my time on, on building out the, the system and the process and that repeatable process that's you know, going to help us get to the next phase. But that includes forecast rigor. I think that's super important. Forecasting and getting from the beginning like when you're a really, let's say a, a company that's, that's still in that sub 50 million territory. Starting there to build out really clear forecasting language. Comm. The way you communicate about it, the way you talk about how to move one deal from one stage to the next stage to the next stage. What's that exit criteria, right. And then just making sure everybody is constantly getting training on that and, and it's a, it's a process that's kind of ongoing. It's not a one and done type of training.
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C
I think what's also in, I want to add color to what John said. So it's also in that when you move from, you know, smaller to large, you know, just changing DNA that you're, that some of those, like we talked about before, some of those people are going to adapt to it. Maybe to get to 50 or 100 million you were doing SMB deals. Now you realize I have to go up market so I'm going to go Large deals. And some of that DNA may not exist in your company. So now you may have to recruit for it. Some of your leaders might not even know how to manage somebody that's a major account or strategic account or global account sales rep. So you need this changing DNA that has to happen. And that's where I think a lot of companies start to break their pick. You know, when they start to try to move up market. Hey, we made it to 100. Yeah, you're doing fantastic. Yeah. And then bang, you know, they just don't have that DNA to go up, up market. The se. The second thing that I've also seen is when companies are really small to add to what John said because he was talking about big deals and smaller deals is sometimes the big deals in the smaller companies can truly mask problems in the productivity. So you measure the average productivity per rep. It is one or two big deals and it masks all the problems. And in, in the salesforce because the sales force isn't that big. Now you, now you start to get a Salesforce with 50, 100 people and now you get a couple big deals. Doesn't really move the needle and people start to say oh my productivity's dropping down. In fact it's starting to flat line. How, what's going on here? What am I doing wrong? How come I can't get the productivity per rep up? I've seen those movies a lot John. Same as like sounds you have, sounds like you have.
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B
Totally, totally John. I, I, yeah, both great points. Like the DNA part so important because you're 100. Right. As you get let's say to 100 million, to get to 500 million you're definitely going to have to be moving, let's say it was SMB that got you there. Right. You're certainly going to probably be moving up market a bit. Definitely more outbound. You've got to hire that DNA into the company so that everybody else can see what good looks like.
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A
Yeah.
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B
If they haven't, it's hard to take a team that hasn't really operated at that level or, or managed an outbound process or you know, sold like you mentioned John, an enterprise type deal, it's, it's, it's very different. Like the, the early stage stuff is often feature functionality. You know, you're kind of selling what the product can do. When you're talking enterprise you're talking solutions. Right. And, and really creating. Yeah solution selling which is much more consultative. It's a, it's a totally different beast.
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C
There's More stakeholders, it's more political. There's going to be enemies, it's going to be some potential champions. There's dynamics that some of the territory people just haven't seen. And I have seen companies that said, no, well, we'll take 10 of our hundreds, you know, territory people and just throw them into these strategic accounts.
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B
Yeah.
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C
And it doesn't work.
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A
You guys are on such a big important point right now because for me, I call them tent poles. If you don't have the tent, if you don't have the poles in the tent, you're not going to have like, you're not going to have a village that can scale. And for me, you know, I very rarely meet a company that says, well, we're just going to be a PLG company and we're going to stay PLG product led growth. We're stay there. We're never going to go to the enterprise where like I, I've hard, I don't, I can't even remember. I'm sure there are, but I don't interact with a lot of companies like that. And I always encourage them to plant these tent poles. And what do I mean by that? ICP is a tent pole and it's going to adapt, but you have to put some kind of pole in the ground at the earliest stages to, you know, figure out exactly how that ICP is going to solidify. Because then it's related to what I the four essential questions of value. Okay, for that icp, what problems do we solve? How specifically do we solve them? How do we solve them differently or better? And where have we done it before? And then the next tent pole is, okay, what's the engagement model? How does that buyer buy that? And if we're in a PLG today, that's different. And then how would an enterprise buyer. And so it's like who's doing what when on the buyer side and on the sales side. And then another tent pole is what is the success profile of each of those individuals, if there are multiple individuals and how that buyer buys and then who's going to do what when? I just don't think John, show, I don't think that enough companies and enough founders are thinking about like putting a tent pole in but being flexible to understand what the data looks like as the deals come in, as the reps and the leaders and the product people start to get more information from the marketplace and then solidifying those tent poles. Because you probably see, John, when you start knocking down all the tent poles, everybody gets Disillusioned. So we built a little community and these are our tents. And then, oh, we're going to go way over here, knock down that tent, we're going to move camp and go over here. I just, in today's environment, it's not the big that eat the small, it's the quick that eat the slow. And, and the, the concept of tent poles I think are, are critical.
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B
I love that. John. I completely agree. I, I think you nailed it. Like those are the key tent poles and, and that like that's what gives, helps set that foundation for you right as you're going to build up and out. It's so critical if you don't have that. It's just like you said, like everything collapses and, and you, your, your culture changes too quickly. You lose trust internally, which can really be a, be a drag on, on the business. So, yeah, completely agree with those. Yeah.
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A
100 then Johnny Mac and John, both of you, I think a leader today, no matter what stage you're in, you have to be not only curious, but you have to be adaptable to the data. You can't run these, you can't run sales organizations regardless of stage, without getting insights into the data on what the answers are to the. Some of the things we just talked about in the 10 polls. John Schoenstein, I'd like for you to talk about, like how does data play and insight about that data and rev Ops teams or you're the rev Ops person in the beginning. If you're in a startup and then building RevOps team, what have you seen as it relates to insights and actionable data that helps you with scaling faster?
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B
Yeah, love that question. And I'll say my RevOps partner is probably one of my most critical partners in making the whole system work. It's all about data. Like it starts there. And I think the important thing though, something I've learned over my career is which data you're looking at. Right? Because I think you've really, I learned this at Amazon, like deeply. If, if you focus on the inputs to the business, you can really make better decisions. You can make better adjustments if you need to. You know, if you're, if you're looking at like the pipeline. You mentioned the pipeline earlier, John. Like that's where I spend a lot of time inspecting the pipeline. Because you could have one big deal that comes in, as John mentioned, and that could mask or cover up like a lot of productivity issues that might be happening under the surface that are not operating where you need them to be. But when you really dig into the pipeline and you focus on what are our win rates, what are our, what's our sales cycle look like at the different segments, by the way, like it's different at SMB versus mid market versus commercial versus enterprise, et cetera. You know, how long has this been in the pipeline? How long has it been in this stage in the pipeline and really inspecting that pipeline deeply with the managers so that you're as, you're feeling as, as good as you can about the data that's in there and the kind of the hygiene of that CRM system that you're looking at and, and then being from there being able to forecast more accurately and identify risk earlier, which is so critical because you know, I remember, you know, when I started working at Survey Monkey, when It was a $10 million sales assisted business, we spent a lot of time talking about the deals that were going on and trying to win a deal, win a deal, win a deal. And that was important then, but we weren't focusing a whole lot on the pipeline because there wasn't a whole lot in the pipeline. But once you get to, you know, 25, 30 million, that, that if you're not looking at the pipeline every week, by the way, with your marketing partners, with your demand generation partners, with your frontline managers and kind of really diving in there, focusing on the, not the, not the outcome metrics but the input metrics there in the pipeline, I think you're going to, you often will get bur on the outcome later.
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A
Johnny Mac, you're one of the best I've seen on this, you know, inputs and outputs of data. And for our conversations you always come back to where you start and you end with sales rep productivity.
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C
Can you just. Sales productivity is number one.
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A
Take it, take it, Johnny. Take the concept from in the beginning. You know, startups you scale to the enterprise. Talk to us about, you know, sales rep productivity and what you learn about that data.
- [34:09]
C
Well, it tells you everything. It's, it's like an output. It's. If you had 10 machines developing widgets, you know, you basically, and you were the general manager of a widget factory, basically trying to figure out like how many widgets can I get out of each of these machines? And I hate the parallel. But I'm only trying to make it simple because I know we're dealing with people, but you're basically trying to measure like what, what is my factory output? You know, every quarter, every month. And that's, you're doing the same thing in a funny Way with, with your sales force, you know, what am I putting in as far as people? Training, development, sales tools, leadership, all of those things. And what am I getting out of it? You know, I'm like, so it does help you when you're measuring productivity per rep, to understand, like, where I should make investments. And I'm sure John's has faced it many times where people come up to him, hey, you know, if we had an extra tech person here, an extra this year, and extra sales tools there, you know, we really need it. And then, you know, you say, okay, well, I have, you know, 50 regions. Okay, well, why don't I try and experiment with two? If the productivity doesn't go up in those two, sometimes you see people just get lazier, so they get something added, but then they decrease their productivity. And you made a big investment, so your cost went up. You didn't get anything out of it. So. And then I'd like to look at productivity per region. So if my average productivity per app is, let's say, $1 million, just to pick a number, but I have, and we'll pick easy 10 regions, and six of them are doing under a million and four doing over a million consistently. Okay, now I know where to make my investments. If I have four heads, I'm giving it to the regions that are constantly beating the market, so to speak, just like you would in an investment portfolio. The market's doing 7. I'm not plowing more money into a 4% investment. Why? Why? It can't even beat the current market. So productivity per rep can tell you a lot of things. You know, it also, when you look at it by region, if you're factoring, like, how many new ramped reps they have, how many ramping reps you start and how many people that leader is churning, you start to get underneath the covers. And you don't let big deals mask and numbers, you know, dollars mask what you think is really going on there. A lot of people just see the dollar sign or the productivity, but they haven't looked at the churn. So the denominator went down. Boom. The productivity looks like it went up. And you go on, this regional manager is really good. Yeah. But he's losing a person like every six months. Then I like to look at, you know, new ASP dollars, you know, average deal size, existing average deal size, you know, the number of dollars that are coming from new versus coming from existing. And if you keep these trends of these for like five quarters, you start to tell. It starts to tell. A picture like oh, you know, my people are starting to get more deal that we're making a number but only off of existing deals, we're not making it off of new. And then so how many, what percentage of my business is coming from new versus existing? You know, how many new customers am I getting of the total customers that participated in, in the quarter? Again you look for five quarters and you see something and then you know, how many new logos am I getting? Now this could tell a story because you start to see these companies starting to get a lot of new logos and, and but they're adding headcount, then all of a sudden ahead the loom logos are starting to go down headcount, starting to ramp and you're like, oh, we got a future problem here. Something's going on with the new logos. You're going to get a lot of reps that are going to are starving here. So why is it that we're not getting a bunch of the number of new logos per ramping rap or ramped rep is going down. And then finally you got to look at renewal and churn like what's my net dollar retention? How much am I selling into my existing customers? Those are some ones that I look at all the time that could start to tell a story. Yeah, and that's what I'm looking for is I think that's the way to kind of answer your question overall is you don't look at data just to look at data. You look at a data to get insights where they can tell you a story, whether it's one metric by itself or two or three together. And you, you look inside and you go, oh shit, look at what's going on over here.
- [38:30]
A
John, show your thoughts. Any other KPIs or any follow ups on that? I think sales productivity is a big topic I'd like to just follow up on for you because in the startup phases you burn a cash and if you're burning cash and you and you are not looking at sales productivity and then that's a precursor to whether or not people are going to make it and whether they stay or how long they stay and how long it takes to replace them, there's a whole graveyard full of startup companies that didn't understand that and they either flip the switch real quick, how many companies do we know, they hired all these BDRs or whatever and then something changes in the economy and they flip it back, they fire, you know, 20 of them or what have you. What are your thoughts on that? On nailing that and getting it right.
- [39:26]
B
Oh man, I love it. Yeah. The productivity. We obsess about productivity. And I love what John was saying a minute ago about, like you said, got to look at the different regions. You've got to look at the different segments and where you're adding headcount really matters. You got to place your bets on the, the, the areas where you're. See where the data is telling you that you're growing. Right. So looking at that productivity by rep, it's critical. Like we, we look at, we, we. We really do kind of obsess about that. We, we want to try to make sure there's a healthy balance of activity going on, especially since we're in this kind of remote world now, which is a little different. Where I kind of grew up always in an office and learning from the reps that were around me. And you don't want to fall behind and you hear the buzz of the office and there's an energy that you can drive in an office. Many of us in my situation right now, my, my salesforce is completely remote.
- [40:31]
C
Wow.
- [40:32]
B
It's a, it's a whole new world that way. And you know, that's where productivity really matters. Measuring metrics really matters and making sure everybody can see the scorecard so that everybody understands like. And when I say activities, by the way, like meaningful activities I don't want activity by itself doesn't really mean anything. I want to see activity that kind of, kind of leads to strong outcomes, like talking about actual meetings with, with customers and moving those, those we look at a lot of like, where did the deal move from one stage to the next? How active is the, is the rep being in that? We're not looking at just like number of emails or you know, that that's something you can, you can game that really quickly. I want to see like what is the rep accomplishing and, and driving. But activity is an important one. I guess I would just say it's a balance between making sure there's enough activity of the right kind of activity so that the productivity then is, is being carried through. And you know, I think there's a couple of the things I might just add to that sort of thread. I think we're looking for reps that are especially in that smaller stage company. You want to see reps that are being creative. And we talked about adaptability earlier, like super important. We, we're trying to reward that in a very public way. So at the same time that we're, you know, showing these kind of scoreboards and dashboards of where reps are, how they stack up against each other. That's important just because they're all competitive and they all want to, you know, be, be at the top of the list of, you know, especially with, with quota attainment. But, but we also really try to publicly reward the behaviors that we're looking for from the reps, like when they're being creative, when they're being adapt, if they're, if the, you know, adaptability comes into it, how they maybe ran into a blocker, came up with something really creative and ended up closing the deal, sharing that broadly with the whole team, it allows us to celebrate that. And, and also it's a learning moment too, for the rest of the reps and so that they understand that that's the kind of culture we're trying to drive. One that is all about constant learning.
- [42:56]
A
Right.
- [42:57]
B
It's not like you get trained once and now you're off. It's, it's, it's pretty much a weekly type, you know, drill where you're always learning more, curious to learn more. And, you know, it's. At Survey Monkey, we, we had a, a tagline that was called Power the Curious. And, you know, we were doing surveys, so it made a lot of sense. But we use that internally as well. And I think it really helped us sort of frame up a culture around learning and constantly wanting to get better, staying humble through that process. But, but knowing that you can always get better.
- [43:37]
A
If, if you're listening and if you don't go back and listen to the last two minutes of what John just said, and you're in a remote work environment, which is the majority of people, and you don't figure out a way to bring those best practices to bring those learnings to a remote workforce, you are going to fail. I just really love what you talked about and I love hanging around Johnny Mac for so long. He did such an incredible job of identifying people that took art and science. Johnny calls it art and science. So we had people that were following the science, and then there's. There was these, this brilliance in the process of the art. And I think John McMahon did such a great job, even back in the day of identifying what that art and science was. And it's not going to show up in systems. It's not going to show up in. It's going to show up by leaders highlighting it, it, identifying it, breaking it down into common language and common processes and getting it back into the system. I think. And in a remote environment, everything we just talked about is at risk 100%.
- [44:56]
B
It's, it's definitely a new world. And we're, we're all, we're figuring it out, right?
- [45:00]
C
We're, we're.
- [45:01]
B
I wouldn't say we've got that code cracked yet, but we're definitely getting, getting better all, all the time. And I think when you create a culture that is open to testing and you know, piloting ideas and you know, new go to market plays and, and rewarding that, like, that's, that's the innovation. And again, a lot of that I was able to pick up at some of the places I worked at previously where, when that's rewarded and celebrated even if you fail, like, even if you try, you know, if you try 10 things, seven of them are going to fail probably. But the three that win, shit, man. I mean that, that could change your whole.
- [45:46]
A
We're moving into a topic here. Johnny, if you're ready, Johnny Mac, if you're ready to change gear, not change gears, but segue, because we're moving into something on this curiosity, this willingness to learn this, this AI in the future of revenue and revenue leadership. John, we're so thankful to have you because you've been, you've been at this for so long. You're also at a company that it's table stakes right now@customer IO. But talk to us about what you're seeing and you know, give us a little insight on, you know, how do you think, you know, what do you think best practices are on how AI is being being used to scale companies right now?
- [46:28]
B
Yeah, love it, love it. So, yeah, we're very excited about AI and I, you know, I think we're all figuring out how to, how to harness it, how to, how to have it be big part of your, your, your sales organization, your sales culture. I think what, what the approach that we're taking. It's, we're, we're a kind of an AI first product that we at the company. And so I think something that's really helped us is our CEO Colin has been from day one, like all about AI in the culture, in everything we do. I think that's the key thing for us is it's not like we're just learning the technical, like technically how to use AI. It's more about adopting it culturally. Right? It's more about like, how does it become a part of every single process that we have at the company. And so, you know, we use it for forecast precision. You know, inspection of the forecast is critical. This AI now Allows us to really triangulate on the forecast. It allows us to, you know, of course, hear what the managers are saying, hear what the reps are saying about the deals that they're working on. We've got a pretty tight process about what goes into our CRM and, and how, you know, how deals move through the various different stages. But, you know, there's always that human element to it and we want to get that human element. We want to listen to our reps, we want to listen to our managers about how deals are tracking and, and how they're lining up for the quarter. That's super important. A lot of listening going on. And at the same time we're able to cross check that a lot and inspect it with. We use, we use gong at our company and so we're using a lot of like double checking. How often were certain phrases used right through throughout the. And were the, were the, are they using language that has to do with, you know, closing a deal, landing a deal, Is that actually happening or is that more in the reps head as opposed to like what's actually happening in the conversation? We're so we're able to sort of, from a forecasting perspective, inspect it without having to beat down the rep. Right. We can kind of just double check it, sort of trust, but verify what's happening. That's, that's been really helpful, I would say, you know, certainly it's all about protecting time for our reps and I think we're trying to embrace. AI is sort of like this co pilot that you work with in every aspect of the sales process. So every, every part of the funnel, like driving more intelligence into literally every part of the funnel. And it leads to enablement too. Like you guys were talking about earlier, like, enablement is one of those big tent poles that you called out earlier, John. Yes. And it's one that you've got to always feed, you've always got to be nurturing that enablement motion. And that's where AI is helping us a lot to help us identify where stuff's breaking down, where reps are tripping up in their sales process, at which stage we also use it a lot with customer success now. So one of the things we're testing right now, which is really fun, is where we're creating these risk scores for all of our customers based on the usage of the product. And it's helping us to identify like early indicators of churn so that we can be proactive and get into a conversation with that customer before they Churn or before they've decided to move to product because decision, it's hard to pivot them back. You know, like they might only be nine months into their 12 month subscription, but they might have made up their mind already and by that time it's too late. So if you're, if you're reacting to customers on the churn side where they're telling you they're churning or they've made up their mind, it's, it's, it's hard to turn them around.
- [50:54]
C
John, a couple of things. One, can you, did you guys build your own telemetry into your product so that you know what the customer usage is?
- [51:01]
B
Yeah, yeah, we're doing.
- [51:03]
A
I did a really bad thing when I kicked this off, Johnny Mac. I didn't really let John talk about what he's doing@customer IO. So please build that into your questioning.
- [51:13]
C
So you, you, you, you're, you guys built your own telemetry into customer usage. Can you give us. So, and then I heard you're using gong, you're using CRM. What are you using? Salesforce.com yeah. Are there any other like primary sales tools that you're using?
- [51:28]
B
Yeah, so we, so it's exactly so Salesforce Gong, we use Sales Loft as well. And then Zoom info has been a, a big help there too from on the AI side and just enriching data to make sure that our, our outbound is a lot smarter. Right. Smart outbound.
- [51:48]
C
And then can you give us example where you're using AI in one of those use cases like you talked about, each different step of the sales process, you're trying to use some form of AI.
- [51:59]
B
Yeah, for sure.
- [52:00]
C
One example. So we know, yeah, I think you.
- [52:02]
B
Know, it just even in the qualification process where we want to learn as much about the customer as we possibly can before we even really talk to them. Right. So we want to make sure that we know what their tech stack looks like. We want to know as much as we can about who the players are that we're going to be interacting with and where did they work before and which tools have they worked with before. One of the plays that we're running right now is using a tool called User Gems and it allows us to often track when a customer might have been using our solution Customer IO at a previous company and then they move over to the new place where they're at. And that to us is like that's a hot lead. Right. Because always almost got a champion there already and, and you go from there. But like That's. That's the type of thing I would say. One of the things we're really trying to get good at, John, is creating these briefing docs. Right.
- [53:03]
A
For.
- [53:03]
B
For our reps, because we don't have a. We're about to cross 100 million. We're super excited about that. But it's a small company still, so we're. We're still. We've got some good resources. I think we're building a great infrastructure, but we're still a little bit scrappy and we're testing constantly about how to leverage AI and automation in general. But one of the things we're really trying to get good at because I am in that process of helping the team evolve from being what used to be almost a complete inbound sales motion to be much more of an outbound hunter type motion. And we're fine. I think what I'm trying to do is make sure they're not just spraying and praying and hoping for the best, but. But more like, you know, spear phishing and being really targeted in what they do when they're outbound and being really prepared with that. Right. So that's where the sort of the. The customer briefing doc is so important to pull together first ahead of time, before they have a conversation. Yeah, they can have a meaningful conversation.
- [54:07]
C
Yes. Totally agree. Yeah. Yeah. What about with all these different sales tools? Are there any. Is there anything that's, like, really frustrating about having, you know, multiple tools?
- [54:20]
B
Yeah, good, good. Really good question. I. I think what's frustrating for reps is having to context shift between multiple different tools. So, you know, we really have tried to be smart, and we've made that mistake, by the way. Like, we tried a few tools that they weren't integrated well with with Salesforce or, you know, because our reps are pretty much living in Salesforce, and we want to make sure that whatever we, whichever tools we bring in, have a really slick integration there, so that it's just pulling data in as opposed to the rep trying to go grab data from one tool, you know, go. Go log into that one, pull data out, download some CSV file, and try to upload that later. It's super clunky when they do that. We lose a lot of time and.
- [55:08]
C
And a lot of time. Yeah. Yeah.
- [55:10]
B
So that's probably the most frustrating thing is when tools don't talk to each other. It's pretty. We're trying to be as. As diligent as we can be about protecting our reps, time, keeping them focused in. In their main tool and then having these be overlays to that.
- [55:31]
C
Yeah, I mean, this is something that they're losing close to one and a half days a week, just like you said, managing data, putting it in all these tools. Then a manager calls them, they have to update the tools. Then whether we like it or not, the tools you bought them, they almost. They also have their own tools.
- [55:49]
B
That's right.
- [55:50]
C
So they're wasting a lot of time managing all these tools. So, like, what you did to try to, you know, combine some of these tools is really helpful, I think, to the reps.
- [55:59]
A
I think this conversation's really good timing because there's a referendum in the markets last week on AI and AI tools and basically, you know, where most of the AI companies, you know, lost valuation, significant valuation last week. And I think what it's saying to me is there's a couple of important things that are. That you guys just discussed and also reference.
- [56:24]
C
You're referencing that MIT study that came out.
- [56:27]
A
Yeah. Or yeah, the MIT study is one. And then just what's happened in the markets. And then when you, when you see what, what people are saying, like when we're talking to people at Force Management, here's what they're telling us. And you guys talked about it. Right now the promise for sales is. Is kind of unrealized at. On a scalable level. And I think it's what you guys just talked about. Tech sprawl is a problem and inconsistencies and popping in and out of different, you know, different tool sets for a rep is just, you know, great sales leaders have been protecting the reps for ages. And most of the great sales leaders I'm talking to right now are very concerned about adding numbers of tools. So companies out there that are working in this space. I loved what you said, John. You said a couple of things to me. I translate in this way, focusing on seller workflow versus Big Brother. And it's, it's part of selling it to the sales organization when it helps me win. Just like Johnny Mac talked about in the beginning of this podcast, when you can show to me how it helps me win and makes me more productive versus you just want more insights and more data points to ask me about. Is. Is critical. And so it's a lot of. This is a mindset. And I loved what you said, John, is you thought you, you know, I think the, the term that Microsoft came up with on copilot in the beginning, I didn't understand it. I 1000% understand that term of copilot. Because that is a home run term for what sellers are looking for. You're not going to replace me as the pilot, but if you can help me fly my mission faster, more accurate, safer, and help me fly more missions, save more people, make more money. And those are just some things I'm seeing right now. The conversations aren't leading with that. They're leaning with inspection and, and, and why it's good for sales, why it's good for companies and CFOs. And it's a problem. I think it's a big problem right now.
- [58:44]
C
Yeah, funny, because I hate that term.
- [58:47]
A
What is it? Co pilot.
- [58:48]
C
I don't know why, I just hate.
- [58:49]
A
Like I hate it in the beginning.
- [58:51]
C
Too because I reminds me of the word hybrid for some reason and I hate hybrid. Anything. Hybrid is never what it's supposed to be. Yeah, co pilot means well, we're kind of there, but we're not really there. So you know, it's co pilot.
- [59:06]
A
Yeah.
- [59:06]
C
I don't know. In the way that John used it though for me was my own bias. That's me. Yeah, I'll leave it there. Get off my soapbox.
- [59:14]
A
Yeah, well, you and I are never going to agree on everything, which is our listeners and voice. The way John used it was not a brand. He was using it as like seller, assistant, seller and it giving the seller the power that says, and I think this is where, I think this is where we're at 100%. I don't believe that a lot of sellers, in some functions they might be, you know, particular functions of the sales process could be replaced. But I'm not even going there. For me, if you're a seller listening to this and you are not doing everything you possibly can do regardless of where your company is, if your company doesn't have tools, if you're not using your own tools, if you're not trying to figure out how to make it more productive for yourself, that's where I see the danger. So I don't think sellers are necessarily going to be replaced, but sellers that do not have AI acumen are going to be replaced by sellers that do. No question in my mind.
- [60:24]
B
Yeah, I, I love that John. I, I, I, it's funny, John McMahon. I have, I had a similar kind of reaction to that term co pilot. I know what, I know what you're talking about. I think what the way I think about it is. It's all about time for me. I want to free up time for my reps so that they have more time to be Able to spend more time with humans because human customers productivity. Exactly right. Because at the end of the day we're still people are selling to people. I think, you know, there's, there's a lot of energy around AI and there's a lot of benefit to it and, and we're trying to embrace that completely. And at the same time, the way I'm trying to adopt it within the sales team is to have it be like a partner that's working alongside of it, that is clearing the way out of like the repeatable stuff. Right. The different tasks that we can automate with AI. That helps our reps a lot because I kind of challenge the team pretty regularly this way. I'll say them like, hey, what if you had 25% more time? What would you do with that? Like yeah, you could increase your pipeline 25%. You can increase your earnings 25, maybe more if you're in accelerators. Right. Like literally what would you do if you could get 25% more time if you had to go to 25% fewer like internal meetings that are just wasting your time. It's time is so critical and I see AI is a big help in getting more time back for our Rex.
- [62:04]
A
That's, that's really, really, really well said. John, do us a favor, do me a favor and help me correct something. I should have asked you about Customer IO in the beginning. Can you give us the, you know, the, the, the elevator pitch a little bit, tell us like what's, what you're excited about and then how people can get ahold of you and your team?
- [62:25]
B
Yeah, absolutely. So we're really excited. I work for a company called Customer IO and it's a leading customer engagement platform. It's designed for tech savvy organizations to create personalized customer journeys. Those journeys, we want them to be super engaging so that customers as our customers, as they're working with their customers are really engaging those customers, converting them and then scaling them. So yeah, we use first party data to send meaningful messages across all channels and that's email, sms, through web, hooks in app, you name it, we're really excited about it. We got a lot of growth happening in the company. Our mission is really to transform the way that companies communicate with their customers. Simply put. And our vision is it's all about building the most trusted customer engagement platform for product led companies.
- [63:30]
A
As we talked about in the beginning, one of the reasons why, you know that's a tent pole and we talked about in that the beginning and I think people that you know, they don't have a process in place to understand the buyer journey. And a great question to ask people is, hey, walk me through the buyer's journey. And what they typically tell me is their sales process. So they tell me what they're doing, they don't tell me what the buyer's doing. And that's why I love. That's why I love. I love your company and what you're doing, and there's all kinds of stuff you're doing with AI and it's. I think it's just really hot and great timing.
- [64:05]
B
Thank you, John. Appreciate it, man. Yeah, we're. We're really excited about it. It's very much an AI first company. Pretty rapid growth. Come check us out. Please do check us out. Customer IO. Customers in the name. I mean, it's all about customers. And that's kind of how I try to lead and. And that's how we think about the business.
- [64:25]
C
What are you recruiting?
- [64:27]
B
What's that? Yes, absolutely. Recruiting, please.
- [64:30]
C
Yes. People, how to get a hold of you then, if you're recruiting?
- [64:34]
B
Yeah, so you can reach me at my first name dot. Last name. So John Dot Showenstein at Customer IO. And I know I've got one of those long, long last names, so.
- [64:49]
C
So we'll put it in the show notes just to make sure people can grab it. John.
- [64:52]
B
Perfect. I appreciate that. Thank you. Yeah, thank you.
- [64:55]
A
You're welcome. Dude, you're amazing. You guys both are amazing. You nailed it. You nailed the topics. I'm really excited for you, John, to see what happens at Customer IO because everything you've touched and been involved with over the last 20 plus years or so has or more has turned into gold. So we can't thank you enough for being on the show.
- [65:18]
B
Thank you, guys. I really appreciate you both. And, yeah, this has been a pleasure. And I always, always come away learning well, which is awesome. I love these kind of interactions. So I appreciate your time and love what you're doing with the podcast.
- [65:31]
C
Yeah, thanks, John.
- [65:33]
A
All right, guys, thank you all for listening to another episode of the Revenue Builders podcast. Thanks for listening to today's episode. Be sure to check us out@force management.com.