Svane. If you don’t have tickets, lock in Early Bird pricing today and bring your team from just $999! (All ticket prices go up December 1st.) Get tickets here. TRANSCRIPT Announcer: Co founder and CEO of Yello, Jason Weingarten, and VP of Account Management at Yello, Michael Megerian. Jason Weingarten: We are very, very excited. Who here has heard of Land and Expand? Michael Megerian: A good amount of hands. Jason: A lot. Who has heard of Expand Again? He works with us. Michael: Two. Jason: A little bit about us. I’m Jason Weingarten. I’m the co founder and CEO of Yello, and joining me today is Mike. Michael: Mike Megerian. I’m our Executive Vice President of Sales and Account Management. My background is 15 years of enterprise SaaS, sales, account management, customer success at Yello. Previously at Oracle, Taleo, and Ariba. Jason: Things that we’re going to cover today are primarily around the importance of expansion. It seems obvious that you want to expand your client base. You want to extract the most value out of every single customer. There’s a number of ancillary benefits that I think are really important. The first one is the product market fit. If they’re buying something else from you, obviously, whatever you were selling them the first time is working. They’re seeing success with it. Additionally, it’s a lot cheaper and easier to upsell an existing client than it is to go out and get a new client. You don’t have to worry as much about competition. You don’t have to worry about long sales cycles. It’s much quicker and easier, so software margins tend to go up. They’re buying something, they’re probably not leaving. It helps you get a good understanding of churn and what that might look like. Then, when you’re going to sell something to another customer, it’s always great to not just say that, “This one company out there, they bought this one thing, and they were successful. They were so successful, they have now expanded usage. Here’s how they’ve done it.” Who really likes to hear that are investors. Investors want to believe your story, believe that the addressable market is as huge as you know it is. This expansion will help do that. We’re going to go back in the day, and we’re going to go through some pitch decks. Who’s currently raising right now? Nobody’s raising? Come on. We’ve got a lot of VCs in here. Who’s raising. Michael: Me. Jason: This is a deck that did not work, but it helped start things. I came to the Valley by myself, January 2014. One of the slides that I’ve put together talked about in the beginning of the fourth quarter these companies were at like x rates and by the end of the quarter they had doubled or tripled. I was sitting with one of the prominent firms here in the city and one of analysts and he says, “It’s land and expand.” I’m like, “What? What was that and write that down?” “Yeah, it’s a land and expand model.” “OK, land and ampersand, there’s an and. Let’s get this down. Let’s get it figured out.” As we started to raise money throughout that year we started to look at our model and we started to look at why we were expanding and how we were expanding successfully. A year and a half later after we had raised our first round, we then had a slide that looked like this. Obviously, we’ve taken off some of the percentages. It shows that we were not only able to consistently land new clients and keep them, but we have what Jason Lemkin refers to as that net negative churn that you’re always looking for. We had it at such high pace because companies were not just buying an ancillary add on, They were getting something significantly bigger. In some cases, they were 2x, 3x, 4x, and that led to the slide this year which we loved, and our investors loved, and our team loves. These are clients that have been with us now for years. Every single year they bought something new, they increased usage. We were able to display success for them. Obviously, Bluth Company and Prestige Worldwide not current customers of ours yet, we’re still working on them. What you’re going to want to do for your slide decks after you’re showing expansion is have those big enterprise logos and really focus on the validation of your success. Without further ado I want to give you a little background about our organization because I think we’re a bit unique. Most of the SaaS companies that are here and I’m fortunate that this is my third year here. When I went around I started talking to a lot of the other founders here. They started going SMB, and then they would get up to the mid market, and then get up to enterprise, and then strategic. We were a little bit different where we started enterprise from the beginning and we landed those big logos from the beginning. The conversations that we’re going to have today while they are a bit focused on enterprise because that’s what we do, we do think it relates to other areas. Founded in 2008, this is actually my second company. Founded another one back in 2000 and sold earlier in 2008. We’ve raised just over $15 million to date. Chicago based, currently in growth stage, and we’re at 130 employees up from about 65 a year ago, so significant growth. What we do is we work with the enterprise. We help with recruitment marketing software and recruiting operation software. Together it’s talent acquisition. All of you are probably selling something. You probably have Salesforce or a similar CRM. You may also have some type of marketing automation like a Marketo or a HubSpot. Think of this in a recruiting standpoint for what big companies do globally. That’s what we do. I want to go through a few of the areas just as we described, Land, Expand, and Expand Again. For us Land is a paid pilot. It’s something we refer to internally because there’s no guarantee that they’re going to continue on with the solution, that they’re going to keep using it. That’s something that is said throughout the organization from an account management standpoint, from CSG, even the engineering team. They all know about the new pilots that we land. We then expand them. We have a variety of different products. We restrict usage, which Mike will talk about momentarily. Then what we do is, once they are on a couple different products, they’re a customer. Then the last part is the Expand Again. These are the difficult but the really fun conversations when you’re speaking with, whether it’s C Suite or really high level people at these organizations, of how you can truly be a strategic partner. We’ll talk about how we’ve been able to do that successfully. First, we’ll go into the Land. Just so you can get a sense of how we have it structured, my co founder is the president of the organization. I’m the CEO. He oversees everything revenue. In a more typical sense it’d be like a Chief Revenue Officer. Mike reports into him, and Mike oversees everything sales and account management related. One of the things that we’re going to talk about, I’m going to throw it over to Mike, is how we built this team and the significance of the structure because it’s not necessarily normal for companies of our size. Michael: Yes, we’ve got three specialized sales teams. Two are focused on that new logo acquisition. It’s our strategic sales. It’s really the large strategic enterprise deals. These are the high six figure lands with the six to nine month sale cycles. We’ve got our enterprise team. Again, these are true enterprise deals, five and six figure lands but a little bit shorter sale cycle. Then we’ve got our account management organization, which is solely focused on managing relationships with our current clients. They’re responsible for the renewal ARR as well as the upsell ARR, selling into the existing client base. Jason: When we put this slide together very recently, it was cool because it was the first time that we actually layered it out. This did not exist a year and a half ago. Mike joined us just a year and a half ago. When you are back at SaaStr next year, if you don’t have a…and again, what we do for us doesn’t necessarily work for everyone, but it has worked really well for us. There’s a lot of change that you can make within one year. This is a great example of it. Let’s get into the Land. I think one of the keys that I like to talk about specifically with the enterprise is the pilot. I think it’s so important that, if you call it a pilot internally, people take it much more seriously because now there’s a lot of risk there. You want to make sure that your team is all on board. You also want to give some comfort to the person that’s actually buying the solution. It is still ARR. It is still something where these pilots might be one or two year, but just having that cover helps a lot. The other thing we found specifically with the enterprise is there’s someone at that company that has a lot to gain or lose by buying your software. Find out who they are. Get to know them. Understand their favorite drink. Know where they like to eat. Know their sports teams. Really, really get ingrained with what will help them become successful because they’re going to end up helping you navigate the expansion and the Expand Again. A couple other items. One is to demonstrate that you’re stable. Very early on it’s, “Will you exist tomorrow?” Peter from Veeva, I loved his opening of his mission. The first quarter was to make it to the end of the quarter and to get to the next quarter. When you’re originally doing those Lands, that’s where it is. Now it’s about, “How can we make sure that you’re not getting acquired? How do we make sure that your organization’s going to be staying around, that you’re going to be financially stable for many years?” Because they’re not investing in you typically for month to month, but oftentimes, years. Lastly is restricting usage and Mike has built this into our solution very recently. Michael: Yeah. We’re a unique model for subscription licensing. We’re able to restrict the usage or the contract limitations based on actual usage. It’s common in SaaS to price based on employee count or company size. The challenge, it creates some barriers for onboarding new logos. At the top of the funnel here in the lands, we’re all about new logo acquisition. The model allows us to onboard a new client organizations by dialing in the license based on their specific usage. In the campus recruiting space for example, we may start to work and create a new relationship with a Fortune 100 or 500 organization solely focused initially on their campus recruiting team in the United States. We’ll demonstrate some success there. We’ll drive value and then we’ll be able to then upsell the same products they already have to their campus recruiting team in Europe or maybe even globally. Once we’ve done that, then we’re able to leverage that success in the foundation we’ve built and then go after their military recruiting teams, their diversity teams, their professional recruiting teams. Jason: The other thing is as we started to do what we had some unintended great benefits, the first one was we found that the pilots were ended up being more successful because there were less obstacles, there were less people that were out there. You really could hone in on just that one group and the success there. The second thing was it stirred up demand. People don’t like to be told no. If we said, “Yeah. Just this group can use it. I’m sorry. You guys can’t do it yet. You have to wait later.” All of a sudden, they want it a little bit more. That definitely helped with expansion. Michael: Let’s talk about expansion a little bit here. Jason: We’re going back. We’re back. Michael: Going back. Couple key things to think about. One, define success upfront. Do it before the implementation. Make sure you’ve aligned the proper resources that work with your clients to drive utilization and adoption. At the end of the day, we are delivering success for our clients. We’re not just out there selling ARR. Equip your account managers. Make sure that they have products to upsell. Your suite has to have multiple products so they can continue to upsell and expand throughout the course of the journey with the client. Then, demonstrate the value you’re creating on an ongoing basis. We’re going to walk through each of these. We’re actually going to take a look at a couple slides that we actually show both clients and prospects in the presales cycle. Here we’re showing a prospect organization’s what their journey with Yello is going to look like from the sales process here in the beginning with the enterprise sales rep, a contract signature. We’re then transitioning to an account manager, who’s going to be there for the lifecycle of the relationship with the client. The enterprise account manager or sales rep then is going back to find those new logos. Clients then working with our implementation team at go live, we then transition to an adoption manager. We actually aligned two dedicated resources to each client organization. There’s an account manager who’s really solely focused on the relationship, the strategy. Again, they are responsible for the renewal ARR, as well as they have an upsell quota. There’s an adoption manager who’s focused on…They’re really the product expert. They’re working with the client every day on utilization and adoption. At the end of the day, these two are working together closely with the clients to make sure that the clients are both happy and successful. And at the the end of the day, that they’re deriving real value from the investment they’re making with Yello. One more. We put in place a mutual governance model as well with clients. This is very helpful as we align the account team on the Yello side to various specific resources on the client side. The Yello account manager is aligned to the executive sponsor on the client side. The Yello adoption manager is aligned to the project owner or the super users. From time to time, we’ll have various project resources as well. This enables us to really continue to further penetrate the client organizations and really understand what keeps each individual and in their part of the organization up at night and what their business challenges are. Jason: For those that are just getting started out and you’re landing very large clients, you are their account manager for life. There is someone else that may be called account manager, but you truly are the account manager. I have several very large clients that, it was kinda cool, they texted me this morning saying, “Good luck today.” You’re developing personal relationships with them and that doesn’t have to disappear, even at scale. We have hundreds of clients right now. You can still maintain a personal touch, but you need to make sure that the account managers are equipped to do their jobs and adoption at the same way. Michael: I spoke earlier about our unique model for restricting these subscription licenses based on usage, so we can on board these new logos and then continue to expand. We also have the rest of the suite to further expand. We’ve got a full tell and acquisition platform. There’s many ways that clients can onboard to Yello. We referred to as the gateway products. Often times, we’ll start solving one or two of their biggest core challenges, onboard them, and then we’ll have the rest of the suite to be able to upsell over time. Lastly, I mentioned demonstrating value. We have to do that often. It’s a big investment that we make with clients. We do that often in the form of data reviews that we’ll do several times a year. Spending a lot of time to help the clients provide insights into the valuable information that they have in the Yello solutions by using the tools. The benefit here is, one, we’re helping show ROI, and really help show clients how they’re deriving value from the solutions. We’re also putting together this package of information that our sponsors, the folks that we have the relationships with are able to use internally at their organization to justify these talent initiatives. Jason: If you think about it again, this is a little bit more enterprise focused. For instance, someone who’s running talent acquisition, they might be great at recruiting, they might be great at building structure around their organization, around recruiting operations. They might not build slides very well. If there are slide decks that are getting to the C Suite, there are slide decks that are getting to the CHRO, they’re selling you right now. You really want to equip them with the ability to know what they should be talking about. Be very confident in the fact that they’re comparing very positively towards their peer groups, which we help them understand as consultants as well. We make it look very pretty. It’s an extremely important part to get these final meetings, which we’ll call the Expand Again. We all can expand differently. When we do that, the way we do that is for us, it’s all about the talent platform. Every single organization, they have different solutions that they need. They have different goals. They have certain initiatives for the organization. One of our clients, the CEO of the organization, has his bonus tied to diversity goals. If that happens, then the head of Account Acquisition better know what their diversity initiatives are, better be able to hit those numbers because you know the CEO wants to hit that bonus. When you find that information out, now all of a sudden you can start layering on a true solution built off of just the products that you’ve already developed. There’s a couple of ways that we recommend for the Expand Again. The first one is find out when the strategic planning meetings are. Jason Lemkin always says that, “Get on a jet.” We do that very, very frequently. We had a very big pharma company that said, “Hey, we’re going to have a strategic planning session. Would you mind coming out to our headquarters for three days?” It was like, “Well, I don’t know. It’s a lot of time. I’m trying to grow the company. I can’t look at my phone while I’m in front of you.” These are all the thoughts that are going on in my head, but of course I’m like, “Of course, yes. I will be there. Thank you for inviting me. We’re honored.” We ended up being the only vendor that was there. There were 12 different individuals. We were locked in this room, ideation around how to get down from 28 vendors to 5 vendors in two years. Guess which vendor was one of those 5 vendors? We were in there. We were a strategic partner to them. Again, if you find out when those meetings are, if you get invited, go. You can’t understand what the goals were afterwards because they probably have some type of deck that talks about all the different things and initiatives that they have. Another thing that we found important, specifically around the enterprise, is you can adjust your roadmap to help. It doesn’t mean change the roadmap, it’s adjust. Oftentimes, the VP of Product, the CEO, they know what you want to build for the next two, three years. There’s a good idea of what that is. There’s something that you were going to build 15 months from now that they’re willing to pay up dramatically to get that moved up forward. Now, all of a sudden, you’ve created a partnership there. They genuinely appreciate that. We hold a conference very similar to this, not 10,000 people yet, but with our conference, we adjust the roadmap. If they are a partner, they have to get on stage and speak. They have to talk about all of the things that they did and why they did it. All of a sudden, it becomes validation. You don’t have to worry about product market fit because you’re working with a leader that’s already helping you build something that you were going to do yourself. Then, you have to have that conversation. This is usually over what we call the “steak dinner” or the “happy hour” where they go from being a client to a partner. It’s not an easy conversation. It’s something that you have to practice, but it’s a good understanding of what do I need to do. Where does my company need to be, where we can be a strategic partner to your organization for the next three to five years? What do we need to invest in? What are the areas that are most important to you?” This is a conversation where you are just listening as much as possible. You’re soaking up all the information. You’re getting a good understanding. You’re not asking them to be a partner that night. It’s a dating experience. It takes a while. In this particular case, you want them to truly feel like you’re going to listen to them, and you will make changes if need be. Then, when you get those partners, they’re much more than the six and seven figure ARR that you’re hoping for. They become your marketing material. They become your client references. They become investor references. One of the things that helped us raise money very successfully each time is we invite our investors to come to our user conference. They can speak to all of our customers, and then we set up a specific time where they can meet with our core partners. Again, getting them involved with it. Then, the last thing that we did is we created something called the CEO’s Innovation Council, the CIC. You might call it a board of advisors. We actually hold these people accountable to specific roles. We meet on a quarterly basis, once in person at our user conference, and then three other times throughout the year. The one that we do at our user conference is kind of ridiculous. It is a 12-course, two-Michelin-star restaurant. We go through with the wine pairings. It is something where it is meant to foster great conversations and where they truly feel special and appreciated. It also gives them the ability to show that you’re giving back to them. They did pay for the dinner, even though you’re the one that wrote that check. Those are the types of things that we think are extremely important. When we have our quarterly meetings, when we have our Innovation Council, we always tie back innovations that we built back to the individuals that created it, or that had that idea. Again, they are invested in us, even if they’re not stock owners. This is our actual CEO’s Innovation Council that we have right here. You can see some of the names that are on there. These are not easy to get, a JPMorgan Chase, an Eli Lilly, a J & J. It’s something that took time to build. We started with just a handful of people. Then, one of the things that we can do, one of the things that we can leverage is if you’re a VP talent account acquisition or a CHRO at a big company, you want your name up there, right? When you’re going through the account management process, when you’re going through the sales process, that’s an area that’s of interest. We just moved to this brand new space in Chicago. It’s absolutely gorgeous. We’re one of the only tech or software companies that’s in this gigantic building in Chicago. I called down and I said, “We’d love to get a nameplate up at the elevator bank. We basically have a whole floor. They said, “No, can’t do it yet, but you can do it at renewal.” I was like, “That’s land and expand again.” It’s areas like that where, again, we can use the Innovation Council as leverage because they want to be part of that group. That helps make them successful internally. With that, I hope everyone has gotten some lessons learned on how to land, how to expand, how to expand again. Last thing real quick, again, I said before, this is my third SaaStr here. Every year that I’ve been to SaaStr, I feel like we talked about all the different people that you meet and the connections that you get and that’s great. But if you’re a company that’s between a half million in ARR and probably two, three million ARR, don’t sit in the CEO sessions, sit in all the VP sessions. That’s where you learn all the departmental areas. My first SaaStr, I learned so much by watching a lot of the VP of Sales and VPs of Product go and talk. I greatly appreciated that. The next year, we were at a much higher level of ARR. Then, hearing people like Aaron Levie speak and Peter today. Those are the ones that you go and you listen to. Make sure you’re sucking up as much content as you can. You can always connect at the after parties. This is the best content out there. If we had SaaStr at our first business, I think it would have been much more successful. We appreciate being up here. We appreciate all of your time. Thank you. Have a great conference. Best of luck to you in 2017. The post Lessons Learned: How to Land, Expand, and Expand Again (Video + Transcript) appeared first on SaaStr.
Needless to say, every company wants to grow their client base. But what’s the best way to do it? You’ve probably heard of land and expand, but what about expand again? Yello CEO Jason Weingarten and EVP Michael Mergerain talk about the importance of expansion and how to best extract the most value out of every customer. Some of the things Jason and Michael suggest doing are starting a one-year pilot during the Land stage, equipping your account managers so they have products to upsell, and the importance of building and maintaining relationships with your clients. You can view the slide deck here. And if you haven’t heard: SaaStr Annual will be back in 2018, bigger and better than ever! Join 10,000 fellow founders, investors and execs for 3 days of unparalleled networking and epic learnings from SaaS legends like Eric Yuan, Tomasz Tunguz, Chris O’Neill, and