Monetizing SaaS: Episode 18 with Jonathan Carlson, Founder of CRM Hacker

Jonathan, man, it is so fun to have you on the podcast. You're an entrepreneur, you're an operator, you're a consultant. I've worked with you and you're amazing to work with. I think more than anyone that I know, you've been in the real belly of the beast from the perspective of the go-to-market tech stack and B2B SaaS companies. You've run ops at great companies like ION Interactive. You've consulted for dozens of companies. You've run your own business with CRM Hacker. You're building a software product as I understand it. Can you tell us in your own words about your career journey and the steps along the way? How did we get to now? Sure.

And thank you for that. Absolutely. So honestly, starting my first job out of college, really in 2012, I jumped into a sales development and operations role at a consumer products company. Honestly, didn't really know exactly what that meant, but I dove headfirst into it and ultimately became focusing on being the main sales support guy for the large sales team that there was, um, you know, making the, all the, uh, Power BI dashboards for the data analytics and everything, just for their performance, how the products were performing. And ultimately it kind of, then I had a marketing background, so it ultimately kind of developed into, um, the product descriptions, keywords, trying to really for the internal a system so that the sales team could then find the products and SKUs that they're looking for quicker and more easily. So then from there I realized like, all right, my job is to make the sales team's job easier, ultimately make it easier for them to sell. And then that just kind of developed one thing into another. And 2015, as you had mentioned, I took a sales operations job at, to lead sales ops at Ein Interactive. My responsibilities were to, you know, run the entire tech stack there on the sales side, including Salesforce. That was the first experience I've had getting into Salesforce. So based on all the different sales requests, the different optimization opportunities and things like that, I was able to actually teach myself Salesforce and how to use it and execute in it through their system called Trailhead, which is a self-guided learning system. And from there then I was managing their emailing, the dialer, the analytics tool and all this. And I realized that there was a point where I think it took 21 clicks for a sales rep to send an email to like 10 people. And at that point we were evaluating Salesloft for Salesloft Prospector back in the day, which was like a data, capture thing through, LinkedIn. And then eventually then that conversation shifted into their Cadence sales automation platform, which we know of it today. And we realized, okay, we can turn 21 clicks into 4 clicks, to send an email, right? So to 50 people instead of 10. Um, so then with all of that, I was working with the marketing team as well to then, identify opportunities to bring better leads. Course, sales always says the leads that marketing's bringing in don't work, blah, blah, blah. And, um, there was also the customer success side that was in that room. Um, eventually, just working with them, I ended up taking over the marketing operations as well. So then I was responsible for sales and marketing operations, um, running the full tech stack of both of those teams, and again, still working with customer success. I ended up sharing an office with the customer success ops person. She didn't know Salesforce as well as I did. So I was able to help her out and do a lot of things with the CS team, um, within Salesforce and really get an understanding and kind of dive into that side of things. Um, within that time, a sales rep sent me a referral for a Salesforce consulting opportunity, just a quick, you know, need help building out my Salesforce and Pardot instance. And so I was ready for the challenge and wanted to just see what that was all about. I took that on, did a pretty good job at that. And then while I was still doing that same gig and my full-time job, then another referral came in for them, like a digital marketing agency. Again, Salesforce and Pardot. So I took that on at the same time and now I'm working in 3 different instances and seeing, I mean, the first one was a trucking equipment dealer and then digital marketing and then a software company. And it was just like, oh wow, there's tons of companies that use Salesforce and they're in the ecosystem. And then these companies are smaller businesses, right? They don't have the resources for, a Salesforce or sale, you know, sales operations person full-time. So then that's really what opened my eyes to, oh wow, like this could be something that could be a business or this could be an opportunity that could grow. Um, so I kind of took one thing at a time. I eventually left ION Interactive, went to then an education software company, jumped straight into the marketing operations side. So I went sales ops and sales and marketing ops, and then I wanted to focus like purely on marketing ops. Um, did that and, you know, helped them out again with Salesforce, Pardot, still the same ecosystem. And ultimately that developed into a demand generation role while I still had marketing operations under my responsibility. And I hired a guy to help like get in the weeds and do like all the execution of the marketing ops and stuff. And I realized then like, I love the operations piece of it. I don't want to do like the demand gen. I want to be, you know, hands-on and do all of this, you know, in the weeds tech stuff and processes. And so then I think it was 2021, I had my hands on like 8 separate instances at once and I just said, you know what, I think it's time to go full-time. And just see what I can do. And since then, then I've been here and, you know, I started as Carlson Solutions. Ultimately, that was my consulting services business. Now, you know, over the last year or so, I've rebranded into CRM Hacker. The whole thought behind that was really one, to get away from just being a freelancer and an individual, want to build a boutique, smaller agency type of model. And then also really get into more of the SaaS and building applications within Salesforce and kind of the stuff that you and I have worked on in the past. And I've worked, I've, this came about really from 3 or 4 different projects that were very similar to you, you know, you're, you know, the one that we worked on together being very similar with all the others. And those were all focused around opportunity management, opportunity automation, and really calculating, you know, quote-to-cash applications and really trying to make it easy for sales reps to create some advanced quotes, not have to do too many calculations in an Excel spreadsheet, then pop it into Salesforce. They can just, you know, put in their quantity, their term length, their number, and ultimately spit out the deal. So that's where, again, just out of necessity or what I've been seeing, I decided to then kind of move forward on that track.

You took the leap. It's such a good story and it's so cool. And I think you've rightfully earned the trust of your customers. And I know that firsthand because I've worked with you. I want to, I want to kind of slightly zoom out. So like you're helping a bunch of companies with Salesforce specifically. Um, is it fair to say that it's largely Salesforce or are there other CRMs as well?

I've worked, um, Salesforce is the primary that I work with, but I definitely have tons of HubSpot experience and I've worked with like Zoho and Pipedrive, but I'm trying to really focus mainly on Salesforce, but I'll, I'll work with HubSpot as well. I know it enough from the sales, CRM, and the marketing side.

Yeah. And so what are the recurring problems that software companies are running into that they're coming to you to try to solve? Are they recurring or is it all across the board?

It's, I mean, it's definitely across the board depending on, I mean, each individual business has its own specific needs and sets of challenges and their own structure and internal resources. But mainly I've been finding it's really kind of becoming more— there's a bunch of silos in their departments where I'm sure you've heard just revenue operations is coming about and really kind of a trendy term, but you've got sales that has been using Salesforce or the CRM for quite a while. Marketing has been using it, but now you're seeing customer success using it more. You've got service implemented into it. You've got all these different departments. And historically there's been, they've had their own separate operations people and their own separate admins. And so then that kind of creates a bit of a mess and not everything is connected as far as processes. There's duplicative processes and, you know, this tech debt is kind of out of control. I'm sure you've seen all the different graphs of just the, crazy different marketing tech stack, Scott Brinker's tech stack map and the sales. Now there's a sales one too. And it's, it kind of just can get very, very messy. And then that leads to a lot of data issues and just, it's hard to like kind of maintain from there. So companies will come to me to try to kind of clean that up and then um, just put really streamlined processes into place. Um, the, the sales side, I really like to kind of help build out a lot of the sales processes, the BDR type of outreach processes, and, um, really like the whole stream of the flow of data from marketing to sales with the routing, and then what happens through the whole deal cycle and the stuff that we worked on and with quoting and all that.

And then after that, do you feel like, I mean, one thing that I've obviously kind of witnessed, seen, been a part of, made mistakes myself is like, you can just go buy a bunch of tools. You can buy a bunch of sales tools. You can buy a bunch of marketing tools. But if you haven't been intentional around setting up the data flow between these tools, like to your point, you just get into this like I mean, this total, you're mired in complexity and you're mired in data that is hard to trust. And then process doesn't work. And then you've got us versus them-ism across customer success and marketing and sales. And it's a real problem. Are you seeing companies become more intentional around the way they architect the stack? Or are you seeing that intentionality largely come after they've gotten into a real problem? I'm kind of trying to understand like where we are in the curve. I think understanding how important this stuff is.

I think they're realizing from their own mistakes of getting into some of these issues that, you know, they need to bring all these systems and departments and everything together into these tools. Um, there haven't been too many companies that I've run into where they're like kind of getting ahead of it to do it. I feel like they're kind of learning after the fact, like, oh, shoot, we've got a mess of data and systems aren't talking to each other properly. And now we have also like 400 custom fields on a, you know, one object or something crazy.

Yeah. Uh, yeah. So you mentioned that you're kind of thinking about building your own software a little bit. Can you zoom out and talk about some of like the big changes or inflections that you see that attract your interest, attract your curiosity, and inform how you're thinking about building your own software?

Sure. So ultimately the software is, you know, like I mentioned, it's, it's a quote-to-cash, you know, type of advanced quoting for software SaaS businesses. Companies are becoming more customer-centric and they're really trying to sell to how the customer needs to buy. There's different diverse customer segments, whether it's an enterprise customer, a startup, or, you know, a small, medium-sized business that they have their own needs and they have their own, you know, pricing, packaging, necessities. Now companies ultimately like have, I feel like they might have 3 tiers of a product or so, and those don't necessarily meet all of the needs of each of these individual products and whatnot. So then you have all the needs just based on nature of a SaaS business. There's software and a service, right? So then you have those two types of products, um, which those need to be operationalized. Those— there's need to have systems and processes behind them in order, for one, for a salesperson to be able to quote those types of products. And then, I mean, you have multiple other different types of billing models, whether it's a one-time service, a recurring service, a usage-based type of product that a sales rep probably will try to sell within one deal, which absolutely needs to, you need to allow. So really companies don't necessarily have the infrastructure or have the systems in place in order to really allow that from the sales side. And then you think about just the full gamut of what does that actually mean? Well, you have your CRM, which is what I'm talking about, but then you've got your provisioning application or your product application, which needs to be able to turn on features, turn off features. Hopefully, like I just mentioned, there's the 3 tiers, pricing's not static, you have multiple different segments, you're gonna have to have add-ons and have different features that you, you know, flip on and off. So you've got to be able to make that happen and enable the actual product functionality for the customer. But then on the opposite side of the CRM, then you've got like the billing system, your ERP, which then you need to be able to invoice the customer, sell, you know, actually take your money and, you know, bill them. And these are just multiple different systems that it's pretty— I mean, there's 3 different systems right there and there's probably more. I don't really deal much with self-service, but you might have Stripe mixed in with it or some type of other different things that I'm not even thinking about at the moment, which you're touching on.

I mean, you and I have like obviously worked together, talked about this, but you're touching on what I think is so at the root cause of complexity around how software businesses monetize. And like what you described are like pricing and packaging, which is like effectively 50% of the revenue equation. You know, there's pricing and there's quantity, as a good friend of mine has said. Well, pricing is governed by all these systems and you named the CRM, the ERP, maybe the billing system, but also the application. And so if you're trying to be agile around pricing, how do you actually achieve agility around pricing? To your point, customer centrism around pricing. If you've got to make changes across so many different systems. I mean, it feels like just incredibly complex, especially if you move into multi-product and the permutations just start to get exponential.

Yeah. And don't even start talking about if you've got like a multi-year deal and then you're trying to, you know, sell an upgrade 15 months into that 36-month deal, then you've got so many different— just on the sales, like, quoting piece, And that's a lot of what I'm working on myself for, you know, really trying to make that part easy for the reps to be able to just select their upgrade product, for instance. And then that just kind of allows everything to automatically work and updates the renewal with the right proper information, which then downstream can feed into, you know, your billing or any other systems.

Yeah. And so it's a good way for people to think about what you're building is like, okay, it's, it's like, it is a CPQ product or plugin that I can get from the Salesforce App Store. And, um, what it allows me to do is like run kind of a standard CPQ process, but it's got like workflows or automations that I can build between my app and between my billing system so that I can kind of coordinate changes across the different systems.

Exactly. And I, you know, what came— what this really came about, Salesforce CPQ is very, it's great, it's very complex, and it's very expensive. And there's a lot of small businesses that need that type of tool, but they're not going to shell out $60,000, like, right up front to purchase it. Ultimately, they need to kind of I mean, as you know, you've got to prove your ROI. You've got to prove that this is something worth the, the juice is worth the squeeze. And so they need almost a stopgap or something that's going to get them the results for this type of quoting. Say they don't need to have a full-time person doing these types of manual quotes in order to, you know, based on whatever their finance and legal teams require. They don't need a full-time person to do it or a sales rep to spend hours doing it. You know, you can spend all your time selling and, you know, just ultimately add products, quote line items and punch in the numbers and it'll all work out.

Yeah. I'm really interested to get your take on, I mean, so we've talked a lot about monetization already, but based on everything you've learned, are there things that companies can do operationally to continuously improve in their ability to evolve pricing and packaging and monetization without all of the brittleness?

So, I mean, first and foremost, you just have to have the proper infrastructure and systems or processes in place in order to make these types of changes. I mean, there's a lot of—

maybe talk about that infrastructure. If we could build this infrastructure together, like what does that infrastructure look like? What are the components that people need to be thinking, especially like RevOps leaders, Salesforce administrators, even like product and engineering leaders, what do they need to be thinking about architecturally to do this infrastructure well?

So it needs to be agile and flexible. It should not be, it can't be hard-coded. A lot of what, you know, today's pricing packaging models whether it's in the provisioning product application or in Salesforce, they're hardcoded, like, and just built in, and it takes months or so just to add in a new product or to make a change to a product and pricing. So if there was a— and it's not what I'm building, but if there's a way to, like, make that a lot easier in order to make those changes, to be agile and be flexible, that's, I mean, ultimately key. And then bringing in like product data as well. So customer behavior, figuring out how customers are using the product really can help just drive your pricing strategy for one and help you make data-driven decisions there.

Hey, I've got a little bit, I think agree with all of that. One thing that I regularly hear from people is, some type of point when the product catalog has become important, and before that it wasn't important. How important is the product catalog as a component in this architecture, in your, in your opinion?

Well, I mean, within— I'll go into Salesforce because that's like what I know very well. Just, we've— the product catalog is essentially a price book within Salesforce, and we've got a large number of products in there, right? And what I've seen a lot of companies make mistakes with, maybe that's what I'll start with, is there's a large number of SKUs based on—

we—

this is a SKU for 1 year, this is a 2-year SKU, this is a 3-year SKU. Oh, this is for usage-based, this is 1, you know, to 10 limits, this is 11 to 20. And then— but they're the same product, right? But it's completely separate. So then it's siloed. And how do you report on that? It's like, it's almost impossible to do that. And that's, you know, kind of been my goal over the last 3 years of trying to consolidate all of those products into one product and enable companies to be able to really see one full view of product subscription A, and then just what's the breakdown of, okay, we have, you know, your different segments of those whether it's years, usage limits, and all of that. I think that's, I mean, I've seen that too many times of having thousands and thousands of SKUs just for every single different variable. You have 3 different, say you have a 1-year deal, a 2-year deal, a 3-year deal, and those are 3 SKUs, but then you have a 1 to 10 usage limit, and so on and so forth, then you've got 9 different variables right there. And that's just on the most basic thing that I can think of.

Well, I mean, it's like so true, right? You want to tweak your SKUs, but you're rarely doing full-scale changes to the SKU. But you end up with SKU sprawl because there's not elegant SKU versioning.

Yeah, exactly. And there might be just a product manager or somebody the product expert that's going to add in all of the products and SKUs and doesn't necessarily have like the infrastructure mindset of, all right, we need to be able to have all this together under one, essentially for each separate product.

You know, this has been really fun. We need to do it again because I feel like we've only sort of like tapped the surface here.

Yeah, I agree.

One of, one of the questions I always like to ask at the end of these is what was the professional experience that ended up being most formative or influential for you? And I'm really looking for is the experience itself, like the moment.

So I'll say honestly, just working at Ion Interactive, working under the Tallaricos, like they have— they entrusted me with so much at that company and just like really showed me that I can grow my career. And as long as I hustle and I'm willing to take on more and more responsibilities and challenges, Um, like I went from sales to marketing ops and sales and marketing ops, and really was able to kind of get myself fully ingrained into the entire flywheel, so to speak, of the organization. Um, I said that was probably the most influential because that also, that's where I learned Salesforce and that's how I started to make my connections with Salesforce and everything. Um, And then like most formative is just starting as a freelancer and just taking on these gigs. All of my customers have been referral-based. Um, so really just having the trust in my customers and clients where I've done a good enough job to where they're willing to pass my name on to somebody else. Um, and other people that I've worked with who then move on to other companies, like sales reps that move on to other companies that then will call me because they, they know what I can do.

Yeah, both are really good. And we, the Talaricos are how we know each other. They're special leaders. So totally understand that. And taking the plunge was the formative one. Um, where can people find you and learn more about CRM Hacker?

So you can find me on LinkedIn, Jonathan A. Carlson, um, crmhacker.com, or just email hello@crmhacker.com and, you know, you'll get a response directly from me, you know, within 24 hours. Um, happy to chat, happy to, uh, to talk about everything, go-to-market, revenue operations, Salesforce especially. I'm a bit of a sales nerd and, um, I, I love this stuff. It gets me going.

Awesome. Well, we'll do this again. Look forward to it. Thank you so much again.

Cool. Thank you so much, Fynn.