Shifting Your Sales & GTM Strategy with Salesforce SVP of Commerical Sales Adnan Chaudry

all of our mid-market business. And, um, we are going to be talking about how our portfolio companies and how Salesforce Ventures, uh, and how Salesforce is shifting our go-to-market strategies during these very uncertain times. And really excited to have Adnan here, um, one of the best sales leaders I've ever had the privilege of working with. And also, he works with many of the leading tech companies, so he has a really good perspective of what is going on in the market. And he also has the I don't know, benefit or dubious distinction, but lived through this before in 2008 and 2009. So a lot of lessons that can be taken from there as well.

Thanks, Matt. Good to be here.

You can go to the next slide. Oh, sorry, am I— Adnan, can you advance?

You're back. There we go.

All right. So everyone is adjusting their go-to-market strategy, and I think adjusting really is the operative word here. It seems for the first few days everyone was adjusting day to day, and now it seems more week to week. And initial reactions certainly were one of shock and just trying to figure out what's going on. Checking in with their employees, making sure everyone's safe, making sure everyone's healthy, and, you know, checking in with customers and doing the same. And seems we're headed more into a bit of an adjustment period, trying to stabilize, trying to establish a new normal. And so we're going to talk about what that means in a bit more depth. Go to the next slide. So we're going to talk about this in two parts. I'm going to first talk about some of the insights that we've gotten from serving Salesforce Ventures portfolio companies, both in terms of what they're seeing in the market and how bookings and churn and things like that are heading, but then also how, how they're adjusting to this on their go-to-market strategies. And then I'm going to hand it over to Adnan, and he's going to go in more depth and provide a framework of how Salesforce is adjusting, and then talk really some of the more detailed specifics about some of the tactics and strategies that we're we're employing. Um, so for those that aren't familiar with Salesforce Ventures, we are the strategic investment arm for Salesforce. So we have over 260 portfolio companies globally. It's all enterprise software, predominantly SaaS. Uh, some of the companies you may have heard of, such as Zoom, um, a lot of other companies on this list like Anaplan that you might be familiar with. And, you know, feel like we did some surveys of the portfolio company, and given the breadth and scope, feel like it gives a pretty good index of what's going on in SaaS and the enterprise software landscape. And so we're going to walk through some of the surveys that we did. You can go to the next slide. So we surveyed a portfolio over a couple of surveys, and to set this up, you know, this is largely companies that are Series A, Series B, and Series C. 80% of the companies fell in that category. These were kind of smaller mid-sized companies with employees generally that had 11 to 250 employees. About 90% of the companies fell within that, within that range, and, and mostly selling mid-market and up into enterprise. So Think of this as more direct sales, mid-market and up, kind of early-ish to early growth stage companies to sort of think about the survey results. So if you look at the results themselves, if you look at Q1, not too surprising, bookings were down. I think the silver lining is, but not by too much. 50% of the companies that we surveyed were at 76% of plan or better, which was pretty good. It does tend to separate when you look at it more in companies that had their, uh, their fiscal quarter ending in March versus April. Um, and, uh, certainly kind of what you're going to hear coming out of this was that companies were able to really accelerate deals that were at the bottom of the funnel, trying to close things quickly. And as April kind of came on, things started to slow down a bit more. So as you move forward and you start to look into Q2 One, not too surprising, everyone's expecting Q2 to be much softer. So in this case, only 30% of the companies that we spoke to expect to be, to hit 76% of bookings plan or better. Certainly some of this is, a lot of this is going to be COVID-related, but I think also it's, and Adnan will get into this too more, I think it's a bit of the strategy Companies were very focused on customer success, retaining existing customers, just checking in, seeing how customers were doing, assessing the health of the business, assessing the health of their own employees, really focusing on upsell, closing existing deals, and, and not as much focusing on top of the funnel. And so if you look at where, where pipeline is right now on the next slide, again, pipeline is flat to down. Again, not too surprising. Similar things, and this has come out as we started to really talk to many of our portfolio companies as well. You know, companies were really reaching out to existing companies and checking in. There was not a lot of outbound sales or marketing. And I really think what we've seen internally and externally is that's starting to change. So last week, really starting to adjust to, I don't wanna say the new normal, but kind of trying to stabilize businesses. And really starting to focus again a lot more on outreach. So we're, um, we're going to check in on this in a month or so, and it'll be interesting to see how, how this changes over time as companies really start to, um, you know, increase outbound as well. And if you look at churn, um, so in Q1, starting to see some early signs of churn. Um, 30% of the companies saw some increase in churn. And then if you kind of look at this a little bit more on the next slide, uh, if you look at the whole year, we are expecting to see a significant increase in churn. 30% of the companies are expecting to see churn increase by 1-5%. Another 36 are expecting to see churn increase by 6-10%. I think the silver lining in this though is that only 14% of the companies think that churn will increase by 11%. So I think that is somewhat of the good news in this, in that SaaS businesses are sticky, companies tend to stick around. And so while the churn, I don't want to minimize it, you know, stable base of revenue should be able to maintain that through the year. So I think that is some good news. If you dig into the churn numbers a little bit more, we're using some of the data that Gainsight provided, and they did a great job. I recommend looking at the survey they did. They really go into churn and customer success in great deal, and this is highlighting something that we're really seeing across the board, and that is you're seeing a bit of a separation in those companies that have really the stickiest, most critical solutions. So if you have a renewal rate of around 90-95%, churn is only expected to decrease by an additional 5%, whereas if, uh, if you're— if companies that have a bit higher attrition and retention is less than 80%, that churn could go up to above 16%. And go to the next slide. Um, so we are getting a lot of questions around what are best practices, what are companies doing. So, um, on the next slide I'm going to go through this, um, somewhat briefly, and then Adnan's going to go into this in a lot more detail. But some of the most commonly cited strategies and tactics from our portfolio companies. Again, really initially focusing on customer success and retention. From there, focusing on, on upsell versus targeting new opportunities. Again, that's starting to shift. We're seeing that shift more in the last week or two to outbound sales, and everyone's really, really redirecting their efforts onto those industries that are less impacted. And now the goal is really moving to identifying opportunities regardless of the size, just finding opportunities that have the highest percent of closing. Call that the sell what you can, sell a box of donuts if you need to, but identify things. I stole that from Adnan. You know, identify what you can and try and close those deals. Also, there is focus on changing terms to try and close and accelerate deals, reducing time commitment requirements for contracts, pricing minimums to get to a yes more quickly, and then also focusing on cash and cash collections by building more efficiency in that process. And some of our customers are also shifting a little bit more into the enterprise side as well.

Let me go to the next slide.

Um, I will say there are some encouraging signs that we're seeing in this. And so 70% of companies have been able to identify new revenue opportunities, whether it's shifting to public sector or shifting to healthcare. And you're just seeing just the whole go-to-market motion and how sales teams are configured to becoming just much more nimble, much more quick, adjusting, experimenting, seeing where there's opportunities and going for that. And I think one of the other positive things, and hard to, hard to see this now, but 90% of the companies that we surveyed did say they believe that they'll, they'll, that this will create a tailwind for the companies coming out of COVID-19. And to dive into that a little bit more, we asked our companies about travel, 31% of the companies that we surveyed said that they'll see a decrease in sales-related travel by 26 to 50%. And then another 24% said that that will decrease by more than 50%. And this is like coming out of this, this isn't now, this is going forward. We also asked another question where portfolio companies said that 90% of the companies expect work from home to dramatically increase. And so When you combine that and some of the other things we're seeing, it's really going to, we think, accelerate the transition to a digital economy. It's really going to accelerate digital transformation. And it's not just going to be, we think, in things like work-from-home tools like Zoom or IT solutions like VPN, but it's really going to transform how business is getting done, whether that's online education and learning. Right now, learning for companies is only at 10% online. We expect that'll increase dramatically. We're seeing a huge uptake in, uh, in people wanting more automation, whether that's RPA or automating their call centers or automating other parts of their businesses as well. And, and it's going to impact all industries, whether it's, um, as we're seeing supply chains shift for manufacturing and companies moving from having a single source for a supplier in one country to multiple countries and, and needing to be much more agile, much more nimble. So that's going to require solutions that are cloud-based that you can spin up in a matter of days or weeks versus a matter of months or years. So we do think that, and what we're seeing is coming out of this, we'll see a huge acceleration in SaaS-related solutions. So that is, again, can't understate how difficult what we're going through now is, but there is somewhat of a silver lining, I think, coming out of this. So what I want to do now is shift over to Adnan, and oh, just last bit too, we have all this data online if you want to see more results from the survey. To take the survey, you can, there's a link here. You can also go to our Medium Salesforce Ventures and we have a bunch of resources there. So with that though, what I wanna do now is shift over to Adnan and let him talk more specifically about what's Salesforce doing, how are we reaching out to our customers and talk through some of the frameworks and tactics that we're using.

Great, Matt, thanks so much. Well, good morning, good afternoon. You know, I'm going to be talking a bit about a couple of things. One is certainly the approach at Salesforce and some of the things that we've been going through, but also kind of a lot of what we've been hearing in the market, you know, between Matt's perspective and the 60+ portfolio companies that he's working with. I'm responsible for the US Gen Commercial business. And so, you know, we've got companies that I interact with that hit all sorts of industries, travel, leisure, hospitality, to, you know, some companies that have been really hard hit, others that have been on the other side of this and have really seen a massive uptick in their business. One of the guiding principles that helped me personally, you know, I was here, as Matt mentioned, I was here at Salesforce in 2008, 2009. I was an account executive covering financial services vertical and covering New York. And so I remember being in New York when the whole market was melting down. And, you know, I think Salesforce has learned a lot since then, and certainly the market has come quite a bit far from that point. Certainly, you know, any, you know, the safe harbor, you know, if I make any forward-looking statements, you know, this is largely meant to be if you're making any decisions on Salesforce, any product purchases, make them based on current configuration, current functionality. More here, invite you to read this later. But, you know, if we zoom out a minute, you know, the way that we're thinking about it And I think this is the case across the board. In late February, early March, I called Marc Benioff, our CEO, had a company all-hands shortly after the earnings release, and talked about, hey, there's this thing coming. And I think everyone kind of looked and was a bit sort of confused, even like, hey, is this really a potential crisis coming down? But here we are 60 days later, or a month and a half later, and we're in this global crisis. And at first, I just want to acknowledge that we're going to talk about the business models of some of our broader customers, some of the things Salesforce is going through. But this is a public health crisis. It's an economic crisis. It's a business crisis. And so I empathize with you, your family, your loved ones. Your businesses that have been hardly hit, you know, hit heavily. And, you know, in these 3 key buckets, you know, the crisis hit officially, you know, I live in California, and so, you know, even though we were working from home, and a lot of global travel for us, and even domestic travel at Salesforce came to a halt in early March. At least California, it was really mid-March when the shelter-in-place directives hit, and certainly the country followed throughout. And when you look here, I think we're still here. When I talk to customers, they're in some version of this crisis management. If you're like me, a parent with 3 different schools running upstairs, as long as those kids aren't even back to work, you're still in crisis management. But I think as a business, though, we've teetered back into stabilization. And then the third component, when all of this comes back and what that new normal looks like, and we go into acceleration. And so this is the framework I'm going to walk through today. And all of this blends, and I'll sort of weave in and out. And I think for us, the crisis management tiptoeing into stabilization, where I think we are right now, at least in our business, this could also be considered the phase of back to work. And how do we equip our teams to get back to work in whatever that new normal means? And so I'll use that term interchangeably in stabilization, and then kind of acceleration is sort of how we grow our business. So this is going to be the framework. And so in the first part of this framework around crisis management, I just want to share some of the things and lessons learned, lessons learned we had. And so 3 key pillars here. One was like really refocusing our team and refocusing your teams, and what does that mean? Then redirecting your operations, and then how do you engage your customers? So each one of these areas has some lessons learned, and You know, I was on a call yesterday with somebody that's working with clients in the education sector, and they're still trying to refocus their organizations and their teams. They're even trying to figure out, hey, do we bring higher ed back? And what's the go/no-go date for some of the universities? When do we need to make that call? And that's going to be probably for them in late July at the best, if students are showing up on campus. And so they're still kind of in this early crisis Having broader relief efforts. At Salesforce, you know, we believe our platform is something that's, you know, the greatest platform for change. And so for us, you know, we've been really active in leveraging our ecosystem. You know, we've gotten over 50 million PPE equipment out in the market. Through just our broad efforts and working with our partners. You know, we've got— and by the way, in the back of this deck, I'm going to have a fair amount of links on a lot of the stuff I talk about. So if you're trying to figure out where to go find information, just know that it's coming. You know, we've reached out and we've set up a grant process for a lot of our SMBs to help them financially in whatever way we can. We've made a public pledge, for example, to not have any layoffs for 90 days and see how that goes forward. But sort of being very open around anything we can do in these relief efforts. And then internally, transparency was a big part. You know, we've got to rethink our channels for employee communications and feedback. And I'll give you an example. We're having a weekly global all-hands call with our executive staff every single week for all 50,000 employees. That was something that was typically at that level done quarterly. Now we're bringing that in every single week. We're doing sales leadership all-hands calls with customer service and support and sales every single week. So that cadence and that feedback loop has really ticked up, and that's the best practice that I think is across the industry. And then also restating and reevaluating your goals. Everyone here, a lot of companies here are led by values. We're led by values. We don't have the market cornered on that, but really we've had to reevaluate How do we think about that? And our internal annual strategy process is called the V2MOM. Stands for vision, values, methods, obstacles, and measures. We've taken that process and put it directly towards what does that mean for COVID-19. And so I've got that full V2MOM at the back end of this deck should anybody want to read that. And that talks about how do we treat our customers, how do we go to market, how do we think about events, how do we think in this new era. And we've really taken our values and applied it to these new methods. Through this crisis management, there was also an opportunity to redirect our operations. One is just everyone's gone remote, period, remote connectivity. That's a lot of challenge. We have teams that are not used to working remote at all. They're office-based. And we have some teams that are purely home office-based, and they're closest to the customer. We have employees we've hired in the last month that have never been on site either to a client, have never met a single employee in person at Salesforce. So how do we bring them in? How do we make them feel part of the team and integrate them? And so we really put a lot of work on that. And then for marketing, we've had to just pivot overnight. We're a company that's heavily focused on high-touch in-person events. And I'll give you an example, our Sydney world tour, you know, we had 10,000 registrants. And when everything shut down, we had to pivot overnight. We went from an in-person event with about 10,000 registrants, and we led it virtually and led all the sessions virtually. And we've got some best practices we've shared around that. And that ended up having 80,000 attendees. And what we found through those events also is not only is there a great appetite for virtual, but on those virtual events, we ended up getting a lot more higher-level, C-level attendance than we would otherwise. And so really shifting both the marketing and sales engagements to all virtual. And then the organization on our operations, we've had to really self-organize. And a lot of this was informed by some of the lessons we learned in 2008. I remember when I was a rep, there was still sort of the agile and the nimble process around credit collections, customer service, contract modifications was still so decentralized. We learned from that early on. And so in this process, really around customer success, developing a financial plan for our customers. And so we've learned a good best practice is to put more tools and more controls in the hands of frontline managers, frontline reps, so the backend finance teams, sales ops teams aren't inundated. And that's really helped through this message. And then engaging customers, I suspect that's the common theme for everyone. How do you do it? If you're like me, I got bombarded just even by so many different vendors and different players in the space about all these emails, and they're— and it's really hard to pull that message back around what that means. And so for us, we've been really selective. So cold calling efforts during this phase, we pulled back totally. Any non-critical outbound efforts, especially for within industries that were hard hit, we've totally pulled those back. And then the check-ins were really about leading with empathy, deep, deep listening. Salesforce, we don't have the market covered on great ideas. And so a lot of what we've learned, we've learned through our customers by deeply listening and deeply engaging. And what we found through that was there was a big appetite around understanding what's happening. And so Leading Through Change is a series we've launched. It's available to everyone, bringing in third-party speakers, bringing in— we had Mark Cuban a couple of weeks ago. We're having Brené Brown for our SMB business around empathy and leading with courage. And so there's a massive demand around some of this content. And then others is just being there and just telling people you want to help. So Salesforce Care is our package of various solutions, cross-industry, whether it's healthcare, it's government sector, or the public sector, it's the SMB space. There are specific tools for each of those areas, specific functions. We have customers that are totally isolated in the sense of that support teams that were used to working side by side at a desk, and now they're working from their home office. So how do you pivot over to ask a question to someone? And so we've turned on tools and we've made a lot of our product bundles free for 90 days. Those were some of the lessons learned we had during crisis management. I think some of the industry has also sort of taken this to operationalize. If I go forward, one framework I just wanted to share from pipeline, I get customers asking me a lot about pipeline. We certainly put a lot of focus on that internally. And the one area I would just point out here is this is illustrative. This is pretty standard out of, you know, certainly out of Salesforce or most CRMs around pipeline fidelity and the chart. So starting from the left, sort of where the pipeline starts at the beginning of the quarter, across the bottom, various percentage changes, and then certainly where you end. And the green activities are the areas that create pipeline, create the positive. The red are certainly the degradation. And so for one, I think the create and close is super important. So every one of these slivers, we dive in deeper. So we don't just say, hey, what's the starting pipeline, what's the ending pipeline? So create and close, that's closing out your Q1 now. And so really the create and close effort, when— what was the motion? And we've even found even, uh, creating SPFs to incentivize create and close in the current motion, in the current month, or in the current quarter created a big uptick. And that's the case across the, you know, the industry as well. Certainly have your pre-book, you have your pull-forward revenue. I think what we tend to see is the more larger enterprise businesses tend to have more ability to pull forward because their pipelines are back-end loaded versus I think in the SMB space that pull-forward has been a little bit harder. Then you go to the push and what were the activities, what were the issues for the push. And for us, this has been super, super helpful because projects are either canceled, they're paused, or they're just pushed for a little bit of time, or maybe they're re— re sort of thinking what their budgets are, how they want to sort of operationalize. And so really understanding this bucket and segmenting it and sticking with it is super, super important. And then certainly a lot of value changes, certain things that are deadening out in the wind. So for both the mid-market SMB space and the enterprise space, I think are super critical. And we find certainly, and I think this is across the industry, the SMB space, mid-market space, there's a lot more create and close and momentum in the front end of the year and front end of the quarter. And so those have been taking a bigger hit versus the larger enterprise motions. Those tend to be back-end loaded, especially with whether it's the January or December year-end. So pulling that stuff forward has really been helpful. So I would encourage people to really think about pipeline in this core fidelity stage. And moving to stabilization. Now, this is the next stage. I would say this is the back to work. In some elements, we feel very firmly here. In other parts, we're still early. And in the same construct, what are the opportunities here? One is investing in your team, calibrating your operations, and then requalifying your customers. And I'll just hit on a couple of points here that I think might be worthwhile to the audience here. One, the importance of morale and well-being, super, super critical more than ever with the situation where the teams are working from home. Our sales teams have never been busier. It's crazy. Like, nobody's sitting around watching YouTube or Netflix. Like, there's real work. And it's not exactly clear, you know, sales is wearing many hats— your customer support, your credit, your collections, your enablement, your number of different things. So we really have to focus heavily on their well-being. We've got a daily 9 Pacific, 30-minute well-being session organization-wide. It was around mental health and well-being. It's been super helpful to our team. We've actually now opened it up to the whole community, all of our customers, anybody on here. There's details at the back end of this deck where you can tune in if there's any sort of content that's of interest. And we've also used This is an opportunity to heavy investment in enablement and reskilling. We have a lot of folks that are based in home offices closest to the customer. This is not new, whether it's in sales. I've got kids, and I was having a conversation with my daughter the other day, and she was talking about one of her teachers who's just been exceptional on the Zoom exchange. Run it, and now they have to really work on a different skill, and vice versa. And so the enablement there has been really important. We thought about our new call motion, our first call approach, how do we come to, come to bear. So that's been a heavy investment. The other part that I think is top of mind probably is around stability. I get asked by virtually every customer I talk to, Hey, what are we doing around giving guidance on job roles and compensation? I'll tell you from what I'm seeing across the market, you have a lot— some firms that have had to make deep cuts for all the right reasons that are certainly important to them. You have some companies that have done nothing. Internally, we've decided to give guarantees to certain sales teams. And so that's been the best way to just sort of pause and say, hey, there's a guarantee. We've got you covered through this. Just focus on the right motion. And so through that, that's really helped. And then if there's a specific tool that we think is really helpful to the market or part of our stack that can really, really help, we put SPIFs to incentivize that continuity and the emphasis. And so putting SPIFs that are very specific and time-bound has really helped quite a bit. And then we've also have had to really harmonize with new tools and processes. There's just so much coming at sales. As I mentioned, they're playing every single role. And so we've had to really create pocket guides and really get them super focused, and same thing with marketing. And then so what are the things we're measuring? And so this is the calibrate your operations. And so if we're saying, hey, do the right thing for the customer, have the right motion. So the kinds of things that we're doing now, and this is what also guided us in 2008, we call it AMP, stands for activities, meetings, and pipeline. This is the notion of, hey, have the right activities, have the right meetings, The pipeline will come. And so we're measuring those inputs because historically the output was, hey, here's your number, here's your pipeline, go for it. Now we have to look to a different metric. We have to look to a different metric than just quota attainment. Those things will come later. And then also forecasting. I've got a for— depending on the deal cycle, deal stage in the quarter. Now what we've said is, hey, cut out the COVID noise to the, to the best extent that we can, take all the COVID impact out, and then confidence and really build that hard edge at 90% confidence. And so with that, that's given people a lot of confidence, a little bit more opportunity to sort of, hey, say this stuff is not going to hit, but this is going to hit. And then it's that having that first data point then it creates a map. And then from there, we've been able to build on top of that 90% confidence. And I've shared that with customers, and I get that that's been a really good best practice. And then our marketing strategy continues to evolve. You know, we certainly continue to roll out virtual events, but we really think it's all about speed and relevance. You've got to be fast, and the content's got to be highly, highly relevant. And so for us, a lot of that's been around smaller intimate roundtables. And also with the customers, when we talk to customers, and that's opened up as things have stabilized, speak to power. You know, talk the truth. And in that conversation, I think people understand, like, there's been a really confirming the project status. Is this on? Is this frozen? What's going on? How can we best help? And through that conversation, we've also been able to qualify at a deep, deep level with that 90% threshold. And I think customers have appreciated it because 'cause these projects just didn't show up overnight. They kind of maybe in some cases got frozen overnight, but they're open to it. And if it's a project that's maybe just frozen, there's actually a lot of, you know, get the permission from the customer, hey, we're gonna continue to work through this with our teams. And that's been super helpful. And it's also helped our team internally, because again, we tend to be heavily on-premise, in-person with some of the events. So even the sort of solutions engineering, the, you know, building the right ROIs, the business case. We've now taken those to virtual sessions, but with the customer's permission, we've been able to actually go deeper and through that uncover a lot of near-term opportunities that the customers are asking for. They're begging for this help. So that's some of the high-level at the stabilization phase. I did want to take this towards one of the key areas that's top of mind, I suspect, for everyone, and that's around capacity and hiring. And how do we think about AEs? And this is just an illustrative example. It's a company with right now 50 AEs that's going to grow to 80 AEs. The same model applies whether you have 5 AEs and you're going to 80, or you have several hundred AEs and you're doubling. And this was something that, you know, in 2008, Salesforce, I think, maybe stalled hiring a bit. And what we learned was that there were some pretty big trade-offs. And so we're leaning into the market. You've seen some of the messaging we put out there. Mark's been very vocal about hiring, and we're leaning into the hiring. And so I wanted to just walk through some of the key tradeoffs on each of these. And so in this example, maintain the current course of hiring. The company of 50 AEs, you drop 20 headcount, and then you're at 30. What's the impact of that to your business? And so that's the impact of capacity. Certainly there's other levers you can pull around improving productivity, minimizing attrition, promote internally, so maybe onboard faster, and certainly the excelling the ramp time. And so this is a bit of an eye chart, but if you bear with me for a minute, the sales capacity trade-off here. In the key hiring phase, if you just assume a million-dollar quota, 60% attainment, again, this is just illustrative. Everyone's gonna sort of input their data in here and pull the lever differently. But in this example, if you go through the seasonal hiring and the example of hiring 10 reps in April, 10 in July, 10 in October, you end the year at 80 reps. Here, we're also taking a pretty big assumption of a 90-day ramp, and you're seeing the ramp phase. Internally at Salesforce, we view our ramp cycle closer to about 6 months. For a typical AE more on the larger enterprise side. And so here you'd have 88% ramp capacity going into December and a bookings impact of $35 million of the yield. If you see what happens if you just stall hiring by even just those 10 hires and you push the 10 hires from April into October, you only end up with 75% ramp and about a $5 million— about a $3 million hit on your business. What's really interesting is if you make some cuts now, So if you drop from 50 reps to 30, you cut those 20 reps out and then you've got to hire those back in the back end of the year. And even a big assumption if you can hire that fast, let alone ramp. So I think the make cuts scenario is a lot, lot more generous than it might be otherwise. Where you end up is you have 50% of your team is only ramped, but the bookings impact is over $10 million. And assuming $150K OTE, again, you can flex the OTE bands. You find that in this example, you get a $10.2 million loss in bookings, but you only pick up $1.5 million gain in cost savings. So just something to think about on trade-offs, because I think the market is moving so fast, and I hear customers in some cases are really struggling with, hey, I'm going to make some deep cuts now and figure out later. And some customers are saying, hey, we're going to stall, or in our case, we're going to go right into it and keep hiring through this downturn. Because we do think on the other end, having the sales capacity ramped and being closer to the customer is super, super important and valuable. So that's just one framework I wanted to share here. And then to wrap it up on the third phase of acceleration or growth, you know, as we come back into work, just some thoughts here that, you know, again, we don't have the market cornered on good ideas, but some of the things that we're working with and the feedback we're also getting One is under any scenario, you got to empower your team. You got to have that psychological safety. It's going to be some form of a rolling reboot for sure. And so you're going to be uber flexible with personal needs, um, whether it's in the stabilization or now, I do think once things sort of get to that standard, uh, you gotta have an expectation of performance. And so we're expecting every sales team member to have performance goals and we're expecting them to perform. Um, And that's going to be creative. We're going to be scrappy. And so this is not about, hey, we're going to sit there and wait all Q4, get that one big deal, and that's going to make the year. No. In this new normal, that's gone. I don't care what segment you're in. Everyone's going to participate. Everyone's going to put a win on the board. I think setting that expectation clearly to the team is going to be super important because we're going to have to have a new calibration. On the operations side, I hear this a lot. From a lot of my clients. Some are in retail, some are in hospitality, and this whole notion of reentering in shifts. You're going to have maybe a Monday and a Wednesday shift and a Tuesday and Thursday shift. How do we have a rolling reboot into the workspace if someone gets sick or a team gets sick and you need to quarantine a whole team? So I think this hybrid approach on adapting the operations is going to be something that's going to be more front and center, and we're going to try to help lead the way with some of our clients. And then just the agility and being responsive, and here, you know, it hits every part of our organization. So as I mentioned with marketing, our goal is speed and relevance. And here, operationally, the same thing. You know, there's going to be a lot of unknowns, whether it's customer-specific or industry or public health directives that continue to come our way. And so a lot of the operations, you know, historically, I think we've been more quarter-to-quarter or year-to-year. Now we're going to go like week-to-week. Month to month. These shorter time spans, shorter bursts, and having those metrics are going to be super critical. And then it's all about elevating our customers, and I think there's some, some companies that are well positioned for this, and the digital transformation is paramount. If people were trying to get here before, they're sprinting to get here now, and really having the full, full journey of your customer and everything that you're doing around digital touchpoints If you're in retail alone, like how does somebody have a shopping experience or return experience? You've got to be fully digital. And here, leveraging what's been successful around the stabilization phase, the remote support, high-touch virtual exec events, focusing a lot of the marketing towards industries in heavy need or surging with new opportunities. And again, just doubling down on the emphasis around tying yourself to digitization. Enabling smarter, more personalized experiences. That's going to be the new normal. That's how we elevate our customers through digital transformation. And so make those investments now. Don't wait, would be my advice to you. Some resources I just want to leave you here with. One, Salesforce Care. Here's the hyperlink. This has all of our key offerings, our product bundles. Our SMB grants, but I also wanted to give other takeaways as well. Here's our daily— the next one up, Safety and Well-Being Actions. That's where we put all of our responses to the market. Our small business grants are on here. As I mentioned, we have a COVID-19 V2 MOM. We're making it public. Encourage you to dig in. Leading Through Change newsletter. Again, we have a lot of thought leaders and change leaders coming. It might be helpful to you or your teams. If there's interest. The Be Well Together is the 30 minutes daily, 9:00 AM. It's been incredibly helpful. My wife and I most days chime in together. It's really brought the content into the house in this new shelter-in-place world. Thank you, and I hope you, your stakeholders, your team are all safe. And doing well. So Matt and team, I think we're there now. I think we're opening it up to any questions, if there are any.

This is Deborah from the SaaStr team. I can read out a few questions for you guys, if you'd like.

Sure.

So we have one that says, how should companies think about sales teams right now? Do you look for top talent that might have been unavailable 3 months ago? How do you identify lower performers when numbers and targets have completely changed or need to be? Do you make drastic changes or stay the course?

Yeah, Matt, I can take that. I think one is just always be hiring. In our case, we haven't let off. We're going to continue to invest in talent through this. And so certainly, if you're in the market, we're looking. Please come find us. I think the second part of that question, Deborah, I think was around, hey, You know, it's easy to just look good with, you know, closing revenue and closing bookings and saying, hey, here I am, like I'm the superhero. But I think that's in some ways, you know, the rising tide, once that goes out, it really brings into focus what are the key activities of the top performers. And as I mentioned before, you know, we're looking at activities, meetings, pipeline, and the underlying motions under all of those are super critical. You know, are people agile? Are they able to learn are they able to pivot fast and move with agility is something I really look forward to and look to. I didn't get the last part of your question. Just to make sure I had it.

So I'm just pulling it right back up. Basically, it says after identifying lower performers, when numbers and targets have completely changed or need to be, do you make drastic changes or stay the course was the final part of that.

Yeah, I think for us right now, the drastic changes are really around making sure we're pivoting our message and our resources to take care of our customers and our teams. The market itself, if you step away from what we're talking about here, you look at the public equity markets, I mean, the smartest minds in the world haven't even been able to price assets. Asset prices have gone down 20%, 30%, and then gone up 20% in a matter of like 2 weeks. And so I think drastic changes from that standpoint, I would maybe pause and think about before massive cuts or massive, massive policy changes towards some of these areas. Where we made the changes are really around giving people comfort and security around some guarantees that they're going to be OK.

So we're seeing some questions kind of on the flip side of that. How are you mitigating churn? Does it impact business in the future? And another almost similar question, how does expected churn vary by company size?

Matt, you want to take that maybe with some of the portfolio that you've hit on the churn side, and I can add on.

Yeah, on the varying by company size, I mean, I think there's more of a natural— larger companies tend to have, you know, a larger base of capital, more stable revenues. And so from that standpoint, companies that are larger companies are going to experience a bit less churn. And so I think that's a bit how company size plays into it. I would say, you know, it really is also going to vary a lot more though by industry and sector that you play in. And then, sorry, the— oh, and how are companies addressing churn? You know, I think Adnan hit on this and some of the stuff that Nick and the Gainsight team focused on was really insightful, but it was really kind of breaking down the barriers between account management and customer success and sales and just really creating, you know, really nimble teams to respond quickly and surround those customers, spend a lot of time, and then being flexible across the board, whether that's deferring, you know, and it's very much a customer by, by customer case, and that's whether it's postponing payments, deferring payments, or sometimes it was giving a customer, not making them pay for all the extra features of a product that maybe they're consuming and just charging them for the base price to keep them on. So it's just getting really creative and thinking about what are the best ways to retain that customer, and sometimes it's really, really going to be specific to kind of what their needs are, but flexibility, listening, empathy is really the key thing.

Yeah, and what I would add, the frontline sales team, the frontline leadership has the best knowledge around how to pivot the solution set to help the customer. Maybe this team has been, you know, put on pause at the customer, but the solutions are— your offerings can be applied here. And they're a lot more nimble if you give them that flexibility. And so what might seem like, hey, it's a contract renegotiation or a payment issue is really around being agile. But if you make it seem like it's an operations and a finance approval, then you're kind of stuck in that path.

So moving forward, we've got a couple of questions about this. Can you give examples of new tools, deployed during this crisis, ones that have been helping engage customers better?

Sure. I can give a couple. You know, one of our examples is even with Tableau. You know, we've— Tableau has turned— Tableau is an acquisition that Salesforce made a year ago or so. You know, that visualization, we've just opened up the marketplace. And so the public sector, health clinics, are running their dashboards on some of these solutions, and just making these tools available has been super helpful. Other is, you know, we've got some of the tools around, you know, remote call centers or remote service or remote service teams. How do you give them something that they can— that's pre-configured and they can turn on very quickly? So that's been super helpful. A lot of collaboration tools that are tied into not just for purposes of pure collaboration, but the next level where they're tied into the data itself and how do you collaborate on the data. That's been super helpful. A lot of our enablement tools and solutions, for example, as we're enabling the team, even like quick videos that we're attaching versus making people sit through long webinars or that experiential training, just kind of making quick guides, quick pocket guides, have also been really helpful.

Yeah, and maybe to add one thing, I think you're, you're, you're hitting on is something that's sort of the secondary effect of, of being a SaaS company that I think will have long-ranging impacts. And that is having collaboration, not just the pure-play collaboration tools, but the inherent nature of SaaS being collaborative and tying to the data. And an example of that is a company in our portfolio, Propel. PLM. It's a, it's a design tool, product lifecycle management tool, and, and it allows companies, as they're going to release a new design, to more easily collaborate with, with other suppliers and manufacturers. And, and so it is, it makes sense inherently, like, having that as a cloud-based solution makes a ton of sense, just because all the, you know, things that you associate with SaaS solutions. But having that collaborative component, as you're thinking about I'm moving my supply chain from, you know, a country in Asia to maybe a country in Mexico, and we've never met in person. We have to do this in days rather than weeks. You not only have to have that— I mean, there's no other way to do it but in the cloud— but then you also, you're collaborating around that project, and, and that those tools really need to be intricately linked to the, to the design changes, the quality assurance systems. So it's, it's something that kind of I always thought was a pretty eye-opening in terms of that that secondary effect of why, why SaaS solutions are going to be so impactful going forward.

So you've both mentioned video at different times, video and being apart during this time. We're seeing a few questions along these lines. Are you able to close big, or rather enterprise deals, that most commonly would have needed physical meetings in the past, or are they being pushed to next quarter?

Yeah, I've never touched more executives in a 30-45 day cycle in my life. The fact that I don't have to jump on a plane— the whole notion of flying to— that really need help right now. And so the short answer is yes. I'll even take it a step further, like we've had to really re— rethink our approach, because a lot of the— I mentioned briefly earlier, like, when we do big architect workshops or solutioning, we've been able to pivot. And one of the ways we've done that is we've been dogfooding internally. Like, we've been running our internal strategy sessions, our internal meetings onto ourselves. The fact that we've got to be running, you know, we're running, you know, daily— I'm sorry, weekly all-hands with 50,000 employees, for example, means we've had to get the tools stood up in place that can sort of take all that content and that feedback and keep working. And so for both— for large-scale organizations especially, they've been coming to us asking us for guidance. And my experience is they're buying and they're interested. And so make your message relevant and move fast.

So it looks like we have time for about one, maybe two more questions. And I kind of want to follow in line with what we were just talking about. This is specific to Adnan, but of course open to both. How is your sales org leaning on ISV partners to generate co-sell revenue, relationships, et cetera? Are you focusing at all on those partnerships as a means of entering new opportunities?

100% yes. I mean, we've got a very strong, healthy ISV channel. What's coming up now are really interesting use cases. Some of our ISV partners are just seeing their businesses boom and others are trying to figure out how to rethink their message. And so, I mean, that's a core, core tenet of our business and how we go to market, whether it's through the channel or even our sales teams and putting that solution set in front of our customers. And so that's never been healthier. And, you know, so from— I don't know, Matt, if you have a different experience on that.

Yeah, I've also just been really proud of how many of the ISVs have responded during this time. So whether it's SIs, or software companies just really helping us and help customers, whether it's standing up solutions so that companies could track— healthcare companies could track their healthcare providers, could track their employees, what their PPE needs are. And that way that you could, within— this was a company that's doing this in Canada— distribute that throughout Canada. Or as I mentioned, Propel you know, leaning in on the manufacturing space for PPE equipment. You know, some of these companies have maybe expertise in areas that we don't. And so as we're pivoting, not only just how can we help, how can we solve these solutions, we've really leaned on a lot of our ISVs to just like, you know, how do we solve COVID, but then also how do we sell into some of these other market segments in new ways that we haven't as new needs are coming up. Coming up, whether it's healthcare, education, or manufacturing.

So it seems like we've actually run out of time, but thank you both so much. We are still inundated with questions, so we'll be sure to share all the Q&A with the Salesforce team and make sure that you have a chance to answer them.

All right.

Thanks so much.

Thanks, and see you guys in the next presentation.

All right. Be well. Thanks.