The Revenue Playbook: Rippling’s Top 3 Growth Tactics at Scale with Rippling CRO Matt Plank

There's obviously a lot of people out there that reference things like outbound is dead or dying, or like that AI is going to replace first SDRs and then account executives, all that good stuff. There's a bunch of reasons why I don't believe any of that, but there's one like very important and obvious reason that every time somebody says that, I'm like, well, you clearly don't do outbound well or at scale. And the reality is that's because 50% of our demos that are booked in outbound are booked over the phone. And I thought it was crazy. Like, I don't particularly answer my phone call to cold calls and all that kind of stuff. And so it feels so unnatural that would be how it's done. But in this month in September alone, we'll book probably 1,300 outbound demos across our various different outbound teams. And literally 50% of them scheduled like on the phone.

Good morning, Zaster. Thank you all so much for being here. Before we jump in, huge shout out to the team at Zaster for putting on just the best conference in the world as it comes to startups. The hall with the expo for the vendors is packed. And as I walk around, everybody just has the biggest smile on their face. So everybody's so happy to be here. So incredible job to Team SaaStr on yet another amazing event. My name's Sam Blonde. I, in addition to hosting SaaStr's CRO Confidential series, I've been in tech sales for something like 15 years, most recently CRO at Brex. I was at Founders Fund as a partner for a couple years and just recently started my own company as co-founder and CEO. I'm joined by an incredible human, one of my best friends in the world. His name's Matt Plank. Welcome, Matt. Thank you for being here. Thank you. Matt is arguably the best revenue leader in the world right now. We did a series with, for CRO Confidential maybe 18 months ago, and Matt talked about being the first sales go-to-market hire at Rippling in Parker's basement when there was $0 of revenue. And we fast forward to today and Rippling is a $14+ billion, many thousands of employees, I think 1,500 folks in the revenue organization, several hundred million dollars of ARR. And Matt grew that organization and that revenue number from making cold calls in Parker's basement just a few years ago. So very few people have accomplished something like this, and my intuition is you're just getting started, as is Rippling. Congrats on all the success and thanks for being here.

Yeah, thank you. Appreciate it.

So today we're going to do, as the title would suggest, a deep dive into Rippling's top 3 growth tactics. As we were talking through what we wanted to talk about, we categorized the go-to-market organization and Rippling's revenue into 3 different stages. And then we went deeper on each of them. Um, and so that's what we're going to do here. Those stages are going to be demand gen. We're going to focus more specifically on outbound, which makes up the majority of Rippling's revenue from an attribution standpoint. We're then going to move on to closing revenue, and then we're going to finish with serving customers and expanding revenue in the base. So we'll jump right in. Let's start with outbound. As I alluded to in the intro, outbound started with Matt in Parker's basement, writing cold emails, dropping people in sequences and making cold calls. Why don't you just talk us through the evolution of outbound at Rippling from those early days to where it is today?

Yeah. So I think you've nailed it. In the early days, what we referred to as outbound was really programmatic outbound. It was led by marketing, which was me in the early days in the basement until we then hired our CMO, Matt Epstein, at the time. And I think programmatic outbound, I think, makes a lot of sense when you're a small company, mostly because it's essentially free. You got to build your database, uh, buy the right tools, but you don't have to staff an entire SDR team to go after the accounts. And so programmatic outbound makes a lot of sense. You have virtually an unlimited TAM. You can, there's hundreds of thousands of accounts that you could go after. And then eventually for us, we did really programmatic outbound up until about 2 years ago. And 2 years ago, we were looking at our next year's growth plan and we were looking at the revenue that we wanted to get to. And we ran into this constraint of we literally don't have enough accounts in our database to continue to get the yield that we get on our programmatic outreach. And so it was like this really big moment in the company, actually, where all of a sudden our growth was going to hit this like major constraint simply because like our database wasn't big enough. And it took us 5 to 6 years to get to that point, but it became a huge, really a huge bottleneck for the company. And so at the time, we were getting around like a 50 bips to 1% conversion on programmatic outbound. So we would reach out to 1,000 accounts and we would get basically somewhere between 5 to 10 demos. Right through the programmatic outbound. Now they were basically free, like the inbound, we basically had inbound SDRs that would schedule those, like engage on the responses, but like they had quotas of, I think, 50 or 60 demos a month. So it was like a very highly transactional, like very CAC efficient model. And so fast forward though, like the database wasn't big enough to scale to getting 50 bips to 1%. And if you fast forward to today, 18 months later, we have about 150 outbound SDRs. And the conversion that we get is between 3 to 7% on the same accounts, right? And so if we now reach out to 1,000 accounts, depending on the segment, we get anywhere from 30 to 70 demos, right? Obviously you would look at that and be like, of course, why wouldn't any, why would anybody want 10 demos if you could get 30 to 70? And the reality is you have to staff 150-person outbound team, which is not just out SDRs, but managers, directors, like VPs, like you've got to build the whole machine. And so it's really important to be able to find a way for your business to be able to support that kind of investment, meaning you need to be able to have the average deal sizes that make sense. You need to be able to like, in fact, close outbound deals with win rates that make sense. There's a whole bunch of things. I think people, you can't just decide you want to go do outbound and go do it because it's a pretty big investment. But for us, it was probably the single biggest thing of the revenue org in the past 18 months of getting us where we are today. And it's really the single biggest thing. For next year in terms of growing at the scale that we're at now. Okay.

Quick recap. And then I'll ask you a question, which is where my mind goes. On the recap side, you really started with marketing-owned programmatic outbound where marketing was determining, building the database, determining who to reach out to, what to say, and then just effectively blasting the universe with marketing-templated email copy. Inbound SDRs were fielding the responses to that. So you didn't have an outbound SDR organization until something like 18 months ago. Started building that because you realized that the sort of ROI on the number of accounts that you were reaching out to was reaching diminishing returns and you wanted to staff humans to get higher yield on the accounts that you were targeting. Where my mind goes with that is something like, in today's world, playing devil's advocate, couldn't like a really sophisticated marketing organization with account scoring, determining the highest ROI accounts to go after, using AI to write like really creative email copy. Wouldn't that be like more effective arguably than having a 22-year-old SDR assigned an account, figuring out how to treat this account and try and generate a demo? Like why, why is this yielding higher results?

Yeah, I think there's two pieces to that question. I think the first one is There's obviously a lot of people out there, I think these days that reference things like outbound is dead or dying, or like that AI is going to replace first SDRs and then account executives, all that good stuff. There's a bunch of reasons why I don't believe any of that, but there's one like very important and obvious reason that every time somebody says that, I'm like, well, you clearly don't do outbound well or at scale. And the reality is that's because 50% of our demos that are booked in outbound are booked over the phone. That was a shocking stat to me when we hired, uh, Ashley Kelly, who runs our outbound sales org, uh, 18 months ago. Credit to her really for building the outbound sales org. If I was building it personally, I'm sure we would not be doing anywhere near as well as we are. But she was like, yes, like this still works. And I thought it was crazy. Like I don't particularly answer my phone call to cold calls and all that kind of stuff. And so it feels so unnatural. That would be how it's done. But in this month in September alone, we'll book probably 1,300 outbound demos across our various different outbound teams. And literally 50% of them scheduled like on the phone, right? And so obviously AI can help with a bunch of pieces of the kind of hierarchy of what you do in outbound, but I don't think AI is going to be like booking demos over the phone anytime soon. And so that's just not really realistic. I think if I go through the, the like, you asked a kind of a slightly different question around why is outbound effective? Like what are the humans doing essentially that, you know, that you can't do programmatically? And I think first I'll just run through like at a high level, what are the things that an outbound SDR does? And then double-click on like, where does AI— we actually do use AI for a bunch of pieces of the process, but the first one is like account fit, like going after the right accounts, probably nothing more important than going after the right accounts, which like seems obvious, but we spent a lot of time going after like some of the wrong accounts. And when I say account fit, I mean, we use rules-based heuristics, industry size, like kind of common sense things you can develop and build like in your RevOps stack. And then we have an ML model on top of it that like the data science team owns to figure out like, okay, within something like manufacturing, which might be a red industry for us or something that's harder to get traction in, there are a lot of heuristics about a company that might make them more likely to respond to things like how long have they been around for? How many, like what's their social media presence? How many followers do they have on Twitter or LinkedIn, whatever? So we use some combination of like rules-based and then a kind of a ML model to sit on top of that and basically provide to the SDRs, like these are the best accounts and then stack ranking them within there. I think the second big piece is who do you reach out to? Your TAM is really constrained by the number of contacts, not the number of accounts. If you have a million accounts and one persona to reach out to, you have a million contacts, but if you can reach out to 4, 5, 6, 7 different people within an account, obviously it massively expands your TAM. And so it's about accounts fit first and foremost. And then it's about like contact stocking. And when we talk about AI, of course you can ingest into your database all the contacts at a company, but like they're generally not good on average for 4 months. Right. And then immediately like a large percentage of them are out of date because people move companies. They don't update their role in the company, like new people join the company. And so you have to have a human to look at the account and the contacts and it can save them time if everything's good. But our SDRs are frequently like adding new people into our database, like in real time as they go through. So who do you go after? The right contacts. I think the second two big things for us is, are very marketing-led, which is what we call intent signals and event signals. Intent signals are obvious. Marketing does a great job harvesting the things like going to review sites, going to demo sites, all the different interactions with our brand, content downloads, whatever, and like pushing that into the CRM so the SDR can like see that people are interacting. Events like a job change is a big one for us. Number one, easiest time to reach out to somebody to buy something is when they've joined a new company and they're evaluating their systems, fundraising, acquisitions, all that good kind of stuff. And so you're going through the few different things here. And then the last two pieces, personalization, obviously, I think more important today than it was even 3 years ago. AI will personalize some things. To give you an example of the downsides of AI personalization, I was chatting with Sam about this. We get a template. Generated from one of our AI vendors that I think automates like the research and not necessarily sending the email. And here's a good example of why. There was an SDR who had a template and it was basically generated by AI. And what had happened was a prospect had posted on LinkedIn something about like their father had passed away. And it was a very nice sentimental post about their father, picture, whatever. And the AI template was like, hey, saw that your father passed away. Very sorry to hear that. You should check out Rippling. It was literally like, and a lot of people would just be like ClickSend, right? Like the AI-generated template, because 90% of them are actually pretty good. And so I think it's about AI can automate research and like filter, scrape the interwebs and like filter you things. But I don't think necessarily that they should be like sending all of the emails. And then the last thing is really about saturation and it's the most important thing. You've got to be able to like email people, send them a LinkedIn request, call them, leave them a voicemail. As somebody who gets prospected to a lot, If you harass, not harass me, that's the wrong word. If you come at me from every different channel around, eventually I'm going to remember the name and I'm going to remember, finally, I'm going to more, I'm going to be more likely to respond, even if it's a no, I'm not interested or not right now. Versus if you're just sending emails, it's like very easy to just ignore those forever and never respond. Right accounts, right contacts, personalizing everything, obviously, but then it's really about like saturation at the end of the day. And obviously cold calls, I mentioned we book 50% of our demos.

Awesome. Really interesting. On the, just wrapping up on the outbound topic, any sort of like last— outbound's interesting because it's the type of thing where if we were having this conversation in 2018, the tactics that we would be leveraging and talking about would be different from 2020 to 2022. Now we're here in 2024. So this is like an ever-evolving process when the market like saturates specific tactics. The industry evolves and new things start happening. Again, we talked about AI. We wouldn't have been talking about this sort of automated email personalization example that you just described 2 years ago. Any sort of like specific tactics that you think you're on the cutting edge of right now?

I'd say that there's one specific bucket of tactics that I think are important that I think of as like required to do the job, but I recognize a lot of marketing teams don't. And the second one is almost like more old-fashioned. To your point, everyone's AI and things like this. I think picking up the phone and calling people is like a lost art. I think a lot of companies just don't do that anymore. And it may even be why it's more effective today is because everyone's cold calling doesn't work. We got to do other things. But I think probably the biggest one for us is the marketing investment in, like, we used to capture intent and like send a programmatic email, right? Hey, you're on our website, right? Here's an email. Hey, you went to a review site. Here's an email. And so I think it's the evolution of just realizing, like, if you go back again a few years ago, people didn't even capture intent in that way, right? If you go back 10 years ago when we were building SDR teams at Zenefits, it was like, you know, spreadsheet. It wasn't even Outreach, right? It was like Yesware or whatever was the first tool. And so I think marketing has come a long way where it's very easy now to capture like the intent and the interaction with your brand, but most companies just click automate programmatic send. And so for us, it's about marketing being like, hey, we can partner together. They don't get credit per se if they're like filtering us the information and the outbound team books it. But I, I do think that having a tight partnership with marketing and not feeling like you care who gets credit is really important because then it allows them to allocate a bunch of their budget at things that actually produce outbound generated S2. So marketing alignment and then good old fashioned, like the innovation is actually going back in time and like picking up the phone and calling people. I think, uh, it does still work.

Awesome. Quick recap on outbound. We'll move on to closing revenue. There are a couple of things that come to mind that Rippling is like bucking the trend on here. The first is there's this like meme of outbound is dead. I think, Matt, you gave me the stat that something like 50% of our revenue is sourced from outbound and going forward, we're forecasting 60% of our revenue to be sourced from outbound. And so that like bucks this trend and concept that outbound is dead. The other one is AI is going to automate away the human SDR. And you've gone from zero outbound SDRs 18 months ago to 150 today. And I imagine the acceleration of that team from a headcount standpoint will continue to increase.

Yeah.

And so two things that are counterintuitive or contrarian compared to this sort of sentiment in the market today. The other thing that stands out that you said is that 50% of the demos, 50% of the revenue come from cold calling. And I just think like with outbound, there are two things that come to mind that lead to effectiveness. And if you're not, if you're not taking advantage of these two things, you're probably not being successful in outbound. The first is the concept of hustling. It's easy to create an email sequence and send it to hundreds of people with the click of a mouse, where I'm going to merge in your first name or something like that. Picking up the phone and cold calling somebody, it's harder. And generally speaking, human nature is to not want to do that. It's easier to click the send the email. I'll tell a very quick story. I even remember the company, but it's something that I will always remember. In the early days at Brex, our office manager came to me and said, there's somebody here to see you with a delivery. And one of the SDRs from a company called Talkdesk had come to our office, said they were a delivery person to like bypass getting into the office, asked if they could speak with me. And so they were like door knocking. And so that's sending an email is easy. Picking up the phone is hard. Door knocking and showing up at somebody's office to pitch them on taking a meeting, much harder.

Yeah.

And so the more like effort put in, probably the higher yield, um, because you definitely will stand out more. And then the second thing is just around being creative. You want to stand out, not do what everyone else is doing. Because it, it will just reach diminishing returns over time.

Okay.

With that, let's move on to closing customers. So Rippling, I think, is famous for the, the concept of a compound startup. I think Parker and Rippling really invented that term. And what compound startup means is Rippling today has something like 30 product, individual product offerings, what you all call SKUs. Rivlin started with 4 product, individual products, and has grown into, again, this concept of a compound startup where launching many new products on a regular basis versus sort of a point solution, which would be the antithesis of a compound startup. I think many companies, many startups are evolving into this compound startup approach, and at a minimum, many startups are launching new products in order to be able to accelerate revenue growth. So I thought this would be a really interesting topic for us to go deeper on. Let's start with how this like compound startup approach manifested in the go-to-market organization structure to begin with, which I think was, again, as I said, like 4 products and maybe 1 salesperson that sold the entire suite, the entire Rippling offering. Today we're at 30 offerings, 30 different products, and a much more complicated go-to-market organization. So if you can just tell us about the evolution of how this compound startup approach manifested in the go-to-market organization.

So yeah, to your point, there's a journey along the way from 4 SKUs to 30, obviously. And I think for the longest time, as we kept launching more products, we convinced ourselves and that like the, that, that if you couldn't keep up with the velocity of product launches as a rep, like maybe it wasn't a rep who could, maybe it was a rep that like wasn't going to make it or it couldn't work out. There was a belief that As you train the new reps and then all of a sudden, no, a couple of weeks later, they don't understand the product. We're like, come on, we trained you. Why don't you understand this thing? And they just, it got to a point where it was very clear that like even the best reps on the team, they just could not absorb any more information about a new set of products. And the reality is that as we went through this process and we learned like painfully along the way, because we did try, obviously before we snapped to this like different org structure. We were not winning in the way that we needed to, which is why we forced the change versus having the knowing that this would come and being able to predict it. But once we got to around like 15 SKUs or something, the reality was what really happened, like we'd been launching SKUs up to that point. They were all similar to our core buyer, similar to like our core product suite. They were like very, very close attachments. Most people would buy them during the same sales process. And then what happened was we launched a set of SKUs, really it was at the same time, around the same time we launched our finance suite. And then we launched our global payroll suite. And when we launched the finance suite, we were like directly competing with Brex, with Ramp, with like really great products, good go-to-market organizations, like companies that were doing really well, very well respected. On the global side, it was Deal and Remote and Papaya Global. And so something changed when we tried to have, it was like the 12th SKU, the 13th SKU, all the same buyer, same category of products. It was like working okay. And then once we had a core rep trying to sell as the 15th SKU and compete with a new logo rep at Brexer ramp, like we were just getting our butts kicked. Like it wasn't, we were just like, this doesn't, like we, we couldn't iterate fast enough. We couldn't keep up with the collateral, all these things that were just breaking. And so we decided at that moment, we need to build what we launched, which is basically our product account executive org. And the easiest way to visualize and describe it is there's 3 teams that sell stuff at Rippling. There's the core new logo rep who touches every single new logo on the way in the door. There's the account management team who owns every single customer post-sale. So those are like mutually exclusive. And then there's a product AE or that like straddles the middle, right? That for some products, the new logo rep just closes them on their own. And for some products, the new logo rep tags in the product AE to like co-sell a deal together. And then on the account management side, similar dynamic. There are like some SKUs where like they own the kind of cross-sell customers and there are those same set of SKUs where they tag in this product AE and essentially co-sell that deal together. And there's a whole bunch of reasons why we did that and benefits from that that I can go into a little bit deeper, but to give you at least a backdrop of, it's like a pretty, we wouldn't have been, even when we launched new products today, I just think about when we launched them, it's man, what would we do if we didn't have this product AE org and we were launching this into 250 new logo reps and trying to train them all. Super helpful.

And I think the reason that this is such an interesting topic is I talk with founders all the time and one of the more, and increasingly so, one of the more common conversations I'm having is around launching a new product and how should we as a startup approach the launch of this product to make it most effective? And so through that lens, probably a lot of folks in the audience that have multi-products in their company today are planning on launching additional products. How do you determine whether a new product launch receives a dedicated sales rep versus having the existing sales rep sales team just add that to the suite of what they are already selling?

Yeah. One, it's a great question because there is I had to develop a very specific point of view on this because Parker, our CEO, every single new product we launched, he'd be like, new sales, dude. Like he was addicted to the idea of a small team that could go sell this. But it's not what you can't have to your point. Like you can't have 30 product teams. It's an app. It's just, it's not managed. You can't manage it, the complexity. And so we did have to come up with a framework of every time we launched probably 5 new products, like every year. So we did have to come up with like, when we launch a new product, which path does it go down? And I think the first one and probably most obvious one is who's the buyer? Who's the person? Who's the persona that you're selling to? Now, not to be confused with our core buyer is HR, right? Selling an HCM product, payroll benefits, talent management, all that kind of stuff. And obviously for most companies, like a CFO is involved in a decision to buy usually our product. But they're not like signing up for a demo. They're not generally leading the evaluation. And when we launch things, we're like, the HR buyer is the one who's like clicking demo requests and filling out their name. We tend to lean that to the core team. When we launched the finance suite, it was very clear that the person who was going in and filling out like a demo request was a CFO or an accountant or a controller or whatever. Right. And so the buyer shifted to a new kind of persona, which has a whole bunch of different ways, like different ways that you sell to them, different things they care about, different pricing strategy, different negotiation. So it's like this very different thing. And that, that's one criteria is what's the persona? If you're selling to IT, if you're selling to front office, it's once you're managing things that are very polarly different, that's obviously the first thing that we look at. It's the first set of, okay, what do we evaluate? And then we move to the second step. And the second step is a really important one and definitely required. And that is do the unit economics work to build a sales team, right? If you have 15 products where you charge $5 to $10 PEPM for all of them. And you launch a 16th product where you also charge $10 PEPM, like you can't build a whole sales team around a single SKU where like the unit economics don't— you can't set the quotas high enough. You can't fund the leadership hires. You can't do that. But a lot of teams, when they're constructed right and they have a much higher kind of PEPM or revenue opportunity for that particular SKU or set of SKUs, like now you can all of a sudden build like a mini little org chart. Because having a rep who's a product AE, that in itself does not get you even halfway there to what you need. You need to be able to have the reps, the managers, the director, and most importantly, you need the like mini CRO who spends every single second of their day thinking about like, how do I beat the competitors in this space? Right? When I think about launching Finance Cloud as an example, um, of course Brex and Ramp and these guys were like good competitors and I wanted to be involved in like, how do we win and what do we do and what product do we need to build and how do we compete against them? And I was involved in some of that in like the launch, but 2 months later, 3 months later, we were already iterating on all of the strategy and I simply couldn't keep up with it. Like I needed the like mini CRO type of person to come in and run this org almost like an incubated inside of like broader Rippling. And that person meets with product all day long and figures out like, what are the right products that we actually need to build? What does the go-to-market team need? Which is sometimes not exactly what product thinks that we need. They're meeting with marketing to make sure that the collateral, the kind of competitor battle cards, like all the enablement stuff, and most importantly, making sure that the demand gen works, right? Like when you think about product AEs, they get their demos from NewLogo reps that bring them in and from account managers who bring them into customers. And so it doesn't just happen organically. The product leaders are poking into the NewLogo sales org and being like, hey, I see NewLogo rep that you're talking to this company that's like an e-commerce. Like, why the hell am I not invited into this opportunity for our finance suite product? It's a perfect fit. And so having that like VP sales leader be able to probe deeper into NewLogo sales or probe deeper into the customer base and create their own demand gen, like you don't get that if you have like a sales engineer or a solutions consultant, like you don't get the same thing. And so it's essentially like the persona. Can you make enough money to fund it? And by the way, when we launch new products and we know that they really need to be a product-led org, we actually think about the pricing with that backdrop. We're like, we need to be able to make sure that we can price this in a way where we can fund that type of environment. And then the last thing is, can it be purchased as a phase 2 project, right? If you launch a new product, but it's always part of the initial evaluation, then like, it's pretty hard to have a product team that owns it. Um, but if you launch products where someone might buy your core product and then it's okay, they'll buy the, the, the second product later, then again, it makes more sense because if you're not attached at the new logo, you just follow the journey over to customer and like now you can still go in the opportunity there. So those are the 3 like very important things that we evaluate even as we're like building the product and thinking about how do we build it and how do we price it, um, to make sure that we can get it into that construct if we need to.

Okay, awesome. And so then just a bit of a recap, starting at the highest level, the theme of this conversation is growth tactics, the most impactful growth tactics that accelerated revenue growth within Rippling. One layer deeper, it's when you went to multi-sales teams, multiple sales teams dedicated to selling specific products. That change was one of the 3 most important things that you have done to accelerate revenue growth at Rippling. And then if, uh, folks in the audience want a pattern match on how to decide when you have a dedicated sales team for a product, there are 3 criteria that you should consider. The first is, is the, um, decision maker or the buyer different from the decision maker in your initial core product offering? The second thing is, do the economics make sense? Can we charge enough for the product to support salespeople dedicated to sell it? And then the third thing is, can this product operate on its own as an independent product offering? And so if those three criteria exist as you launch a new product, at least if you want to follow the Rivlin playbook, you should start with a dedicated sales team to sell that product versus attaching it to your existing suite of products that your sales rep is selling.

Yep. Absolutely.

Okay. Let's keep going. Servicing customers. We're just like moving down the, uh, customer life cycle here. Similar to the other two topics, the way that you have serviced customers, especially as you've introduced this product complexity, has evolved over time. I think you started with, and this is by the way, um, another one of these topics that I hear about all the time, which is like, should we do CSMs? Should the CSMs just focus on revenue retention? Who owns upsell in these accounts? Is that a separate person? I think you've evolved with the business over the course of the last several years. Just tell us like how you have evolved and then we'll get to the like major takeaways in terms of what you would recommend folks doing in terms of structuring a customer servicing organization to optimize for revenue. Yeah.

Yeah. I think one of the lessons early on, I remember asking our CEO Parker, like, why can't we have CSMs and account managers? And he was like, doesn't work like that. You have to pick one. And I think I've learned, and I think my biggest, one of the most obvious—

just for, just for qualification, CSM is more empathy-oriented, retention-focused. Account manager is more like revenue-oriented person servicing and upselling the accounts.

Yeah. From my perspective, customer success manager, CSM, like does not own a, does not own a new business, new revenue quota. They can, I don't recommend it. An account manager to your point, like owns a dollar quota is like managed just like an account executive. And so I think it's about, some of it's about your company and the structure, and also it's, it different motions make sense at different times. So when we launched our company back years ago, we had 4 products. We couldn't have account managers because we sold all 4 products to pretty much every single customer that signed up, right? There was nothing to sell them after the fact. And so we had customer success managers, one, because there wasn't, it, it, there was no revenue to capture post-sale, and two, Early on, Series A, Series B, it's like everybody needs to have deep empathy for the customer, right? Hopefully that's true long-term and the bigger you get, the more you have to reinforce that. But certainly when you're small and you're getting your first 100, 200 customers, like it helps to have a CSM who's, I don't think they would refer to themselves this way, but they end up becoming like escalated support at the end of the day, right? It's like there's a support team that can do all the day-to-day transaction stuff. Who's not on calls generally. And so the support team can be more responsive, but when there's not like a comprehensive enough response, it will get escalated to a CSM and a CSM can like help make sure that they're taken care of. And so early on we had CSMs as the only kind of post-sales resource. And we really did that for up until probably 4 years in, and we launched products a lot sooner than 4 years in. And so there was this time period where we were launching products And we had the customer success managers who owned post-sale customer relationship. And what would happen is they would, when somebody wanted to buy a new product, they would float it back to the new logo rep that closed it maybe 2 years ago. So a new logo rep's doing 20 demos a month of new logos that are much, much larger deal size. And all of a sudden they're getting a customer from 2 years ago that wants to come back and buy one product as an add-on. Like they don't prioritize it the same way. They don't care about it the same way. It's never going to work. And so we were like, okay, we got to transition and make our CSM team own cross-sell. We're going to cut off new logo. Like you don't ever get cross-sell anymore. You only get it for customer success. And then we tried to transition the customer success team we had hired to be like account managers without the title. And we realized very quickly, like, this does not work. We hired an entire team of customer success managers who frankly didn't, many of them didn't even want to have a, they're like a quota. I don't want a quota. That's not what I signed up for. So we had to go through this kind of painful transformation to actually change the role. Like it became account manager and not customer success. And as it became account manager, we then gave them like a dollar quota. They owned cross-sell. We really tried very hard to integrate them into the sales team and make it feel like culturally part of sales. In fact, at the time, the CSM org reported into our VP of customer experience who owned like implementation and support. And so we actually moved it over into the sales org probably about 2 years ago. And so last year they were account managers. They did an incredible job. They had like explosive growth in the customer base that like could not have been executed any better by that team in the transition, the new people that we hired. However, when they, when we transitioned them, they didn't own a retention quota. As CSFs, they only owned retention and as account managers, they only own new revenue. And we convinced ourselves that we're a high velocity business. They had a lot of customers. We convinced ourselves that, look, if someone's churning, I don't know that an account manager can save them necessarily. It might be a product thing that happened or there's there's some reason why we don't know that it makes sense for an AM to try to like really chase this down. And we convinced ourselves that over 6 months, 8 months, 9 months. And as the year went on, there were just these small moments of time where somebody would churn and we would go look at the interactions and we would be like, this interaction from the account manager was clearly not the interaction of somebody who actually cared if this person churned, even though it was part of their job, meaning like we managed them to it. We had expectations, we had a playbook. Right. But it was like, there was a stick, but there was no carrot. There was no incentive tied to it. And so we just made the decision in Q4 of last year that this year we were going to make that team own a retention number. Part of the reason we did it or were able to do it is because we had this product AE org. And so it would like, they were owning sales of all of the products post-sales. And we said, look, you're going to own the relationship commercially, but if you need to go sell like finance suite, like you're going to actually tag in an account executive who's going to own the demo, the evaluation, the negotiation, like all of the things they were owning. And so all of a sudden it opened up some capacity and we're like, what you're going to do with this capacity is you're going to care about retention. And we're going to actually tie comp to retention as a number and like just dramatically change the behavior and the impact and results this year. Like our baseline of churn and from the account management org is like just a number that we just massively beat every month. And we were talking about like some of the, you can't just make them own retention and comp and then expect everything to change. That's like a starting point, but you also need to make sure that there's like the right behavior that you, uh, give them time for and allow them to do so that they can do the things that actually do impact retention. But if I could go back and do it all over again, definitely would have not ever thought that like someone could own, like technically own retention as a company goal and not own it as like an individual goal. That'll never work. Okay.

In the interest of time, just to recap where you are today. And I think what you would wish you had done earlier, and every business is going to be different and more nuanced, but the structure that you would have done earlier and where you are today as it pertains to servicing customers is you have a sales-oriented account manager. So somebody with a background of selling, owning a revenue number and a quota. They are the sort of like face of the business to the customer. They own the customer relationship. But they do not sell to the customer. They own the number, but they pull in the sales rep that specializes in the product to upsell the customer. They still get credit for it. They own the number, but they aren't the ones doing the actual selling. In addition to owning the revenue number and being a sales experienced person, just from a profile standpoint, they also own a retention number. And owning the retention number, if you think about the concept of like incentives drive behavior or the Charlie Munger, show me the incentive, I'll show the outcome, as you added the retention part to the compensation, the, the, there were immediate benefits in terms of improved customer experience and, and the outcome of reduced churn. And so then that's how you would structure a servicing organization knowing everything today.

Yeah. And we chatted about this decision where if you have to choose between a CSM profile that's going to own revenue. Or an account manager profile that needs to be like customer success oriented, 100 times out of 100, I'm picking the account manager that needs to be customer oriented because you can teach a revenue generating person to have empathy for a customer, right? It's a cultural thing that you have to, that humans can learn. You, you can't make at large a CSM org, like want to be a quota carrying revenue generating team. It's just, it's a different profile. And I think Certainly there's people from both groups that you could make crossover, but I think you were talking about like 100% Oregon transforming them and what's the profile you're going to build. I would always go with sign me up for a quota. Like that's what I want to do and teach them the empathy for the customer. I think that's the trade-off that you should make.

Awesome. We're going to wrap up on that note. Thank you so much everyone for attending the session. Thank you, Matt. Awesome job and have a great rest of SaaS Day.

Thanks everyone.