Sales and GTM in Uncertain Times with Adnan Chaudhry and Matt Garratt (Video + Transcript)

This post is by Team SaaStr from SaaStr

Leveraging survey data from 66+ enterprise SaaS companies, Matt Garratt, Managing Partner of Salesforce Ventures shares the landscape of how businesses are shifting their sales & GTM strategies to react to today’s uncertain times. Adnan Chaudhry, SVP of Sales at Salesforce then provides actionable takeaways on how to refocus your sales teams, engage with customers, adjust your sales comp, and how you can properly forecast in today’s new landscape.

Adnan Chaudhry | SVP of Sales @ Salesforce

Matt Garratt | Managing Partner @ Salesforce Ventures


Matt Garratt:
All of our mid-market business and we are going to be talking about how our portfolio companies and how Salesforce ventures, and how Salesforce is shifting our go to market strategies during these very uncertain times and really excited to have Adnan here, 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.

Adnan Chaudhry:
Thanks, Matt. Good to be here.

Matt Garratt:
Next slide. Oh, sorry. Adnan, you have feedback. 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, 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 checking in with customers and doing the same. And seems we’re headed more into a bit of an adjustment period of 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.

Matt Garratt:
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 they’re adjusting to this on their go to market strategies. And then I’m going to hand it over to Adnan and he is 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 employing.

Matt Garratt:
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. Some of the companies you may hear of such as Zoom, a lot of other companies on this list like Anaplan that you might be familiar with and feel like we did, 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 in the enterprise software landscape.

Matt Garratt:
And so we’ll walk through some of the 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, this is largely a company that are Series A Series B, and Series C, 80% of the companies fell in that category. These were kind of small or mid sized companies with employees generally that had 11 to 250 employees, about 90% of the companies fell within that range, and mostly selling mid market and up into enterprise. So think of this as more direct sales, mid market and up kind of earliest to early growth stage companies to sort of think about the survey results.

Matt Garratt:
So if you look at the results themselves, if you look at Q1, not too surprising. Bookings were down, I think silver lining’s but not by too much, 50% of the companies that we survey, whereas 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 fiscal quarter ending in March versus April. And 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.

Matt Garratt:
So as you move forward, and you start to look into Q2, 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 hit 76% of bookings plan or better. Certainly, some of this is and 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 a 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 not as much focusing on top of the funnel.

Matt Garratt:
And so if you look at where the pipeline is right now, on the next slide, again pipeline is flat to down. Again, not too surprising, some similar things. And this has come out as we started to really talk to many of our portfolio companies as well. 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 won’t 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 going to check in on this in a month or so and it will be interesting to see how this changes over time as companies really start to increase outbound as well. And if you look at churn, so in Q1, starting to see some early signs of churn. 30% of the companies saw some increase in churn.

Matt Garratt:
And then if you can look at this a little bit more on the next slide, 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% to 5%. Another 36 are expecting to see churn increase by 6% to 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 a 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, stable base of revenue should be able to maintain that through the year.

Matt Garratt:
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 that they did. They really go into churn and customer success a 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 solution. So if you have a renewal rate of around 90% to 95%, churn’s only expected to decrease by an additional 5%. Whereas, if companies have a bit higher attrition and retentions less than 80%, the churn could go up to above 16%.

Matt Garratt:
Go to the next slide. So we are getting a lot of questions around what are best practices, what are companies doing, so on the next slide, I’m going to go through this 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 upsell versus targeting market new opportunities. Again, that stunning shift, we’re seeing that shift more in the last week or two to outbound sales. And everyone’s really, really redirecting their efforts on to those industries that are less impacted.

Matt Garratt:
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 doughnuts if you need to, but identify things, I stole that from Adnan. 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.

Matt Garratt:
You can go the next slide. 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 the public sector or shifting to healthcare, and you’re just seeing just the whole go to market motion in 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 see this now, but 90% of the companies that we surveyed did say they believe that this will create a tailwind for the companies coming out of COVID-19.

Matt Garratt:
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 to 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 a portfolio company 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.

Matt Garratt:
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 will increase dramatically. We’re seeing a huge uptake in people wanting more automation, whether that’s RPA or automating their call centers or automating other parts of their businesses as well. And it’s going to impact all industries, whether it’s we’re seeing supply chains shift from manufacturing and companies moving from having a single source for a supplier in one country to multiple countries 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.

Matt Garratt:
So we do think that what we’re seeing 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. 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 want to 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?

Adnan Chaudhry:
Great, Matt, thanks so much. Well, good morning. Good afternoon. 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, between Matt’s perspective and 60 plus portfolio companies that he’s working with. I’m responsible for the U.S. commercial business. And so, we’ve got companies that I interact with in all sorts of industries, travel, leisure, hospitality, to some companies that have been really hard hit, others that have been on the other side of this and have really seen a massive uptake in their business.

Adnan Chaudhry:
One of the guiding principles that helped me personally, 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 in New York. And so, I remember being in New York and the whole market was melting down. And I think Salesforce has learned a lot since then. And certainly the market has come quite a bit far from that point. Certainly the Safe Harbor, if I’m making any forward looking statements, this is largely meant to be if you’re making any decisions on Salesforce or any product purchases, make them based on current configuration, current functionality. More here, I invite you to read this later.

Adnan Chaudhry:
But if we zoom out a minute, the way that we’re thinking about it 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 to even like, “Hey, is this really a potential crisis coming down?” And here we are 60 days later, or a month and a half later, and we’re in this global crisis.

Adnan Chaudhry:
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 horribly hit heavily.

Adnan Chaudhry:
And in these three key buckets, the crisis hit officially. I live in California. And so even though we were working from home and a lot of global travel for us, and even domestic travel at Salesforce came to halt in early March, at least California, it was really mid March when the shelter in place directives 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 three different schools running upstairs, as long as those kids aren’t even back to work, you’re still in crisis management.

Adnan Chaudhry:
But I think as a business though, we’ve teetered back into stabilization. And then the third component when all 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 also 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 and whatever that new normal means.

Adnan Chaudhry:
And so I use that term interchangeably in stabilization. And then kind of acceleration is sort of how we call our business. So this is going to be the framework. And so in the first part of this framework, you’re on crisis management, I just want to share some of the things and lessons learned we had. So three key pillars here. One was 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 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 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.

Adnan Chaudhry:
[inaudible 00:17:17] having broader relief efforts at Salesforce, we believe our platform is something that’s the greatest platform for change. And so for us we’ve been really active in leveraging our ecosystem. We’ve gotten over 50 million PPE equipment out in the market through just our broad efforts and working with our partners. We’ve got, and by the way, in the back of this deck, I’m going to have a fair amount of links, a lot of the stuff I talked about. So if you’re trying to figure out where to go find information, just know that it’s coming. We’ve reached out and we set up a grant process for a lot of our SMBs to help them financially in whatever way we can.

Adnan Chaudhry:
We 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. 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 our 50,000 employees. That was something that was typically at that level done quarterly. Now we’re bringing that in every single week.

Adnan Chaudhry:
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 is really ticked up. And that’s the best practice that I think is across the industry. And then also restating validating your goals. Everyone here, a lot of the companies here are led by values, were 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 a V2MOM. It stands for vision, values, methods, obstacles and measures.

Adnan Chaudhry:
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.

Adnan Chaudhry:
Through this crisis management, there was also an opportunity to redirect our operations. One is just everyone’s gotten remote, 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, 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.

Adnan Chaudhry:
And then for marketing, we’ve had to just pivot overnight. We’re at a company that’s heavily focused on high touch in person events. I’ll give you an example. Our Sydney World Tour, we had 10,000 registrants. And when everything shut down, we have 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.

Adnan Chaudhry:
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 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 were still so decentralized. We learned from that early on. And so in this process really around customer success, developing the financial plan for our customers. And so we’ve learned good best practices to put more tools and more controls in the hands of frontline managers, frontline reps so the back end finance teams, sales ops teams aren’t inundated. And that’s really helped through this message.

Adnan Chaudhry:
And 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 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 noncritical outbound efforts, especially within industries that were hard hit, we’ve totally pulled those back.

Adnan Chaudhry:
And then the check ins were really about leading with empathy, deep, deep listening. Salesforce, we’ve got 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 couple of weeks ago, we’re having Brene Brown for our SMB business, around empathy, and leading through courage. And so there’s a massive demand around some of this content.

Adnan Chaudhry:
And another is just being there and just telling people you want to help. So Salesforce Care is our package of various solutions across industry, whether it’s healthcare, it’s the 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 they have 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.

Adnan Chaudhry:
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. I go forward one framework I just wanted to share from pipeline. I get customers ask me a lot about pipeline. We certainly put a lot of focus on that internally. And one area I would just point out here is this is illustrative. This is pretty standard certainly out of Salesforce or most CRMs around pipeline fidelity in 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 neck activities are 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 don’t just say, “Hey, what’s the starting pipeline? What’s the ending pipeline?” So create and close, that [inaudible 00:24:05]

Adnan Chaudhry:
Closing out your Q1 now. And so really the create and close effort, what was the motion? And we’ve even found even creating spiffs and 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 industry as well. Certainly you 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.

Adnan Chaudhry:
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 sort of thinking what their budgets are, how they want to operationalize, and so really understanding this bucket and segmenting it and sticking with it is super, super important.

Adnan Chaudhry:
And then certainly a lot of value changes, certain things that are getting 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, I think that’s across the industry, the SMB space, mid market space, there’s a lot more create and close and momentum in front end of the year, in the 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 step forward has really been helpful. So I would encourage people to really think about pipelining this core fidelity stage and moving to stabilization.

Adnan Chaudhry:
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. In the same construct, what are the opportunities here? One is investing in your team, calibrating your operations and then re-qualifying 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.

Adnan Chaudhry:
Our sales teams have never been busier. It’s crazy. Nobody’s sitting around watching YouTube or Netflix. There’s real work. And it’s not exactly clear. Sales is wearing many hats. You’re customer support, you’re credit, you’re collections, you’re enablement, you’re a 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 actually have now opened 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 as 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 conversation with my daughter the other day, and she was talking to one of the teachers who’s just been exceptional on the Zoom exchange [inaudible 00:27:24].

Adnan Chaudhry:
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 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 some firms that have had to make deep cuts for all the right reasons 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.”

Adnan Chaudhry:
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 spiffed, incentivize that continuity in the emphasis. And so putting spiffs 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.

Adnan Chaudhry:
And then so what are the things we’re measuring? And so this is to 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. It 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 at different metric than just quota attainment. Those things will come later.

Adnan Chaudhry:
And then also forecasting, I’ve got a [inaudible 00:29:28] depending on the deal cycle, deals days in the quarter. Now what we’ve said is, “Hey, cut off the COVID noise 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, this stuff is not going to hit but this is going to hit.”, and then it’s 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.

Adnan Chaudhry:
And then our marketing strategy continues to evolve. 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 has been around smaller, more intimate roundtables, and also with the customers when we talk to customers, and that’s opened up as things have stabilized, speak to power, talk the truth. And in that conversation, I think people understand 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 these projects just didn’t show up overnight.

Adnan Chaudhry:
They kind of maybe in some cases got frozen overnight, but they’re open to it. If it’s a project that’s maybe just frozen, there’s actually a lot of get the permission from the customer, “Hey, we’re going to 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 we’ve been the sort of solutions engineering, building the right ROI is 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 from the sale.

Adnan Chaudhry:
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 in hiring, and how do we think about AEs. And this is just an illustrative example. It’s a company with right now with 50 AEs. That’s going to grow to 80 AEs. The same model applies whether you have five AEs and you’re going to 80 or you have several hundred AEs and you’re doubling. And this was something that in 2008, Salesforce, I think, maybe stalled hiring a bit. And what we learned was that there was 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 leading into the hiring.

Adnan Chaudhry:
And so I wanted to just walk through some of the key trade offs in each of these and so in this example, maintain the current course of hiring. [inaudible 00:32:31] Some cuts, in this case, the company with 50 AEs, you drop 20 headcount, and then you’re 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 accelerating the ramp time. And so this is a bit of an eye chart. You have to bear with me for a minute. The sales capacity trade off here. In the key hiring space, if you just assume $1 million quota, 60% attainment, again this is just illustrative. Everyone’s going to sort of input their data in here and pull the lever differently.

Adnan Chaudhry:
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 six months for a typical AE more on the larger enterprise side.

Adnan Chaudhry:
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% ramped and about a $5 million, about a $3 million hit on your business. But what’s really interesting is if you make some cuts now, 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 they make cuts scenario is a lot, lot more generous than it might be otherwise, where you end up is you have a 50% of your team is only ramped. But the bookings impact is over $10 million. And assuming 150,000 OTE, again you can flex the OTE event, 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.

Adnan Chaudhry:
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 it 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, valuable.”

Adnan Chaudhry:
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 as we come back into work, just some thoughts here that 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 have to be uber flexible with personal needs.

Adnan Chaudhry:
Whether it’s in the stabilization or now, I do think once things sort of get to that standard, you got to 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, 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 until 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’s going to be super important, because we’re going to have to have any calibration.

Adnan Chaudhry:
On the operation 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 re-entering 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, you need to quarantine a whole team. So I think this hybrid approach and 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.

Adnan Chaudhry:
And then just the agility and being responsive. And here, 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. 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. So a lot of the operations, historically, I think we’ve been more quarter to quarter or year to year. Now we can go week to week or month to month, the shorter time span, shorter bursts and having those metrics are going to be super critical.

Adnan Chaudhry:
And then it’s all about elevating our customers. And I think there are some` companies that are well positioned for this, and the digital transformation is paramount. 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, for somebody have a shopping experience or a 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 [inaudible 00:37:56] around tying yourself to digitization, enabling smarter, more personalized experiences. That’s going to be the new normal. That’s how we all get our customers through digital transformation. So make those investments now, don’t wait would be my advice to you.

Adnan Chaudhry:
Some resources I just want to leave you here with. One, Salesforce Care. Here’s the hyperlink that says all of our key offerings or 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 Wellbeing 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 V2MOM. We’re making it public. I encourage you to dig in. Leading Through Change newsletter, again we have a lot of thought leaders and change leaders coming and might be helpful to you or your teams if there’s interest. The Be Well Together is the 30 minutes daily 9 a.m. 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.

Adnan Chaudhry:
[inaudible 00:39:06] 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. 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 three months ago? How do you identify the lower performers when numbers and targets have completely changed or need to be? Do you make drastic changes or stay the course?

Adnan Chaudhry:
No, 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 that the second part of that question, Deborah, I think was around hey, it’s easy to just look good with closing revenue and closing bookings and saying, “Hey, here I am. I’m the superhero.” But I think that’s in some ways the rising tide. When that goes out, it really brings into focus what are the key activities at the top performers. And as I mentioned before, we’re looking at activities, meetings, pipeline, and the underlying motions under all of those are super critical. Are people agile? Are they able to learn a new skill? 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.

Sorry, I’m just pulling it right back up. Basically, it says after identifying performance 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.

Adnan Chaudhry:
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, two 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 okay.

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?

Adnan Chaudhry:
Matt, do you want to take that maybe with some of the portfolio that you’ve had on the churn side and I can add on?

Matt Garratt:
Yeah, on the varying by company size, I mean I think there’s more of natural, larger companies tend to have a larger base of capital, more stable revenues. And so from that standpoint, 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. It really is also going to vary a lot more though by industry and sector that you play in. And then sorry, oh and how are companies addressing churn. I think Adnan hit on this and some of the stuff that Nick and the Gainsight team focused on was really insightful.

Matt Garratt:
But it was really kind of breaking down the barriers between account management and customer success and sales and just really creating 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, and it’s very much a customer 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 in 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.

Adnan Chaudhry:
Yeah, and I would add that [inaudible 00:44:02] online sales team to frontline leadership has the best knowledge around how to pivot the solution set to help the customer. Maybe this team has been put on pause by 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 negotiation or a payment issue is really around being agile. But if you make it seem like it’s an operations and finance approval, then you’re kind of stuck in that path.

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

Adnan Chaudhry:
Sure. I can give a couple. One of our examples is even with Tableau. Tableau is an acquisition that Salesforce made a year ago or so. 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 we’ve got some of the tools around remote call centers or remote service or remote service teams. How do you give them something 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 enablement tools and solutions for example, as we’re enabling the team, even quick videos that we’re attaching versus making people sit through long webinars or the experiential training, just kind of making quick guides, quick pocket guides have also been really helpful.

Matt Garratt:
Yeah, maybe to add one thing I think you’re hitting on is something that’s sort of the secondary effect of being a SaaS company that I think will have long ranging impacts, and that is having collaboration not just the pure pay to play collaboration tools, but the inherent nature of SaaS being collaborative in tying to the data and an example of that as a company in our portfolio Propel PLM, it’s a design tool, product lifecycle management tool and it allows companies as they’re going to release a new design to more easily collaborate with other suppliers and manufacturers, and so it makes sense inherently like having that as a cloud based solution, makes a ton of sense just because all the things that you associate with SaaS solutions.

Matt Garratt:
But having that collaborative component as you’re thinking about, I’m moving my supply chain from 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 also you’re collaborating around that project, and that those tools really need to be intricately linked to the design changes, the quality assurance systems. So it’s something that kind of I always thought was pretty eye opening in terms of that secondary effect of why SaaS solutions are going to be so impactful going forward.

So you 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 the next quarter?

Adnan Chaudhry:
Yeah, I’ve never touched more executives in a 30 to 45 day cycle in my life, the fact that I never jumped on a plane. The whole notion of flying to [inaudible 00:48:14] really need help right now. And so the short answer is yes, I’ll even take it a step further. We’ve had to really rethink our approach because a lot of the, I mentioned briefly earlier, when we do the architect workshops or solutioning, we’ve been able to pivot and one of the ways we’ve done that is we’ve been thoughfully internally. We’ve been running our internal strategy sessions or internal meetings onto ourselves, the fact that we’ve got to be running daily, I’m sorry, weekly, all hands with 50,000 employees, for example, means we’ve got to get the tools set up in place that can sort of take all that content and that feedback and keep working. And so 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?

Adnan Chaudhry:
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 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 center for our customers and so that’s never been healthier. And I don’t know Matt if you have a different experience on that.

Matt Garratt:
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 solution 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, this was a company that’s doing this in Canada, distribute that throughout Canada, or as I mentioned, Propel leaning in, in the manufacturing space for PPE equipment. Some of these companies have maybe expertise scenarios 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, how do we solve COVID but then also how do we sell into some of these other market segments in new ways that we have and as new needs are 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 so 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.

Matt Garratt:
Right, thanks so much.

Thanks. And see you guys in the next presentation.

Adnan Chaudhry:
You’re welcome. Thanks.

The post Sales and GTM in Uncertain Times with Adnan Chaudhry and Matt Garratt (Video + Transcript) appeared first on SaaStr.

SaaStr Podcasts for the Week with CMX Media and Salesforce — May 22, 2020

This post is by Deborah Findling from SaaStr







Ep. 335: David Spinks is the Founder @ CMX, the premier network for community professionals. In 2019, CMX was acquired by Bevy, where David now serves as the VP of Community. Bevy is a customer-to-customer community management platform, building products that brands use to build, grow and manage their community event programs, both virtual and IRL for companies like Slack, Twitch, Salesforce, Atlassian, and Duolingo. Prior to CMX, David founded 2 prior startups centred around different forms of community building and before that was Community Manager in the early days of LeWeb the largest tech/startup conference in Europe.

Pssst đź—Ł Loving our podcast content? Listen to the start of the episode for a promo code to our upcoming events!

In Today’s Episode We Discuss:

* How David made his way into the world of SaaS and came to found CMX. Why David believes that community is so central for all SaaS companies today?
* How does David advise teams on expectation setting around virtual events? How ambitious should they be? What big mistakes does David often see in the early days of the planning? How does this differ if you have an existing cohort of users vs are starting new with no audience?
* How dependent is the success of the community on the platform it is hosted on? What is the ideal size for Slack, Telegram and Whatsapp communities? Should the host seed the discussion or allow it to be natural? How important is it to establish a handbook of expected actions and behaviors? Should you cull members who are inactive?
* What does David believe separates good from great when it comes to discussion groups? What innovative strategies has David seen work when it comes to bringing a virtual event to life? What is the right amount of people in that discussion group? What is the core role of the moderator for the group?


Ep. 336: Leveraging survey data from 66+ enterprise SaaS companies, Matt Garratt, Managing Partner of Salesforce Ventures, shares the landscape of how businesses are shifting their sales & GTM strategies to react to today’s uncertain times. Adnan Chaudhry, SVP of Sales at Salesforce, then provides actionable takeaways on how to refocus your sales teams, engage with customers, adjust your sales comp and how you can properly forecast in today’s new landscape.


This podcast is sponsored by Guru.

SaaStr’s Founder’s Favorites Series features one of SaaStr’s best of the best sessions that you might have missed.

This podcast is an excerpt from Matt and Adnan’s session at SaaStr Summit. You can see the full video here.


If you would like to find out more about the show and the guests presented, you can follow us on Twitter here:

Jason Lemkin
Harry Stebbings
David Spinks
Matt Garratt
Adnan Chaudhry

Below, we’ve shared the transcript of Harry’s interview with David.

Harry Stebbings: Welcome back to the official SaaStr podcast with me, Harry Stebbings, and you can suggest both questions and guests for future shows on Instagram @Hstebbings1996, with two Bs. And I always love to see you there. But to our episode today. And there’s one question every SaaS company is asking themselves right now, “How the hell do I do virtual events, and what makes the best so good?” Well, diving into this today, I’m thrilled to welcome David Spinks, founder of CMX Media, the premier network for community professionals. In 2019, CMX was acquired by Bevy, where David now serves as the VP of Community. Bevy is the leading provider of in-person community software, powering community programs and incredible companies like Slack, Twitch, Salesforce, Atlassian, and more. And prior to CMX, David founded two other startups centered around different forms of community building, and before that was community manager in the early days of LeWeb, the largest tech startup conference in Europe.

Harry Stebbings: But enough from me, so now I’m very excited to dive into this extravaganza on what makes the best virtual events, with David Spinks, founder of CMX Media.

Harry Stebbings: David, it is so great to have you on the show today. And what you probably don’t know is I’ve been an admirer of yours from afar, mostly on Twitter, for a while. So thank you so much for joining me today, David.

David Spinks: Honored to be here.

Harry Stebbings: I would love to start, though, with some context. So tell me, how did you make your way into the wonderful world of startups, SaaS, and how did you come to found CMX?

David Spinks: Yeah, it’s a long story, but to make it as brief as possible, I’ve been building communities online since I was a kid. Started in middle school, around video games, Tony Hawk’s Pro Skater 4 was my game of choice, built a big online forum around that, and just became pretty fascinated by how technology could connect people and create community. And so I did that, I was just active on every online community platform I could. Eventually that became my career and I became community manager, joined a startup in Philly called Scribnia, at the time. And we were in an accelerator program for three months, and halfway through that accelerator program, we pivoted and started SeatGeek, which, everyone will know SeatGeek, and no-one will know Scribnia. And we kicked that off and that was my first entry into tech. And I ended up running that first company, Scribnia. I was the managing director and ran that company. And that just got me in the door and that led to more and more opportunities to work with different tech companies.

David Spinks: I ran community at a company called Zaarly for about a year, I ran community for LeWeb, which you may know was one of the biggest tech conferences in Europe for many years.

Harry Stebbings: Sure. Absolutely. Loic.

David Spinks: With Loic Le Meur. Yep. And helped Udemy kick off their first community program, and also started companies. So I started a company called Feast, which was delivering ingredients to your home, and you get this home cooking experience with videos that teach you how to cook.

David Spinks: And ultimately kicked off CMX six years ago, because throughout my career, starting companies and building community for companies, ironically, there was no community for community professionals. And so I would do everything I can to find other people who are doing this work and just get to meet up with them, ask them questions. I co-founded with a couple of friends, about eight or nine years ago as a place to just start writing about this stuff.

David Spinks: And eventually led to starting CMX Summit six years ago, which is our conference, as just a place to bring everyone together who’s doing this work, building community for companies. And so that grew, we bootstrapped it for five years. Last year, at the start of last year, we were acquired by a company called Bevy, which powers event programs, event communities for companies. And that’s how I’m here.

Harry Stebbings: And the rest is history. Speaking of communities today, every company in the world is thinking, “Shit, how do I move from physical to virtual events?” I want to dive into that because I think many are foundering and a lot of scratching their heads, doing it for the first time. So you’ve had a starting point, and expectations set slightly when thinking about the transition to virtual events. So when you think about maybe expectation setting for these companies, how do you advise companies to approach just how ambitious they should be when it comes to that first virtual event?

David Spinks: Yeah. It’s funny because I’ve been banging this drum of community for more than 10 years now, and all it took was a global pandemic, and all of a sudden everyone’s like, “Wait, this is important.” I’m like, “Yeah, I know.” And so there’s companies that have been doing this for a while, but even the ones who have been doing it for a while were probably still reliant on in-person events, and they’re trying to pivot. And then you have companies who weren’t really doing much in terms of community, or weren’t doing anything online and they’re kicking it off for the first time. If this is your first time doing that, I think just getting started’s really important.

David Spinks: It’s easy to overwhelm yourself and try to do too much, and launch a massive forum, and throw a huge virtual conference. But you can start in very simple ways with just simple discussion calls, kick off a Zoom call with your 10 top customers. People are craving community right now, they can’t connect with each other in person. And so they’re looking for any opportunity to connect with each other, and they’re all dealing with this epidemic. It’s affecting everyone, and so everyone has a lot of shared challenges and lot of things they want to ask each other right now. And so just start creating those spaces for them to come together, and a lot will start to happen organically.

Harry Stebbings: Can I ask, when you create these spaces for them to come together, and sorry, this is off schedule, but I’m intrigued, do you seed the discussion threads themselves, or do you let the discussions flourish naturally within the participants?

David Spinks: Ideally, it’s all happening organically, and you’re just sitting back and nudging the direction or facilitating. More realistically, you’re going to launch an online space and you’re going to have this vision of everyone showing up, and participating, and engaging. And then it’s just going to be crickets. There’s so many spaces for people to engage today, that to create a new space, you really have to put in the work and facilitate. And so in those early days, I think you really want to be creating a lot of the content yourself, be putting out discussions, be putting out conversations that you think would be interesting, and then don’t even wait for people to respond. As soon as you post it, message five people that you know, and already have a relationship with and say, “Hey, I just posted this question. I’d love to get a conversation going. Do you have a minute today to jump in and post a response?”

David Spinks: And so you’re manufacturing the example that you want others to see. So when someone new joins a group, now they see activity, they see people engaging, they see thoughtful responses in there. And now, that sets an example for them to be thoughtful in their responses and start posting. And it just puts out the message that this is an exciting place to be. It’s the same reason that a bar might only let some people in at a time, in order to create a long line, so it looks like it’s in high demand. Same kind of thing for communities, if people show up and it just looks empty and it looks dead, that’s not going to feel like an exciting place to participate, but if you start to create that experience of engagement and excitement in the community, then when people join, they’ll feel drawn into that group.

Harry Stebbings: So, as I said there, we write these schedules and then we just go completely off script, but I much prefer it that way. In terms of the platforms, I’m really intrigued. How dependent is the success on the platform choice that you make? Because you could do anything from a WhatsApp group to a Telegram group, to a Slack channel, to any of the collaboration tools that we have today. How dependent is success upon the platform choice?

David Spinks: Yeah, it’s a big question. If you already have an engaged audience, and a lot of people who are trusting the brand, aware of the brand, engaged with you, it’s going to be easier to launch your own owned platform. Maybe you kick off a Discourse forum, or you use one of the enterprise platforms, and you bring people to your site and your community, because they’re already engaged, because you already have an audience, that’s going to be easier.

David Spinks: If you’re starting from scratch and people still don’t know who you are, and they’re not fully engaged with your brand, and your team, and your product yet, maybe you don’t have a lot of users yet, it’s going to be really hard to get people to participate in a new space as well. You’re just creating a new habit, and people are so used to going to big social to interact now, that it’s hard to get people’s attention. And so in that case, it might be better to go to where they are already, which might be a Facebook group, Slack is really popular because people are already in there, Discord is really big for gaming, and use that to build the community. And then, once you have that engagement, once you have an engaged community, the community is the people, it’s not the product. And so once you have the people engaged, then it becomes easier to move them to different spaces that maybe they otherwise wouldn’t have.

Harry Stebbings: Totally get you. Can I ask, in terms of those groups and communities that you build in those initial days, how do you think about optimal size? Because you want enough where there’s enough discussion and enough content going around, to where it feels like the velocity of thought is high, but you also don’t want too much where there’s apathy and too much noise. How do you think about the optimal size in those early days?

David Spinks: Smaller is often better, right? A good quality group of 10 people is going to be much more valuable to someone than a hundred people that weren’t as curated, and in an experience that isn’t as intimate. And everyone knows that, like you go to a dinner with 10 really awesome people, this is the best experience, right? Everyone loves that kind of experience.

Harry Stebbings: Totally.

David Spinks: But then you go to the meetup with a hundred people just casually drinking, and it was open to anyone, that’s not nearly as valuable. It’s not as facilitated. You don’t get to talk to people as deeply. It doesn’t feel as curated. And so in general, I think smaller is better to start, and then you want to grow it incrementally. So if you’re looking at an online group, maybe ten’s a little small, unless you’re in a WhatsApp group, or a chat space that works with a small group, but let’s say you did a Slack or a Facebook group. You’re going to want more people than that, I would say maybe 50 or a hundred’s a good starting point.

David Spinks: And then you want to grow it gradually. So you don’t want to overwhelm it, right. Going back, I keep using bar examples, I don’t know why. It’s on my mind, I guess, I haven’t been to a bar in months, but you ever go to a bar, and you’re with friends, and it’s not that crowded and you’re having a great time, and you can hear each other and you have space to move, and you can get a drink quickly, and then rush hour hits. And all of a sudden it’s packed with like 500 people, and you can’t get to the bar and you can’t hear each other, and you don’t have space, and it no longer feels like it’s there for you? That’s what it feels like when someone kicks off an online community and they have a hundred people in it, and then they invite 500 people into the group. It just completely overwhelms the community dynamic that you had in there.

David Spinks: And so maybe a good rule of thumb is to keep it to like 50% growth each week, or each month, or even 25%. So if you have a hundred, then add 25 more each week, and then you can welcome those people properly. Everyone who’s in the group can contribute to welcoming them properly. And you create more of what feels like an organic growth, rather than a manufactured growth.

Harry Stebbings: Can I ask a tough one? Do you cull people who don’t engage or who don’t consistently show themselves to be a meaningful part of the community?

David Spinks: Usually, no. It depends on the format. Let’s say you did bring together 10 people in a discussion group, and it’s noticeable that someone is not participating, that they’re not showing up, that they’re not engaging. Then I might call that. And I might say to that person, “Hey, it seems like maybe this isn’t the best fit for you, so totally cool. But we want to make sure that we keep this group really focused. And so we’re going to keep rotating members out based on engagement.” You might be able to do that in that small group, just to keep it really high quality. In a larger group, it doesn’t matter. You actually want to have people, even if they’re passively engaging in these large groups, because that becomes an audience for those people who are creating, that makes them want to create.

David Spinks: So there’s the 90-9-1 rule is this old study on large online communities, and it basically said that 90% of people will passively consume in a community, 9% will be responding and engaging, and 1% will be creating. And so realistically, every community is going to have a very small percentage of people who are actively creating and contributing, and then a much larger percentage who are passively consuming. And then there are people who just go completely inactive. And at the end of the day, unless you’re paying per user, or some meaningful metric to you, you can just let those people do what they do. And you can also run campaigns to try to reengage them. So everyone plays a role in the community at all different levels of activity.

Harry Stebbings: Can I ask, we mentioned the different levels of activity and we mentioned some different behaviors there, in terms of very active, responsive, and then creating. In terms of guide books, or guidelines, when initiating people into the group, how important is it to have almost a guide book, a set of rules? “This is how the community operates.” How important is that, versus letting it be much more free flowing?

David Spinks: It’s absolutely critical. There are communities out there that prefer to just be completely free flowing. I think we’ve seen that historically devolves into some pretty bad behavior. And I think it’s really important that you have a lot of intention in any community space that you create. And so there’s a concept called setting the container. And I think that applies to anything from a small discussion group, where you’re trying to essentially explain, “Here’s how to participate in a quality way, and here are the rules that will make sure everyone feels safe and comfortable participating here,” right? So it’s not just rules, it’s not just what not to do. It’s also being explicit about, “Here’s how to contribute in a great way. Here’s the kind of behavior we encourage in this group.” That’s going to guide people to know how to participate in a quality way, that they may not have realized, or may not have been comfortable doing that before.

David Spinks: And so it’s really important to have that. That said, you should always be open to evolving and changing and learning from your community members. And so maybe someone one day recommends a different kind of guideline, or they do something within the boundaries that you’ve set, and you realize, wow, that was a great way of approaching this problem. Let’s turn that into an official guideline or rule. So you can constantly adapt and evolve your guidelines, but you always want to be intentional about how you want people to participate, and how you don’t want them to participate in the community.

Harry Stebbings: We’ve spoken quite a lot about discussion groups there, and I think a lot of companies in particular, are scratching their heads in terms of how to really encourage engagement within the community. I’d love to hear your thoughts, having seen so many different kinds of viral and vibrant communities, in terms of really, what cool methods of engagement have you seen really work well in virtual events?

David Spinks: Yeah, so the world of virtual events is evolving rapidly right now. And I honestly think everyone was sleeping on the value of virtual events before, and now that they don’t have a choice, everyone’s getting a crash course in it. The default has been the Zoom call. The Zoom webinar, the traditional webinar. Have a speaker, everyone watches that speaker. There’s a chat feed where they can respond, or ask questions, or talk to each other. And maybe there’s a Q and A at the end. It’s pretty one way, right? It’s one person broadcasting to a lot of people.

David Spinks: That’s not really going to be a virtual event in the same way that a physical event, you have the opportunity to meet people, to turn to your neighbor and talk, to network. And so the really great virtual events are incorporating more opportunities for those attendees to engage, to participate, to network with each other. And so, events that do this really well have a combination of different formats. They do have speakers that are presenting and educating, and then they have speed networking, so is a really great tool for this, or if you use Hopin. A lot of these tools have speed networking built into it, where each attendee gets randomly matched up with another attendee. Icebreaker does a good job of giving discussion prompts for them as well. And you can choose the time that it rotates out. So you can do three minute talks, or five minutes talks, or seven minutes, and then it fades out then at seven minutes, and you get matched up with someone else. So our community loves that, that’s been really effective.

David Spinks: And then just a small discussion group. When you have a speaker broadcasting to everyone, no-one else is getting to meet each other or discuss the content. And so using breakout rooms, using smaller group discussions, is a really awesome way to make it feel more like a real event where they’re getting to meet people. They get to participate in the discussion, they get to bring their questions and hear from others. And so that’s a really valuable way of making your virtual event more engaging.

David Spinks: And you can combine these things, right? So we do, CMX Connect is our global event program that’s run by members of our community. We have over 60 chapters around the world. And for all of the events that we do, we combine all these different elements into one event. And so we might have 30 minutes of speed networking to start, and then we’ll have a speaker talk on a topic, like measuring your community, or running virtual events. And then we’ll break out into discussion groups, so that people can discuss that topic amongst themselves, and share their own challenges and their own lessons. And we might mix up that order, and mix and match different formats, but you can think it as modular like that, you have these different event modules, and you can combine them to make a more holistic experience for your community members.

Harry Stebbings: I’m really pleased you mentioned Hopin there, it’s one of our favorite platforms. So, really pleased to hear that. And you also mentioned discussion groups, and I’ve heard you say before that one of the key rules is, it’s under 10 and over 30. Explain this ratio and rationale to me here, David.

David Spinks: So it’s just a way of remembering how to make a discussion group really valuable. And it’s not a hard and fast rule, but more of a guideline. So under 10 means less than 10 people. We’ve all been in discussion groups with 15 people or 20 people, and there’s just no way that everyone gets an opportunity to have their voice heard, not everyone’s going to get to participate in the discussion. If you try to involve everyone, you just don’t get to go very deep. And so I think ideally discussion groups are generally six to eight people. I think 10 is about the most you want to have, so shoot to have less than 10 people per group.

David Spinks: And then over 30. So this depends, but generally, especially if the entire event is a discussion group, 30 minutes is just not going to be enough time. You want to have enough time for people to introduce themselves, for you to kick off the conversation, and then really give people opportunity to bring their challenges, bring their voice, be able to respond to each other, be able to get into conversation. And just so many discussion groups, especially virtual ones, which just take a little bit more time to really facilitate and engage, they get cut off at 30 minutes, and that’s when the conversation usually starts getting good. And so, just making sure that you have ample time for people to have that discussion, and you keep the group small enough that it can be a meaningful discussion.

Harry Stebbings: Totally with you there in terms of giving it ample time. You mentioned the facilitation, there. I’m interested, because it’s a tough role, being a facilitator. What’s the most important role for a facilitator to enforce, in your mind?

David Spinks: I think it’s about equity of voice. I think their job is to identify who hasn’t had a chance to speak, and making sure they create the space for those people to speak, and their job’s to see when somebody is taking up too much airspace, and moderate and facilitate and say, like, “Thank you so much for sharing. It’s been really great to hear from you. I’d love to hear from other members of the group. Harry, what do you think about this topic? Anything that you’d like to share?”

David Spinks: And so without that moderation, every single discussion group I’ve ever participated in has devolved into one person talking a whole lot, and everyone else is having to sit there and listen. And when people participate in a discussion group, they don’t feel like they’re in a position of power or authority to moderate themselves. And if they did, it might feel very, they’re bringing conflict to the group. And so first of all, every discussion group should have a moderator, a facilitator. You should never have an unmoderated or unfacilitated group. You always want to have someone who’s responsible for facilitating the discussion, and it’s that person’s job to make sure that everyone has an equal opportunity to share their voice

Harry Stebbings: Totally with you in terms of the voice equity. There’s one element, which is always challenging, which is that terrible, awkward silence, especially when you throw an open question out and everyone’s waiting for everyone else to answer. I’m interested, in terms of the awkward silence, what’s the right way for the facilitator to act and engage in those awkward silence moments?

David Spinks: You just got to sit with it, honestly. It’s always tempting to try to fill in empty space. You always want to take out the discomfort for everyone, but I think a good facilitator is comfortable just sitting with that silence and letting others fill it in with their voice. And sometimes it’s just people wanting to be polite, and they don’t want to be the first one to speak, and they want to give other people a chance to speak. I remember in elementary school or middle school, not wanting to be the first one to raise your hand. People just are hesitant to be the first one to volunteer, but then once one person gets going, then it opens it up, and others want to share.

David Spinks: And so just being comfortable with those uncomfortable silences, letting it sit and letting people fill it in themselves. I’ll just sit there on the Zoom call and smile, and see them start to smile as they realize that no-one’s saying anything. And then inevitably someone, within 30 seconds, which might feel like a lifetime, but it’s usually only 30 seconds, someone will be like, “All right, I’ll go.”

Harry Stebbings: That’s funny. 30 seconds, as a facilitative before, 30 seconds does feel like a lifetime, I tell you, David. I do have to ask, though, when we do Q and As, as well, the awful moment is when you say, “Does anyone have a question from the audience?” And you get the really awkward, no questions. What do you do in those situations? Do you seed people in the audience? Do you have backup questions ready? What’s the right way to approach that really awkward element?

David Spinks: Yeah. I think that you really do want to seed it ahead of time, if possible. And you want to continue to remind people to post those questions. One really fun thing you can do is ask people to send in questions ahead of time. And if you’re doing it like a webinar or Zoom call, you can actually have them send in videos of themselves asking the question, and then you can pull in the video and play it live, so it actually looks like someone came on and asks a question and then you bring it back to the speaker to answer the question. So that’s a fun way to make it work on virtual events that you couldn’t even do elsewhere and offline, but seeding things upfront is really good throughout the event.

David Spinks: Reminding people, like, “Hey, just as a reminder, we’re going to be moving to Q and A in 10 minutes. So please put in your questions now, so we can get rolling right away.” Right? So that’s the kind of thing, because sometimes you open up to Q and A and you forgot to remind anyone that it’s coming up, and then they’re not ready to ask a question. And so you want to try to seed it as much as possible. And then when you get to that Q and A point, if you realize that there are no questions in there, don’t stop and say, like, “All right, any questions?” Just keep rolling through it and say like, “All right, well, I have a few more questions that we seeded from the community ahead of time. Please keep posting your questions here in the chat, but let’s dive into the first one.” And so you don’t have that dead air time. And so that’s different, right?

David Spinks: If you’re facilitating a discussion group, uncomfortable silences are really good. If you are putting on content, you’re performing, you’re creating, it’s like doing a podcast or doing a radio show. You don’t want dead silence on a TV or on a radio. It’s the same thing in your webinar, you don’t want to be sitting there live with 200, or a thousand, people watching you and just saying like, “All right, any questions?” That’s just awkward and that just looks like people aren’t engaged, which isn’t a good look. And so I’ll just keep rolling through it, and just go right into those pre-seeded questions that you’ve already pulled in, or prepared. Or just make it up, say like, “Oh, we collected these questions ahead of time. Let’s dive into that.” Even if you literally made up those questions right before the call.

Harry Stebbings: Trust me, David, with my over-excited British way, there is never an awkward silence in my podcast, but I totally agree with you there. I do want to ask this, so we have this event, and we want to know if it’s successful, and we need to measure it. In terms of measurement, I’ve heard you say before that there were two lenses with which to really measure the success of your event. What are those two lenses and how do you break them down?

David Spinks: Yeah. So in working with any community team, we map it out that you have two, what do we call them, dual objectives. So you have a business outcome that you’re hoping to achieve, and then a community outcome that you’re hoping to achieve. And you should be able, in theory, to achieve both with any sort of experience or program that you run. So if it’s a forum, you have your engagement in the forum, your monthly active users, your daily active users, your sense of community, you can actually survey people, you can get NPS, and all these ways of measuring the health of community. And you might be looking at something like reducing support costs, or collecting feedback on your product, or retaining customers. And so you have both the community and the business objectives.

David Spinks: And it’s the same thing for events. You’ll have aspects of the event that you want to tie back to, are we building a healthy community? And in the same way as an online group or forum, you can send out surveys. “Do you feel like you belong in this community? Do you feel safe in this community?” Net Promoter Score. You can look at number of attendees. How many RSVPs did you have, and what percentage of them showed up? How many of those people were repeat attendees? So these are all kinds of things that show you, is your community happy, healthy, and engaged?

David Spinks: And then you’re going to have the business objectives. We use a really simple framework for identifying the business value of community programs. It’s called the SPACES model. So that breaks down into support, product, acquisition, contribution, engagement, and success. And so those are the six areas and you could probably figure it out from the name, but support is people supporting each other, answering questions, giving each other support with their technical problems. That tends to be more in an online forum space, but it can work in events as well.

David Spinks: Product is, you’re collecting feedback and insights on how to improve your product from your community members. So, did you collect that feedback at a booth at your event? Or did you have people fill out a survey at the event to help you improve your product?

David Spinks: Acquisition is growth. So this is actually a really key one for events, and everyone should be doing this, and every event platform should hopefully be able to help you do this. And so you should be able to say, who came to our events, how many people came, how many of them were new leads? How many of them were new prospects? How many of them were opportunities? How many of them ultimately closed to sale? How many of them were customers? And so that gives you a good idea of how your events are actually impacting pipeline.

David Spinks: Contribution is, if you have a platform, let’s say, Airbnb, you have hosts who are contributing to the platform. They run lots of events for their hosts, and they want to see that those events are helping their hosts become more successful at contributing to the platform.

David Spinks: Engagement is essentially customer attention. And so, are our customers more likely to be loyal, to stick around, customer lifetime value as a result of attending our events.

David Spinks: And then success is, customer success. It’s helping people be more successful at using your product, and growing in their career through education programs.

David Spinks: And so all of those can be powered by your events and your online communities, and you can tie any of those events back to one of those business outcomes.

David Spinks: And the last thing I’ll say there is just, we tend to think of these events as one-offs, right? We think of it as like, “This is an event and this event needs to drive this business value, this community value.” And that’s it. We look at it in that bubble, but what you should look at your events as, is touch points with your community over time. And so your goal is to build an ongoing, engaged community over years. And that event is just one single touch point amongst many touch points, that can include your forum, it can include your email, it can include events, in-person events, when those come back. It’s one touch point in an ongoing community member journey that people are having with you.

David Spinks: And so, think about holistically for your event program. Maybe you’re doing a big conference twice a year, and you’re doing regular meetups every month, and you’re doing office hours every week. Those are different kinds of events that you can create, and each one of those is going to have a different community goal, and it might even have a little bit of a business goal. Or maybe some of the events don’t have a business goal, it’s just about engaging the community, knowing that later it’s going to drive business value. And so when you think about it, now you start thinking about your entire community program holistically, and all the different events and touch points that might feed into that customer journey.

Harry Stebbings: I absolutely love that holistic perspective. And I really liked the breakdown there between the two different lenses. So I think that’s an awesome clarity to what is quite a murky, “How do I measure success?” I do, though, David, want to move into my favorite, which is the quickfire round. So, I say a short statement, and then you hit me with your immediate thoughts and I’m going to throw in a couple that aren’t in the schedule that you just mentioned because I’m too intrigued. So just roll with that. Okay. So you mentioned that RSVP to confirm in attendance, what’s a good measurement and a good success rate in terms of that RSVP to attendance of virtual events?

David Spinks: That range is going to be huge, because it depends on the size of the event, right? If you have a 10 person event, you probably want all 10, or at least nine out of 10 people to show up, because you personally invited them. If you have a big conference, it’s going to be lower and we’re seeing the range all across the board. Some people are seeing higher attendance rates than their offline programs were, some people are seeing lower rates, and so offline, historically we’d see for a free meet-up, or a free event, you’d see about 40% people show up. We just hosted CMX Global. We had 3000 people RSVP for that event and we had 2200 show up. It was about 70% showed up, which awesome. It was really cool to see that high of a turnout rate.

David Spinks: It’s hard to have a benchmark, just compare against your own events. So if you did a conference, how do you compare against the last one? If you do a meet-up, how do you compare against your previous meet-ups? And see what you can do to continue to improve that conversion rate by improving your emails, your communication flows, things like that, that might help people be reminded that the event’s coming up, and make sure they have it on their calendar, and that they’re ready to join when it kicks off.

Harry Stebbings: What a terrible question from me, I apologize for that. Benchmark- [crosstalk 00:30:08].

David Spinks: Well, it’s a terrible, “It depends,” answer, which everyone hates.

Harry Stebbings: Tell me, what’s the biggest misconception around virtual events?

David Spinks: There’s a belief that you just can’t build real community through virtual events, there’s just no way you can replace in-person experiences with virtual experiences. And that is true, that you can’t replace it, and there’s a hundred percent, many elements of in-person gatherings that we are just never going to be able to replicate virtually. Even if you got the VR experience perfect, and you have your haptic suit, and you could feel everything. And even then, it’s still not going to be the same as just being able to run into someone in the hallway of an event. It’s the serendipity that you miss out on.

David Spinks: That said, there are a lot of things that you can do to create really meaningful experiences that help people actually connect with each other, and form relationships and form legitimate bonds. And so you have to get creative, and you have to figure out ways of creating serendipity and connecting people with each other in ways that aren’t just a webinar.

David Spinks: You can replicate a good amount of things that you have in an in-person event. Will it do it a hundred percent? No, but there’s a lot of value that you couldn’t even do in an in-person event, because virtual events are just more accessible, for one. So people who may have not been able to travel, or afford a ticket, they can all come together in a virtual event in a way they couldn’t in person. So look for the unique values, or the unique opportunities that virtual events provide, rather than just trying to copy what an in-person event is.

Harry Stebbings: Totally agreed in terms of not being a copy of the in-person. Final one, but a really interesting one for me to hear is, obviously you have CMX, but of all the other virtual events you’ve been to, what has been your favorite virtual event, and what made it so good?

David Spinks: it would be the virtual Passover Seder that we hosted with our friends and family.

Harry Stebbings: Got you. And what made it so good was the bond between friends and family?

David Spinks: Yeah, it was awesome. It was a virtual Seder and, so Seder means order. And so it’s basically, you go through the order of Passover, and you read the stories and you sing the songs. And we had, everyone pulled up a virtual Seder, and they each read from it. So we rotate around. So everyone felt involved, everyone felt included, you drink a lot of wine during it. So it was fun. And so we used to host Seders at our house all the time, every year.

David Spinks: Obviously we couldn’t do that this year. So we did it virtually, but my family is in New York. I grew up in New York, I live in San Francisco now. And so they’ve never been able to be there for the Seder that we host. And this year they were able to join from New York. And we even had two other friends, from Australia, join us. It was morning for them, so they maybe had a little less wine than us, but it was really cool to be able to have our really close friends in San Francisco and our family involved. And just seeing that melding of different groups, that I think otherwise would have been really hard, because everyone would have just done it with their friends, or with their family, to be able to bring those groups together was really special.

Harry Stebbings: David, as I said, I’ve been an admirer from afar for a long time. So I can’t thank you enough for joining me today, and this has been fantastic.

David Spinks: Awesome. Well, thank you so much for having me.

Harry Stebbings: Absolutely loved that deep dive with David. And if you’d like to see more from David, you can find him on Twitter @DavidSpinks. Likewise, it’d be great to welcome you behind the scenes here. You can do so on Instagram @HStebbings1996, with two Bs.

Harry Stebbings: As always, I so appreciate all your support. And I can’t wait to bring you another fantastic episode next week.


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