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©2017 Gainsight. All Rights Reserved.
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ORGANIZATIONAL CONVERGENCE IN A RECURRING REVENENUE WORLD
J.B. WOODPresident and CEOTSIA
#Pulse2017
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The best practices & thought leadership your organization needs to succeed.
TSIA has the world’s largest vault ofboard-ready data insight in Technology Services.
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State of the Management Thinking
On-PremAssets XaaS
RevenueMarkets
Op/Org ModelFinancial Model
A B C
3
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‘As Is’ vs. ‘To Be’ Prime Organizational Thought
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SALES SERVICES
As Is
Command and Control of Two Major Business
- Hit Revenue Targets- Control Costs
- Hit Revenue Targets- Control Costs
R&D Marketing G&A
Add Them Up and You Get the Company P&L
To Be
Optimize a CustomerGrowth Process
Add Up TWO Things:Land AER
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‘As Is’ vs. ‘To Be’ Prime Organizational Thought
5
SALES SERVICES
As Is
Command and Control of Two Major Business
- Hit Revenue Targets- Control Costs
- Hit Revenue Targets- Control Costs
R&D Marketing G&A
Add Them Up and You Get the Company P&L
To Be
Optimize a CustomerGrowth Process
Add Up TWO Things:Land AER
Not Good Handoffs (2)
Handoffs Are CRITICAL (100s)
www.tsia.com
Traditional Tech Org Structure
6
C-LevelGlobal
Services ExecGlobal Sales
Exec
Customer Support
Education Services
Consulting Services
Managed Services
Field Services
Service Sales
Sales Engineering
www.tsia.com ”“ “ Customer
Success is a service motion
with a sales result.”
Organized in Services Paid for as:- Service COGS when monetized- Sales & marketing expense when it’s not
J.B. WoodCEO TSIA
7
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Profound Questions Arising…
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EBITDA or ARR?
Role of Sales in ARR?
Role of Customer Success in ARR?
Account Ownership?
Role of Marketing?
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Common Answers
9
EBITDA or ARR?
Role of Sales in ARR?
Role of Customer Success in ARR?
Account Ownership?
Role of Marketing?
EBITDA
ALL REVENUE
ADOPTIONCould Be Regional
SALES
AWARENESSEDUCATION
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Ø Growth in ARR = Higher growth in valuation
Ø Sales will be distracted from “LAND”
Ø High value adoption services will be given away
Ø Inconsistent CS processes
Ø Inadequate funding to scale CS
Ø Over apply high cost sales resources
Ø Under apply cost effective Marketing
What’s Wrong with That Thinking?
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Why Are Many CEOs Leaning In This Direction?
11
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1. For many, there is a confidence crisis with Service leadership. They don’t trust them to own Expand and Renew.
2. If Sales owns the number, they demand to control the resources.
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TSIA’s Point of View
13
EBITDA or ARR?
Role of Sales in ARR?
Role of Customer Success in ARR?
Account Ownership?
Role of Marketing?
ARR
LAND REVENUE
ADOPTION, EXPANSION
and RENEWALGLOBAL FUNCTION
THE CUSTOMERENGAGEMENT
PROCESS
MQLs, MULTI-TOUCH ATTRIBUTION
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Why Is This Better?
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www.tsia.com 15
ü Most expensive sales resources are focused on the hardest sales scenario: “LAND”
ü Growing ARR is a data and process driven capability (does that sound like Sales?)
ü The success of Marketing is measured by its ability to cost effectively engage prospects
©2017 Gainsight. All Rights Reserved.©2017 Gainsight. All Rights Reserved.
FUTURE ORGANIZATIONAL STATE
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XaaS Organizational Design Principles
• The Customer Engagement Process owns the customer– Not Sales, Not Services, Not Marketing, Not Product Management
• Overall company P&L trumps individual business line P&Ls• Minimize organizational capability redundancies• Maximize offer delivery efficiencies• Simplify the customer experience whenever possible
– Every company offer (technology or service capability) should be designed to maximize the customer experience as cost effectively as possible.
• GEOs cannot opt out of services required for a successful customer journey• Offer delivery will fund and direct up to 1/4 of R&D costs to improve margins and
customer experience.• Marketing will secure a higher percentage of the Sales and Marketing budget.
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Target Organization StructureWell Funded Demand Generation Engine
CEO
LEADGEN
MARKETING
GotoMarketPartners
18
www.tsia.com
Target Organization StructureA Sales organization focused on LAND
CEO
MARKETING LANDSALES
VERTICAL2VERTICAL1
SALESRESOURCES
SALESRESOURCES
LEADGEN
GotoMarketPartners
19
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Target Organization StructureA Customer Growth Engine
CEO
MARKETING CUSTOMERGROWTHLANDSALES
VERTICAL2VERTICAL1
SALESRESOURCES
SALESRESOURCES
LEADGEN
GotoMarketPartners
20
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Target Organization StructureWith Account Coverage That Drives Adoption
CUSTOMERSUCCESS
CEO
MARKETING CUSTOMERGROWTH
MEDIUM
RENEWALSPECIALISTS
LANDSALES
VERTICAL2VERTICAL1
SALESRESOURCES
SALESRESOURCES
LARGE
SUCCESSMANAGERS
SMALL
SMALLEXPANDSPECIALISTS
INDIRECT
LEADGEN
GotoMarketPartners
21
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Profitability of Support Services
22
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Profitability of Customer Success
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Most likely to make highly profitable Unlikely to make
highly profitable
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Target Organization StructureWith A Converged Resource Pool To Deliver Offers
CUSTOMERSUCCESS
CEO
LEADGEN OFFERDELIVERY
MARKETING CUSTOMERGROWTH
MEDIUM
RENEWALSPECIALISTS
LANDSALES
VERTICAL2VERTICAL1
SALESRESOURCES
SALESRESOURCES
LARGE
SUCCESSMANAGERS
SMALL
SMALLEXPANDSPECIALISTS
INDIRECT
SUPPORTSERVICES
EDUCATIONSERVICES
CONSULTINGSERVICES
PARTNERENABLEMENT
24
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Service Initiatives: 2017
25
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Target Organization StructureSophisticated Customer Analytics
SUCCESSSCIENCE
CUSTOMERSUCCESS
CEO
LEADGEN
CUSTOMERANALYTICS
OFFERDELIVERY
MARKETING CUSTOMERGROWTH
MEDIUM
RENEWALSPECIALISTS
LANDSALES
VERTICAL2VERTICAL1
SALESRESOURCES
SALESRESOURCES
LARGE
SUCCESSMANAGERS
SMALL
SMALLEXPANDSPECIALISTS
INDIRECT
SUPPORTSERVICES
EDUCATIONSERVICES
CONSULTINGSERVICES
PARTNERENABLEMENT
226
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Target Organization StructureCh 4, The Technology as a Service Playbook
SUCCESSSCIENCE
CUSTOMERSUCCESS
FINANCE/ADMIN
CEO
LEADGEN
CUSTOMERANALYTICS
OFFERDELIVERY
MARKETING CUSTOMERGROWTH
OFFERDESIGN
INFRASTRUCTURE
MEDIUM
RENEWALSPECIALISTS
LANDSALES
VERTICAL2VERTICAL1
SALESRESOURCES
SALESRESOURCES
LARGE
SUCCESSMANAGERS
SMALL
SMALLEXPANDSPECIALISTS
INDIRECT
SUPPORTSERVICES
PRODUCTDEV
EfficiencyEffectiveness
TightAlignmentTightAlignment
EDUCATIONSERVICES
CONSULTINGSERVICES
PARTNERENABLEMENT
27
www.tsia.com 28”“
Forbes, March 2012
Today’s business of any size implores a
singular goal: grow efficient, predictable, revenue faster.
And while it might come as a shock, little about the average
business’s structure is actually aligned around
doing this.”
www.tsia.com ”“ “ Customer
Success is a service motion
with a sales result.”
Organized in Services Paid for as:- Service COGS when monetized- Sales & marketing expense when it’s not
J.B. WoodCEO TSIA
29
www.tsia.com
Introducing TSIA’s CustomerSuccess Power Index (CSPI)
30
TSIA ...• Measures your organization’s
effectiveness and economic impact
• Helps you understand your strengths, weaknesses, and opportunities for growth
• Provides a highly analytical roadmap on where you can improve and the resources needed to get there
Take your benchmarking to the next level with our unbiased, data driven scoring methodology.
EffectivenessRating
EconomicImpact Rating
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©2017 Gainsight. All Rights Reserved.
THANK YOU
©2017 Gainsight. All Rights Reserved.
#Pulse2017
