(upbeat music) Hi, my name is Jacco van der Kooij. (upbeat music) I'm the CEO of Winning By Design. (upbeat music) And I love music. (upbeat music) Oh. And I also love sales. (upbeat music) Yes, I do. (background upbeat music) And today I'm gonna share
with you the data model. And what we can do of the day tomorrow. (upbeat music) You ready? (upbeat music) (background upbeat music) Now over the past weeks, we have been talking about a
few of these business models. I don't know if you have followed us on our YouTube channel,
but up to this point we have been discussing
these three models. The business model, the GTM model and the growth stage model. And as promised, we
will step model by model and we're gonna go through all of them. The next one up is the data model. (upbeat music) That's where we're going to
start today, the data model. And I wanna share with
you some of these changes that have occurred over the past years. Now, what we see through this data model, is that historically
we're used to a funnel. This funnel that all of you know, it's a little bit historic, okay? (background upbeat music) Yeah. That kind of historic. (background upbeat music) Okay. And what we see in this model, that has been put
together by Crystal Ball, Sages, it feels like wizardry, okay? (background upbeat music) And this wizardry is
applied to different parts as if we are using like some magic to turn prospects into pipeline. (background upbeat music) That makes many of us
think that it's an art. (background upbeat music) Now what we see here in this
art is divided in three pieces, three parts; pipeline
conversion, often done by sales, pipeline development done
by teams of prospecting, or by content, or by marketing teams, and pipeline creation often
done by the marketing function. (background upbeat music) But I have to tell you. (background upbeat music) It is time to move on from this. (background upbeat music) This approach to looking at customers as if we are generating revenue and we are just popping
them out, is outdated. (background upbeat music) And that's why we're gonna
take a look at the new model. And this new model has a
relatively new approach. ♪ Where do we go from,
where do we go from ♪ We're going look at
what we call the Bowtie. (background upbeat music) ♪ No one can save us ♪ And this bowtie is based on
science, proper modeling. ♪ I don't wanna lose you,
I don't wanna lose you ♪ The idea is that you don't
want to lose a customer, once you've signed them. You wanna keep them with
you, and you wanna help them achieve the impact that
they wanted from you. ♪ Hey, hey, hey ♪ ♪ I just wanna say you're my new crave ♪ That's it. We want them to be craving. They want them to love it. ♪ Hey, hey, hey ♪ ♪ I just wanna say you are my new crave ♪ ♪ Before you turn around ♪ Yes, yes, yes. And so what I'm gonna take a look at, is I'm gonna take you
through what a modern funnel can look like. Now, a model funnel is based
on these five key elements, four key elements. I'm gonna take you through
how it's full funnel, how it has closed loops in there, how it is customer centric, what specific data we're gonna measure. And we're gonna share
with you some findings. So let's get going on that. What we're gonna see that historically, the bowtie, what we're looking to complete is making it full funnel. I'm gonna draw from the single funnel. What we see down here is not full. I'm gonna tip it to its side. Boom. And we're gonna see
that that process historically is there to sell products to customers. Think of routers, think of like, yeah like equipment and so on and so forth. Now, what we see here at the left, and we have prospects coming in on left, and closed/won deals on the right. In order to close them, we have a very seller perspective, we call about negotiating, targeting, winning, objection handling,
selling, and so on. And all that is, it is
as if we are focused at closing the deal and
being done with them. Now in order to do, we take
them through three stages. Those stages are; create the awareness. You know what? It could
be with a billboard. It could be an
advertisement in a magazine. It could be with content online. It could be with targeting them with content on LinkedIn based on persona. What we then do is we see, educate them. We educate them with content. What are the options
to have them learn more about the problems they're running into. To have them learn more about the solutions that are out there. And then what we see is
they're gonna make a selection. They are gonna deem this as important and once it is important
it becomes a priority. They're gonna spend money and resources in order to
achieve the desired impact. That is from a very customer perspective. Hey, I become aware. I educate, I become educated and therefore I now know what I want. And I'm gonna make a selection
and come to a decision. What is still here at the bottom is, prospects to sell to and closed/won, that is still very seller centric. Imagine what is it like, It feels like there's an end. Once I close here, closed/won, boom! The end. Thank you very much. (background upbeat music) Can you imagine let's pay the end credits. Thank you for coming people. We closed the deal. Good luck. See ya. Bye-bye. This is not what business is like. (background upbeat music) For those of you who've
been long in sales, you know, your relationship
with your customers is often what you take,
what you keep way longer than your relationship with
the companies you represent. Now that means that we need to
make this seller perspective. Now, what I'm going to do is I'm gonna lean it a little
bit in on the journey and say like, hey, we started there. We come to an end. How can we change that? Well, we need to change
that by not thinking about prospects as people we sell to, but as prospect as people who
we can help achieving impact. Who can benefit from it. And there is no end, what you see down here. That is not a closed/won deal, but instead like a relationship, it is a start of a commitment. We are mutually committing to something. Now, this makes it no longer the end to stay in the movie theme. The end of the movie, we're
just entering the intermission. Get your popcorn, get settled. Talk a little bit about the, you know, like what you think
who did it in the movie, because it is gonna get on. And what you see down here. Yeah. Like, I don't know about you, but whenever I'm in a cinema, I saw the other day Tenant, great movie. But what I found is that,
you know, like your popcorn. Yeah. You're done with the popcorn even before the movie starts. Sidebar, sidebar, sidebar, you know. Like little I can say
about that other than, (background upbeat music) Okay. Good. What we now gonna do, we're gonna go, continue the journey. So no longer is there an end. We're coming back from intermission. Now what? Now, what we're going to do, is we're gonna see that
there's an entire new funnel coming to the right. And that right, we're going
to focus on right now. (background upbeat music) That is really where we're going. That is where are we
going from here, okay? I want you to realize,
that's the one that we want. That's where we're gonna go to. Now, in order to do
that, I'm gonna make sure that we're gonna go through a few stages, that actually are really similar to what we see on the sales site. These three stages that
we're gonna go through is activate slash onboarding. For people who selling applications, think of a Chrome plugin,
that's activation. But if you sell a CRM
platform or security platform you're probably thinking about onboarding. Now, sometimes that can take you know, minutes, seconds,
days, weeks, months. But it's gonna end up with the client having a working platform. A platform that works as advertised, is delivered as promised,
within budget and on time. Now, what we see once
that platform application is performing, it delivers the
impact that the client wants. That impact is the reason why you start to recurring revenue stream. And as you grow your business, you achieve the maximum impact over the lifetime value of that client. That means that on the
right, the vertical axis, depicts the impact that was
delivered, the maximum impact. And on the left, the total
available market is not like how many people are out there, but how many people your product can impact the business. That creates a full funnel approach. As I promised that I
would demonstrate to you. (background upbeat music) Whoo! We now know the bowtie is a full funnel. It's full funnel. It goes, marketing sales,
prospecting, customer success, onboarding, account
management, everything. (background upbeat music) Next one I'm gonna step into, is explain to you, how they're a loops inside that full funnel. Where there are loops, creating occasionally
a closed loop system. Now, what we're going to take a look, is we're gonna take a
look at the same model, as you see down here. And you see the client journey as the client maneuvers
through stages, you know, like meetings, discovery
calls, demonstrations, proof of concepts dependent on the size of the deal, and what not. As it comes through that journey it ends, and you know,
like the first thing that I start notice is, is this journey really linear? Look at that. Is it linear? Second is, it's like, hey, my gosh. Is there only one way we can go? And the third question is, is this truly the end? Is there no more? This is the end of it. (background upbeat music) What you see here is a closed loop. And this loop creates a feedback
on the end of a customer. Think of it as an NPS score, where a happy customer generates
through a recommendation, a new lead. (background upbeat music) You can mimic this. You can create your business. You can create processes,
where you'll learn who your best customers are and start, you know, like
acquiring them that way. So for example, if you think of a customer that you really, really like, who has brought you
lots of other customers. They were like, one of those customers that unlocked a whole bunch, a whole new segment of customers. Had you known that at the
beginning of the journey, you would have been probably
willing to spend a lot more you know, marketing dollars and sales support dollars
on that, to acquire them. Acquiring those kind of
clients would find you willing to increase the
client acquisition costs. (background upbeat music) That creates a form of
a closed loop system if you would note that. Now what is closed loop? And I wanna draw it as
an analogy down here. A closed loop can be thought of when you're driving your car. It was not too long ago, that
you can create cruise control. And cruise control is where you
essentially like, you start, you know, like programming
the speed of your car. There's no radar in your car. And when you program at
the 65 miles an hour, it will be going 65 miles an
hour until you run out of gas. And in the beginning, that was quite fine. Or bump into something. Yes, I get that too. And so you know, that is cruise control. You program the speed. Now, that is an open loop system. It is not responsive to what
is happening all around it. Now, what I'm going to
create, is I'm going to create a closed loop system. I'm gonna create some
feedback loop in there. That feedback loop, I'm
creating through radar. And when I use radar, I'm measuring the
distance to the next car. And as I see the distance decreasing, I'm starting to adjust speed. That is a closed loop system. (background upbeat music) Now I can go very wicked with this, because what you'll can see,
is what is now the difference, and how are we going to apply
artificial intelligence? Artificial intelligence
most of the time requires a closed loop system. If you do not have closed
loop systems, there is no, you don't even need to talk about AI. There's just a little use for it. AI learns from closed loop system. That's the whole nature
from learning on itself. And as I let you read these blocks here, you're gonna learn what
the closed loop system is. Most of the time, we're not looking at closed loop systems inside, marketing and sales operations. Almost always, they're open loop. And at best, what we gonna
see is some automation. (background upbeat music) And that is what you
see depicted down here. Almost all systems in the
market are open loop systems. Now what we start to see
when AI starts to play, think of Amazon, recognizing what you buy, applying what other people have bought, adding your spending power,
time of day, all that, and then trying to create
a closed loop system. In other words, making you a prospect for a new product to sell. These loops, you know,
create smaller closed loops. And what you see down
here, is these loops. In this case, for example, we see a loop like this
in the sales department. Think of, in a sales department where a seller is progressing from discovery to demo
to maybe a proposal. But then runs into a
person, a senior executive who says like, hey, what
are we spending money on? And that executive needs to go through, hey, what was the discovery process? Give me a demo before they approve. Therefore they go back
into the sales journey. This going back and forth
create little loops. Most CRMs are not very
well suited for this. If you think of that, it means that you move your CRM forwards from stage to stage to stage. And you're, let's say you're
in the proposal stage. And then suddenly you would reset it back to stages, to discovery mode. You know, like people in the
organization would see that as if your opportunity has
decreased in likelihood. It has improved because of
the essentially steps through with a senior decision maker. This is an indication
that today's CRM systems, are incapable of registering what is truly happening in the deal. And it just puts it into an advanced mode such as navigating the organization or creating decision approval
or something like that. Where in true fact, it is stepping with the executive decision maker through the discovery and demo process. (background upbeat music) There are other loops. And what the loop that you see down here is the nurturing loop. This is a more well known loop, where we keep nurturing
content to the database until they, you know,
surpass a certain threshold and expressing interest to buy. Whether that is by contacting us. Or whether that is by visiting, for example, a pricing page
or something like this. This creates a loop down here. And now that is called the nurturing loop. The problem with this nurturing loop, is that we have hit it so hard over the years that people
are really overwhelmed. And so this has become less valuable in many organizations where we see that the marketing
material being distributed during this process has
gotten at such a volume that it no longer triggers,
truly interested people. Now, this gives us a start. There is one more loop, and it's the most exciting loop of all. (background upbeat music)
(clapping) (siren blaring) Here it comes. (siren blaring)
(background upbeat music) Ladies and gentlemen,
this is the growth loop. This is what we're doing this for. (background upbeat music) And when I say we, I do not mean the selling organization. (background upbeat music) I mean, all of us are
working towards this. (background upbeat music) This is the growth loop. And it creates compound growth as you will see in later models that I'm gonna describe. (background upbeat music) Now what you see down here, is a client, you know, you're achieving the impact,
and ready to find more impact. Either they can expand the
contract for another year. They can put more users on it. They can buy new product from you. This creates a growth loop. (background upbeat music) Yes, yes, yes. This growth loop is what
this business is about. Now, what you've seen
down here, what I've done, we now have the bowtie, full funnel model. In that model, we start to
see the customer journey. The customer journey, is
the journey that they take full of experiences, and
they make loops and bounces. They go one way, they go two ways. And hopefully in the future,
when you do your job well, they create closed loop systems. That is what we're looking for. Next step that we're gonna talk about, is how to create customer centricity. Because up to now, when
we're looking at it, we still do not know, what are we selling? (background upbeat music) So, time to get going on
the customer centricity. And this is one of the
most exciting parts. Now what I'm going to take you through, is I'm gonna once again,
use that baseline model. The bowtie. The bowtie again, is full funnel. It goes from all the way to
marketing, through to sales, of prospecting sales organization, onboarding customers' access
to account management. (background upbeat music) What we notice is where the
power of that growth loop was. Where it created recurring revenue. And our intent as sellers
in SaaS organizations, as sellers anywhere, when we sell to a customer,
we love them to buy more. This is referred to as recurring revenue. It can come from an
existing hardware contract where a customer buys
this similar routers. It can come from software sales as a service software, as a service. It can come from anything. Now, what I'm going to do, is once that client starts
creating more and more recurrence it, at a certain point in time achieves the maximum revenue possible. The client either graduates
out, you know, like in let's say it's over
five, six, seven years. We now have achieved lifetime value. (background upbeat music) Now the key here is the following. Look at the top. (background upbeat music) Okay. That's the point. Recurring revenue, is the
result of recurring impact. Let me repeat it. (background upbeat music) Recurring revenue is the
result of recurring impact. (siren blaring) That, ladies and gentlemen, is a success to all of your SaaS business. To understand that recurring revenue, is the result of recurring impact. Why don't you arrest me right now because that essentially, is
the key metric of all, okay? (siren blaring) (laughing) I'm so sorry. I'm sorry. I'm having too much. (laughing) Good. I'm gonna start it out a beat. (background upbeat music) Sorry. I'm having too much fun. (background upbeat music) Okay. (sighing) So we wanna achieve
that recurring revenue. Now, I want you to take a look. If recurring revenue is a
result of recurring impact, that means that they are interchangeable. Look at the bottom right, okay? I'm gonna gray it out, over there. Recurring revenue and maximizing revenue. That can be exchanged with the following. If I achieve recurring impact, I can tell you we gonna
get recurring revenue. And if we achieve maximum impact, then we're also going to
achieve maximum revenue. In other words, in order to
achieve all this revenue, we simply gotta deliver
the client the impact that we promised we would, right? (background upbeat music) Yeah. I mean, I cannot make it
any simpler than that, right? I mean, dude, you bought an
Uber ride and it dropped you off exactly where you want it to, at the time you really want it to. Wala, which is French for dare. You see? And so I'm telling you, it's that simple. Now in order to be able
to deliver the impact, I'm gonna go upstream.
I'm gonna go in reverse. I'm gonna go back into the funnel. (background upbeat music) Now, before I do that, I forgot, you know, impact has two kinds. We call it emotional
impact, which is, you know what you normally measure. It's a form of an NPS score. Customer expresses love for you and rational impact or just money. You know, more seats, you know, more increased
usage and so on and so forth. These are two kinds of impact. Now what I'm going to, I'm gonna look at the causality. That means I'm gonna go upstream and say, before I can achieve recurring impact, I gotta first be able to achieve impact a client is ready to. In other words, I need to onboard them. Now, before I can get
them onboarded, I need to probably get them committed
before I assign resources. So I need to get a
mutual commitment signed. And before I do that, I probably, in the sales
process need to engage them in a conversation around
what they want to achieve. What is the impact that they
want, and demo that impact. Then if I go further upstream, what we consider a lead, is like it's a person who expressed to learn more about the impact that
you can achieve in that. Then if I go further, then actually a prospect
is somebody whose business I can impact. That is the simplicity of this. This is it. It's not more complex. (background upbeat music) Now, what you see down here, calling your customers
prospect, lead, opportunities and so on, is still a bit seller centric. So we're gonna change that. (background upbeat music) Now, the great thing is, the answer to what we should call it is staring as literally right in the face. If we remove all those
sellers centric words, then you're going to see, in there, you're going to see
someone who identified. Somebody who expressed interest, somebody who was engaged in it. Somebody who's committed to it. A client ready to achieve
it, and so on and so forth. Simply if we highlight
those words, we will get to what we are actually
doing and how valuable it is. Now, I'm going to see identified. I'm gonna take that. I'm gonna take that to the top. And over there, I'm gonna
create what you would refer to a historically as the customer journey. A client, we identify clients whose
business we can impact. We create awareness about
the impact we provide. They become interested. We help them with education
on the problems to solutions, the different options that they're having. They become very engaged. As they go through the engagement process, they are picking a choice. Where there maybe one
of two or three options. It may be between us and a competitor. It may be between us and no action, not deemed to be needed enough, or it maybe in an alternative way. These are all options. Finally, they commit. And as they commit, you
know, like they need to activate that, you
know, like in a platform it may take a week to
get the platform onboard or in case of activation,
it may take a few seconds. You click you install
and so on and so forth. Once your option is enabled the Chrome browser plugin is working. You start to achieve
the impact that you want and you achieve the impact
every day, every hour every minute, every week, whatever it is. As you expand it, as you like
it, you start to expand it. You want more of it. You renew the contract, weekly, monthly, annually,
quarterly, whatever it is. You buy more, and you eventually end
up at maximum impact. That is the impact journey. All along. You do it every day in your life. You do it whether you buy from Amazon, Starbucks, Uber, Lyft, everywhere. It's the same journey. All you do is, hey, I
pay you for something, deliver me for that what I pay
you for, it is that simple. Now I want to highlight
some change in here. In the middle of there. For many of you who run
into a platform sale, you create a little gate there. And it says like, hold on. I'm not gonna let everybody through. And the reason why that is,
is because once you pass through this gate, and this is often where the sales professional accepts
the client into their funnel, the client is gonna get access
to, for example, experts, executives at the company,
proof of concepts. You may start spending lots of time and energy on responding an RFP or an RFQ. All that takes lots of effort. And as a result, you're increasing the
client acquisition cost. For you to access that, we need to make sure
that the client is ready. We refer to that as a form of priority. Historically, we use that
gate as if you have budget. That was the historic. That's no longer needed, because SaaS contracts
often fall within budget and budget should already
have been tackled long ago. SaaS companies are not buying because they don't have budget. Budget actually is not that important. Next what we did, the
second generation people they made a decision
based on an ROI model. Do we provide enough
return on your investment? However, when we looked at ROI model, SaaS pricing, by the very nature of it, is priced at a fraction
of what historically was the perpetual model. That means that we always
have a positive ROI. Dude, we just dropped the costs to 20% as if you bought
the software upfront. We just dropped it to
20 from 100%, you know, like perpetual software
license, to a SaaS contract. You know, like whatever. We went from a million dollars
a year to $20,000 a month. You bet you that the ROI is skyrocketing. Now, you're not selling
just against a client with a virtual software or with hardware, you're selling against all
kinds of other SaaS provider. So your ROI model doesn't
make sense anymore. SaaS contracts and today's
contracts are sold on, is this a priority right now? And the priority's base, is do I want this impact at
this given point in time? If I look to a traditional ROI model, it doesn't take into
account the element of time. It just says there is a need. And when we provide this, there is, you know, like
it's a positive outcome. We deal with priority
because you are selling against 20 other SaaS
providers, who have an equally important ROI model that has a 10X. And so you have to determine, as a buyer, or as a buyer has to determine, is this a priority right now? Keep that in mind. This is a whole different
world with selling in today. (background upbeat music) You like? Wooh! (background upbeat music) Whoo! Okay. That was a lot, okay? I, yeah, like there was a
lot of nuggets in there, that I want you to think about. What we now here see,
or what we now see here, is a bowtie framework that we are gonna build a data model on. We need this, because if I didn't build
a proper framework first, then our data model wouldn't make sense. I first need to put in
the proper fundamentals. Is it customer centric? Doesn't deliver what the client wants? Otherwise, I'm just gonna have, you know, a limited data model. But now, I have a proper data model or the fundamentals, and I can start building a data model. (background upbeat music) I'm just having too much fun. (background upbeat music) Don't you see what I see? Folks. This is what sales is about. We think that sales is about closing and objection handling. These are secondary skills. (background upbeat music) Learning what your customer really wants, the impact they want to achieve. That is the real art. What we refer to as art of sale. But it's just a science. Learn what your customer wants and deliver what they pay for. (background upbeat music) (sighs) I'm telling you, I love what I do. And I love to share with you. I just hope, you're not like, you don't think I'm weird or anything. (background upbeat music) Okay. This now gives us the
opportunity to actually build the data model. Okay? Now it's time. Let's build this data model. We now have full funnel,
marketing sales, customer success, prospecting, onboarding,
account management, everyone. We now, it's closed loop. It has a nurturing loop,
it has sales loops, it has growth loops. It's looping everywhere. It is customer centric. It is built to deliver the
client the impact that they want. Now, what we can do, is we can start building a data model. (background upbeat music) I'm gonna do that, I'm step you through
three different metrics, starting with the first
metric, volume metrics. Now, what you see with volume metrics is things we measure in volume. Think of how many leads do we have? How many opportunities
are in the pipeline? How much revenue? What is the total weighted pipeline? These are all things we measure. How many seats do we have active? How many customers do we onboard? You know, like, have you onboarded
last week? Volume metric. And one of the most
common volume metric is, how much recurring revenue? MRR as in monthly recurring revenue, or AR as an annual recurring revenue. So let's take a look at what
those data models look like. What we see down here, is we're taking a bowtie, and we're gonna look at the bottom and we're gonna define volume metrics. Look how they map up against the top. Against like, identify that interest. They all map to that, okay? That's where I'm gonna go. So now what we're gonna see, is different go-to market models of map code their volume
metrics differently. In case of a two-stage sales organization, what you see down here, they're calling that MQLs and
SQLs and so on and so forth. Now, if the contract closes annually, then you're gonna see ARR. What you see for example,
of product-led growth, it operates at a different speed. It often, you know, talking about the sale
cycle measured in days where a platform that uses a
two stage sales organization as ARR and Es, often are
using sales, you know, measured in weeks or
sometimes even months. And so down here, what you'll see, is they use different metrics, sign up, instead of MQLs and
product qualified lead, and so on and so forth. Because those contracts, in this case I assume that they're signed
on a monthly contract. You're gonna see MRR as measurement M7. Now that may be very different. For example, if we are using
a field sales organization, and in this case, this field
sales organization is targeting and using qualified accounts
instead of leads, and you know, like sales qualified accounts
that are getting access to advanced resources, in this case, most likely because, you know, like, of this bigger deal size, they're gonna sign annual contracts. And that's the reason why
you see those metrics there. The point down here is this data model, the volume metrics need
to be defined upfront. And that is a great
place to start for you. What are your volume metrics? How have you defined them? And this is a key because it
provides the fundamental basis for us measuring what we're going to do. Now, as you measure, you know, as you create the process, you're going to find that, you know, it looks something like we have done here for one of our clients. At the top, you see your bow
tie funnel, and then you are measuring your metrics. What is my MQL or what is my, you know marketing qualified account definition? What is my, how do I define a win? Is that a signed commitment? Or is it clicked on, you
know, like a form that we have activated account? All these need to be defined. This process of defining. We recommend that you do that as a team. And then once you experience that, you're gonna find it's
so great to do that. What I wanna point you to,
is a mistake you will make. (background upbeat music) And that mistake, is
where you are starting to look at exceptions. Yes, but what if this and that? (background upbeat music) I know I've been through many of these. Don't spend 80% of the time,
discussing the exceptions. Okay? Keep it simple. Let the exception take
care of itself later on. Don't try to be all inclusive, with every exception condition
that you can identify. What I now have is I can
define the time metrics. Now, the time metrics, you know, We have used historically, we've only used a few very common time metrics. The most common time
metrics is sales cycle. And we still don't know
when we start measuring it and so on and so forth. Now, the sale cycle is often, can be determined as the moment in time that the sales professional in
charge of helping that client come to a mutual commitment, that they do that, in the
length of time needed for that. The other one is time to life. You know, like for an application a Chrome plugin, for example,
that may take seconds. Whereas, you know, like
for product-led growth, that may take like a few minutes. And for installing, you know, entire CRM and replacing
existing systems may take months. You know, these are a few of the metrics. What you've already noticed is that sometimes we talk about MRR, ARR, that depends on your contract. So we know, are we going month to month? Or are we going year to
year or quarter to quarter? These are all the
different metrics of time. And so you see down here, the 𐤃t indicates the time difference. Conversion metrics work exactly the same. (background upbeat music) Now what you see here is the, historically the conversion
metrics we were using. And it's even more three letter acronyms. (background upbeat music) Because there weren't enough. Okay. Now, we have these more metrics that we're having. These stand for, lead to opportunity and opportunity to close. These are historic metrics. The problem of these
metrics was they were not, they didn't give us the level
of granularity that we needed. So we needed to close closer typically, because some of our
higher velocity business, those metrics up front
are really important. And so what you see down here, we define for that higher velocity business,
we are defining, you know like more resolution converting or looking at the conversion metric
of prospects in this case for example, to MQL being
CR1, and conversion rate too from MQL to SQL and from
clients who are interested to client being engaged, being CR2. We do the same thing with
the opportunity to close. Yes. Like I said, more
three letter acronyms. And in here, we're two conversion rates. This conversion rates
CR3 is often referred to as the handoff rate. Is this case, the prospecting
person often referred to as an SDR, sales development
rep, handing it off to the AE. Then that AE, account executive
sales manager, closes. And that is the close. The win rate is CR4. Now, what we want to make sure, is that if I look down
here at T4 at the bottom, this is essentially the sale cycle. You always want to make sure that that sales cycle measures, aligns with the win rate. Sales cycle and win rate, go hand in hand. You cannot measure win
rate from this particular metric down here, and
sale cycle from another. They are measured across
the exact same time span. That is a key. And you can see here why that makes sense. That means that this line, for example is an important line down here. Because as I said a second ago, that is the line that depends sales cycle. And in this case, the sales cycle and win
rate, are along these lines. Now let's take a look at
what other metrics are. And these metrics are very, you know, like I said, very defining in
two-stage sales organization where a prospecting person, hands off the deal to a seller. These give us the four
match specific metrics, the acquisition-based conversion metrics. We're now gonna take a
look at the retention-based conversion metrics. Historically, we looked at churn. But churn by itself is not defined enough. Most sales organizations are looking at things like revenue churn, and so on. What we say is, before we go
there, let's split up first. What is the onboarding churn or retention? And what is the usage turn and retention? That is what you are seeing, that these two are
really, really different. Now onboarding churn, involves
the buyer's remorse, you know may have been a wrong sell, are less, should not be accounted necessarily to the customer success organization. They may very much relate
to the sales process. Whereas, the logo churn, license churn, and revenue churn, license
refers to the seats. Logo refers to obviously the entire client being lost. Revenue leads to the revenue
per client being decreased. And licensed means like,
hey, I'm losing seats. My average revenue per seat is going up. So I don't have revenue churn, but I got fewer seats to, you know, make an impact on their business. These are three very different metrics. It gives a very different definition. We are looking closer at the resolution that
we're going through. I need to make sure that you understand, that we measure churn. Churn is often like 2%, 3%. And we are measuring this as part of our calculations as retention. Not at worse, 4% churn
equates 96% retention. One minus churn retention. In order to put it all in
the same mathematical domain. The same we see here at the end. Expansion, upsell growth, and pretty much always similar kind of term for describing am I selling more? Am I creating more impact for my client? When we take a closer look, we referred to that metric as CR7. The growth metric, the expansion metric. And it is defined in four
different ways of growing. You get renewing, same
contract, same decision-maker. Reselling, same contract,
new decision-maker. Upselling, same person selling more stuff, same department selling more stuff. And cross-selling, selling
to other departments. Four very different metrics. Now, if you're running a $2-$3 million recurring revenue operation, this is all the same. But if you're generating
60, 70, $80 million of revenue a year, or just
for a shock and awe, a month, then these metrics have
different departments, different organizations,
different, you know, like like ways of managing them. I want you to think about that. What you see down here, is
the old and the new form of data, of conversion
metrics, side by side. Where you see that the refined
customer success metrics, have a lot more detail to them
than just churn and upsell. That's the point. There's a lot more to it. Those creates the conversion metrics. And we refer to them as conversion rates CR1 to CR7. This creates a data model in which these three
metrics look like this. (background upbeat music) And this is always, once you use this model, we can, as you'll see in the next
model that we're gonna describe in the next video, in the near future, I'm gonna show you that I can now apply mathematical formulas,
based on this model. If I don't have the data model, I cannot apply mathematical formulas. Now, what you see here
is I what I'm gonna next. And the final part is, I'm gonna step in, and we're going to talk a
little bit about what can we do? What are the findings that we have, okay? (background upbeat music) Wooh! (background upbeat music) Let's stretch. Gosh. My neck is getting stiff. (background upbeat music)
(clapping) Let's do this. (background upbeat music) I'm ready. You ready? Are you ready? (background upbeat music) Wooh! The last part of this video. We're gonna go into three specific cases. We're just gonna start
off with benchmark data. Benchmark compare. Here we go. What we now have, because
we have the data model, we can start comparing
customers against each other. And what we noticed is that
based on annual contract value depicted here on the left, we noticed that there are certain trends. These trends can now be observed and can be applied. That there. So annual contract value
of $10,000 versus $100,000 has different conversion rates. Okay? Now take a look at that, as I explain what happens here. What you'll see down here is that the conversion rate is mapped through awareness and education. And these are the two
metrics I said before. Now, what it creates, it creates typical annual
contract territory, anywhere from 20,000 to all
these large dollar values, that's annual contract. Now, what you see here, is
in those annual contracts what you are expected in conversion rates. All the way from CR1 to CR2. And if you see down there CR3 and CR4, with the subtitling here at the bottom indicating handoff and win rate. There you have it. (siren blaring) Yes, yes, yes. That's what we're doing here. Okay? Now those are
typical annual contracts. What I'm going to do next here, is I'm going to also say, hey, those annual contracts, they in generally are exponential goal. if I explain like next time, but here, where is territory
for compound impact, is these contracts that
come in at the lower ACV. That is where you see
compound impact territory. Primarily because the
renewal cycle is monthly. Therefore, if I compound these things, I compound them per month. So a three-year contract
compounds 36 times, versus an annual contract,
which compounds over three years at the compound factor of three. So, that is that benchmark. The key down here is we can
compare where you're at. We're gonna come back
to that in a little bit. Now, what we're going to do is I'm now gonna apply this data model to different go-to market models. I'm gonna show you some of the findings that we are now seeing,
based on his data model. Now, I was struck the other day, when I noticed that I saw a blueprint, how ,yeah, for me these two things start to look very similar, right? That you know, like, and I know it may not,
you gonna like, Jacco, you're a little like, what? Say what? You know you're little
like, looped too little because you may not see it. But I see these things
as being very similar. So having done that, I just
thought that I, you know, like share with you some
of what we see down there. Okay. If I see that I'm gonna say, I'm gonna only take a
look at the acquisition because I gotta, I need some
space on the right here, okay? So on the right, I'm gonna use some space. But now what I'm going
to depict is a standard go-to market model. I'm gonna create volume, use of volume metrics, in a one-stage sales organization. My marketing campaign is
measuring volume of MQL. Very standard, very straightforward. Then I'm gonna qualify those MQLs. I'm gonna put them through a disco demo, and what I'm measuring key
performance indicators are, volume of demos, and
conversion of MQL into commit. Now these are good metrics. I may even start measuring if I now turn. And look, I'm turning into
two-stage sales organization. Now my SDRs in this case, you know, I have one group that
is gonna qualify those leads and one group, that's gonna close them. Get them to a commitment. Okay? You see down here,
conversion is split up. And so now measuring
my MQL to SQL metrics, my conversion rate there. And my conversion rate of SQL to wins. Then because I noticed
that there's a handoff, I give them a little
bit of handle right now. Look at what I'm measuring on the right. I'm measuring volume of MQLs,
volume of demos provided, conversion rate, and hand off rate. These become my key matrices. These are how I'm gonna
measure performance indicators. And as I, you know, like go further to the right, I may even think about like, hey, I'm gonna do outbound prospecting. No longer am I gonna go inbound. From here, I'm gonna go outbound. When I go outbound, I'm
gonna create, you know, number of emails and calls. Look at the top. I mean, I'm adding new metrics. Number of emails and calls, and measuring engagement of clients. And as I work in order to
target the right companies, in order to make sure I address them, I'm gonna identify those. Then once I have identified them, I'm gonna pre-qualify. I'm gonna do that by doing research. And the research that I'm doing on, is I'm learning from the
existing demos I've provided. Now look at that again, I'm gonna go to the left or to the right,
key performance indicators. Prospects identified, prospects qualified, prospects research. These are all become key
performance indicators. Look at the list that is growing. Now, I'm gonna reach out to those people. Number of emails and call sent. Does this start to feel familiar? That you start to see, this is a volume based
outbound organization. Now what I'm going to do, I'm gonna make sure that I'm measuring the number of meetings set. So I'm gonna outreach. And I'm gonna make sure that
the discoveries are set. What some of you found out, is that, hey, if I don't research, if I just start spamming my clients with volume of leads, I'm just
spamming them with emails, I don't need the research. I don't need to identify. I'm just giving them emails. And so I skip the
identification and research. I just, as I reached out
to them, I qualified them. When they respond to me, I only spend time with
them when they approach me. Right? And then I qualify. Now what I'm doing is, what we found is by inserting
or what the world found, by inserting an automatic
calendaring tool link in there. Why do I even have a qualification? Dude, if you wanna discover
me, meet? Let's go do it. So this approach has created,
I no longer need to look at the engagement of volume of MQL. I'm just looking at the
amount of meetings set. Now, while I do that, you know, my salespeople
are now responsible for, you know, getting that
commitment for the logo's won. And what you see down here, is
a typical outbound, improper, not the right way, kind
of sales organization of key performance indicators. How many emails per calls per week? How many meetings set? And how many deals won? And then we're gonna add an
incentive program for this, in order to make this even worse, okay? Now, look, this is outdated. (background upbeat music) We may as well put, you know, like this kind of music to it, okay? (background acoustic music) I just wanna let it sit
in, how we went through it. I'm gonna skip through it, okay? As you listened to the music, I'm gonna replay this, okay? (background acoustic music) Let's rewind. (background acoustic music) You see. It keeps going wrong. Again and again. I can literally hit rewind, (background acoustic music) and do it again. Then we end up with the same result. Okay? This for most
organizations, won't work. (background acoustic music) Okay. So we need something new for that. And that's, you know, like that is what the program that we are seeing more and more today, the things that we work on
in an effort to improve. Okay? So that isn't a
clear, noticeable thing. And many of you who are at this point then go like, yeah, yeah. (applause) Yeah. I hear you. I hear you. It is painful. Yes, yes, yes. We'll get through it, don't worry. We're all here. It's gonna get better. (background upbeat music) Now what we're gonna see
with the new GTM approaches, and think of content-led
growth, product-led growth, or research-led growth, what
we're really targeting, right? You'll see that those
organizations actually increase the effort. And so, with a content lead growth,
think of that as word of mouth. We are targeting content. And as clients engage with
their cons, or content, their content come in as an inbound. That inbound acts and behaves,
as a self qualification. They researched the content. (background upbeat music) Because they come inbound, the calendaring function now
takes place semi-automatically. It could be a response via an email, it could be automatic,
but they are interested. They qualify. (background upbeat music) This is what we see. For example, product
led-growth organizations. Why they are doing this really well. In this case, it is the
assistant product-led growth, where a lead comes in and
an insights sales wrap up, pick up the process,
but that is not needed. We see more and more that this process, if the client really wants to buy, and if the commitment is within reason, they will go through the entire process. And it automatically creates, and give room to the product-led growth. (background upbeat music) Now, product-led growth
and content-led growth, go really well hand in hand, meaning I have lots of interesting content that is driving people to
take a look at the product. These two, are like two peas in a pod. That is how we can look at all this volume and conversion metric, and
how we can now explain things, measure and see why we
are doing certain things and how we have to create
certain performance indicators or do the wrong thing. Create the wrong performance indicators and cause the wrong action. Right now what I'm doing is advanced. It is what most of you will not do. (background upbeat music) Not in a while. But it's so fun. (background upbeat music)
(clapping) Whoo! (background upbeat music) (siren blaring) (siren blaring) Sorry. I'm just having fun. Sorry. Let's get back Jacco. Get back. Say your track. (background upbeat music) Okay. Last and final one. This is the fun part. This is the payoff. This is where the future goes. This is where in five years,
10 years, 50 years from now, what I aspire, what I dream, what I hope with my entire heart. How we are gonna teach sales
at the universitary level. Okay? You know, like we're
not gonna teach closing and outbound code call. That is not gonna be a skill
that we need, you know, like graduate level interest. Okay. What we see down here, is in this case we're gonna
define win rate as a conversion. In this case, from a sales
qualified lead into a win. I'm gonna keep it simple. (background upbeat music) What we see here are two cases. Rob, who turns in 30
SQLs, and he turns them into 10 deals per quarter,
with 20 days sales cycle. And we're got to compare that, against, in this particular case, with a win rate of 33%
sale cycles 20 days, with an average MRR of, new level of MRR of $50,000. If you compare that the against Mary, Mary turns 30 SQLs into six
deals, significantly fewer. Therefore, her win rate is 20%. She also has a sales cycle, a sales price of 5k, but she
uses a few more days, 28 days. So if you see right now,
if you have to fire one, or if you still have to say like, hey, I can only keep one of them. Most people would keep, based on standard volume
metrics, and conversion metrics. Volume metrics being, in this case Rob generates more MRR, and has a better win rate. And his sales cycle is shorter. Based on these three metrics I gave you, you're gonna say, hey,
we've gotta keep Rob. And so we're gonna let go of Mary. This however proves not to be the case. Because if we now started
taking into account, what happened to the
churn at the back end? (background upbeat music) We see that Rob actually, his churn, he churned 50% of all the deals. That means half of his deals churned. That means that the new MRR per month was reduced to $25,000. And, but on the other hand, and this, you know, like phantom case, Mary's deal did not turn. Why? Mary spent a little
bit more time with them. Listened more, and made sure
that the deals she closed, that she got commitment on, essentially resulted in those
clients actually wanting them. And here dare 40 cases. Mary should not be let go either. I'm not saying one or the other. I'm just making a point down here, is both are doing something good. We still like that Rob, you know, turns a lot of deals, but
we may wanna tune that. And we may wanna tune as well, Mary, that she's closes a little faster, so that both are within reason. But it points out to you,
that there is a metric. What happens here is, we are
comparing two conversion rates. Two! Dos! (speaking foreign languages) Two. Two conversion metrics. And when we compare
them against each other, we are gonna get performance metrics. I'm gonna explain this in
detail because this folks, this is like the world of growth
for the next, like I said, decade worth of sales processes. What we see down here, is I'm gonna take that
conversion rate four, which is the win rate. I'm gonna put that on that axis. And I'm gonna put the win rate, the churn, on that horizontal axis. Okay? This creates a two by two. Now, what I'm gonna do in this two by two, I'm gonna assume an average
contract value of $24,000. Now, I'm gonna go into my benchmark data which I copied here for
ease of understanding. And I'm gonna say at $24,000, it fits in the bracket of ACV $20k. In that, I now know
that my conversion rate, I'm gonna pull that out of
there in that benchmark. And that says, on average, that middle line should be at 22%. So I'm gonna enter that 22% in there. And I'm gonna get what is below average. Oh, well blow 22%. So, you know, 10%. And what is above average, 30%, right? So, I now know there's something
below and something above. Now, what I'm going to do, is I'm gonna have to say, it's like, hey, that's
conversion rate number four, I'm gonna point that it came in, what we measured our
conversion rate, you know, phantom created here, not reality. But phantom is, hey, we have a conversion
rate ourselves of 18%. That is what we measured. We have a win rate. We win, one out of
approximately every five deals. And so what we see now here is
that that fits below average. What I'm now going to do, I'm going to take a look
at our churn metrics. How much of these clients
are properly onboarded. Well, we see that seven
out of a hundred clients. Yeah. Like they stopped being onboarded. They exit out of the onboarding process, and they want their money back. In retention metrics
that therefore is 93%, 7% churn on an annual platform. Now, what I see here is that
the norm at that price is 96%. And so I'm gonna fill in 96%. I'm gonna say we're at 93%. So as I put in 93%, it
shows me I am below average. I'm below average on my I churn, and therefore I'm not doing good. And I'm below average on my win rate. So I'm sitting into that quadrant. Now I know where I'm at. (background upbeat music) Let that sit in. I noticed because of the benchmark, and because of the
metrics and of the data. Because we're all measuring the same data, we can now compare with each other. I can now compare apples
to apples, so to speak. Now, what you'll see is, I'm now gonna turn, like
what you think was, you know, I started off with magic, right? And how bad that magic was. I'm now gonna turn science and magic. They're the same thing,
but science is real. Okay? It's like magic, but it's real. Okay. So what I'm gonna do down here, I want to depict to you
what I can do right now. This is like, I hope you enjoyed this as much, learning from this as I
love sharing it with you. If I know that the below average win rate, and a below average conversion
rate fits in that scenario, then I now know what to do there. I can establish over time that if I, my win rate is low and
my retention is low, that I need to look at having
a go to market problem first because I'm not winning the
right deals potentially. Are we selling into the right market? Are we promoting the
right impact we offer. If we're not, we're gonna see
that we're in this category. So, I'm gonna point upstream and say like, hey, folks, we are having a problem, that our pipeline sourcing is not coming from the right kind of clients. And that is most likely, it happens a lot. Oh, we just went to a trade
show and we got a whole bunch of like flaky leads in there
that went through the pipeline. And as they, the proverbial,
the S word in the funnel leads to the S word
coming out of the funnel. Now, if I look further to the right, I see that retention
is still below average. But I'm winning above average. That means like, hey, I'm
winning a lot of deals, but I'm winning a little bit to money. Like what we saw with
Rob being in the case. We're winning the wrong kind of deals. Client seems to be in a hurry, which is a customer success problem. Or they have buyer's remorse. They didn't really
bought what they wanted. And so I know what to do there. If I look at scenario three, we have a below average win rate. And we have an, you know, a good six, retention, below average attention. We see that we were winning
the right customers, but not enough. It all comes down to here or to the right. And it says like, hey, if we
are having successful churn and so on, that is what we really want. We wanna get to that scenario four. That creates four scenarios. These four scenarios,
can be compared not only in this specific case,
but they can be compared in all kinds of, I can measure MQLs against win rate. I can measure a hand off of the SDR, against the win rate and so on. I can see things. These are all different
performance metrics, that will tell me what I
need to do in the process. So if I occur in that situation, then this is the most likely
outcome I need to take. The reason I say all these,
I dropped earlier on, the word artificial intelligence. The moment in time, I create
these closed loop systems, because that's what they're doing, I essentially be ready for
artificial intelligence. This allows to growth in the future. That's to me, we can now, like, I can teach
this, you can measure this. We can repeat this. We can improve this. We can do so many things with this. This is just the opening of
all the things we can do. The entire world is open to us. Okay? (background upbeat music) ♪ Where do we go from,
where do we go from ♪ So in summary, ♪ No one can save us, ♪ ♪ Save us from keeping clear ♪ Here is your day tomorrow. ♪ I don't wanna lose you ♪ Just measure. Think of this data model. This allows you to rethink all your ways. You know, like measure the
right thing, do the right thing. Convert the right thing. (background upbeat music) And that was it for the data model. ♪ Hey, hey, hey ♪ ♪ I just wanna say you are my new crave ♪ ♪ Hey, hey, hey ♪ ♪ I just wanna say you are my new crave ♪ Next one up is the mathematical model. We will launch this. I
have it already created. I just need to create the video around it. But I have all the material ready. (background music playing) Give me one week to two
weeks and we'll launch this. ♪ Hey, hey, hey ♪ ♪ I just wanna say you are my new crave ♪ (siren blaring) Whoo! (upbeat music) I am just excited that I
can share this with you. I'm looking forward and hope that you are as excited, to
have as much fun with me, as I'm having, giving it to you. (upbeat music) And with that, I want to let you go. Wanna wish you a happy, happy time. I wanna thank you all for being here, and looking forward to see
you on the next session. (upbeat music) ♪ Losin' track of time ♪ ♪ Losin' track of myself ♪
