Learn how to manage conflict between your sales channels to grow revenue. If you have ever had to juggle the competing demands between sales channels such as online, in-store, or partner sales, you know how important managing channel conflict is. From cannibalization between sales channels to lost revenue, the impact on your top and bottom line is real.
This session focuses on how to leverage this gap as an opportunity for revenue growth.
In this on-demand replay you will learn:
- How to identify if your organization is not managing different sales channels effectively
- The problems solved by effective channel sales management
- Best practices for managing different channels of sales
- Managing sales channel conflicts
- How to ease the complexity of channel sales management
- Understand the revenue upside of effective channel sales management
Get actionable insights that can immediately help your organization increase sales by addressing this gap. Determine what’s next for your subscription business and how you can grow your business by meeting this challenge.
On-Demand Playback
Presentation Slides (PDF)
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About Our Experts
About Catalin Adam, Product Manager in B2B for 2Checkout
With over nine years of experience in launching and managing innovative, leading edge solutions to enterprise-class platforms, Catalin is well-versed in coordinating global projects for customer-facing applications and internal environments.
Catalin has first-hand experience in managing commercial launches that involve the orchestration of multiple channels: online, in-store, or partner sales for a variety of products including well-known brands such as Electrolux, L’Oreal or Philips.
He’s lead teams promoting international information management systems to global buyers, he has supported custom implementations for omnichannel interactions and, most recently, he has been managing the technical solution for Channel and B2B for the all-in-one monetization platform, 2Checkout.
His expertise spans product development, customer experience management, business analysis, channel conflict management, and product portfolio management.
About Kathy Greenler Sexton, CEO, Subscription Insider
Kathy Greenler Sexton is the CEO & Publisher of Subscription Insider, a media company uniquely focused on the business of subscriptions. Subscription Insider reports on daily subscription economy news and delivers best-practice information, training and research through memberships, training events and conferences. Subscription entrepreneurs and executives representing all sectors of the subscription economy depend on Subscription Insider to improve decision making, team skills and business profitability. Learn more at qa.subscriptioninsider.com and www.subscriptionshow.com.
Transcript
Kathy Greenler Sexton:
Well, hello and welcome everybody, this is a Subscription Insider webinar. And today we are with Catalin Adam on our webinar, Grow Revenue by Managing Sales Conflict. Hello, my name is Kathy Greenler Sexton. I am the CEO and publisher of Subscription Insider, and your host for today’s event. I’d like to welcome you to our webinar today, Grow Revenue by Managing Channel Sales Conflict. Today, we’re going to learn how to manage conflict between your sales channels to really grow revenue. And if you’ve ever had to juggle the competing demands between these channels, whether they’re online, in store, or through partners, you know how important managing channel conflict is. From cannibalization to lost revenue, the impact on top and bottom line revenue is absolutely real.
Kathy Greenler Sexton:
Our discussion today is scheduled for an hour. Please use the chat to ask any questions throughout this discussion. But we’ve also left time at the end to make sure we can address your questions. So with us today, we have Catalin Adam. Welcome, Catalin.
Catalin Adam:
Thank you.
Kathy Greenler Sexton:
Catalin is the Product Manager for B2B for 2Checkout, with over nine years of experience in launching and managing innovative leading edge solutions to enterprise class platforms. Catalin is well versed in coordinating global projects for consumer facing applications and internal environments. Catalin has first hand experience in managing commercial launches that involve the orchestration of multiple channels, including online in store or partner sales for a variety of products including well known brands such as Electrolux, L’Oreal, or Philips.
Kathy Greenler Sexton:
He leads teams promoting international information management systems to global buyers. He has supported custom implementations for omnichannel interactions. And most recently, he’s been managing the technical solution for channels and B2B for the all-in-one monetization platform 2Checkout. His expertise spans product development, customer experience, management, business analysis, channel conflict management, and product portfolio management. Said differently, we’re in good hands with Catalin today as he walks through today’s presentation. Welcome, again.
Catalin Adam:
… very much for having me. Thank you very much Kathy for the introduction. So guys, thank you for joining this Grow Revenue by Managing Channel Sales Conflict. I think that we’re here to understand basically how to generate revenue especially in these times. So what I’m thinking is, let’s just take a look at where we are right now in terms of B2B landscape. So I’ll just let you take our first look. And I’m getting into this direct because I think this is the most important part that we have for this year. We are looking at COVID-19. Some of us with here, some of us seeing opportunity.
Catalin Adam:
Right now, there are a lot of surveys going on, but nothing conclusive. The only surveys that we have is basically around the shopper experience under shopper desire. So what we’re seeing right now is a huge growth when it comes to everyone working from home. Everyone needs tools in order to work from home. In order to work from home, you need enterprise grade tools. So basically, that’s usually in SaaS, PaaS, BPaaS, and so on. So we’re seeing a forecasted growth and everyone is expecting a lot more, a significantly higher than planned purchase of a B2B SaaS.
Catalin Adam:
And why is this important? What does this look like from the shopper side? How does this translate into what we already know or don’t know? I think another very important slide is this. We were looking at a very close split between traditional and digitally enabled sales interactions in the past, which in the context of COVID-19 has just grown exponentially. What we’re seeing is everyone is moving on online and at the same time everyone is moving online and in self-service. So this means that across the board, everyone needs to just be better at channel communication and channel sales.
Catalin Adam:
And when I’m saying channels, of course, we are in B2B SaaS, so there’s not a lot of brick and mortar but there’s a lot of self-service, there’s a lot of shopping carts, e-commerce, partners, affiliates, or referral programs, assisted online sales, and so on. So basically, something that’s very important to understand here is how do all these channels come into view and here is the point of omnichannel in all of this. And the first thing that I wanted to do is clarify a bit what omnichannel is and just get our terminology straight.
Catalin Adam:
So we’ve been used to a multichannel retail which basically means that you have silos, you have channel, channel, channel, and the way that you will be communicating through them is you will have an experience and in one channel and start all the way back in the beginning in the other. This can be done seamlessly. This can be done assisted in order to reduce the pain of this but it’s still some sort of a pain to move from one channel to another. So for example, here is moving from a partner channel to a cart channel or so on, things like that.
Catalin Adam:
And then we’re going into omnichannel retailers, basically is all revolves around your customers creating a single experience. So basically, you’re going through different channels in order to get to the best experience that caters your customer needs. So, basically the question here is we’ve been talking about omnichannel for a while now, why would this be important at this point? And we’re going to be talking about this. Kathy, I feel you have a question.
Kathy Greenler Sexton:
Yeah, you can hear me, I get a question here. So I noticed that you’re eliminating touch points. So I’m curious why that is.
Catalin Adam:
This is a very good question. Let me just go to the next slide into how this impacts your margin. So let’s say you have a multichannel approach. This means that you have different channels and through the channel you have different touch points throughout the experience. From channel to channel, some channels are more expensive than others. Some channels require multiple steps, require automation, require all sorts of transitioning between the these points. So then all of this costs, and this is money that’s coming out of your pocket.
Catalin Adam:
So if you’re going to omnichannel and you have a lot fewer touch points, you are just paying for the interactions between some of them. So there’s a cost associated to touchpoints transitions, and you’re paying it. And just keep in mind that some channels costs more than others. This is something that you guys are experiencing firsthand. And most probably, even though you have a main omnichannel experience that goes through some touch points, you are still maintaining the entire channel for a percentage, a small percentage of your business.
Catalin Adam:
So maybe at the end of this webinar, you will have this question of, is that percentage worth it to maintain all of these touch points that are costing you money and all of these transitions? So basically, the aim of this is what volumes are going from one point to another in order to justify that transition and those touch points. So, given this, this is basically how it impacts your cost. But sometimes cost can be offset by revenue. And let’s see how this equates into the omnichannel discussion. So basically, coming again to the multichannel model, you have self-service and assisted sales side by side.
Catalin Adam:
Let’s talk a bit about the conversion rate. So in terms of conversion rate, because this is basically generating your revenue, when you’re looking at self-service, you’re looking at four to 5%. So it does cost less, it cost less because there’s a lot of automation, there’s a little human interaction in there, so that cost less than salaries. It’s an initial cost to set over, but as you progress through the timeline, it’s going to cost less per acquisition. So, you have four to 5%, but at the same time, overall it costs less. And let’s say that you have assisted sales, you have a sales team that is costing you, of course, salaries and tools, sales automation tools and so on. But again, they are converting between 10 and 15%.
Catalin Adam:
So, then what can we do in order to keep the cost aspect in check, but at the same time, see what we can do in terms of conversion? And of course, we come back to this model, it will cost less to acquire so if you try to acquire through self-service means that means you are going to drive volumes that then you are going to filter out if you’re passing them through assisted sales. And you are going to be passing them, for example, through assisted sales at the critical moment in their transition.
Catalin Adam:
So basically that’s the moment when they are deciding if they want to buy it or not, and that is giving you the conversion rate increase. Basically high conversion rates cost a lot, but use high conversion rates at the right moment in your customer lifecycle is going to pay back all of that investment.
Kathy Greenler Sexton:
And what are the key things that you’re looking at when you’re deciding what to keep and what to change and other things, is it profitability? How are you looking at that, Catalin?
Catalin Adam:
Well, if you are to start choosing, so we started with the two side by side and when you start with the two of them side by side, you are going to look at the steps that everyone is going through each of the experience. And then it’s a numbers game. You really have to look at each touchpoint and each transition, what’s the conversion rate? How many people are going through this? What’s the average order value? How much money am I generating through these dots? And actually, you can even go by a rule of thumb that I’m already showing in here. Usually, the beginning steps. And when I say beginning steps, you’re going to see in a few moments how the experience should look like when you’re talking about omnichannel, the beginning and the end usually make sense to be self-service.
Catalin Adam:
Because at the beginning, it’s too fast for them to make a decision at the end that they have already taken it and there’s just the paperwork to get started. So in terms of this, I already gave up the next topic. It’s how basically to look at an omnichannel experience so that it really makes sense because at this point, it’s just a bunch of dots on a screen. It’s a bit far fetched from what you guys are going to be doing in your own businesses. So then the way we recommend in to check out so we’ve been looking a lot at customer interactions and being a subscription management and the payment company, we’re always about, how can we convert?
Catalin Adam:
So basically, we’ve been trying to create a cross channel experience that is looking at both sides of the question and see how the best experience should look like. So let’s talk about the two sides of the coin. So we’re calling one side the self-service. So this is no human interaction on your behalf or the customer is on their own, and they’re doing everything that they want on their own. And you have sales assisted, that’s the moment in which you have a hand holding experience or even more you are driving the sales experience. So usually you can start in both situations, you have companies who are starting in the self-service and moving both. But you also have the usual hunters in the sales hunters that are going from assisted sales and then pushing them back.
Catalin Adam:
And let’s see how regardless of where you start, and now I’m arbitrarily starting on the self-service part. The first thing on this experience would be getting inspired. Basically, the purpose of this step is attract potential clients, generate buzz. And your goal in this point is to extend your reach while doing cost and quality control. Because basically, if you are doing this on your own, you have to tackle direct communication with a total addressable market. So basically, you have to think about which are all the people that might buy from you and you have to get to them. This is going to be a lot of costs and communication.
Catalin Adam:
So if you want to externalize this through people that already have this set up for their influencers or partners, their distribution networks and so on, then you have some management costs and some organizational setup to consider. And that also, if you are externalizing these steps, you’re no longer fully control. So then what we’re recommending is use managed affiliate networks. So instead of driving your own affiliate program, do it through networks that are facilitating this. And they’re providing you with the set up to run referral programs while doing payouts tracking and communication. You’re basically showing up with your products and promoting it through this network that’s already been managed.
Catalin Adam:
When it comes to partners that’s basically something that you wouldn’t usually outsource, you are working directly with your partners. But some of the partners are not generating the biggest value. So that’s your long tail of partners, that you need to automate, and you need to basically consider them also shoppers, also clients. They get access to the same tools, maybe some privileges. We’re going to be talking a little bit later on of this difference between shoppers and partners and this privilege automation area, and what does it mean?
Catalin Adam:
And something that’s very important in order for you to do quality control is sharing your product catalog collaterals. One of the projects that Kathy was mentioning was actually a global, the setup for a tool that was holding all of the product information and sending it through all the channels in order to ensure that everyone is aligned. It’s horrible when your partners or your affiliates referrals are using outdated materials to communicate. And yeah, it just becomes messy at one point. Especially, we were talking about COVID. Remember that we just adapted. In less than a year, we adapted, and we changed, and I’m seeing all sorts of commercials on the TV that just were created in the past two months.
Catalin Adam:
So if you’re creating collateral this past in order to adapt to a changing market, you really need to make sure that you’re pushing all of this as fast as possible to your clients. So outsourcing this get inspired part is a very good takeaway via referral programs. And at the same time, product information sharing is key in order to do quality control at this step. So getting this part, keep in mind this is the moment when you are generating your funnel, you are getting people to notice you. When you get noticed, the next step is they’re going to start looking at what you’re selling. So in terms of discover programs, your purpose is to educate clients and the goal in all of this is to assist them in understanding your products without being there.
Catalin Adam:
Of course, this is something that has been talked a lot about in a lot of years. There’s no silver bullet, basically to this. There’s a lot of information out there of potential ways to do this, but you’re still going to run into, “Hey, I have a product catalog that could maybe contain just three products. But do those products have add ons, variations, usage billing? What do they have additional that you can configure?” All of those configurations are going to drive complexity and rigidity of your product catalog. When they’re going to go through this, you are going to have to ensure content quality. Again, the same thing as you’re doing before and get inspired, you have to do it here, but in order to really clarify what your products are about.
Catalin Adam:
And navigability of the website is exactly the biggest struggle that you’re going to have here, and that’s why I wrote, etc. So everything revolves around, how do I explain my portfolio in the easiest way possible? And in order to do this, what we recommend is that you do a hand holding experience. You have seen a lot of configuration wizards, but at the same time, how many of you have just stopped at one point you were going through the configuration wizard? And you’re like, “How many steps? How many more steps was this complexity? What does this parameter mean?”
Catalin Adam:
And then you clicked, went to another page, and then you said, “Okay, I’m going to do this tomorrow.” And then it became that dread of a task that you have to do instead of a fun shopping experience. So this is one side of the story. But think about it the other way, you’re just creating a automated product catalog that is going to self-service the client. And then you have on the other side, your sales team. And they’re always going to be coming with the exceptions, “Hey, I have this client that is going to pay a lot of money. It’s a high value client, but they just need a fourth product.”
Catalin Adam:
What do you mean fourth product? Well, take one third from the first half of the second and another third from the rest. That makes more than one product. Yeah, but packages themselves. So that’s one of the pitfalls of solving just one side of the problem. And we’re going to tackle this in a second of how to do solve the complexity. But on self-service, do a hand holding experience but always consider the exceptions that are going to come out. Enable your sales teams to customize the product offering and of course at this step, basically invest a lot in the UX.
Catalin Adam:
The second takeaway is, take inspiration until you’re the market leader, then innovate. This is a path through which the likes of Apple, Google, Facebook, everyone has dreaded this. Everyone has spent millions. They wrote books in order to pay for those millions. Parts of those books make sense, parts of those are going to work just for Facebook, Google, and so on. So basically, fail fast, fail cheap, and look at the market leaders what they’re doing. On the right side, you have some of the complexity drivers when it comes to discovering products.
Catalin Adam:
The next step in all of this is basically either the finish up self-service or the beginning of sales assisted is the demo trial, the low end of purchase. This is the point in which the client needs to get hooked on the next year of your product. It’s an infinity loop, when they’re starting with nothing is the first year but you keep getting them through this loop. This is actually one of the pitfalls. Everyone is thinking about the demo trial for the basic package, but then they’re not considering that the basic package needs to be either a trial for the standard, or the standard needs to have their own demo.
Catalin Adam:
So we’ve been seeing this and I’m just recommending, “Hey, guys, add a demo or a trial for each of the packages or think about them in such a way as how the customer is going to look at added value piece by piece.” So basically product tier definition intended versus actual use. And also, there’s a point to identifying when to send demo and trial offers. Again, it’s an infinity loop, you’re coming back through this place. Do you know when you should be upgrading people? What are the flags that are going to tell you when to send a demo or trial and so on? When do you automate upsell at the end of a demo? Do you just start bugging them? Do you just leave them a period of time?
Catalin Adam:
This is basically the blind spot that you have with your own product. You know the product, but do you know how it’s going to be seen by the client? And of course, one thing that you’re always going to have, especially if you have a sales team, containing the cost of demos and trials, “Hey, how long has this client been on the demo?” So if you ever had this question, no, you had this problem. So the solution is identifying key differentiators between all this. I mean, as I was saying before, there’s no silver bullet to it. It’s going to be a hard work.
Catalin Adam:
So basically, I’m going to keep repeating this, especially in COVID-19, this is hard work. But the path has been shredded, we just have to pave it. We know the path, just start standardizing it. The way in which you’re showcasing, so you’re basically packaging the differentiators into small demos and trial packs. This is another pain point that we’ve been seeing. So for example, everyone is looking at feature rich products or they’re considering trials as a feature less product. But it’s not about the features, it’s about solving the problem for a small case and then building them.
Catalin Adam:
So if you’re just looking at features, you might be having people who are really happy with just your trial version, because it just satisfies their needs, there’s nothing more than that. And when you’re cutting their usage, they just don’t feel the need to upgrade, they will just rather pay for just that small thing. And you’re asking them to pay for the basic, which is extending the feature package. So it’s not always about the feature, it’s about the differentiators. What can I use this for?
Catalin Adam:
So basically, don’t let the client leave without something and keep giving them free stuff, but think about how you’re going to convert them. So as you’re doing this, so this gets a flavor and at the same time, the nurturing potential, I put them one after another, but they’re mixed together. They’re happening just one after another and maybe in multiple iterations. So nurturing potential, identified, this is the moment when you’re looking at this. You’re basically thinking about how to grow your client lifetime value. And this goes down to identifying who and when to engage. You’re doing this through data visibility.
Catalin Adam:
And a lot of moments you are going to be thinking of, “If there’s a report about it, that’s fine. They can go and look at that report.” But what we found out is that if you don’t put actionable information in front of the people who are going to drive this, so your sales team, they are not going to go clicking around and trying to find a report. They’re more likely to just focus on volumes and keep going for another deal, another deal, another deal. But if you are putting, for example, subscription data visibility for CLTV to date, recent usages, the moment when I’m seeing a spike on one of our clients, I’m going to call them, “Hey, what’s happening? Is this going to happen next month as well? Should I upsell? How do I identify when there’s an unexplored need? How do I know that the client is ready for the next step?”
Catalin Adam:
So in order to do this, you need an in depth coverage of the usage payment evolution. Are they lagging behind with the payment? What payment methods are they using for what sort of products? What should you be selling? Because at some point, we saw cases in which you’re not even selling a different product, you are selling a different payment plan. So they’re just going to be paying you in a different way, and they’re happier with that. And that is the moment when you can actually drive more revenue in the long run. So data access is key to your sales people and what customer behaviors are you flagging right now to understand that there’s a need for nurture.
Catalin Adam:
We have this and we’re trying to do this throughout all are tools and just putting the numbers in front of the right person. The next thing is just doing a custom offer and the upsell. So remember, we were talking about discover products. This is the moment when all of that rigidity is coming to bite you. So you have to adapt to high value clients, and you have to offer flexibility at this point. So your product catalogs are inherently rigid. I mean, that’s why you create them to clarify what the products are. And when you’re trying to create complexity, then you’re just creating more variations of those products that then you need to handle.
Catalin Adam:
Sales teams are not product teams. So this means that basically, the same handholding experience that you’re offering your clients, you need to offer the same thing to your sales people. Then they don’t dream about all the products and all product variations, their goal is to get it out the door. And focusing on one channel mostly for upsell, drives cost and drive conversion down. So if you’re looking at these customized offers through self-service means, you are going to be driving your conversion rate down because there’s no one there to help you. There’s always going to be exceptions when you have high value clients.
Catalin Adam:
And if you’re always using sales team at this point, you’re driving up costs. So you need to have both of them in order for the client to just choose which of them to use and usually this is going to get your sales team to be a bit more relaxed and be able to go after other things. So basically, the key takeaways is automation implies rigidity and flexibility implies complexity. So there is a never ending loop and you have to find the balance that fits your organization depending on what sales teams you have and what automation you have.
Catalin Adam:
But basically, treating everyone as a client is a very good rule of thumb. Just sell it to your clients the same way you should be selling it to your internal people. Oh, cool. So as you’re doing this entire experience, then you start getting to the to a problem of basically human nature, what I would consider it. So if I’m in sales assisted, why would I ever give up the guy who the guy, the person, whoever I’m calling, and I’m asking, “Hey, I need three more seats on my subscription.” Those three more seats cost five minutes, but we’re also going to chat about the weather and how the COVID situation is impacting us. So that means 20 minutes of a salespersons time for three seats that might be $5.
Catalin Adam:
In the end run, it’s not going to equate very well for you. So returning to self-service is something that you need to take into consideration. Assisted support is addictive. And the way you are going to be driving this down is you need to have a great UX in your self-service portal. Keeping up the person that I keep calling cannot be a painful moment that I’m getting into a self-service experience that, “Oh my God, I cannot understand anything from this. And what the hell am I doing in here?” So here you are enabling your clients to drive their own experiences.
Catalin Adam:
And this needs to reduce cost and pressure on your sales team. The way you’re going to do this is you have to really set a threshold of what high value deals are not high promises, not high maintenance, not, “Hey, if I stick with this client, it’s going to happen.” No, you have to set a timer on it, you have to time box and cost box this. It’s not enough to have sales targets, you also have to add nuances of what the minimum deal value is, how much time spent? Or what are they buying? Or how long? What’s the need looking for?
Catalin Adam:
And if you are creating your client portal in order to automate the self-service part, never focus on information display. And we’re seeing this as a pitfall we even fell into this pitfall up to a couple of years ago, we were displaying a lot of information so that you know that it’s you and this is your subscription because, “Hey, you’re using it all day long. But yeah, here’s the data again about it.”
Catalin Adam:
Focus on the actions. What are the most important actions? And this is these are the things that you’re getting from your sales team or your customer services. Why are they calling you? “Hey, I need an upgrade. Hey, I need an invoice. Hey, I need a cancellation.” What are the things that are not driving value or just wasting your time and your resources? Automate that in the easiest, simplest way possible, click, click, done. The three-click rule should apply here as well.
Catalin Adam:
And also, investors from sub subscription management systems. If you want to have this customer portal and at the same time have a sales experience, in order to drive both of these, you need to first of all have access to those subscriptions. They need to already be automated. They cannot live in ERP and then you have to ping them and then a lot of things have to happen. They’re already pre-build systems for this. And they usually come with a white label customer portal solution in order for you to customize it.
Kathy Greenler Sexton:
Catalin, you mentioned some obvious things of [inaudible 00:33:08] actions is a great inflection point to push people to self-service. Are there other things that we should be thinking about when to push people to self-service?
Catalin Adam:
So what I’m understanding this except for the moments when you’re looking at the deal value, what are other moments when you should be pushing people to self-service? Well, from the experience that we’ve been looking at our clients, it’s mostly cost-driven. So whenever the cost outweighs the benefit, that’s the moment when you push them to self-service. But at the same time, it’s really about all for your client tiers and defining the client tiers. Sometimes you are going to have a tier one client that is slipping out, they might have had a huge promise in the beginning, it slips out.
Catalin Adam:
So you have to keep tracking your clients and at one point, start pushing them through the self-service experience just because their business has started to subside, or they’re not really using them. But when you’re starting to push them to self-service, keep in mind it’s an infinity loop. So you’re pushing them to self-service, but start recommending them other products so they come back around. That might actually be a moment when you’re identifying potential and just moving just across the infinity loop.
Catalin Adam:
Basically, this is the infinity loop that we’re proposing. And the way we’re looking at this is the left side is low cost or acquisition but low AOV. This is not the million dollar or an order moment. And on the other is high conversion rates, but high cost, but also high AOVs. So the point of this is just keep running them through the loop in order to gain the maximum value that the customer is willing to provide. So the title of this meeting is basically, how are you managing sales channel conflict.
Catalin Adam:
And what we’ve been talking up to this point is the market context and the way we’re proposing that you go about this. But we haven’t arrived at this just because we said, “Hey, let’s see how we can order a pre-existing experience.” We bumped our heads, and I just wanted to show you the things that we’ve been bumping our heads around, and our clients have been doing the same thing, and what we’ve been learning out of all of this. So how do you know if you have them and basically, what are the telltale signs?
Catalin Adam:
So the first thing is siloed channels, we were talking about the multichannel approach. And basically, here you are going to have the self-service, sales assisted types of channels, and you’re going to have a brick wall between them. Usually the problems that are coming around here are like this; how do I keep both product catalogs in sync? So I have a self-service, then I have my salesforce, how do I keep all of them in sync? Well, basically, if you even manage to keep them in sync, then you have a problem of, “Hey, great, I have a standard, rigid product catalog. What the hell am I going to do with this in order to sell it to clients that want specific things, they don’t even care about my product catalog that I spent two years organizing and automating?”
Catalin Adam:
Then another problem comes when, “Okay, how do I ensure higher conversion rates? How do I start thinking of the people that I have in my funnel? And how do I get them to buy a lot more? What are my problems and conversion? Hey, I need to talk to these people, I need to get the feedback.” And then you’re already engaging people. Even if you’re not selling, you’re already engaging people in order to find out, to do surveys, to do all sorts of things. So in order to start the nurturing process, you move them to sales assisted.
Catalin Adam:
But if I moved on to sales assisted and I have two different channels, “Hey, can I have direct visibility into the history of the self-service client? And if I have all of this, I’m doing a great job here? How am I keeping my sales team a sales team, not a customer service? And how do I keep them focused on growth, not retention?” Because this is always a pitfall when it comes to sales teams, they would rather keep milking the cow than hunt for a completely new, different animal. So this is the point where you’re moving them back to self-service.
Catalin Adam:
And here you have the problem of, “Hey, how do I report this? How do I know how much value was extracted from sales self-service versus sales assisted? How do I know where to invest?” Because we were talking about the different touch points in the experience. So this all becomes just messy. So our entire point here is just don’t build along in the first place. If you already have this wall, and most probably you will because the way we got here is human nature. This is how the market evolved. We started with several channels, each company just drove one more than the other. And then we got to a point of, “Hey, we need both.”
Catalin Adam:
Because in self-service they grew from smaller clients and then started having key accounts, so volume to key accounts. Sales assisted started having a lot of key accounts that weren’t generating that much money and have to be just pushed to automation. So this is the first problem. The second one is cannibalization. And this one, I think you are going to be familiar because basically, if you have a number of clients versus a value chart, it’s going to look like this. You’re going to have the [inaudible 00:39:25] dwellers. How I affectionately call them, I really don’t think they’re going to like that. But yeah. So you have these people at the low end of the value chain, but then they’re going up on the middle, but then you have the top value.
Catalin Adam:
But when you’re looking at channel cannibalization, you’re going to look at something [inaudible 00:39:47] when you’re having self-service, you’re trying to drive it a lot. You’re trying to automate as much of your funnel as possible. You also want to have a privileged self-service. So this is either your partners, your resellers that you want to give them some discounts, but keep them automated, or these are your assisted deals that just went down in value and you want to still keep their privileges, but put them there. And then you have the mostly assisted deals, but then here is the problem that they’re overlapping, and especially in the mid, high value, where if you are looking and if you’re just doing an area, this is the point where you’re getting a lot of value from the numbers, as well as the AOV.
Catalin Adam:
So this is the sweet spot of your business because the bottom and low value are going to keep coming on and the top you need to take care of them, but they’re a long sales cycle usually. So basically the way we’re treating this is, of course, cleaning out the mess. What we are usually recommending is that you don’t really extend self-service more than your mid value clients. This is where you should be stopping because between mid value and the high value and this is basically up to you to define which are the limits for all this. But between the middle and almost 80-90% of the value that you can extract from a client, that’s where you have privilege self-service.
Catalin Adam:
You are giving them automation, at the same time you are giving them some flexibility. And then you have the mostly assisted part which those are your key clients. The reason why I’m saying cleaning up this is especially what I was saying of sending them back to self-service. If you are in this picture, the self-service area is clouded here, you don’t really know where they are. And when you don’t know where the client is, usually you’ll be wasting money. So just get to a point like this or as much as possible like this.
Catalin Adam:
The next point up is, of course, cutting your legs and when I say legs, I’m looking at the business sitting on the two pillars, I am doing direct sales and indirect sales through partners, referral programs, and so on. So, basically there are several ways in which you can look at this, one of them is the production-oriented company in which you are going to be driving your own sales of other very minimalistic level but you are going to have a huge distribution network. Basically, an actually a bit more than a distribution network because here, what you’re going to do is you’re going to give them a discounted price. This is your cost, you have to ensure their margin, but at the same time you are going to ensure the services.
Catalin Adam:
My point here being again you are choosing to be a production oriented company. This means that you are going to externalize basically your entire sales or your entire sales processes to someone else. So, basically, if you are transforming your indirect sales channel into the main channel, they are becoming an extension of your company. Then you need to focus on your product, so that means that you need to externalize a full half of the infinity loop, you cannot be doing basically doubling down on the same processes that your sales channel is doing.
Catalin Adam:
So, either you’re going to be living in a situation in which you have the sales team and everyone is selling downstream for you but you’re taking care of the major clients. Or for example, you could be like Microsoft, which is doing the exact opposite. You can directly buy from their websites, but if you want to use their products, and talk to someone, you’re going to be talking to regional partners. So you have to externalize one half the discussion in order to get this model going and not cannibalize yourself.
Catalin Adam:
The next one is the regional distributor. So basically here, you’re sitting on multiple legs on one side. But here, you’re no longer having the service cost. Basically, the service cost is contained in the margin of your indirect channels. So here, you are using them to represent you in your regions. And if you do this, they are your clients. You have to treat them the same way as a client and they can be key accounts that you need to manage in assisted way, or they can be clients that are just going through a sales assisted, or through a self-service. So exactly what I was saying about automating the long tail of this.
Catalin Adam:
So basically, this is what we’ve been seeing through the majority of our clients, these are the major channel complex that they’re running into. And again, no silver bullet, a lot of hard work. Cool. What does it take? So we’ve been discussing up to this point market, proposed good solution, and how we got to that solution. But what does it take in order to make all of this happen? And what we’ve been doing is we’ve been mapping out all of the pieces that need to stack on top of each other in order to offer this entire experience. So you have e-commerce, mailing and direct sales, multichannel support, affiliate networks, partnerships, and so on, all the way down to your integration through your other applications.
Catalin Adam:
So basically, this is a complex landscape and the maturity of each of these pieces is up for grabs, depending on which is your pain point. But the idea in this, is we’ve been seeing two schools of thought depending on the size of the client and basically their market situation. So basically you have either the best of breed, in which you are choosing pieces and pieces of all of this and each of them is a different tool. So you’re using salesforce with an Oracle ERP, and you’re using someone for billing, you’re using someone for order management.
Catalin Adam:
That means that these individual pieces are going to be providing you the most value within each block. You are going to be seeing value losses when you have to integrate this. So integration is always going to be a pain point if you’re in the best of breed. We have never seen any of our clients saying, “Hey, yeah, we have a very diverse landscape, and we’re happy about it, no one else.” But at the same time, this is the way that you want to go in the moment in which the tools, the way you’re equipping your organization needs to work for a multitude of use cases.
Catalin Adam:
So this is the moment in which you are servicing a lot of clients in very different landscapes, very different businesses, and you have a conflict of business. And on the other side is the only one solution providers so you’re moving to someone who is giving a one stop shop for all of this. This works for a lot of companies from small all the way to large companies. When it goes to enterprise, it already needs to be best in breed because basically, that’s how they work. They also have the budgets for this, but this all-in-one solution is usually a good fit that then you need to start duct taping other things, you need to start changing, adapting to your specific needs.
Catalin Adam:
In the end, the way that it usually happens is there’s always a jump from one to another. You either start in here and as you keep up duct taping other solutions to these points, you’re getting to best of breed, or you’re in the best of breed situation. And at one point, someone just says, “Hey, enough for these paths. What’s predominant? Well, I have Microsoft all around to Oracle, I have whatever here as predominant.” Okay. “What are their preferred integrated solutions? Let’s just cut the complexity and move as much as possible to this landscape.” That then gets complicated.
Catalin Adam:
So basically, you’re just going from one way to another, but these are the two paths that we can see. And what we’re recommending is especially now in the COVID situation, best of breed was a good solution when you had time. Right now in the COVID situation, there are opportunities that you need to seize as soon as possible. So moving, just having a solution that works is going to be the thing that gets you to move agile on the market. So these are the two paths that we would have been into.
Catalin Adam:
So if I lost you at any point in this discussion, a short wrap up before we go to Q&A. Some B2B SaaS is on demand due to COVID-19. We’re looking at this. We know this not from the merchants point of view, but from the shopper point of view, and shopper interviews. Basically, the demand is high so we need to up the supply. Omnichannel gives you the best bang for the buck because you are choosing the highest conversion rates or touch points and you’re moving through the fastest way through the funnel. This means that yes, you will have some losses in the channels that you’re not really using or the touch points you’re not really using.
Catalin Adam:
Yes, but you have to focus on where is the majority of your business in order to drive cost down and increase the conversion rate. Drive your clients around the infinity loop. That infinity loop used to be in my slides. Do you know the Hot Wheels reference? So basically, it’s the Hot Wheels. On one side, it goes up and it really needs to spin up to move again through them. So the next thing is don’t build a wall between your channels. Most probably you already have one. So if you have it, start thinking about how to share information between the two of them. A common product catalog, a common subscription management, and all both of them thought out with exceptions in mind, you cannot be boxed in your own center.
Catalin Adam:
Don’t overlap high cost channels over low value clients. Exactly the graph that I was showing you. And don’t go with assisted or privileged on the mid tier and so on. Clarify the roles of your partner in your value chain. If they are distributors, treat them as clients. If they are service providers that are basically an extension of your company, then pick one side of the experience or even outsource both of them, that can also work. And then you have to choose a best of breed or all-in-one of our personal preferences all-in-one but at the same time, in all honesty, we are an all-in-one solution provider.
Catalin Adam:
So, of course, we would be saying this, but I think, and we strongly believe that, especially in this COVID situation, you will have to move fast. So this would be a good choice. Cool. So this is basically it from my side. Yeah. Thank you so much.
Kathy Greenler Sexton:
Well, great. Thank you so much. It’s some really, really good information and some good comments throughout the presentation. If you can move to the next slide, so we have some questions here. And we have just a few minutes. There’s a question about taxing as you’re going around the infinite loop, how should we be thinking about taxes and managing taxes between self-serve, and leveraging omni, and sales assisted?
Catalin Adam:
I’m trying to think about this. So what you’re going to be looking at is … Of course, you wanted to sell as much as possible from the beginning. But from this perspective, I am trying to think about what do you mean by managing the taxes through the infinity loop. So, of course, the first thing that comes to mind is the way you are going to be handling basically the costs for you being present in different markets. So, my first thought comes to the partners network and how you are managing the taxation through them, and not having to pay different taxes all the way through for different countries, and so on.
Catalin Adam:
One thing that we’re always taking into consideration, for example, is tax exemptions, of course, in the B2B SaaS world. So this is actually going to help your partners and also you have to take this into consideration throughout the entire experience. Usually, tax exempt is going to happen mostly through your sales assisted area because you have to talk to someone and give them the documents that are implying that you’re tax exempt and having this discussion. But there’s also a more and more tools that are going into the self-service area that are providing tax exemption capabilities depending on the [inaudible 00:54:37]. I hope that I answered this question, if not, please come back with it.
Kathy Greenler Sexton:
Yeah, and Michelle asked that question. And Michelle, thank you for giving us your email because there’s some more detail there that I think would be perfect for one-on-one follow up. And Marie, so you had asked a question early on, and I think if you could make sense that we get your email so we can follow up specifically with you. What’s really great, our people have very, very specific questions. So ask away, make sure we have your email because Zoom can sometimes make your questions anonymous. So we want to make sure we get all your questions and follow up with them.
Kathy Greenler Sexton:
I have one last question as we begin to wrap things up here, Catalin, what’s your prediction as we move into 2021 and beyond, and hopefully beyond COVID? What should we be thinking about and imagining as we think through this issue in the coming months?
Catalin Adam:
Yeah. Well, I’m always thinking a lot about this when going through these slides, what’s the next step? So something that I kept repeating in this presentation was a lot of hard work. I’m a firm believer in that especially when it comes to omnichannel. So we were providing this omnichannel experience as being a very good solution, especially in the COVID situation. But the problem with that is, there’s a lot of things that have been written about it, but at the same time, there’s no silver bullet, no one just provided, for example, if you want to do search engine optimization, the book has already written. You can go and these are the steps, this is how you do it. So there are some variations but usually you’ll know what to do.
Catalin Adam:
When it comes to omnichannel, it’s a more personal experience that you need to do from your side. So I don’t think that there’s a silver bullet to this, I think that focusing on delivering an omnichannel experience is key, or you are going to be hearing a lot about AI. Just moving into this direction and help you going through the value chain as fast as possible. Of course, that will make it easy for you, for example, to identify nurturing opportunities. But in the end, just having this infinity loop set up as well as possible through the touch points and not focusing on just one of them will bring a far bigger increase in revenue. So my point is just work with the plan.
Kathy Greenler Sexton:
That’s great, great advice as we start thinking through this and planning for 2021. Catalin, thank you very much for your time today. Really great info.
Catalin Adam:
Thank you very much, Kathy, for having me.
Kathy Greenler Sexton:
It’s great. And I’d like to thank everybody attending today. We know an hour is a lot of time these days, and we will be sending out a link shortly, so you may view the playback through Sunday. So if you missed anything, you can certainly do that. So thank you for your time today. And with that, have a good one, everybody.
