Raj Sharan: Welcome, everyone, to the Alexander Group Insights. The Alexander Group is a revenue growth management consulting company. I’m a leader here in our tech practice. Today we’ll be talking with Chris Beaudoin at Veracode on annual planning. How does evolving sales strategy impact segmentation coverage and roles, sizing of sales team, incentive plan design – all part of the annual planning exercise? Most years, companies make minor tweaks. Every few years, the company will embark on a significant transformation. We will talk to Chris about the recent transformation at Veracode. Veracode is an application security company and provides multiple security analysis technologies on a single platform. Veracode recently updated its strategy and decided to make a shift in how they structured their go-to-market focus. It then had to update the marketing, sales and professional service and customer success strategies to align with corporate strategy. What forced the change? Veracode saw an evolving market in September and October last year, and went into fiscal year planning, which starts in April for them, to update their strategy. Besides top-line growth, Veracode decided to focus on improving Net Promoter Score among current customers, and increasing the renewal rate. How did they accomplish all of this? We have Chris Beaudoin to tell us all. Chris runs revenue operations at Veracode. Chris, welcome. Tell us how you translated the sales strategy into an annual planning exercise.
Chris B.: Thank you, Raj. Great seeing you again. Thank you for having me on here. As you kind of mentioned over the past year, we’ve definitely seen a changing market, especially around the purchasing process. Procurement has gotten a little bit more rigid. CFOs are getting heavily involved, especially in the small deals, and every opportunity out there is now a competitive one. We’re rarely seeing single vendor, single quote, decision-made selections. Everything is up against competition. Every time it’s multiple rounds, it’s a different market out there. In order to get ahead of that changing landscape a little bit, we really increased our focus on the ideal customer. We want to make sure if we’re spending cycles, time and resources, that it’s going toward the right area where it will have the largest impact for both Veracode and the customer. Along with that, we also wanted to make sure we were really aligned to how our customers buy rather than forcing them to come to the way we sell, we wanted to change our methods and really reach out to them to their buying mechanisms. What we did is we dug through mountains of win-loss data, support tickets, renewal rates, customer satisfaction scores and measured against a lot of the data we had already: technographic pieces, Firmographic, personagraphic. We really wanted to uncover four areas that align to our desired outcomes. Once we had those four pieces of areas that really measured what a successful customer would be, we put those into a simple calculator that helped us score both customers and prospects along a scale. From that scale. We then layered on some geographic locations and capacity planning in order to start to finalize territory maps and how we would need to structure our go-to-market to best achieve these outcomes.
Raj Sharan: Chris, one Firmographic data Veracode chose not to place heavy weight was on company revenue, which is usually one that many companies use that is readily available. Tell us why you picked other attributes.
Chris B.: Revenue is very readily available, which makes it an easy one to use and it’s a great indicator of customer size. The downside of it is revenue isn’t necessarily an indicator of the value you can provide to that customer. What we did is, again, looking at those metrics, we started defining what successful customers look like and which factors most tightly correlate to that. We started seeing a lot more commonalities in other attributes. One example is we tend to thrive in heavily regulated industries. So we focused a lot on those industries and understanding which ones match to our ideal customers or not.
Raj Sharan: That’s great. Thanks for that input, Chris. The other significant change for Veracode was coverage and role changes. Can you tell us more? How much did the roles change during this transformation?
Chris B.: Huge changes to both our roles and coverages. Everything was on the table with these changes. We really wanted to start with a positive customer experience and then build a structure that supported that rather than just what makes the most sense within Veracode. Customer experience was our number one goal in all of this. In order to meet that, it required two large changes for us. The first was around coverage. We’ve always aligned our go-to-market strategy across all departments, but we don’t necessarily take it to that next step to ensure consistent segmentation across all teams. What I mean by that is when customer success says a “big customer”, that may not be what sales means when they say a “big customer”. So the big customer team and customer success is working sometimes with the big customer sales team, sometimes with the medium customer sales team and sometimes with the small. As you start to work across departments, it’s not inherently bad, but what it does do is create a series of inefficiencies that got in the way of delivering the highest possible level of customer service. What we did is we took a step back and aligned those definitions across all segments and even went a step further to create what we’re calling pods.
Chris B.: These pods are small teams that have representation across marketing, sales, customer success, renewals, and they all support the same small handful of customers. These teams meet weekly now to ensure they have a strong rhythm working with each other and allows them to deliver a top-class customer experience. The second change we made was around roles and responsibilities themselves. Historically, we’ve always had one team that’s responsible for one motion and another team and another department that was responsible for another motion. Well, the specialization can be super helpful and allows folks to get really deep. It also creates a little bit of misalignment and ultimately a confusing experience for the customer. So when we took a step back, we made sure to align these roles and responsibilities so that any person who interacts with a customer at Varicode maniacally cares about onboarding and adoption. Once you start to do those really well, it’ll naturally uncover white space opportunity and an uptick in renewal rates.
Chris B.: The most important change we made with that, however, wasn’t just that it was messaging, we made sure we changed the variable comp that reinforces it. Well, the waiting may vary from individual to an individual or team to team, all the teams involved: sales, renewals, customer success, are all aligned to the same variable metrics. What’s good for one team, is good for everyone.
Raj Sharan: Chris, one question that always comes up after such massive transformations, how is the organization handling the change? What kinds of green shoots are you seeing that indicate the newly designed segmentation coverage and comp models are working well?
Chris B.: Great question. We’re still early on right now. We’re only four months into the new changes. So most of what we’ve seen is pretty anecdotal. A lot of the departments were coming back to us and saying there’s great alignment. They’ve never worked so strongly with each other and they’re starting to understand those customer pain points. We do measure pipeline generation very regularly and we’re starting to see a small uptick in some of that white space as each person who’s dealing with the customer is constantly asking the right questions to understand what the pain points are for those customers. What we’re hoping is over the next months, quarters, upcoming year, is we’re going to start to see an uptake in renewal rates and customer satisfaction scores as well as these customers are getting that better adoption and onboarding experience.
Raj Sharan: Perfect. Thank you, Chris. So I know this was a very intensive process, right? The annual planning. So having gone through this transformation and annual planning cycle, what advice do you have for others embarking on the same journey?
Chris B.: Well, anyone who’s gone through planning knows, get your sleep now. It’s a long process. It always takes longer than you expect. So rest up while you can. But on a more serious note, I can’t underestimate the importance of enablement. Data is data. You understand your salesforce, you know if your data is clean or not, but the human element – can you articulate easily and more importantly, why it’s important for the success of the business, why you’re doing all this? That’s going to determine if this actually lands or not. The last thing you want to do is go through all this work, have you run through all these data analysis and enable everyone, and then no one understands why we made these changes. If they can understand what data was used, how it’s impactful and what type of outcomes you’ll see, you’re going to get everyone buying in really quickly on that.
Raj Sharan: Perfect. Well, thank you so much, Chris. Really appreciate your insights here on annual planning. To learn more, visit alexandergroup.com. We have events, benchmarks and valuable insights. Please do reach out to any of our practice leaders to discuss more. Thank you.
