People of WePay: Kurt Bilafer, CRO
The Chief Revenue Officer is a relatively new role cropping up in our industry. What are your views on why this position came to be, and why should other businesses consider it?
I think the Chief Revenue Officer is a role that exists now because sales is an operational, not a transactional discipline. It isn’t just, ‘do you have a sales team and are they meeting quota?’ It’s, ‘do you have the right infrastructure in place to capture why people are buying and why you’re losing deals?’ Do people understand the right metrics of success and how companies are achieving them? That’s a big part of it. I think the other thing is in the days of selling on-premise software, you could just sell the software and be done with it, and the customer would typically automatically renew, and if they didn’t it wasn’t that big a deal. Now, in the SaaS business, you’re competing for that renewal every single day, so I think that’s a big part of why the CRO role has evolved. Another part of it is people want sales leadership to not just be transactional. They want leadership to think longer term about the values and benefits all of the solutions, and of the customer, and how those two things go hand in hand.
You were previously the VP of Sales and Marketing here at WePay. How have your role and responsibilities developed?
The reality is I’ve been doing the job pretty much since I got here, so the role hasn’t really changed. I think the difference between a VP of Sales and a CRO is the VP of Sales is really just focused on new customer acquisition, and the CRO role is focused on the entire journey of the customer. Not just ‘do they sign up and what is in the pipe’ but is there adoption, preventing churn, strengthening and deepening the customer relationships, as well as optimizing what I call the value chain, the ‘time to money’. So how long does it take from when a leads come in, to when we get them up and running and successful based on a joint definition of success. That’s the real area of focus. I think inside of WePay, all this CRO title did is give me more awareness amongst supporting organizations to help them understand how they can help facilitate better and more impactful engagement with our customers.
What are the top metrics you focus on most for a SaaS business?
With internal metrics, Customer Acquisition Cost, or CAC is a big one that everyone looks at. Others are the Customer Lifetime Value and Churn, meaning how quickly are you losing your customers. For me, things I think businesses should start looking at are the new level of engagement and activities on their sites or with their solutions. That could be things like creating personas of your active and passive users to better understand how and why they use your solution. Gaining insights into these different user’s behaviour will generate significant insights as activity is a good indicator of people seeing value in your solution. One other big metric that people should start looking at is how many opportunities are coming from customer referrals, which is about making NPS real (Net Promoter Score – a measure of success with customer relationships). If your best customers are also your best referral sources, then you know you are doing something right. Right now, I also am focusing on Expansion Monthly Recurring Revenue, too many models are built on Average Revenue Per User (ARPU) and the reality is that we need to be focused on expanding the initial transaction. When we expand our footprint we become “more sticky”, more valued and less likely to be easily displaced. The last metric that I like to focus on, since I also am responsible for Marketing, is Qualified Lead Velocity Rate (QLVR), with our qualified leads coming into the pipe, you can’t continue to grow.
What metrics do you think SaaS businesses focus on too much?
Although I think Customer Acquisition Cost (CAC) is an important metric, as mentioned before, the reality is it depends how you determine those costs. In today’s day and age, you’re not just selling to your customers, but also to your customer’s customer, and that requires a lot of resources to constantly stay engaged and help people understand the value of your solution. So with that, sometimes CAC can be inflated and people will tend to think that you should manage those costs down. The reality is just because it’s SaaS software, doesn’t mean that you don’t need sales people, and it doesn’t mean you can do it all over the phone. Sometimes, the sales process will continue to be complex, and with CAC generally looked over a 12 month period, that may be too short to truly determine the right number.
What do you believe is the single most important attribute of a successful startup and why?
To me, culture is probably the most important attribute. Culture isn’t just value posters that hang on the wall, culture is how the company lives and operates every single day. There’s a great article that I read the other day that basically said ‘Culture is defined by the people you hire and fire, versus the posters you hang on the wall’, and I think that’s exactly the case in SaaS businesses. We aspire to do all these things with a company’s values, but sometimes we let people roam the halls that don’t conform to those values because we deem them too important or too critical to the business, and they end up creating a counter culture.
You’ve previously founded a startup that was acquired by SAP. What advice can you offer others based on this experience?
You have to build a business to stay independent as long as you can. Whether your intent is to IPO or get acquired, the most important thing is you have to start with the premise of, ‘You’re building your business, it’s here to stay, and it’s going to get built the right way from the very beginning’. A lot of companies try to get to a billion dollars as quickly as they can to have a successful outcome, and if there are hiccups along the way, the business isn’t self sustained, so you have to build it for that.
The second thing is you have to surround yourself with people that you know are smarter than you (like everyone says), but have different experiences than you have. The reality is that most leaders in startups now have never sold in a down cycle, and there’s a lot of value in having people that possess 20+ years of experience, that have been through the dotcom bust and some other cycles as well because they will be the ones to prepare you to be resilient.
What aspects of sales culture do you believe other companies should adopt across all functions and why?
To me, I believe the customer and their success is ultimately what drives our own success. Product supremacy is not necessarily going to win the day over the long term, those victories are short lived, but a customer intimate approach where we don’t just understand what their current needs are, but one where we can anticipate their future needs, and have things like customer advisory boards, inviting them to provide feedback that we can integrate into our product roadmap. Those are things that help us ensure success as opposed to us thinking we’re smarter than everybody else and we’re going to go out and build this whiz-bang product. Part of what creates that customer intimate approach is a strong sales driven culture. Not just a revenue driven culture, but understanding why people buy our solution, what do they value, and how do we make sure that this value comes out in all of our conversations, interactions and developments.
Favorite sales movie scene?
I’m a big fan of Tommy Boy. Tommy Boy has a scene where he’s selling brake pads, and he has a really bad sales meeting where he ends up burning all of the model cars on the desk of the person he’s selling to. The whole scene is just a mess and I cringe every time I see this segment because in reality, there are a lot of sales cycles that go that way. Really. He didn’t have a plan, he didn’t understand the value prop, he wasn’t prepared, and it was essentially just a “show up, throw up” moment, and I think that’s what a lot of salespeople do now, not having the proper preparation for a sales call, like Tommy Boy.
Go to sales close move?
The presumptive close is a really good move, but to me the close is the easiest part of the sale. I think the more important thing is how you adding value through each step of the process so there are no surprises. I’m a big fan of The Challenger Sale, and one of the big things to me is the preparation and having a prop in your first meeting that helps set the tone. What I do is have a copy of the Wall Street Journal, which would always have an article that was relevant to the company we were interested in. The only preparation with this prop that was required was reading, or even skimming the article. When we would walk into the meeting, we would use that article to create an anchor for how urgent the prospect needed what we were selling, like if their competitor was on the front page for high levels of fraud or record earnings, we basically said ‘Your competitor is in the newspaper, here’s how we’re going to get you the accelerated growth and on the front page or keep you out of trouble and out of the Journal’.
For me, how you use those openings is how you set the stage for creating that sense of urgency. The big thing I always try to tell salespeople is there are three questions you have to ask: Why your solution, why now, and what happens if the prospect doesn’t choose you to y don’t do this? And in sales, if you can’t answer those three things from your own and your customer’s perspective, you’ll never get to the close. I don’t think there is a classic sales close move anymore, but it’s how you set up the deal so that the customer can ask those three questions, so for me it’s more about the approach than the close.