#197 – GST XX: A Framework For Post-Sale Success w/ Dr Ryan O'Sullivan

 

 

Full episode transcript: 

​Please note that transcription is done by AI and may contain errors.

​​

George: Hi everyone. George here, the editor of the Sales Transformation Podcast. This week on the show, it's another talk from Global Sales Transformation 20. If you're a regular listener, you probably already know Dr. Ryan O'Sullivan from Introhive. He's a world expert in relationship mapping for salespeople,

and he's been on the podcast and spoken at GST before, so please do go and check out those episodes if you want to hear some more from him. This time the focus of his talk was the danger of B2B retention rates slipping, and how post-sales has to be an area of focus for salespeople to keep the customers you already have.

As always, you can see the slides for this talk over on our YouTube channel, so head over there for the full video. With all that said, please enjoy another talk from GST 20.

​

 

​

Phil: So I'm very happy to have Ryan with us again. Um, one of the, I guess, UK's leading experts around the whole topic of relationship management based on your doctorate. So thank you very much for joining us.

Ryan: Very kind. Thank you, Phil. I'd like to start by just recognizing what you've actually achieved here.

20 of these. It's not an easy feat to put this together over 15 years. When you mentioned that this morning, I was thinking 15 years ago, we were probably talking more about sort of digital transformation. I dunno what I would've thought if someone talked about sales transformation 15 years ago, but it certainly set the stage for professionalizing the profession of sales, which I think a lot of the students are in this room.

So we're all professionals in this, uh, art of selling or science, maybe nowadays. But my session is really about picking up on some of the things that we've talked about today, which is that sales process where we've heard a lot about attuning to the client's needs, understanding, uh, their business case, understanding their priorities, and doing the right things through that sales cycle.

And obviously at the end of that, we, they sign on the dotted line, which is the great moment of celebration or relief, uh, whatever you may feel. But there's a problem that I've been seeing, uh, in the market certainly this year, and I think it's becoming even bigger, uh, of a problem. And that is what happens post-sale.

So we talk about the great sales process and we, we convince them that we understand their business, but I think a lot more needs to be done on this post-sale piece. So I'm just gonna start with some stats to really frame this up. And one in particular here. So. What is the average gross retention rate for B2B software companies? But before I answer that, who's familiar with the term gross retention rate in the room? By show of hands. So that's good because I had never heard of it. I've been in sales for over 20 years. I only came across this this year as I was researching this problem. And this stat in particular really focuses on this problem.

So I'll just explain it. So you've got a company. With a hundred clients, and let's just say each client spends a a million dollars. For example, you've got one product that that's a million dollars and that's all they can buy. So you're a hundred million revenue company. What gross retention rate looks at is say January 1st.

You have this 100 clients. How many of those remain December 31st, so it's not additional clients that, that you sell to. It's not even additional revenue. It's saying how many of those remain, and this really zooms in on this retention problem. And I was, I met with a client actually yesterday and they're a $300 million software company in the city and he said himself, he's facing a crisis of retention.

So I think this is the big problem that, that we're seeing today. And I'll, as I unfold some of these stats, I think it will bring it to bear. So the average gross retention rate in the B2B software space is 91%. So when I first saw that, I thought, that doesn't sound too bad. 91% of your clients are happy.

So you know, you can't please everybody. Can you? There's always going to be one or two difficult clients, but it actually is a bit misleading because if you're thinking about this in particular, the software space, you would typically be selling maybe three year contracts. Mm-hmm. So. At the start of the year with these a hundred clients, not everyone can leave. Maybe one third can leave.

The others, even if they're not happy, are tied into the contract. So when you think about it like that, of the 33 that can leave, nine are leaving. So then it's almost a third of your clients are leaving, which is a huge, huge problem. And this is getting worse. So a few years ago, this was 95%.

And I see this trend going down, I think we can, we can see, uh, where this is going and people in the room may be sensing that as well. So, a couple of more points to compound this. Why I think this is a, a huge problem is how much more does it cost to replace loss revenue with net new revenue? And there's lots of stats on this, but if you think about this company and you're maintaining that client that's spending a million dollars, what is actually required for that?

So you've got like a, a certain set of people that are managing that engagement. But if you lose that one client for 1 million, you have to replace that. So all the costs that go with that around marketing, around the, the sales cycles, the effort from the teams to go through that process. Maybe you win one in three or one in five.

So you've got to go through five sales processes to win one. And the stats. I mean, I took a very conservative stat that says five times, but there's some data out there that says it's actually 25 times more expensive. And, you know, it's, it's really amazing when you think about that. And it brings you on to this point, which is what's the typical profit margin of a new enterprise client in the first year?

And I, I did take a conservative one, but most would say it's, it's minus. It's negative and I allowed myself a bit of creative, uh, uh, leeway here just to make the point. So if you save a $1 million client over three years how much is the total revenue that you're actually saving? So three times, one is 3 million obviously, but usually built into those contracts you have an incremental increase.

You've got the opportunity to to upsell during that process, and this is the slight of hand a bit, if you don't lose that client, you don't need to replace it. So the one that you replace it with is actually revenue you wouldn't have had if you had to replace the one you lost. So. This is a whole point to say, look, I think we really need to focus as much as possible on retaining the clients we have and taking some of the things we've heard about today in this sort of sales process over the over to the other side.

So that's what I'm gonna talk you through today. And this is the problem, I think. So we talk about the problem, and this has got a bent, I guess, around software, but it's equally relevant in services as well. But the, the language will be, uh, leaning towards the software space. So you imagine you, you sign a new contract, uh, project starts, all of these things have to happen, don't they?

So you have a project team on your side. They have a project team on their side. It's, it's debatable about the experience, certainly the client facing, and the, some of the skills we've heard about and some of the stuff that, that Phil talks about, those types of, uh, skillset in that team is lacking, let's say in a polite way, but they're busy delivering a project and a technical delivery.

So you've got all these things happening around handoff, mobilization, implementation, testing, and. The project team on the client side are usually quite inexperienced. They're certainly not business focused, and they are project managers. If you're lucky. Maybe they are just learning on the job as well, and when you start to talk to them about the key points.

About value. Why did you buy this software? Or why did you buy this solution? What is it supposed to do? These are the use cases that you can deploy with it. They're a bit confused. They're busy with this anyway, and they just don't get it. And you're trying to, well, you're actually depending on them to evangelize that around the organization.

And that's where the problem comes. And when we talk to people in, in the industry, when I've been doing my research this year. You've got these scenarios more and more common where there's an Excel sheet in the CFO's office with all of these software or solution expenses, and there's a red pen, and they're deciding, look, what do we get rid of?

What do we need? Who's, who's going to come in and bang on my desk if we cancel this, this, this, this project or this, this software. And it leads to this famous problem that we hear more and more the leaky bucket. And again, if you think back to the stats, it's, it's almost impossible to imagine as you start to lose more clients, how can you even maintain your existing revenue?

You're starting on January 1st and you know you have to, to, to get nine new clients this year just to finish the year where you started. And you've obviously, they'll be coming at different points in the year, so you won't actually have the same amount of revenue. So it's a bit doom and gloom, but there is a solution I have to say.

So this is, uh, something that I think we've, we've talked a bit about today and it's really about how do we. Be more prepared with the client context. So we, we are looking at, like linking this to their stated priorities. We are looking at identifying the relevant business stakeholders. So that's really what this is about and engaging with them, building the right relationship.

And delivering value to those like the end users that, that you, that you promised during the sales cycle. You met some of them during the sales cycle, but as we say, as the project starts, they sort of dissipate. They get on with their their day job. So the mantra, I guess, is when you're in those project conversations, there's the cogs here that I'll come back to at the end.

This is the thinking, the preparation, the work that's being done with the help of ai. To arm you and that project team with the right. Knowledge and the right things to say and do. So as you're articulating to the client project team, this is why this project's so important. You're linking it to the business priorities that that exist, and obviously that enables them to go and, uh, the spread the word internally, you've got a bit more faith in them doing that.

So I'm gonna take you through a case study. Three step case studies. So step one is, and anything, you know, with me is always linked to mapping, uh, the right executive. So that's why I tend to start with that. So. Who are the right people that matter. The research and intelligence gathering, and then the engagement strategy.

So I've got a case study that I'll talk you through. This is the model from my book. I didn't mention that at the beginning, but, uh, that's a, a book that I think some of you in the room that were here last year would have a copy, uh, of. So, uh, let's start that off. And I think the main point that I'd like to make, yeah, that's a good reminder, is.

I talk often about, uh, understanding where you have existing relationships and then leveraging those relationships and it's like a relationship first approach to doing business. That's what I tend to, to speak mostly about, but there's a slight change in, in like the model here is what I'm describing is if your relationships are external, the the very best way to actually promote.

Op, uh, the solutions that you have is through an internal champion. You need somebody on the client side that acts as your, your proxy, if you will. And we all know through the deal cycle how important a champion is. That's you. You won't win a deal if you don't have the champion. And I've, I mean, I've got my own podcast and we, we talk about deals that the people have closed and there's always a champion there every single time.

And even the, the case studies in my book, same thing, but. On the client side, when you're delivering the project, it's exactly probably even more important because if you don't have someone on the inside, as you'll see, this is the, this is the real differentiator in how you make, uh, are you gonna have an opportunity to solve this problem is you need them on site to be able to, to, to, to do the internal communications for you on your behalf, which you enable them with as we'll discuss.

So I'm gonna talk you through a case study mentioned I'm from Introhive, so this is a, a case study of like how we approach this problem. We, we sensed this problem a year or two ago. We tried to figure out a way around it. This is our solution. It's working for us. I think it can work for you as well.

We have a whole bunch of case, uh, sorry, use cases here, uh, and. They're all very, you know, very impressive, very much, uh, pertinent as we go through a sales cycle, whether it's data quality CRM, data quality, we give visibility into the relationships you have. Sales enablement. We save time preparing for meetings.

We save time. Updating CRM marketing lists with the, the right title as you can target the right people opening new accounts. You can leverage existing relationships to do that instead of cold contact key deals. You know who the key decision makers are, what's the relationship with them? How do you track and monitor that through the deal cycle key accounts?

Same thing across all of your service lines. Where do you have existing relationships with the right buyers? And sort of leverage that and prioritize those service lines based on the data m and a for acquired companies. Alliances, we hear a lot about, and we've heard today about these hyperscalers.

Bigger, stronger, deeper relationships with your biggest partners. You ask them, you ask the client, so what is your relationship like with your biggest partners? They have no clue. So it sort of walks into these types of use cases, alumni tracking, HR onboarding, succession planning, operations about improving what does good look like.

So these are the sorts of things we will talk about through the sales cycle. Obviously we get. Quite a lot of enthusiasm around solving these problems. Not to say that it makes my job very easy, it's a very difficult job. Uh, but when we actually start the project, this is the key part. And where without intervention, the wheels start to fall off.

The people we work with. During this project delivery phase are invariably this side, so it's the, the CRM owner. So if we've got a, a tool that works with CRM, it's who owns CRM. We go there. If it's a sales enablement component to the, to the way we're delivering this, it will come from that sales enablement team.

Marketing sometimes have the budget, so they will sign to buy the software, but the project team will come from one of those. One of those places. But when we look at who are we engaging with across all of these other rich use cases, the reality is zero. There's no interaction with any of them, and we are back to that same problem we described before where we are working through the project team and we're evangelizing those use cases as I just did to you to get them.

Enthusiastic about them and relying on them to go and do the work, uh, internally, and quite frankly, it just doesn't happen. So here's step one, which is we need to identify who the key decision makers are that are relevant to each of your use cases. You have your own, obviously this is. A mixture of LinkedIn and, and sales navigator.

I don't, I think Microsoft have locked down Agen AI to help you do this. So this is a bit of manual work. We're pleased to know for now about identifying who the specific individuals are. And you can see the, the key execs here, and I, I've talked about strategic deals, so you can, in this scenario, we can find who is the global head of Strategic deals.

What's his name or her name, where does she sit? Where does that organization sit underneath the regional breakup in this scenario? Apac, Europe, north America. Who else is in that team? Same you can do for marketing the CMO, the regionals, and I just did underneath the people with marketing in their job title.

So you can get a feel for what is the size and scale of this organization. So that's 0.1 to say, look, these are the people that matter, and I think this is an important step, which is often overlooked. We just don't really know who the people are. And you think about it, it's obvious, but when you have a process in place to, to sort of rectify that, it makes it a lot easier.

So who do we know from the sales process? Often these relationships will get lost. In the, in the process you, you may have had in, if it's a long sales cycle, but you may have had 10, 20, 30, 40 meetings. Who were on those meetings? What's the relationship with them? Who met them? Did you keep them warm or do you keep engaged?

Who do you know from previous lives, et cetera. So where do people fit in the overarching org chart so you get a feel then for, uh. Where the CEO fits the reporting lines, these different clusters of execs that you have in mind around your use cases.

You obviously won't be too sure around where they fit in particular, but it's just about back to the cogs that I showed you.

You, you're, you're improving your knowledge, you're improving your understanding of that organization and improving your credibility. And back to the stuff, you know, we've been talking about all day is how do you position yourself as the. The famous, trusted advisor and insightful about their organization.

It starts with this stuff, and you can, this is using Intra Hive, but you can obviously use your own, uh, org, org chart building software to get an understanding of the relationships that exist and other activities going. So that's step one to say, uh, who are the right people? Step two. This is interesting.

So again, back to those use cases, and this is, we've heard earlier today from, from Trevor and, you know, and, and others throughout the day about this ability now to automate some of this stuff through, through ai. And this was, I was chatting to, that was one of my differentiators earlier in my career. I would do this research, I would prepare very well.

To understand the client, and that would be how I would differentiate myself. But literally in 10 minutes now you can say, look, here's our use cases, who's been talking about this at the organizational level. And very interestingly here, and it's again, it highlights the problem that we were facing is nobody's talking about.

The, the, the, the spots where we have the relationships. They're talking about all, obviously all these other things. And these are just three quotes from the, the CE o's statements on earnings calls, all specifically related to these problems. And we talked about. Their strategic deal pipeline, and this is quarter by quarter close and it's like gone from 300 to 500 to uh, 7 45.

And the must have accounts for prospects like they've got 45 accounts and there's a special team focused on those 45 accounts, and a quarter of them are Fortune 500. And then the deepest. Uh, deepening relationships with their partners. So you can find that type of detail. This is very literally, this took two minutes to find where it would've taken you two days in the past if you could get that level of detail.

But there's way more than that. And obviously you've got those individuals that are responsible for those teams. What are they saying? Where, where are they speaking? What are they saying on LinkedIn? And you contextualize all of that data through this desktop research phase. So that's table stakes. Now, that would've been my differentiator in the past, but the differentiator for me, you know, this is what I'm arguing, is this intelligence gathering phase.

This is back to my relationship, first approach to doing things. And we are talking about doing a relationship audit, as I call it. So you need to identify the existing relationships. That you have, and these aren't maybe people you met like previously, people that were on a meeting and you had a, you know, a quick session with them.

We're talking here to distill it down to real relationships. Someone you can have a confidential conversation with. And this is, this is the data that we had from our analysis. There's a bunch of different softwares that's all sort of compliment each other. Introhive will give you the the internal relationships based on internal communications. You've obviously got LinkedIn, BoardEx, CRM. Walking the corridors, the old fashioned way, talking to people. What were the deals that we worked on? Who did we talk to? And when I do this analysis, you would be absolutely amazed at the insights that this throws up. We, I give an example from, uh, some, some, some.

I was doing for a consulting company that was selling to Tesco in the change team. So we did this type of analysis. You know, who used to work at Tesco now works at your firm. Who works at your firm now works at Tesco. You can literally do this in, in two, three minutes on, on sales navigator, even LinkedIn.

And we found out that he had, uh, someone who he'd spoke to every day who was a, an admin that used to work at Tesco in the change team. So it, it was, you know, it was just amazing. And the same thing on the other side, but you don't know what you're going to find until you actually do that analysis. And as we will all testify.

One relationship can make all the difference in these types of situations on the sales side, but again, like I'm trying to apply some of this sales rigor to this pro, to the, the, the post-sale process. So you identify. This universe of friendlies or at least say people you can have a real relationship with.

And then how do you engage? So like I say, some will be friendlies, some they're the people that you literally one or p members of your team have a good relationship with. Maybe they work with them in the past. Uh, they'll be happy to jump on a call, give you a bit of intelligence. And what you're trying to do here, which is crucial, is really contextualize that desktop level research.

So you're looking for the right terms that they use. The internal language, the acronyms they use, like in this scenario, they had a key account program. It was called the Turbocharge program. So that would include the top 30 accounts. So this is the type of detail that you're looking for, that when you go back at the end, we'll see how we go full circle.

We start to talk with the right language and that will resonate with the people on that project team on the client side because that's what they're used to hearing on their town halls, on all these internal calls. So you're talking their language. So you're really trying to not necessarily build relationships to sell to, which is great if you've got those that exist from that first step.

But these are just people to, to help you with context. And some people have since left. Would give you a bit more context as well. I think they tend to be more open about the realities on the ground and then others, uh, others that you can, you can build some insights from. So this three step process prior to the project starting.

So we are coming back full circle now, and that's when I come back to the gears to say. Hopefully I've done a good enough story to demonstrate the difference between just sort of walking into this project that's kicked off and having you or a team have done all of that preparation work. So you start that project and you still have to do all the other things.

You still have to deploy this. There's still a bunch of stuff that needs to happen. It's not day one. You start talking about this stuff, but you've got that knowledge and everything you're doing helps to position you as credible. As someone that understands their business, you have a business conversation.

You know the names of their key executives that you can drop in. Like the, these, the people on the, the project team on the client side won't be known to these execs, but they will certainly know. The names of these people that are on the, on the key, uh, internal calls and do their town halls in wherever they are, you're using their internal terms and acronyms, which is very important.

So that helps them to, to really build up some, some trust. And we just heard that from Jessica about trust. You can link your use cases to their objectives. So that is the real key. So you start to then talk about what is their CEO saying, what is the head of the strategic deal saying? Who's the one running that their, their, uh, their prospect account program was called, uh, must have account program. MHA, and like we said with there are 45 accounts. Who's running that? What are they saying? So you're talking their language. You help them prepare the content to engage with their identified stakeholders. So this is real spoon feeding. You're explaining to them the, the, the, the objective. You're explaining how your use cases can help solve their problems.

You're helping draft some content that will then, uh, be used in an internal messaging system as come, I've got one slide to go. Every single piece of communication for executing this plan was done on teams. It was literally shared screen, open up a teams note, draft it with them. Very simple. They don't, the person on the receiving end of this doesn't know this person.

They're just, you know, you know, quote unquote a lowly project manager. But we, we, we are, we are, uh, we are tuning it to, to, to, to relate to what they're working on. And that's the difference here. And then obviously as there's a dialogue, they're like, well, what shall I say now? And you, you sort of, uh, have that dialogue, uh, with them.

So that's the, the engagement strategy during that process. And hopefully, hopefully that, uh, tells this story of, of positioning, which is so important. And then the results, as I've touched on already, and you saw from the green lights from the research, you focus on the use cases that matter.

You build the story behind the business imperative.

Very, very powerful story linked to their words, their mission, their objectives. Everything was done through internal chat. I mean, I know we talk about relationships and et cetera. This was a big global company. I didn't really highlight that, but $6 billion company, 200 or 150,000 employees, so very much as a distributed organization, but this is the key part, 100% success rate across those five use cases.

So not everybody that we wrote to. Responded. But the beauty of having, like, say for those key deals, there were seven in that key deal, you can, you're not gonna pester them so you can drop one and maybe they don't respond, but you've still got a couple of other options to go after. But we had a 100% success rate across those, uh, those five use cases in, in relation to somebody in that, the senior, senior role coming back to us.

And that led to Really what this is all about, which is you building direct relationships with the people that matter. And back to where I started, around the, the, the fateful Excel sheet in the CFO's office and somebody raising questions with software, it may come down to adoption, who's logged in? And you've got all these reports.

But in our scenario here, and this is a real life example. The strategic, uh, the, uh, the Strategic deals team, the use case for that, for our, our, our solution is very simple. They are a, a team that helps support $50 million TCV deals, and they bring a bunch of people in to help with the marketing, the messaging, and they, they do some relationship mapping as well.

So they would look at the execs, they would look to try and find relationships that potentially exist in the organization. They can bring into the bid team and then, uh, you'll find a, you'll find the point there where we help to win a $100 million deal. So that may be someone who logged in for five minutes.

And found that relationship that made the difference. And that's the guy that's gonna go in banging on his fist on the desk to say, we can't lose this software. And it's less about relationships, uh, less, less about all of the, the different sort of use cases and logging in, et cetera. So that's, that's basically what I had for you.

So it was good timing. Thanks Phil. Uh, so. Happy to connect. I mentioned my book. You're happy to, uh, you can see the, the details there. Phil very kindly did a, uh, testimonial for the book, but, uh, yeah, happy to, to chat more. I think I'm around tonight, so we've got a, a new location, isn't it, for the drinks?

Phil: We do,

Ryan: so

Phil: yeah. Three minutes away.

Ryan: Okay.

Phil: Okay. Thank you very much, Ryan. Yeah.

​

​