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Episode #3: Balancing the Science and Art of Value Management

Ran is excellent at problem-solving. He can methodically analyze a situation, understand all the details and develop solutions that will have a significant and positive impact within his company.

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Transcription:

Tim Page:

Welcome to episode three of Driving Value Your Morning Commute. I'm excited again to have Chris Dowse. Chris, thanks for joining. Chris is the Vice President of Customer Outcomes for at Smartsheet currently, he's joining me for this is episode three. We're gonna do three more in this series. and joining us both is Ran Haimoff, and I'll let you Ran, kind of explain who you are, your background, and we'll start from there.

Ran Haimoff:

All right. Thanks, Tim. good to see you again, Chris. Ran Haimoff, I am the head of Sales Strategy at Replicate. Replicate is a conversational AI company. We help automate contact centers and handle what we call tier one conversations. And we do that through what we call a thinking machine, which is a very intuitive interface to have these conversations. And it helps our customers basically save their contact center agents to handle you know, higher level, higher value conversations. before I spent seven years at DocuSign as their head of value management for North America. I helped build a practice and I also helped launch a couple of sales programs there. a big deals program and a value journey program. And before that, I spent about five years doing management consulting. It's a pleasure to be here.

Tim Page:

Great. Thanks for joining us.

Chris Dowse:

Great to have you here. And, and I really love your value management journey. so I, I can't wait to hear a bit more about that. Cut. Moving forward now. Um So Ran, you know, the, the aspect of your big deals program and, and that being a transition from a, you know, a classic value practice to that go to market transformation. Tell me how the, the value outcome dialogue changed with the customers. How, how did you, you know, what was different versus your mainstream value practice?

Ran Haimoff:

Yeah. You know, I I'll start with a story. When I, when I was still doing management consulting a recruiter reached out and said, Hey, you wanna do value engineering? And I said, What is value engineering? That seemed completely made up. and then, you know, I had a few conversations and I found out, well, actually it's a real thing. And it, it makes a whole lot of, of sense. And you know, seven years later you know, still was still in DocuSign and enjoying it. but one of the things that led me to that is that I realized that enterprise sales is hard. and there is a component of art and science to it, but I felt like the, the, the art component of it was still very prevalent, Right? reps were still spending a lot of time I wouldn't say winging it, but, but doing it in a, in a unscientific way.

 and, and the way to do it scientific, really, it comes down to execution, right? That's, that's the, the implementation of how do you do it? Well, you, you, you implement a process and you follow best practice. and, and the big deal program was really try to do that, right? everybody knows you know, they have a handful of tactics that they use and they've used successfully, but there wasn't really a program that tried to take all of that in and create the model sales process from beginning to end, starting with identifying the right opportunity, doing the right level of research to come in with a point of view and understanding how we're gonna add value and make an impact for the customer in a way that, in contextual to them. And then really get that opportunity on the rails and then drive that through excellent execution. And this was really a, a kind of a pilot, right? This was a, an experiment. Can we institutionalize a program that creates the best run deal cycles deal after deal? and it was taking a lot of the disciplines that you learn in management consulting, just being very process oriented and the best practices you learn from value engineering.

Chris Dowse:

And I assume, you know, obviously as part of that, it was an elevate the conversation, target a more senior buyer more repeatedly. So what, what parts of your sort of process, you know, what was the hardest parts to change? Was it your value models? Was it the, the scalability aspect to the field? How, how did that go? Or you know, it wasn't the value model because the, at least for a DocuSign, the, the value model, you know, it stayed the same. It's really how do you, how do you generate a value proposition that will re resonate with the customer? And that actually required more just understanding what this customer is facing, what they care about the most at that given point in time. and then crafting it in a way that would make them kind of drop what they're doing and, and, you know, listen to what we have to say. and then if the stars aligned, the timing is also good. Cuz you know, there's some things you can, you can do everything right and just not, it's not, not the right time. so I, I would say that the hardest thing was getting the enough insight on the customer to be able to craft a message that would land.

And did you, I mean, you mentioned the distinction between art and science. There's, there's services out there, like data book as an example, is one that I've repeatedly used. Is that the type of contextual, financial, strategic alignment kind of narrative you're, you're trying to build then?

Ran Haimoff:

Yeah. Yeah. Data book was certainly one of them. we worked with with, you know at least one more vendor that does something similar. and, you know, again, this was an investment of time of the value engineer to really play more of the role of a strategist. And, and, and, you know, all over time we've developed this process of, you know, a series of workshops. I think we broke it down to like three, three se three sequence, a sequence of like three meetings, internal meetings where you strategize and create the hypothesis on, on the customer, right? And then the output of that is what's gonna be the outreach sequence that the XDR is gonna put together or the emails that the AE will put together. and then once we get the, that first meeting, it's like, okay, what's gonna be, you know, crafting that, that first call deck and, and coaching the, the, the accounting you know, how to, how to make sure this message lands.

Chris Dowse:

Yeah. And so now that you've swapped over to a new fRant of more go to market transformation revs mm-hmm. <affirmative>, whatever label you want to use, how are you like, you know, how are you seeding your team? How is it different? So like, I know when I started my first value practice at, at Smartsheet, it was clear I needed, you know, a classic business value consultant. But you probably are seeding your group differently if, if you're starting with a higher aspiration there.

Ran Haimoff:

Yeah. So, so thankfully, you know, replica did not grow as a company that you know, the product isn't one of those products like, like a Smartsheet or, or a DocuSign that is, you can go viral, right? You don't start with the freemium and, and then graduate into a few paid licenses and then, you know, expand into an enterprise license. This is, this is an enterprise deal, start to finish. So the company grew up with a culture of an enterprise sales to begin with. So I, I didn't come in having to do evangelizing and selling to the importance of value and impact in our conversations with customers. thankfully, cuz that's, that's, that's always a, a, it's a hard fight. <laugh>. Yeah. It's, it's, it's an, it's a continuous <laugh> conversation. It's <laugh> it's for it that way, right? And especially when the company's been so successful growing with an enterprise sale with a commercial sales motion, they're like, eh, what do, like, what do I need this stuff?

Like I'm doing really well. and it doesn't work that well in enterprise. so here I got it. And like, I no evangelizing, they, they know, they, they, they need it, they're doing it. they just wanna do it better, you know, and, and faster in a more scalable way. So I didn't need to seed anything. The question is now how do you how do you create a process, a repeatable process that sets up the value conversation from the very beginning and evolves and expands on it as you're growing down the, you know, as you're developing the opportunity, right? And so, as an example, one of the ways that we do discovery today is like we break the discovery into like three separate calls, right? that's a lot of discovery to do. and, and we typically will hold off on kind of sharing impact potential, like until like the, the third call or so, and, you know, I have a hypothesis and we're gonna test it out and see if it works, right?

This is live like, hey, we can ask for like three pieces of data and share a ballpark high level look on average, this is how much we helped our customers. Is this interesting enough for you? Right? Cause if this is close enough, then great, let's keep talking. If that's just like a 10th of what you would prioritize for this year, then, you know, thank you very much. You know, we're gonna move on. and if you're calling BS on this, that's also good because that means you're leaning in now. And let me show you exactly how we got to the, Oh, that's not the number, you know, the whole, you know, great. Now you're, we're bringing you in. We're you're, we're part of the same conversation. You're finding out exactly why we're making these assumptions that may seem outrageous to you, but we can show you that they're actually pretty reasonable based on our success, Right? That's the whole point of having these discoveries. so, so that's really what we're trying to do, right? It's, it's less seating and more just evolving. Yep. how we're operationalizing value and impact.

Chris Dowse:

So in that discovery, like the, the delayed value perspective, right? you're talking about, and you're talking about art science again, like, do you have, and you don't have to share the number I guess, but like, do you have a target number, like a ratio of, you know, spend to value that you're thinking that is sort of a, a key threshold to, to move the needle on sense of urgency? Like, or is it sort of you're still discovering that for your space?

Ran Haimoff:

Yeah, it's you know, I got my heuristics, but they're, I, I need to test them for, you know, a new industry and a new product. So I, I don't wanna give any numbers, but you know, over time you, you kind of understand a by the reaction of the customer. I mean, first of all, there's kind of this high threshold, which is when you get to four digits of roi, you know, you're kind of in silly, silly territory that you should reeled it. but then that's, it's still a pretty big you know range there, you know, zero to a thousand. so, you know, you probably want to be over a hundred. You probably don't want to be over 500 or starts getting silly again. but then, you know, it, it, we have seen situations where like credly, it does get to the silly area.

You just, it's, it's a hard conversation to have, right? So you'd rather stay pretty conservative and, and believable. There's always this, this interesting dance that you need to you, you, you must maintain credibility, right? That's, that's number one. But then there's always this, that's the art part of this, which is it needs to be meaningful enough to stay on this executive's desk and be better than the three other options they're considering. Completely unrelated, like not direct competitor to, to our product. It's just other things that they can do, right? Other levels they can pull, but they only have so much budget, right? So it needs to kind of edge them out just a little bit. Yeah. so and you learn that over time, right? You learn that over time by understanding the impact that your customers have achieved, talking with the customers that bought of, like, you know, why did you end up choosing this over other things? And then you kind of calibrate what's that goldilocks zone that you wanna try and, and land in there.

Chris Dowse:

Right? Makes sense. shifting gears a little macro economic, you know, tightening of the, the spending enviRanment. how, how do you see either for yourself or in general you know, what's hitting whose desk <laugh>, you know, like, is, is there a change in what's gotta hit the desk and, and, you know a lower threshold of what's landing on the desk or, you know, how would you sort of characterize what you're seeing or what you expect?

Ran Haimoff:

You know, it's, it's interesting being like having, like enablement is part of my title. You get hit with every vendor under the sun, and everybody's shifting their messaging to, you know recession proof your, your sales team,

Chris Dowse:

Right?

Ran Haimoff:

And frankly, like I'm, I'm not entirely sure for, for companies that sell services and products that ultimately help you run your business more efficiently, I'm not sure what the dynamic will be. Cause one, you know, one view is to say, Oh, they're tightening the belts, period. They're not gonna take on any new IT project. They're, they're kind of in, in hun or down mode. or the other is that they're aggressively looking to cut costs, right? Mm-hmm. <affirmative>. So I'm not an economist. and I don't have a kind of a crystal ball. So I'm not entirely sure what this would mean for specifically for, you know, my company right now. I, I know that we're not, we didn't slow down although I know a lot of other tech companies have. so I, I don't, I don't have any good good predictions here.

Chris Dowse:

No worries. Well, we won't hold that lack of you know, an economics degree against you then. Yeah. <laugh>. Yeah. Tim, anything you wanna jump in on as we get closer to time?

Tim Page:

Yeah, no, I'm listening. you guys have both been around a bit. you know, to to just as an enviRanment's changing in itself, right around people actually. So Ran, I didn't know what a value engineer was before I joined here.

Ran Haimoff:

<laugh>,

Tim Page:

I'd hire a lot of ex consultants that I used in financial wizards that put together a value prop. But it, you know, the simplest thing to me I'm interested to get in a view is as a CEO of any company hitting a recession or not, you should always be open to any, any type of product or service that's gonna help you do more better. Mm-hmm. <affirmative>, right? Cheaper, better, faster, less risk. You name it. There's companies out there a lot that could help that don't know how to articulate their value. And I've seen 'em in seat, I've seen a lot of 'em where I'm going, Man, you've got unbelievable value. You have no idea how to articulate it. Right? So I think, you know, and look at what you guys do, I think you got a big market going into this thing cause

Ran Haimoff:

Yeah,

Tim Page:

You do is like super impactful. So yeah. So choice on that end. I don't know if you have any worry Chris could jump into on this, on where you think this whole value's a little ethereal, Right. Which I think, you know, that's why analysts haven't taken on this thing as much as they should is, you know, always I struggle with the word value, but I've used it my whole career. Yeah. But really you should be building product around value. You should be inter everything you do as a company should be around what pain do you solve it for? How you solve it for it, and what will people pay to solve that pain? What are your insights into having been consulting great background by the way, right? And then moving into this role. Like if you were a CEO of a company, how would you organize this value function?

Ran Haimoff:

Hmm. From a go to market perspective?

Tim Page:

Yeah. Well, yeah, in general, cuz I, cuz you want to do whatever you do, I'll see you a little bit. To me, you need, I figured out I'm a simple guy. You have to be directionally correct and you gotta operate a scale. The last thing I want is what I used to have at a big company, you know, 10 million deals or more, I ha you could call my group that I paid millions of dollars for a year, right? Mm-hmm. <affirmative> mm-hmm. <affirmative>. So if you're a scale up company, like both you guys have been through Yeah. You wanna do a lot, you want be directionally correct, not a perfect conversation Yeah. With a prospect and scale it and make sure you're adding an a SAS world functionality product that people are gonna love, you know, forever.

Ran Haimoff:

Yes.

Tim Page:

So how do you, how do you see, cuz I think CEOs, I've talked to a bunch of them kind of mid-market or I say mid-size down, I've talked to a lot of CFOs even at fortune thousand companies over the last year mm-hmm. <affirmative>, right? So I'm finding in value itself is it is the CFO CEO conversation, right? Yeah. To help the cro who some get it and some don't, but do you see it evolving? Cause it's interesting, the jo the role you're in now compared to where you were compared consulting background. So if you were in the big seat, what would you tell a CEO he or she needs to have to go run a company correctly from a, from a value perspective? If that's a fair question.

Ran Haimoff:

Yeah. I mean, I think it comes down to, so you, you can call it value, you can call it impact, you know, business impact can call outcomes. That's,

Tim Page:

Yep.

Ran Haimoff:

The same thing. I think it comes down to the, the, the culture of the company. How you are setting that as, as part of your culture and DNA from the very top. And then how are you institutionalizing it and making it easy for the, for the people on the ground to actually do that and make that part of their process. It's almost like that's, it's not a, it's, it's not an extra step. It's, it's the process, right? Yep. It's not that if I'm a good seller or if I'm, you know going the extra mile, I'll build a business case or talk about, No, that's like how you sell this product. And you know that when you're gonna, you know you're, someone's gonna stop you in in the hall proverbial hall now because nobody's in the office. Like, so what's the business impact for this deal that you're, that you've committed to, that you're gonna close this quarter? It's like, you need to know what the business impact is, you know? And if you're early on a hundred percent direction, you're like, what's, what's the pain yourself? What's that narrative? Right? What's it worth for them? Like that? There needs to be a high, and that's, so for the ceo, I would just say make that part of your culture.

Chris Dowse:

Yeah, I, I've been lucky to sort of be in that middle, go to market transformation and then have a c and so have the CEO be supportive, but then get a new CEO that's already been through value consulting as a presales, then as a go to market transformation, him come in and I'm, I'm talking about it at Service now. you know, Bill McDermott's history with value was, was so long that when he arrived, he was like, Well, it's a spare part, been of value. Every function needs to be guided by it. How do we reconstruct ourselves and our, not just our go to market, but our product DNA around lanes of value. I mean, that to me is what you would be saying to a, a, a new ceo. And I guess, you know, as, as time's moving on now and, you know Ran's moved between multiple practices. There's, there's multiple experienced players now that have done that. You're, you're, you're starting to see people start at a later stage. ideally they would say, Okay, well it's, it's obvious that in a SaaS space, value and outcomes, the degree to which the customer re utilizes that dictates your total addressable market. So <laugh>,

Ran Haimoff:

Right?

Chris Dowse:

So you wanna work your whole company backwards. so I've been lucky to see one version where we've sort of restructured to do that, but ideally you would tell any C level, maybe not the cfo but definitely the ceo you know, you want, you wanna do it this way. It's dna. It's not just a a go to market gimmick.

Ran Haimoff:

Right? Exactly. And, and, and you're exactly right, Tim, also that it, it, it, it extends, you know, product, marketing, sales, success, you know, services. Like everyone needs to get on that same page and, and sing from the same tune. But and, and Chris, I mean, Bill McDermot is, is famous for that, right? of operationalizing and scaling value at SAP and bringing that with him to service now. So what I've been surprised is to see that it's not only the very large companies, now companies as small as you know, series A, series B, really series B, like startups are bringing in and standing up a value engineering function where in the past it used to be considered like a, a luxury. that is a nice to have, even with large companies. And now it's, it's a must have because as you said, SaaS, you're, you're selling on value. If you're not proving value early on they're not gonna renew. And, you know, most of your revenue is gonna, you're gonna make up that cost of acquisition on the tail end of this, of like multiple renewals, not, not on the, the closing of the first deal. So proving value early on and then continuously proving that you're realizing value to the customer. That's, that's the imperative today

Tim Page:

If you think about it. It's every function, right? I honestly think it's guys like you. They're gonna be the next president, COOs, because you should have a value framework hiring any kind of COO or president company. So if you're a bigger company, that's the framework they should be interviewing around. I think people want it, but they don't really know how to say it yet. and that's where it's gonna end up going because even the CIO function should be a value function, why you buy in a simplify and et cetera, right? CFO functions same thing. Mm-hmm. <affirmative>. So I think eventually as this thing matures, whatever it ends up being called, it should be a COO or president company, should be a value based executive position. So thanks Ran, for your joining. Chris, again, thank you for taking the time and great conversation.

Ran Haimoff:

Thank you very much, Tim. Thanks Chris. It was great. Had a lot of fun.

Speaker 1:

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