Categories: Sales Transformation | Company Alignment | Buyer Alignment
Scaling the success that comes with product-led growth (PLG) brings both opportunities and challenges. If your company is aiming to drive ongoing outcomes, while reducing inefficiencies across customer-facing organizations (Product, Customer Success, etc.) you may find value in what Segment prioritized, as a company, to take their organization to the next level.
Segment enables customer-focused growth with good data by giving their customer a single API to collect, clean, activate and orchestrate all of their customer data. In late 2020, Segment was acquired by industry leader Twilio for $3.2 billion.
John Kaplan caught up with Joe Morrissey, Former Chief Revenue Officer at Segment. In their discussion, Morrissey details how Segment implemented a sales motion to scale their organization’s PLG success, increasing annual recurring revenue (ARR) by 150% over a two-year period. To achieve this success, Segment's leaders launched a company-wide transformation initiative to ensure cross-functional alignment with their buying audience and evolve their go-to-market (GTM) approach. Consider how you may be able to garner support from executive leaders to launch a similar initiative and achieve critical company outcomes.
1. Dig deep into sales execution challenges and define how they impact other areas of the business
Morrissey joined the business at a time when the company was experiencing rapid revenue success, as a result of their solution’s product-led growth. Through an extensive 90-day plan Morrissey recognized opportunities to make investments in the company’s go-to-market distribution approach.
Morrissey spent his first 90 days working to truly understand the sales challenges his team faced as a result of product-led growth and how those challenges affected other customer-facing departments. He held interviews with stakeholders across the organization, including board leaders, department leaders and front-line managers and reps. While he couldn’t tackle every challenge he identified, the process significantly helped Morrissey and his cross-functional leadership team highlight the most pressing challenges and inefficiencies within the go-to-market approach. Challenges like:
- Shifting buyer value drivers: As customer companies matured, the owner of Segment deployment within that customer organization moved upstream, creating a massive shift for the sales team. Sales would have to go back and resell their deals all over again to completely new buyers, causing dips in renewal and expansion revenues.
- Inefficiencies in product and customer success organizations: The sales approach often left gaps in customer knowledge, which made it hard for both product and customer success organizations to achieve critical benchmarks of their own.
2. Commit to your best opportunity to improve sales performance
As a CRO, your commitment is vital to the success of any transformation initiative. Morrissey shares, “Whatever you choose to do as a CRO to drive transformation, you’ve got to be 100% bought into that. The entire organization has to know, very clearly, that this is the priority.” This commitment was clear in Morrissey's actions as he defined his plan to enable Segment's sales organization to hit critical growth benchmarks.
After his extensive research, Morrissey knew he needed a transformative way to address the challenges he identified holistically. As a result, he fully committed to launching a transformation initiative to capture cross-functional alignment with their buyer and operationalize it in a way that’s consumable to the sales organization.
Morrissey focused on using his transformation initiative to make the sales organization a point of acceleration for their company’s flywheel, rather than a point of friction that hinders the entire company (Product, Customer Success, etc.) from achieving growth benchmarks. To make his initiative an organizational priority, he clearly pinpointed how improving sales alignment with the buyer would benefit not only sales, but the entire customer-facing organization. Enabling sales to align with their buyer on what problems they were solving and how they would be measured, would minimize the need for product engineering support after deployment and improve handoffs to customer success. Clearly defining connections like these, helped Segment's leaders build consensus on the right go-to-market shifts to pursue.
3. Get company leaders to buy in to your transformation initiative
Truly changing sales behaviors and improving buyer alignment, often requires a company-wide mindset shift. As a sales leader, you need company-wide support and commitment to drive successful transformation, meaning your initiative has to become a top company priority. Start with company leaders and your board.
Morrissey garnered commitment from company leaders by discussing the details of the transformation with every member of Segment’s board, the CEO, and other cross-functional department owners. He articulated what his conversations uncovered and the benefits each individual would see as a result of improving buyer alignment. Through these cross-functional conversations, Segment's leadership team made the transformation initiative a top priority. Moving forward, the organization's goal was to use the initiative to generate a focus on buyer alignment and operationalize it in a way that's consumable, not just within the sales organization but across the company.
In the video below, Morrissey pinpoints some of the first steps he took to capture cross-functional alignment and support for his transformation initiative. He defines why those actions were critical to driving organizational transformation.
4. Capture cross-functional alignment on buyer value
Segment’s leaders participated in workshops to build a Value Framework that enabled them to align cross-functionally around their solution’s business value and differentiation. Morrissey shares, “Getting that alignment across the company is not an easy thing to do. But the Value Framework is such a critical part of that. It doesn't work unless everyone is bought in. It gave us really clear focus and alignment, it was really impactful.” Here are some key characteristics of the Value Framework, if you’d like to dig deeper.
If you're also aiming to improve buyer alignment across your organization, you may find value in hearing how Segment built their custom Value Framework and how it's now being used to accelerate their flywheel. In the video below, Morrissey shares the benefits organizations can recognize internally after improving buyer alignment and how the Value Framework can support entire companies in driving impactful buyer outcomes.
5. Define measurable objectives early in the process and focus on them throughout
Defining the measurable outcomes of the transformation initiative and achieving them was critical. Morrissey worked early on with his board and partnered with Force Management to set clear and measurable outcomes for Segment’s sales organization and the company as a whole. He shares, “We had a rigorous board who was clear on ensuring I had defined success metrics in mind and that we could tie this engagement back to improvements in retention, efficiency and sales productivity. I am very happy to say that we delivered on those.” Today, Segment’s sales organization has significantly increased retention and expansion revenues and the entire company is seeing improved efficiencies as a result.
Setting and achieving measurable results takes a rigorous effort and experience, and often a partner who can help you avoid common setbacks. If you plan to leverage a partner to move forward with your strategic initiatives, understand what CROs like Joe Morrissey look for to ensure measurable sales impact.
Achieve Results and Build an Elite Sales Organization
By driving sales transformation and changing company mindsets, Segment has driven a 150% increase in ARR over a two-year period. Whenever you’re launching a large-scale transformation initiative, you need to ensure impactful results and ROI, just like Segment did. You can review their full story here. Share it with your product, customer success and other company leaders who may find value in it.
