Market Dominance Guys

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We Need to do Together Before We Partner Together.

August 4, 2020

Safoian episode 2

 

Part 2 of the interview with SADA CEO, Tony Safoian. Questions answered include How is Google going to support my enterprise business better than its competitors. Needs have changed, demand for "bat phone" support is now part of any proposal. Every customer is different in their behavior than they were four months ago. If you're an organization that doesn't know how to meet your customer where they are now, your organization is dead. 

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The complete transcript of this episode is below:

 

https://marketdominanceguys.com/e/we-need-to-do-together-before-we-partner-together/

Chris Beall (00:34):

Welcome everybody to another episode of The Market Dominance Guys with your host, Corey Frank, and with me, as always, is the sage of sales, Chris Beall. Today we have the CEO of SADA, Tony Safoian.

Tony Safoian (00:47):

It's not even about, like, is this point solution from this vendor better than that vendor, is the cloud thing real. It's, what is the transformational impact and outcome to my business. If I choose Google versus somebody else, how is Google, as an enterprise, going to support me versus somebody else? And I think that's never been truer or more compressed in the context of digital transformation, as we're facing right now, because every customer is different in their behavior than they were four months ago. So if you're an organization that does not know how to meet your customer where they are, which is online, or in their, home or whatever, then your business model is dead.

Chris Beall (01:32):

We don't have many guests, but when we do, we have the best.

Corey Frank (01:36):

Of course, the name of this podcast is The Market Dominance Guys. We have to talk some market dominance, but Chris, I think you'd agree that what Tony... And Tony, certainly, you're in a business and in a market that you're not just competing with the other non-Google-Cloud providers, you're competing with other Google Cloud providers.

How do you square that circle, as you see, because clearly Sada is it can bud here from a market dominance perspective. And maybe, what thoughts would you have, Chris, for Tony, on market dominance when you kind of have that split sector, if you will, where he doesn't have just one guy with a mask, you got a couple of different folks from different areas, all gunning for Assata here.

Chris Beall (02:15):

Well, my advice is always the same, which is manufacture trust to pace and scale, harvest the market at your leisure, stay sincere. That's kind of it. I mean, if you have the goods and you have the will, you really don't have to add a lot of ingredients. If you're the most trusted, which always starts with the human conversation and then it moves forward by doing what you said you were going to do. And then it moves forward further by how you handle the first crisis together with that customer, because that's the eye of the needle in every relationship, is when it goes through the crisis, whatever that crisis is.

You know, if you do those things, you create a god-awful problem for your competitors. And it's a simple problem. It has to at the asymmetry of trust, once somebody trusts you, they automatically distrust anybody who tries to displace that trust they have in you. So the cycle time to go from stranger to trusted friend, from invisible, scary stranger to trusted stranger, the quicker you can make that cycle time, and the more often you can apply it, the more insurance you buy at the lowest conceivable price.

You want to insure any company against the vagaries of time, so to speak, where things happen that we don't expect, like the occasional pandemic, and there'll be another thing we don't expect. There's scandals, there's everything else in the world that happens, right? Bad stuff is always out there waiting to happen. How do you ensure yourself against that? Well, the currency of insurance for a business is trust. It's not true in the consumer world. This is the asymmetry consumers buy based on what's going to work for them, and the risk is generally their money.

So I buy that Tesla and I take it off the lot. And I discover one day in that I hate it. Unlikely, by the way, because all my friends who own Teslas have the opposite experience, but I'm going along, I bring that thing home and I just go, oh, I didn't even know, I live in a house without electricity. I can't even charge this thing, right, to own this vehicle. What am I going to do? I have to buy one of those Peloton things and generate electricity for it? I'm here in the Pacific Northwest. We don't have sunshine. I can't even do solar. I guess I got to dump the Tesla, right? So I go to dump the Tesla. What am I out? Five grand, 10 grand. It's just money.

I do the same thing for my company. It doesn't matter what my job is. I buy the company Tesla and it turned out to be a disaster. It doesn't matter if I'm a CEO, I'm toasted. My reputation has hurt and I've put my retirement in risk. I've put my future work in other companies that might want to hire me after this one blows me out for making that idiot decision. I might go into the doghouse somewhere and not be allowed to make any more decisions. Worse than being fired, in the penalty box and a company that is one of the worst place in the world to live.

I got put in there in 1996 in August. I quit three days later. You don't want to live in the penalty box, trust me. To me, it always comes down to this. It is so scary to buy a B2B. And what Tony's company sells, what SADA sells, is the single scariest thing you can buy in the current world, which is a decision to go or not go to the Cloud. It's not really who you go with. It's a decision to grow or not go. It is so scary.

When you've asked your IT people any question over the last 10 years to do anything of interest to anybody in the business, their answer has always been no. They have 157 different ways of saying no. You could build the matrix. It will take you a long time to go through it, but they're all no. That's what they're going to say, right? So now, you're trying to get a yes all the way around because anything can break.

So it's the scariest decision. So they have to trust you, Tony, really it's you, more than they trust themselves. How did they get to that point of trusting you more than they trust themselves? Well, a whole bunch of them trust your people. Your engineers, that's tied to them, that they've met, that they've had a conversation with. That salesperson introduced them to and they were nervous about it, and they thought it was going to be crap, and you thought you were going to be insincere, and that you had another agenda, and blah, blah, blah. Right? All that stuff had to be overcome. Engineers are the most skeptical people on earth, and Missouri is so taxed so high with engineers I'm amazed there are anywhere else. It's just the show me, you've shown me, show me, show me, right?

Tony Safoian (06:32):

You're right on. And the and the factor of trust, which is, again, the last two years, especially, is what Thomas Kurian and Company has really worked on building with customers, existing and prospective customers. Because you're right, these decision-makers and their entire teams, they're betting their career on this dice roll. And needs to not feel like a dice roll. It needs to be clearly the best decision.

And it also happens to be... What we're discovering is we're being pulled up market. And there was one article that mentions a particular dollar amount for Manheim in New York. Not only are they betting their career, they are betting their company, a lot of these digital natives, right? And a lot of the enterprise. I mean, Manheim's $50 million commitment to Google Cloud? There's not going to be a bigger economic commitment that this company will make ever than it's bet financial bet and strategic bet on Google Cloud. That is a tremendous amount of responsibility if you're SADA and you're signing your contract.

Chris Beall (07:32):

Now, I did it, by the way. I bet my company on Google Cloud and on SADA. We move 14 production systems. You know how many production systems we have? 14. We moved them all. That means certain large companies that depend on us... We had one the other day, they called us up at 6:29 in the evening on a Sunday and said, "PPP loans are going to be released by Congress on Tuesday. We'd like to put 335 new people on Connect and sell tomorrow, and have 75,000 conversations next week. Can we do it?"

If one of my Cloud instantiations of ConnectAndSell can't handle that, I've just said yes to the CEO of one the most powerful companies in the world about something he really cares about. They ended up talking to 98,000 people that week out of the 75,000. They had 98,000 conversations.

Tony Safoian (08:28):

Wow.

Chris Beall (08:28):

It was a successful week. I didn't worry a bit. Okay, so maybe I had a half an ounce of blends that evening stared out the window for a moment, and contemplated the world. But I didn't worry any more than that, that the trust that I've put in Tony and his team in a Google cloud was going to result in a good outcome. I know what it feels like to bet a company on you. I've done it. And it's not the company like my internal infrastructure. It's a company like this-

Tony Safoian (08:59):

It's a whole company.

Chris Beall (09:00):

...what we deliver on. It's the whole company. When that's gone, we have literally nothing.

Chris Beall (10:01):

We don't exist anymore.

Corey Frank (10:03):

So Chris, it's not just all pragmatism, and cold cognition, and facts, and data sheets, and speeds, and feeds. There's an element. And Tony, you had mentioned this in your VP of sales, right? There has to be an element in the culture to create this certainty, to create this trust. So how do you instill that? What have you done to teach that? How does that work? Because Chris, I've known Chris for almost 20 years, he's not exactly an easy sell. And if there's more than one choice, I am sure there was a matrix that Chris has had. So in order to cross that chasm and get him from the cold cognition to the feeling of trust and competency is no easy task. How did you do that? And how do you do that at scale?

Tony Safoian (10:45):

The scale is the tough part, right, because as any business grows, you hire many, many more people. And now, I mean, everybody's distributed, but imagine you're in a traditional cadence, you're growing up markets, you're paying people thousands of miles away from headquarters, and you're trying to export that culture, and methodology, and way of thinking, and allow people to have their market idiosyncrasies. And they need to. Yes, Quebec is very different than Chicago, and they should have a little bit of their own culture. But I think it's first and foremost, having a culture and a proven track record that is recognizable and credible.

You can point to SADA turns 20 years old on August 16th. We've been growing at 65% KGR, or whatever, for the last 15 years. And the people you have leading the charge are themselves credible and trustworthy. So when they hire, enable people, and put them through the school of Joe Kosco, or the school of Dana Berg, or the school of Miles Berg, or the school of Rokita or [inaudible 00:11:40], they are going to create an amplification effect of what is their essence, of what has made them successful to date, right?

Getting the credibility with customers at scale... And here's another beautiful part about cloud, and you could argue ConnectAndSell itself is a Cloud service, and it is. The ability for customers to put vendors in a position that they have to prove and earn credibility over time is a relatively new construct in the world of enterprise software. Because back in the day, customers could do a proof of concept of some kind. It was almost never production grade. It was almost always full of smoke and mirrors. And that ended up in a massive, multi-year, very expensive commitment that you were stuck with for three to five years, and that you paid for upfront.

And I think, 90% of the time, the plethora of what you bought and never got implemented. I think what's beautiful about ConnectAndSell as a SAS platform, or Google Cloud in general, is that we can actually engage with customers with very heavy pre-sales engineering effort, and resources, and enterprise class methodology.

Sometimes we charge for that, sometimes we don't, sometimes Google funds it, whatever. You're not trying to minimize effort at that stage. We're actually trying to maximize effort. You can do a POC where you have to validate what you're proposing in a small, low-risk environment. It happens in almost every sell cycle, especially with customers that have a distinct desired outcome. They're like "Oh, Google Cloud can do this and your engineers can deliver that? Show me in the small sandbox."

And you actually go and do it, Corey. The beauty that when you do it, and then you win the hearts and minds of moving one workload or one system, you have to keep proving it. But the beauty of the business model in cloud, and in SAS... And as Chris's customer called and said, I want to put this many more agents on and make this many more calls... Our expectations with every one of our customers, if we continue to prove value over their lifetime, their consumption, and therefore our revenues related to that customer will continue to grow at a pace that gives us the investment capacity to give the customer more and more attention over time, but also just clearly aligns incentives.

Meaning we have to be there. What if something happened on that weekend, or on that Monday, and ConnectAndSell did have a problem. GCP did have a hiccup and Chris had to call me or my head of support. How responsive are we going to be? Are we going to use the bad phone with Google to fix Chris's problem because he has his credibility on the line. We get tested over and over again for the lifetime of that customer relationship, which was very much not like how enterprise software was delivered before.

Chris Beall (14:10):

I agree. I mean, enterprise software and shelfware have been synonymous forever. It always would have been cheaper to go ahead and just pay the license fee and not even try to implement because you were going to fail anyway. You were never going to get to the finish line. And now that's no longer the paradigm. And I think folks are shifting to, and have to shift competitively, to a do it together and then make the decision as whether you're going to partner together.

Cory's doing this in his business. He's got the first ever what you might think of as an outsource sales business, cold calling as a service or whatever, that's ever existed on the face of the earth, where a fully transparent, full production experience, much like your team experienced with ConnectAndSell but he's doing it, coming up with the message, putting the people in.

He had guys in an RV last week parked outside the building so that they could come in at 5:00 AM on a... I kind of think of it as a competitive test drive with four similar companies to him and the end customer, all seeing how many meetings they could set-

Tony Safoian (15:12):

Wow.

Chris Beall (15:12):

...in a day. And Corey wanted to make sure that this team had a little psychological advantage. So they started at 5:00 AM. and by the time the next team came on, these guys had already settled up in meetings. They said 41 out of 40, which when you're playing against four other competitors, you get 31 of the points that are available on the board. It's actually kind of a done deal, right? Think about that, an old business like appointment setting, the transformation in that business that has now taken place with Youngblood Works is this. They will actually do a full production test drive up, but with results as the idea, and they'll do it with you watching with full transparency.

So it does keep rolling into older and older parts of the business world that it turns out doing is much more important than saying, and giving PowerPoint presentations, and making claims, and having testimonials that may or may not be completely valid, and all that kind of stuff. All those things still happen, but I think we've entered a doing as part of selling... And not part of, that is the essential part, doing together before we partner together. I think that's kind of like do together before we partnered together and make something measurable happen that we can all look at, feel like this makes sense. Now let's go a little bigger.

Tony Safoian (16:37):

And to your earlier point around trust, it might actually end up that it's not the right thing to move forward. That you shouldn't buy this from me, and that's okay.

Chris Beall (16:45):

It is okay. We only convert 37% of our test drives. That's about the right number, as far as I'm concerned. That's something I learned a long time ago in the math world, when you're sampling, if you're not getting into false positives, your samples aren't very good. When you think you're perfect... People try to build sales funnels and at the very top of funnel they go, "I only want ideal customers coming in." Well, you can't discover their ideal customers until you have a conversation with them. So we had a chicken and egg problem here. I better have more conversations than there are ideal customers, or I'm leaving the very best one.

Corey Frank (17:19):

The one that we use, and I've used for a long time... And again, I'm at the floor of Grand Canyon University right now, which is the largest Christian University in the country, so I think this is an appropriate aphorism here, is that Jesus Christ was the best sales person that ever lived. And he didn't close everybody. And he had a better product, arguably, than any software, or ERP, or Cloud-based system. And so the Son of Man himself will not have a hundred percent close rates. So because of that, Chris, you're absolutely right. 37% of your conversions on your test drive, that's admirable. Maybe JC himself would probably have 38 or 40% and that's exactly how it should be in nature.

Chris Beall (18:00):

Many are called, but few are chosen. Well, I guess we've come to the end of what looks like an hour. Tony, this has just been exactly better than I even thought and I thought it was going to be tremendous. Thank you so much for coming onto Market Dominance Guys. We don't have many guests, but when we do, we have the best.

Tony Safoian (18:19):

Wow. Thank you. I don't know if I deserve that, but it was a pleasure. It was fun to be on this side. Let me tell you, we try to put out podcasts weekly and it's nice. It's a relief. It's fun to be on this side, where you get to be the guests. And Corey, it was a pleasure to get interviewed by you. Loved your questions. And I can't wait to listen to your episode.