Revenue Management Flywheel
2020 was a year that no one expected to happen. We weren’t ready for it. Or were we? At Ecaresoft we were (they still are) dedicated to improve patient healthcare through technology. Not the best case scenario but it did prove that the cloud services for physicians, patients and the healthcare organizations was the way to go. The COVID-19 pandemic hit hard and at the same time it accelerated the adoption of Nimbo. And brought interesting opportunities.
A lot happened that last year. I’ll walk you through.
The Success Flywheel
Ecaresoft operated in México and LATAM at the beginning, and to depend only on these markets was dangerous. So the plan for the company was to explore new and emerging markets. Starting with Middle East and Philippines.
Middle East Market is big and has a lot of opportunity for healthcare. Ecaresoft developed a partner and opened up operations in Egypt and Saudi Arabia. It was important that the new partners got to know the people, the products, and the company. So they made a visit to our offices in Mexico.
To my surprise I was required to help with the Nimbo presentation. I was surprised not because of presenting but because it was an holistic presentation of the business unit: The market, the segments, the product and how it was sold, running growth numbers & profitability. And I had to translate everything to english. It was challenging, to present to a group of executives and owners of important health networks on the middle east.
Presentations went really well and got a good relationship with most of the board members. They said they were looking forward to working with me, and I was excited for the opportunities.
For the Philippines partner we had to do the same but this time we went to meet up with them at our offices in Austin, Texas. I learned a lot from this experiences: how to sell the product and the benefits as a business to business owners and C-suite executives, what information are they looking for, what questions they ask, how to answer and deal with their objections, how not to panic and freeze when the difficult questions and comments arise, how to get along and get buy-in from their part. As I later found out, this skills would influence directly the kind of deals that I could handle.
During my last year I started working with enterprise level deals, I had no prior experience and felt like I was going to fluke or loose the deals. I am proud to say that I was able to handle and win with big organizations like FEMSA (on the occupational health sector), Tec Salud (the health institute from Tec de Monterrey), Yza Pharmacies (one of the 4 biggest pharmacy chains in Mexico), Farmacias del Ahorro (the biggest pharmacy chain in Mexico. Although in this one I was more of a sales support role), RFP Group (another one of the 4biggest pharmacy chains in Mexico), Medica Sur (biggest hospital in Mexico), Soluglob Ikon (a Pharmaceutical & hospital logistics company), and Christus Muguerza (top 3 Health network in Mexico).
They were big wins because they meant product innovation and adaptation, scalability of our services, professionalization of our Project Management methodologies, and a big chunk of revenue for Nimbo. From this deals I learned negotiation, power & interest, strategy, how to navigate an organization to move the pieces & the right stakeholders, change and transformation for an entire organization, project design, and enterprise finance. It also enabled me to be a better coach for my teams in sales, customer success and Implementations.
We were winning big, and this brought the right motivation for the team at a moment of high stress and unpredictable times. It’s worth mentioning that 90% of these deals were closed via on-line. No physical presence was needed, some times it was but the pandemic made that difficult so we had to be resourceful on how to sell and work with clients remotely.
We now had 3 areas: Sales, Customer Success & Product Implementations. Some changes were made:
- We started measuring Monthly Recurring Revenue. It became a northern star for the 3 areas. Cash flow is king. It was reflected on the Sales Goals and quotas, on how we retained our clients, and how we optimized our resources for implementation.
- Sales was unified. We passed the Inside-Sales-baton to marketing, focusing on automation of users and inbound leads. Sales was focused on searching and developing healthcare networks and organizations, we required a more senior sales role. They had aggressive quotas and performance plans. I had 1 sales manager that helped me with one sales team of 3, and I directly managed another team of 3. At one point in time I had a second direct sales team of 2 senior sales people that were focused on opportunities that were of the size I was dealing with. And I had the support of a Sales Operations Manager, a very special and important role when looking to manage multiple teams and deliver big results.
- We had +26,000 users and clients. How might we best manage the segments? And with the incoming deals and their size, how might we create an scalable structure for Product Implementations? Customer Success was evolving into a segment-based account management with a focus on Program (how to overview several Projects) and Project Management (how to handle individual projects). We had 3 people for Customer Success and Product Implementation.
- Protecting the castle became a priority. This means managing a healthy customer churn (and if possible have a negative churn), work with our current client base to expand revenue, and becoming really really good at customer onboarding so they don’t want to leave within the first year or fail to implement Nimbo in their organizations.
- We started doing cross-product implementations: Nimbo, Cirrus, and Estela (BI for healthcare organizations). So I was dealing with the PMO at Ecaresoft, my Program and Project management competencies were really tested here. I learned a lot from him.
What does it take to attract your target customer? This was the big question. Regardless of whether you’re selling a SaaS service or a physical good, you need to understand what it takes to attract your target customers and decide how much revenue you want to earn from them. That gives you the ability to plot how you’ll reach those customers, which gives you three options:
These axes were created by Joel York to define the three key sales models for SaaS businesses and are a great way to help you understand how to move forward. (The bottom-right quadrant, a complex sales process with low value customers, isn’t a viable business, so it’s not even worth considering.)
Many startups, when using this model to define themselves, end up in the bottom-left quadrant because it’s the easiest one to scale in. The problem is that being in the lower left means you usually end up with a high amount of low value customers. This limits how you can acquire customers. Spending $300 to acquire customers for a $99 product isn’t economical.
Crafting a sales strategy is one of the core activities every business will have to undertake. You can delay it until you’ve acquired your first 100 or 1,000 customers, but at some point you’ll need to find sustainable traction in the market. And it was our time to step it up the pyramid of the market: Graduating Nimbo to Enterprise.
So as the Director of Revenue for Nimbo, I had to create a strategy for the 3 areas. So for sales we started focusing on:
- Total $$ on pipeline. We wanted to have a cadence of incoming new deals at the top of the funnel (Sales Reps should always be looking or nurturing leads), a robust mid funnel that would support the Quarterly Goals, and a quality bottom funnel (securing the deals that would bring us the MRR goal).
- Ramp up time to be productive each Quarter. Related to the first one, the question is, how long would it take them to reach the KPI for top, middle and bottom? We wanted to accelerate the rate so that it would not take more than a quarter and they could reach their desired commission.
- Individual performance. What activities would bring the highest value? How were they spending their time? Where are they obtaining their leads from? The point is not to micro manage but to trim down to the things that would bring positive ROI on their time and avoid saturating them on activity metrics that are pointless.
- Prospecting Mastery. We needed to be better in lead generation to have a robust pipeline with constant opportunities.
For these Key Result we considered money over number of deals on pipeline so that we may achieve Sales Goals. It’s also more representative of the deal potential and that we are focusing on the right size of prospects. We definitely made some extensive efforts: We hosted several training sessions regarding the product, the market and our segment; Developed several channels for prospecting; Marketing helped with the creation of Drip Campaigns & how to use them, SEO/SEM focused on Healthcare organizations, a lot of changes to Nimbo functionality.
We measured the Total Addressable Market to estimate potential deal sizes by territory (and assign them to reps), definition of Buyer Personas for Enterprise Deals, a more structured and focused process for sales (by stages, we call it “buying made easy”), a Leads SLA for activity and new business, we also did a several Design Sprints (focused on the set of products that full fill a Job-To-Be-Done for a type of organization), and we started to implement a daily/weekly leaderboard to to encourage healthy competition and uplift activity (we later found out it was a bad idea though).
We also tried other Lead generation and Sales Development activities:
- Health Events
- Referrals from current portfolio
- Outbound lists from Sales Ops & Marketing
- Prospecting for Outbound workshops
- Lead Management SLA. Basically our internal rules on the commitments and how to handle the Leads.
Customer Success and Implementations are basically one and the same, they function together. We focused on:
- Protecting the castle. One of our greatest challenges was customer churn and lifetime value. We wanted to measure their satisfaction and better understand why and how are we failing to retain them.
- Increase user and new user engagement. Delivering the best experience possible on the first 7 days after sign up ensured retention, and focusing on continuous engagement ensured less customer churn on the long run.
- Support Automation. As I said, we had a huge user and client base, how do you keep up? How might we maintain response times? How might we enable better support? What’s the best way to use our human resource and time?
- Account Management Success. At the same time we were more effective at managing resources in support, how could we deliver results with the new health networks? How might we maintain a healthy relationship with more complex and bigger clients?
We needed to effectively measure Monthly Recurring Revenue, Customer Churn and Life Time Value from our clients. We started measuring this metrics weekly and made efforts to understand what events and at what key moments clients were likely to churn. We also focused on making up-sells and cross-sells to have a negative churn.
We also focused a lot on the handling process between sales to customer success because some times when the baton is passed, it was dropped. We started aligning the service with the clients expectations and focused on following up with Clientes on the key moments we knew they could drop. Among other things we worked on:
- A Support Chat SLA that helped the Customer Success and Product teams align on response times, best practices when answering and better communication between areas.
- Better workflows for our users, better suited to explore the product.
- We also focused on understanding the biggest FAQ to create new Support replying automation and we created support content for self-service.
- We embraced the use of bots for support. This one was very interesting.
We ended up focusing on this KPI’s:
Things got serious, huh? I had the best teams, I am thankful that we were achieving what we were achieving because of the talented people that I was working for (yes, as a manager my job is ensuring my team grows, develops and have the appropriate tools to make great things). When things get complicated and serious you need to sit down with each one, and then with the whole team.
It’s important that they understand the challenges, what’s required and what’s expected from them, and that they can have a big impact on the business and our clients business. Better healthcare through technology is the mission, are you in? The answer was yes from each one, I asked for their 100% and they gave 150% each time. They were committed, inspired, motivated, and focused on making a change.
They got us out of the pandemic, their efforts really paid off. The last entree for the Nimbo series will be focused on the pandemic Challenges & Innovations.