Alexa, CEO of Pocus, hosts Product-Led Sales (PLS) “Ask Me Anything” sessions with PLS experts to share best practices, frameworks, and insights on this emerging category. These AMAs are an opportunity to ask PLS leaders any question — ranging from hiring to sales compensation to tech stack — in a low-key, casual environment.
The PLS AMAs are for members of the Product-Led Sales community, the go-to place to learn, discuss, and connect with go-to-market (GTM) leaders at product-led companies. The goal of the community is to bring together the most thoughtful and innovative GTM leaders to build the next generation of sales together.
Interested in joining? Request an invite here.
Now, keep reading for a recap of what we discussed in the latest AMA chat.
Meet Eleanor, Sales Leader @ Retool 👋
Today’s guest Eleanor Dorfman has always excelled at building new go-to-market functions at early-stage companies.
She joined Retool, a platform for creating internal user interface tools on top of databases and APIs, as Sales Leader in November 2020. At that point, there were only about three account executives, one sales engineer, and just a few sales development reps. Today, the sales org has grown to include around 30 AEs, many SEs, and an entire SDR team.
Previously, at the customer data platform Segment, she also worked to build out the company’s customer success operations team before pivoting to creating an expansion sales team, renewals team, and a new business sales team.
It’s easy to see that Eleanor is excited about building up companies with product-led growth motions, which is why we were stoked to talk to her about all things PLS, including:
- Retool’s sales process (using DoorDash as a real case study)
- Retool’s primary sales channels, and how different teams work together to tackle each
- When to layer in an outbound motion
- How to find expansion opportunities
- Handling sales comp
“I'm very passionate about early-stage startups and building. As you can probably see from my background, the specific team is kind of irrelevant. The building and the people side is what's really fun for me.”
Diving Into Retool’s Sales Process (DoorDash Case Study) 🚘
Eleanor tells the story of the time DoorDash came through an inbound channel to exemplify what the sales motion typically looks like at Retool.
A couple years ago, DoorDash approached Retool with a problem they needed help solving: They wanted a more efficient way for their operations team to turn off deliveries to certain zip codes during dangerous storms.
At that time, their process was handled ad hoc. People would first have to submit tickets via Jira, then an engineer would have to get involved. This system wasn’t able to match the urgency of the situation, and it made little sense to have a team of engineers at DoorDash’s home office responding to weather issues around the globe as the company scaled.
To save time on building a solution from scratch, they came to Retool to quickly spin up an internal tool that would meet this important need.
At first, they just signed a small contract. But, thanks to Eleanor’s sales process, today they’ve engaged Retool to build out as many as 60 apps for many different teams. With ongoing, in-depth account management, Retool keeps finding new teams and new use cases where Retool can solve problems for DoorDash.
Now, when DoorDash is considering new products, one of their key planning steps is consulting with Retool about what kind of tooling they can provide to support new additions.
Retool’s Sales Channels
At Retool, AEs work primarily within four sales channels:
- Inbound leads that come directly to the sales team
- Outbound leads that come from account execs or business development reps
- Conversions from the self-service motion
- Expansion of existing customers
Self-Serve Conversion + Expansion
About 80% of Retool’s customers come from their self-serve business. In 2021, 20% of the revenue that Retool’s AEs booked came from self-serve conversions, so this is where AEs are especially focused on nurturing and expanding accounts.
There are typically two tipping points where self-serve customers upgrade to a higher pricing tier:
1. Volume 🔊: Once businesses are using enough seats in Retool that they’re ready to move off of a month-to-month plan and make an annual commitment, they’ll reach out or their AE will start the conversation around a volume discount on an annual contract.
2. Sophistication 🧐: Usually when a company reaches around 500 people, they want to start using more sophisticated tools to manage the platform they’ve built in Retool. At this point, they’re often ready for a discussion about upgrading their accounts.
Inbound leads typically come directly to AEs from demo requests. Often, these are from people who know they're going to need enterprise features — advanced integrations, security, etc. — and who want to go right to the source and talk to a person.
Outbound leads typically come from AEs reaching out to VPs of engineering, directors of engineering, internal tools teams, data engineering teams, and other teams they know will benefit from Retool.
When’s The Right Time to Layer in Outbound?
For the extremely rare Slacks and Dropboxes of the world, the answer might be not for a long time. But for the rest of us, the best time to add an outbound motion to the PLG approach is “about a year before you need it” according to Eleanor.
Retool really started going hard on outbound at the beginning of 2022, when about 60% of the previous year’s revenue was still from inbound. Eleanor knew it would take between six and 12 months to spin up a really successful team, the right ICP, the best incentive program, the perfect messaging, and all the associated systems. So for her, it was important to start while Retool’s AEs were still generating reliable revenue growth via inbound, but had room to grow with a new outbound motion.
Handling Handoffs in the Sales Motion 🏈
While there are many different ways to split up who handles what within a sales org, Eleanor optimizes for simplicity at Retool.
Account execs keep the customers they close and remain responsible for them through renewals and expansions. They continue to stay involved with each account they close, even as those accounts role into activation and future planning.
The deployed engineering team, which is a technical post-sale team similar to a post-sale sales engineer, works with customers on building their applications, which is a little different than how some companies handle it. Deployed engineering at Retool is active in shared Slack channels, does paired programming sessions with customers, and even participates in customer-sponsored hackathons.
The customer success management (CSM) function — a newer and smaller development — has taken over ongoing product/project management. This team is being shaped to work with customers to define roadmaps for their Retool use cases.
A Team for Every Lifecycle Stage
While some may think that sounds like too many teams all trying to work with the same customers around the same time, the flow works well for Retool because they’ve carefully crafted these groups around key stages of their customer lifecycle.
AEs and pre-sales sales engineers are experts in discovery, relationship building, negotiation, and closing and asking for money, which is a fairly important skill set.
Deployed engineers tactically go in and help new customers get their first app deployed, get integrated with GitHub, get SAML configured, etc. They're also experts at triaging and cycling through feedback.
CSM was implemented because AEs were spending an inordinate amount of time on adoption activities versus generating new revenue. So this newer team is all about establishing Retool across various use cases within the customer’s organization.
Having each of these teams fleshed out enables AEs to continue to focus on expansion and hitting revenue targets. Each time they land either new business or expand an existing account, the cycle of acquisition ➡️ activation ➡️ adoption ➡️ growth starts all over again.
How Do You Find Expansion Opportunities? 🔭
Eleanor shares several methods Retool uses to uncover expansion opportunities:
Hackathons with customers have often unveiled tons of new use cases in other departments.
Retool helps customers host internal tech talks where engineering can present an app to the rest of the org that they created with Retool. Retool will follow up by offering office hour sessions, where they often see new departments from across the org engage with Retool.
Sometimes, if a customer has already built a tool that could be useful across the business, Retool’s AEs will shop that solution around to other departments within the same business. As Eleanor says “No one should ever apologize for talking to their customer.”
Sales Comp at Retool
Comping AEs on the initial self-serve purchase was a model that Eleanor used at Segment, but it’s not what they currently do at Retool.
While their process is evolving and has seen varying levels of success, right now they follow an account pool model.
In this model, AEs do round robins for unassigned customers. But AEs can go in and claim a set of customers that they can own and nurture and then put back into the pool. AEs are also empowered to outbound prospects and self-service customers in various ways.
The deployed engineering team at Retool, just like it was at Segment, is comped based on net dollar retention — Retool’s North Star Metric (more on that next!) — as well as a few usage metrics:
- Customer’s first use case went into production
- Customer’s first tool has at leave five end users (to reward value, not just speed)
North Star Metric: Net Dollar Retention 💫
Things like top-line revenue growth, ARR, and burn are all of course incredibly important. But for Eleanor, net dollar retention (NDR) is the most important metric for SaaS companies.
She believes it’s the ability to retain and grow existing business, therefore driving up margins while driving down cost of sales, that enables SaaS companies to command the high valuations they do.
This plays into why she’s set up her sales org at Retool to focus so heavily on expansion rates. Pivotal to that is keeping original AEs involved throughout the life of the customer. They know the original buyer on the account, they know why that person made the decision to go with Retool in the first place, they understand the business and its struggles and goals, they’ve become an embedded consultant at this point.
This practice has created a very customer-centric culture at Retool, which isn’t just key for morale but also a huge boon to their ability to land, expand, and retain.
“I very much believe NDR is the single most important metric for the long-term success of a SaaS business.”
Read more about the North Star Metric in our PLS AMA with AJ Bruno.
Will You Join Our Next PLS AMA? 🔮
If you can believe it, there was even more insight and tactical knowledge in Eleanor’s AMA that we didn’t have time to cover in this article. To experience the next PLS AMA yourself — and get your own important questions answered by a pro — request to join Pocus’ PLS community.
We can’t wait to see you at our next AMA!