Episode #21: “Revenue Operations, the Salesforce Way” with Meredith Schmidt

Hosts: Tim Clarke & Sara Varni
To put the customer at the center of all we do, Salesforce created a single revenue platform that sales uses for every type of buyer at every stage. Imagine effortless quoting, integrated e-signatures, and no wasted process. Spend less time booking revenue and more time selling. Hear a frank and lively conversation on the value of questioning everything with Meredith Schmidt, EVP and GM Salesforce Essentials & SMB, Salesforce.

Episode Transcript

Tim Clarke: Thank you for joining the Quotable Podcast. Today we’ll be discussing revenue operations the Salesforce way with Meredith Schmidt, EVP Global Revenue Operations at Salesforce. Welcome Meredith.


Meredith Schmidt: Thank you. Thanks for having me. This is great.


Clarke: For those of you who aren’t familiar with your work, I know you started at Salesforce in 2005. Can you give a bit of background on yourself?


Schmidt: Sure. My Salesforce journey has been really fun. As you could imagine, joining in 2005 we’re a very different company today than who we were then. I joined right after the IPO to really start the revenue operations team at Salesforce working for the CFO. The team has evolved dramatically since the inception.

But just as a point of reference, we came in and everything was on paper. We were typing everything by hand into Salesforce and really realized that was my journey was how do I automate this process and just seeing the power of Salesforce, even any platform at all, how you can take data and really transform data. It’s been a really fun mission for me at Salesforce.


Clarke: Perfect. For anyone that hasn’t listened to the podcast before, I’m Tim Clarke, Product Marketing Director at Salesforce, and I’m joined today by our guest host, Sara Varni, SVP of Marketing at Salesforce. Welcome Sara.


Sara Varni: Thanks, Tim. Thanks for having me.


Clarke: Thanks. Meredith, let’s start off with your philosophy. I know you’ve written a couple of pieces recently with regards to your overall philosophy on sales operations, some of which around process, policy decisions, technology. Can you dig into that a little bit more?


Schmidt: Sure. I think what we’ve really done over the last several years here is really defined what is revenue operations, where does revenue begin. I think what’s interesting is it really begins when you create products. Product operations actually is part of revenue operations at Salesforce. You think about when you create a product, you got to figure out how you’re going to recognize revenue, how you’re going to pay commissions. How do I capture that data at the product level?

And so that was not part of the original scope of our team, but it was really about order processing, paying commissions. So we really brought the teams together over time. But as we’ve done that with product operations, partner operations, first thing we do is look at your process. What are you doing? Are there process improvements? People call it BPI: business process improvement. We rebranded it here at Salesforce: business process innovation. I don’t want to improve on anything; I want to change everything.

That’s really where we started is with policy and process. Because I think so much of what we do is engrained in how we’ve done it. People just think that’s the way to do it. And so before you try to take technology and start automating things, we always start at the policy and process. What are the things that we shouldn’t be doing?

I have a saying amongst my team, “If you don’t know why you’re doing something, maybe you shouldn’t be doing it.” And that is the way we start every onboarding, every new hire. Tell us what you don’t like what you’re doing. Again, starting with policy and process, you can make such change with that that you don’t need technology. So that’s really the philosophy is [just] start there and question what we’re doing and then move to technology.


Varni: I love the focus on business process innovation. I think it’s really interesting, Meredith. When you started at Salesforce 2005, you were also encountering the new business model. Right?


Schmidt: Right.


Varni: Subscription billing was pretty disruptive at that time. What were the particular considerations you had? How did you have to motivate your team to think more broadly about this new model and bring it to life through a program that could scale?


Schmidt: Yeah, when you think about the subscription model, we still think about new business. Get that order in. Book that order. It’s ring the bell for sales. But you’ve got to think through the life cycle of a customer. Because with the SaaS model, you don’t stop when you bring in a new customer. You’ve got to nurture that customer; you’ve got to renew that customer.

And so a lot of it was don’t stop at the new business. Think about the life cycle. And that was a big change I think really is I have to not only bring in new business and create new quotes and forecast that, but how do I forecast and manage?

At the time, the renewal business in 2005 was not like it was today. We were about a $300 million company. We’ll be over $8 billion this year, which is incredible. But when you look at $8 billion of revenue, more of that is coming through renewals now than from new business. That was not necessarily the case in 2005. So really when you think about just the growth, you really have to consider the renewal life cycle management as a key, key part of this job.


Varni: Yeah, absolutely.


Schmidt: That was something that I found it was an afterthought before. As we have evolved now to 2016, this is obviously a big part of our business and customer success is really the number one thing in our business, and that was just a complete change from the software industry. My experience prior to here was PeopleSoft. Went through the Oracle acquisition. Happy to say I never actually became Oracle, no offence to the Oracle people, but I got my job offer here before my last day at PeopleSoft.

But coming from that software mentality of sell it and walk away. Even when you look at sales compensation plans, you have to motivate the sales team to actually care about the customer throughout the customer’s life cycle. So it was just really thinking, one, the mindset of what does it mean to be a SaaS company and then the processes around it.


Varni: Yep.


Schmidt: But being able to say, “the customer is in the center” I think changes everything.


Clarke: One of the other articles we’ve got on Quotable is from Tony Rodoni, “The Death of a (Traditional) Salesman.” He really dives into this about the difference between traditional sales reps being focused on the deal life cycle, whereas now the modern sales rep is focused on that customer life cycle. Within this e-book you go through five different best practices, and we’re going to go through each of them throughout this podcast. The first one you’ve already touched on a little bit about some of the new hires, how you get them to question things and really challenge the status quo. So maybe you can dive into that in a little bit more detail.


Schmidt: Yep. I think it’s almost becoming an overused term now, “challenge status quo.” I’m trying to think of a better term for it because I don’t like it anymore. Everybody is saying it.


Varni: Right.


Schmidt: But it’s just fundamentally true. We don’t have to do what we’re doing today; we don’t have to do it tomorrow. I think people are just opening their eyes that change is OK and we actually encourage it. As employees you kind of get scared. “I’m I going to lose my job if I bring up this idea? Because it’s kind of automating what I do.”


Varni: Right.


Schmidt: And so I think there’s a little bit of getting over that hurdle with the team. This is not about automating your job away. This is about making your job more interesting. There is so much we can do. I have a backlog of 5,000 items we can work on.


Varni:  Right. No shortage of work.


Schmidt: Yeah, there’s no shortage of work. It’s all about really encouraging the employees about making their job more interesting and upleveling their skills. We don’t have to be the machines anymore. We don’t have to be the data entry people. We can be managing the machines, telling it what to do.


Varni:  Building new machines.


Schmidt: Building new machines. And that to me is really changing status quo. But part of it is accepting that you’re not going to lose your job. I don’t know that everybody has that same philosophy. It’s definitely my philosophy. It’s also about self-funding, my headcount. Working for the CFO, I don’t get the same growth as the sales army and everybody else.


Varni: Sure.


Schmidt: So how do I scale with that? And a lot of it is about funding my own headcount through a lot of this stuff.


Varni: Right.


Clarke: To put it into I guess [a reality check for anyone that] listens to this podcast thinking about, “Hey, love this idea of challenging,” but perhaps they’ve got people all over the world. What are some of the actual things that you actually do in order to get the feedback to be transparent with your team?



Schmidt: We do a couple things. We use a couple tools we have internally. We use Chatter. So of course we have our Chatter groups [or] we have an ideas group, and people can like it. But we also took that further as you can’t dislike. So we went to the ideas exchange as well where you could actually promote and demote ideas. But we try to leverage that global community because what might be a great idea in the U.S. may not be a good idea for Europe because of other regulations.

And so we’re always considering the global impact of change. And so we actually have change champions that we’ve nominated throughout every region. Yep, we’re in nine locations now, not nine countries but close, but we’re in nine locations. And those locations have different tax laws. Just different eSignature laws. When can these things work? What’s it look like? So we’re always considering. You have to considering local requirements because what we’ve done is really enabled a global process.

What’s great about that is no matter where you are in the world, we do the same thing. And it actually allows my team to give more or less 24 by 7 support to the sales army, again using Chatter in cases and other types of things how we interact. But by really defining and understanding the global process, we can get that different support model around the world where Singapore goes to bed, the U.S. wakes up. Actually that’s backwards. U.S. goes to bed and Singapore wakes up. [Me] it goes to bed, we wake up. But you really follow the sun now.

And by really looking at that and leveraging the global team, that’s a really big focus for us. Because if we were U.S.-centric or whatever headquarters you are in the world-centric, you might not be making the right decisions. So it’s really about getting the voice of everybody.

Again, it can’t be all 250 people on my team because that’s a lot of voices. I want all those votes, but that’s why we’ve identified by region our change champions to say, “Yes, this works for my region. It does not work for my region.” Even when we document our SOX controls or any of our knowledge articles that we use, we’ll call out what the exception is by country. We’re very, very focused on global and in leveraging the team.

One other thing we’ve done, and I’ve probably done it every other year, is we’ve actually ran a SPIF, like you would for sales. You want to bring deals in. I really want to encourage people to bring their ideas up. I see there will be a lull in ideas, and so we’ll run SPIFs. Usually they’re policy and process SPIFs. What we’ll do globally, and we’ll use voting, is top three ideas win. Something we can implement by policy or process change without technology. And really leveraging that global community to say what’s the best idea.


Varni:  That’s awesome.


Schmidt: So just simple things like that that just bring creative juices to the forefront, but motivates everybody to do it.


Varni:  OK, so another topic that I know that you’re big on is just how we can automate more. I think it just goes back to what we were talking about in the beginning where it’s not about replacing jobs; it’s about augmenting the day-to-day. What have been some of your best practices, your secrets for success in really scaling this team?


Schmidt: Yeah, I think automation is really interesting because you can automate a lot of little things by themselves. But if you’re not thinking about the end-to-end process, you might not be getting the best automation. And so what we really thought about was now that I’ve fixed policy process, I will give one story on policy, which was I was convinced I needed an eSignature solution, because I was spending a half an hour literally every day, my team members at the end of the day signing order forms.


Varni:  Yeah.


Schmidt: I started questioning. I’m not reading them. I’m just signing them. What am I doing?


Varni: Right.


Schmidt: It was a legal step. I went to legal and said, “If we’re using a CPQ tool that is enforcing all of our approvals, all of our legal, RevRec, finance, pricing, anything you name it, and all of our configuration for products, really a quote has been approved by Salesforce when it goes to the customer.


Varni: Right.


Schmidt: If it’s already been approved by us, why do I have to countersign it? That simple question changed everything. We don’t countersign our contracts anymore.


Varni: Yeah.


Schmidt: So I still use eSignature for customers, but I don’t have to sign, even via eSignature, those million orders we did last year. That was just a really good example of where we thought technology was the answer, but it wasn’t going to come fast enough and we went policy first, and it’s changed everything and I’m very happy about that one.

But I think automation is about data and where does data start. If you can start capturing where that data and the life cycle of whatever process you’re doing starts, that has been our philosophy is start capturing data. Once you have the data, you can tell the machine what to do with it. Then even taking it further, what I’m super excited about is bringing Einstein and intelligence into it, predictability into it, is we do capture enormous amounts of data.

But some of the things we’ve done is really look at, OK, as a salesperson you’re capturing pricing, product. OK, what don’t you know when you’re creating a quote for the customer? And what when it gets back from the customer are we typing into our systems? It was things like who signed it, what their purchase order information was. With a tool like eSignature, we actually started capturing that additional data from the customer, because it’s customer information.

So we looked at where does the information come from for the back office to process. It doesn’t come from us anywhere. That all comes upstream. So our focus was really capturing data. And we’ve gotten to a point now where we’ve been able to essentially capture all the data we need to deliver service, bill the customer, recognize revenue, calculate commissions. And the result here is actually pretty phenomenal where we have a process running.

Once a customer signs the contract it comes back to us with a bunch of validations. Did they fill out all the fields? Are they valid? We can put validations on fields. So if you have a VAT number and you type in “the zoo,” it will recognize those are not a string of numbers. But we’ve had all those validations. So if it passes this validation that a human used to go do and literally just look at things and say, “Yep, it looks good,” they’d hit a button.

Now the machine is doing that for us. We’ve written this automation code with these validations where 85% of our orders once executed by a customer is no touched by anybody in Salesforce, including the sales team. Not only is this great from our side. From the AE side they’re not wondering, “When is my deal going to close?” because it’s gone through the validation. And usually within five minutes of the customer submitting the order it’s been accepted and provisioned. So not only is this great for us internally, our customer is getting delivery faster.


Varni: Right.


Schmidt: Service lead delivery is almost instant now. Now I would say they probably don’t like that billing is also instant, so they get their invoice, too. But for that 15% that falls out, there is some validations we do. We’re actually aiming 95% by the end of next year, and I think we’ll get there no problem. But either way if it’s a human or machine, our billing, a hundred percent automated. We have no billing department at Salesforce.


Varni: Yeah.


Schmidt: We had to collect, of course, but there’s no billing because we have all the data and we have billing engines and jobs running and all these integrations with just great products, be it Salesforce products or any product through AppExchange. Even our competitors. Working with Oracle as our back office. We’re integrating with all of this and it’s just all possible. It’s the art of the possible now, which is so exciting. I think that’s actually getting overused as well. But there’s something there that’s just really, really exciting that you can do with data.


Varni: At Salesforce, we obviously sell to all types of customers from one-man, one-woman outfit all the way to some of the biggest companies in the world. [Are there special] considerations you’ve had to meet in building your model for the size of the customer? I imagine the people who are listening to this are coming from all different walks of life. Are there any special considerations you’ve had to make based on the segment the customer is in [with the] complexity of the deal, I guess?


Schmidt: I think what’s interesting is if you take that simple approach about data, it doesn’t matter if you need to capture 10 pieces of data or a hundred. The way I looked, at least at our process for revenue operations, it’s the same. It doesn’t matter if you’re selling 1 product or 10,000 products. There’s some complexity in it that changes, obviously. The rules get a little more complicated, but those rules are not being applied by us.


Varni: Yeah.


Schmidt: In the old days an AE would go download a PDF document and try to figure out, “OK, based on what I’m selling, what level discount am I at? What’s the product rules to sell this?” They had to figure it all out for themselves.


Varni: Yeah.


Schmidt: And so I had this concept about when do you push information versus pull information. [He] shouldn’t have searching for information. So the complexity certainly drives maybe the setup of the automation. But ultimately it doesn’t matter if you’re a 10-person company selling an amazing single product. You can still get this automation and it’s much easier, much quicker to get.

But I think that the revenue cycle is the same no matter what you’re selling. You can sell bicycles. You can sell Software as a Service. You still got to get a customer order, you got to deliver it, and you got to bill it. So you bring it all together. I think any industry, any services, any size company really can follow this process.


Varni: Great.


Clarke: Perfect. Let’s pick up on that point of the salesperson and [could use something] we think about in marketing constantly whether we’re coming up with a new campaign or a new initiative or new [event] rather than marketing sitting in an ivory tower and creating this thing that is not relevant to sales. We spend so much time with our counterparts ensuring that everything that we’re doing is very relevant to them. This is actually your third best practice, which is focusing on your customer, your end user, which is sales. Maybe you could tell us about some of the initiatives that you’ve been working on there.


Schmidt: Yeah. I think you have to put your end user at the center. And I think the end user can be sales. It can be my own internal team, how we’re using systems. It could even be our partners through the indirect channel. What is their experience? Is it going to be easy for them? We shouldn’t have to train you how to create a quote because it should be that simple to follow. If you follow screens and we’re guiding you to required fields, you can really make this bulletproof stuff. But you also want to make it look good. It’s got to look fancy now.

This is one of the things back to the new hires. I love college grads, because they’re coming in and saying, “Why isn’t that on the mobile device?” I’m like, “I don’t know. That’s a great question.” But they’re also like, “This screen looks like 1999,” and we’re like, “It does.” I’m like, “Were you born in 1999?”

I think people want to work differently. And so we actually really do a lot about user interface, and we’re actually launching an entire new thing in 2 weeks for our quoting tool is we’ve built a Lightning UI on top. It’s 10 times faster than what we have today and it’s easy to use. It’s just intuitive.

And I think making things intuitive where you don’t always have to train on new tools, train on new process or policies, but they should be intuitive. And the user should be able to at least fumble through on their own, and hopefully it’s not that bad. But we want to be easy to do business with.

I look at revenue operations as a little mini company. I want people to see us as being easy to do business with. And supporting the sales army, I get a lot of input from them on what they would like to see change. Yeah. But it’s really fun to work with them and really think about when the end user feels that they matter, you get their buy-in early on. Right?


Varni: Absolutely.


Schmidt: And so we bring in user groups and focus groups all along the process of whatever we’re building. “Do you like this? Where should the button be?” It’s simple things like that. “Top-right or bottom-right or bottom-left?” But you bring people along in the process and I think that you just get the ownership, you get the buy-in, and you’re kind of doing it together. And so you can’t just think you know who the end user is. You got to bring the end user in as well.


Clarke:  Yeah, and the last thing any account executive wants at month-end or quarter end is to have technology that is going against them.


Schmidt: Right.


Clarke: They’re trying to get the deal over the line.


Schmidt: Right, right. Exactly.


Clarke: Cool.


Varni: Next topic. We’ve talked a lot about how you started Salesforce as a much different company. Can you talk about your key points around how you can think for scale and long term when you’re setting up a revenue team?


Schmidt: Yeah. I think what’s interesting here, and I see this even today, we tend to focus on today’s problems and not challenge ourselves with what tomorrow is going to look like. I’ve seen over the years, not just here, of building something that’s not actually scalable or isn’t the growth of where we’re going.

Early on you can look at Salesforce and we’ve actually learned this lesson. We’ve built a homegrown quoting tool. It worked great when we were a single product company. All we sold was Sales Cloud. It was all subscription-based. It was a thing of beauty.

As we acquired companies, got more creative in our product strategy, that system was not scalable. At that time when we built it, again almost, gosh, 12 years ago now, who would’ve thought Salesforce is who we are now? But it’s really given me, in retrospect, never to think and limit myself to today.


Varni: Yep.


Schmidt: I think with Salesforce where we’re going, and I think any company where you’re going, it’s really thinking about the technology of the future and how what you’re doing now has to evolve. And can you plan for it? You can’t always plan for it. Sometimes you just got to get the job done and fix a burning issue. You got to move fast.

But I do think building in and thinking about products, technologies, and processes is really thinking about what could possibly change that would impact it. And so we were doing this very interesting meeting today actually with all of the finance organization including our CFO about a five-year technology roadmap. And we’re bringing Peter Schwartz in who’s a futurist.

And so we all in finance are like, “I need to do my accounting in Oracle. I need to do this.” It’s like, “What if the way we work totally changes?” We’re doing a bunch of what if scenario planning and it’s really making us think differently. Peter asked me, “Meredith, what are you going to do if all billing is voice activated?” I’m like, “I have no idea.”


Varni: Right. Great question.


Schmidt: Great question. I’m like, “I could make the quote voice activated.” And I think technology is changing so fast and how people are going to want to work is changing so fast, you got to think about what’s that next technology on the horizon. If what I’m doing now is going to stop me from adopting in the future and let us get behind. I want to be on the forefront of thinking about it.

I can’t always build for everything. But just knowing the what if scenarios and even based on my roadmap, what could change it? What could fundamentally change everything we just thought of? Salesforce could completely change their pricing model, which would completely change everything I do.


Varni: Yep.


Schmidt: So there’s a lot of things like that is how do I build that in? So again, it’s thinking about you got to scale for today but you have to grow for tomorrow.


Clarke: We’re coming up on time here and I think best practice number five we’ve touched on a little bit already about empowering the individuals and giving them a voice. I want to finish of with the final question around some of the technology that you’re using internally. I know we had a discussion about this beforehand around how you describe it in a platform. So if you could just dive into that.


Schmidt: Yeah. Something I’ve been really thinking about is really the revenue platform of the company. What is the revenue platform for Salesforce or any company really? When I think about a revenue platform, it shouldn’t matter who’s buying. If it’s a customer buying through eCommerce, if it’s an AE creating a quote selling direct, if it’s a partner coming through our indirect channel, I want a single platform that I’m maintaining. And that’s really where I think about this process is how do I create a revenue platform.

Now it happens to be that I’ve used a lot of apps to put it together. I think there’s amazing apps on the AppExchange. I use Sales Cloud, Service Cloud, all these great things, but there’s little bits of technology I still need that we’re not going to build, and how do I fill that gap? We’ve definitely custom built some things like order management. We’ve built [our own] billing on an application on our platform. So there’s definitely some custom apps, there’s some native AppExchange apps, and then some non-native apps.

And there’s Oracle. I still have to record my revenue and do my financials in my GL. But one thing I love to say coming upon 12 years here at Salesforce, running revenue I’ve never logged into Oracle once. We have really, really taken that to heart building a revenue platform in the cloud. I call it bringing the back office to the front office.

When you think about revenue operations, the data is the same data as sales data. You put that data in one spot, you have a 360-degree view of the customer. As an AE you’re not calling to get a customer a footprint and show me all the orders they’ve placed from the finance team. You have all the information exactly where you want it. And so to me it was about all information in one place. When you think about, sales and revenue obviously go hand and hand. That was the concept of the revenue platform is how do I get everything together.


Clarke: Perfect. Look, we really appreciate you talking about revenue ops the Salesforce way. We’ve got this and many other insights available on Quotable.com. Thanks Sara for joining us to host today.


Varni: Thank you. Thanks for having me.


Clarke: And thanks very much, Meredith, for sharing your insights.


Schmidt: Great, thank you for having me.

Clarke: And thanks everyone for listening in. If you like what you hear, please take a minute to give us a 5-star rating and feedback on the Quotable Podcast. And if you want to hear more, go to Quotable.com/podcast. Thank you.

The 7 Sales Skills That CAN’T Be Taught By Dan Ross,
Sr AVP, Commercial Sales, Salesforce
Why It’s Now or Never for Social Selling with LinkedIn’s Mike Derezin Interviewed by Laura Fagan,
Product Marketer, Sales Cloud, Salesforce
Making the Tricky Transition from Sales Peer to Sales Manager By Keith Rosen,
Author of "Coaching Salespeople into Sales Champions"
Learn from the best. Sell like the best.