Peakon was founded 2014 in London by Phil Chambers and Dan Rogers. Peakon is an employee success platform that converts feedback into insights you can put to work. With more than 260 employees and 68mio in capital raised, Peakon delivers solutions to more than 1.000 customers, including Trustpilot, Easyjet and Verizon. On Jan 28, 2021 Workday announced its intent to acquire Peakon for 700mio.
On market segmentation:
Peakon focuses on two different market segments with different teams. Our mid-market team sells to companies under 5,000 employees, where the average deal size is around €50,000-60,000 ARR and a classic sales cycle of about 90 days. In our enterprise market, the sales cycle varies, but is roughly double that length. In terms of deal size, these deals vary between €150,000 and half a million at the top end.
On pain:
We’re quite lucky that our solution is replacing something. The budget item is already used for running annual surveys. What we’re providing is a more innovative, agile way to get the results, so we’re not fighting for budget. It’s there. Maybe we’re trying to increase it, but it’s already marked as an item.
On reporting and analytics:
We look at performance and bigger questions quarterly to make sure we’re not making knee-jerking decisions. The variations between 12 cycles can be huge.
It’s important to be selective about what you include when you do the board reporting. I wouldn’t want them to see certain things monthly. For example, if there’s a swing deal, they could panic, although especially on enterprise deals, these things happen. That’s just how the sales cycle works.
Just because I report something to the board on a quarterly basis doesn’t mean I don’t monitor the activity monthly. I proactively look at the data and go, “Okay, this is different than last month, is it because it’s summer or did something change?” Europe pretty much switches off in the summer--the Swedes literally disappear. They’re off. Another example are RFPs: the monthly data shows me when companies typically run RFPs, so I can put this back into quotas at the right time.
When you work in SaaS, there’s so many things you can measure. We generate loads of data and I’ve got it all. But you need to know what questions you need to ask. You need to interrogate the data versus having the data flow overwhelm you.
The questions I ask the regional VPs of Sales in my weekly forecast calls are:
How many reps are going to hit their quota? How many teams?
What is the pipeline coverage for the following quarter? We know from experience where we need to be at in order to be successful.
Where is that pipeline coming from? Only if I know where it’s coming from, I can start to work on efficiency.
What is the forecast for the big deals in that region? How many are committed? What’s the best case?
Are there swing deals among the larger deals I can dig into and offer a discount or make something happen?
Every quarter, I dive a little more into the regional performance:
Are we on track with our hiring plans?
What’s the pipeline spend per dollar that we make on each of our channels? In this calculation, we separate out the different channels, e.g. PPC [pay per click], or hosting physical events. Our model also factors in the salary of the SDRs and the demand generation team.
What’s the average deal size being created at the first stage of our pipeline?
What are the win rates/conversion rates?
At the board level, we discuss across all regions:
What’s the status of our big swing deals (>€100,000)?
How are we doing with our key accounts?
What’s our sales efficiency?
What’s our SaaS Magic Number?
What’s the ROI of each region?
Win rates versus competitors
On using KPIs from reporting for strategic decisions:
When we were initially entering the APAC [Asia Pacific] market, we were just trying to get something going. We wanted to build some customers, build a network. But the average deal size going into the funnel was just €10,000, and after procurement negotiations, it ended up closing at €8,000. I knew we would be spending more than €8,000 on servicing these accounts before they would churn, so these tactics weren’t working very well for us.
That’s why we shifted our approach towards ABM [account-based marketing]. I said, we need to win a couple of big logos with credibility, so we’ll do a much more targeted, tailored event. Throw out PPC, take that spend, put it into hosting our own podcasts and webinars with C-suite buyers, and play the network card.
And off the back of that, we landed a couple of big logos. When we went back to PPC and put the logos on the website, suddenly the mix of deals coming through was much better. Because the leads were seeing on our pricing page in a pass, “Oh, wow. You already work with Auckland Council. You work with Fox News.” People just knew the logos, and it makes a hell of a difference.
On sales compensation:
Our standard is that every sales rep should at least bring in their OTE times five. Of course, that’s our target for mature markets like the United Kingdom. There’s actually a lot of factors going into this multiplication factor. For example, it’s lower for emerging markets or if the competition is really fierce.
I want us to run like we have 12 year ends. I want that energy running through us all the time. If we have that level of rigor and focus, we’re proactive on the data, and don’t wait two and a half months each quarter to do something with it. We’re in a fast-growth market, which means we’re probably not alone in it. It’s a race, and we have to run faster than everyone else.
On sales organization:
In our sales organization, we have two quota-carrying roles. The first group are our Account Directors. These are the most senior sales reps, who focus on the largest deals and also own up to five growth accounts. The other group is what we call our Commercial Customer Success team. Their targets relate to increasing existing accounts.
On tools:
We have a really big internal tech stack. That was one of things I was really focused on. Our tech stack gives us an advantage in getting in front of the market. For example, we have improved our win rates because we’re only contacting accounts at the right point in their buying cycle. Obviously, the reverse of that investment is a need for people to run that technology--so we have quite a number of people in technical sales support.
Once you start scaling, you’ll want to test everything. But you need to have the right data to be able to test something. If you don’t get the systems and the fields in Salesforce right at the start, you spend so much time backwards dating. And then everyone eventually throws their hands up and says, “We’re gonna have to start again”. Or for an AB test that you can only roll back three months, you’ll wonder, “How did this trend occur in Q4 last year?”, and you won’t know. So my advice is: own systems very early.
Our mid-market team utilizes more tools than the enterprise team, and more frequently. That’s simply because they’ve got a much higher volume coming through that they need to disqualify out, as much as what they need to qualify in. So they’re utilizing nurturing tools, and they’re monitoring things that are bubbling up. It’s a more reactive way of using tools, whereas we do more proactive sales in the enterprise segment.
Tool list:
Salesforce: CRM, “heartbeat” of all tools
Gainsight: Top of the funnel
Clearbit: Top of the funnel
Marketo: Lead scoring for the SDR team
SalesLoft: Email cadences and outreach for SDR team, faster integration into Salesforce
Tableau: Data analytics
Microsoft BI: Data analytics
Guru: Enablement process
Workramp: Sales onboarding process
Chili Piper: for our leads, rotations.
Drift: Interaction on the website, push content at the right time
Salesforce Community: interactions with different people
On account planning:
In mid-market sales, you’re not doing as much account planning. You’re very much deal-focused: “It’s live now--how do I win it?” But in enterprise sales, we ask: “How do I get myself into position where there’s something to win?”
That’s what we do account planning for. We have actively identified our key accounts using our ICP. These are companies where we know that they will buy Peakon--the question is when. That’s our belief statement.
Actually winning these key accounts requires us to constantly build relationships across their organization. We need to be aware of what’s impacting them at a market level, what’s impacting them at a company level, and what’s impacting the individuals that are Champion-level:
Individual level: Who do we know within that company? And what’s their influence? We represent that in a visual circle. In our Ideal Buyer Profile, the CHRO [Chief Human Resources Officer] is typically our economic buyer. But there’ll be multiple threads underneath that role, like VPs of HR, or CIOs (because it’s SaaS). We identify them and score the influence of that individual.
Company level: What market does the company work in? Who do they compete with? What transformations that are currently going through? For example, we search the media for clues that we can use to make assumptions on. Right now, for example, everyone’s on a digital transformation because of COVID.
Market level: What macro events are they going to be influenced by? Brexit, for example. Or the presidential elections in the US. Because depending on the sector, there could be a big shift in their funding and focus.
In the next step, we build out our action-orientated plan: Which account-based marketing tactics can we use to influence their strategy around employee experience and employee engagement?
For example, we ask:
Have we had any of their C-suite connect any of our C-suite at our digital meetups?
Who do we know that they know? And how can we utilize those connections?
Who’s worked there that has used Peakon before?
If we’ve seen that they’re opening a new office somewhere and a lot of hiring, we ask: What can we send to those people that will put Peakon on the agenda?
The results of these questions go into a health score for that account: gold, silver, or bronze. Even if they are bronze status, because they are in a 3-year contract with another vendor, we are still building relationships to use opportunities.
On sales structure:
There are two types of customer success. First, there’s customer success for the door kickers, the guys whose job it is to win those new logos. To them, customer success ends where the contracts are renewed and you pay your increase of 7%. But there’s also customer success that comes from having adoption experts. These people are advocates of our solution. They look after the accounts to find out where there is the opportunity to drive upsell, whether that’s additional licenses, selling services, or product items. When you can afford to do it, create focus as soon as possible by separating these two kinds of customer success. The sooner that you have someone focused on your existing customers, the better. Especially if you’re talking fast-growth businesses.
When you don’t have focus, you’re not getting the best of both, you’re getting the worst of both. How can you possibly tell a rep: “I want you to go and win 50 new logos. By the way, I also want you to support these other 10 accounts.” Naturally customers have questions, they take up time. And what happens is, you are losing on both ends: you’re probably not providing world-class customer service to your existing customers, and you’re losing ground on the new market, because your competitors have already created focus.
We make sure the New Business rep will not sell a dodgy deal by publicizing our customer NPS scores internally in our Slack feed. Every time we send out the surveys, it goes to the whole company. This is brillant--because if the survey comes back bad, it says on Slack: Account name, Sold by, Customer success rep. Who wants to have the lowest NPS score of customers? You sold it?
We ask our customers for referrals as soon as they bought. Because that’s when people are at their happiest: “Yes, we’re over the line, we’ve started using Peakon.” That’s the time when they’re gonna go: “Yeah, I know this person, this person!” So that’s the time to strike and use their network.
On upselling:
If people say “upsell” they usually associate it with increasing just the customer. No, no, no: the customers drive your new business! Your customers are your best weapon for growth--through referrals, case studies, G2, crowds turning up at your events and your webinars... I think sometimes people just miss that trick when they think about upsell.
Think about all the variables that allow you to drive upsell. Our product has very simple tiers: Essential, Business and Premier. By using range pricing, we ruled out being too expensive or looking too cheap. But not all customers need to upgrade their tiers. That’s why we offer other products to drive uplift as well. For example, we now offer more service packages. This year is the first year we’ve become a multi-product organization.
To realize the uplift potential, go back to your metrics and ask which accounts have the highest propensity to buy your new products. This in turn allows you to figure out your headcount planning: how many people you need in commercial customer success to realize the potential.
We could double the business next year if I didn’t sell one new deal, based on the new products and the amount of seats that I have available. This is how important upselling is to building sustainable and efficient growth.
On lessons learned:
Going into management, one thing you learn very quickly is the importance of being analytical. When you’re doing maths at school, you think, “When am I ever going to use this?” When you get into SaaS, you do actually use it. Taking the time to understand the inputs is what makes you successful, what has made some of the top reps I see brilliant. I call it KYB--Know Your Business, the inputs of what you’re doing. If you don’t understand your inputs, chances are that it might work once, but it’s not repeatable. And everything in SaaS is about this: how to make it repeatable and more efficient.
When I was 21 and just starting out in sales, David Mead taught me the hard yards of cold calling. I hadn’t hit my call numbers, and I said, there’s no leads, there’s nothing come in today. He literally got a chair, and he wheeled the chair against the window, gave me a clipboard and a pen and paper and said, look out the window and write down every company you can see. And we’re on Camden High Street, so there’s bands going past, there’s lorries... Within 20 minutes I had 15 companies on my call list for the day. There’s always, always a way. If plan A doesn’t work: there’s 26 letters in the alphabet. Keep going.