The Sales Hacker Podcast
The Sales Hacker Podcast

Episode 215 · 1 month ago

Why Champion Lifetime Value is Critical

ABOUT THIS EPISODE

In this episode of the Sales Hacker Podcast, we have Christian Kletzl, CEO and Co-Founder, UserGems, a fully-automated, AI-powered rev gen pipeline. Join us for an energetic conversation about champions and their lifetime value.

What You’ll Learn

  1. The importance of following your champions
  2. Valuing personal connections in B2B sales
  3. The lifetime value of a customer who loves your product
  4. Delighting your buyers consistently reduces churn and creates advocates

One, two, one, hey everybody at Sam Jacobs. Welcome to the sales hacker podcast. Today on the show we've got Christian Kletzel. Christian is the CEO and Co founder of user gems, really really cool company that's focused on pipeline generation by helping you track your champions as they move from job to job to job, so that when your champion leaves one company, you know it's a churn risk and when they join another company, you know it's a purchasing opportunity. So really cool conversation, really cool company. Before we get there we'll hear from our sponsors, of course, but I hope you enjoyed the interview. This episode of the Sales Hacker podcast is brought to you by outreach. outreaches the first and only engagement and intelligence platform built by revenue innovators for revenue innovators. Outreach allows you to commit to accurate sales forecasting, replace manual process with real time guidance and unlock actionable customer intelligence that guides you and your team to win. More often, traditional tools don't work in a hybrid sales world. Find out why outreaches the right solution at click dot outreach dot io forward slash thirty MPC. That is click dot outreach, dot io forward slash thirty MPC. This episode of the Sales Hacker podcast is sponsored by pavilion. Pavilion is the key to getting more out of your career. Our private membership connects you with a network of thousands of like minded peers and resources where you can tap into dozens of classes and training through Pavilion University. Make sure you take advantage of the pavilion for teams corporate membership and enroll your entire go to market team in one of our industry leading schools and courses, including marketing school, Sales School, Sales Development School and Revenue Operations School. Unlock your professional potential and your team's professional potential with a pavilion membership. GETS STARTED TODAY AT JOIN PAVILION DOT Com. Once again, that's joined PAVILION DOT COM. This episode of the Sales Haccer podcast is brought to by varisson. High Performing Revenue Organizations have a plan for growth. Get Yours with varrison. SET SMARTER goals and design territories to maximize your revenue potential. Create incentives that motivate the behaviors needed to achieve your goals. Use Ai of an insight's to make better decisions and outdo previous performance. Learn how verisent can help you create a predictable growth engine. At verisent, dot com forward slash sales hacker. Again, that is Veri sent, dot com forward slash sales hacker. Today on the show we've got Christian Kletzel. He is the CEO and Co founder of User Gems, a pipeline generation software that surfaces buyers that matter most to you. Before starting user gems, he worked at Google, Microsoft and McKenzie and as originally from Austria, Christian, welcome to the show. Hey, sa I'm very excited to be here. We're excited to have you. So what we like to do is we like to start off with what we call a baseball card, which is really an opportunity for you to give a high level summary of the company that you started. So user gems, tell us what you I read a quick description, but tell us in your words what do you do? You know, how do you do it? Give us a little bit of the pitch. So use the terms we we help you find the Bios, the metamos to you and really the idea is that as a company, you already have users, you already have buy is, you have people...

...that love the product. But in this current economy and the previous one, these people change their job all the time. So what we do is we track those people for the job changes and we let you know who left, because that actually that can create a churn risk. But we also let you know where they went to and then you can sell to them again, and we are seeing that this play generates much, much higher response rate and ultimately generates a lot of new business for companies. That sounds very, very useful. Tell us a little bit about the origin of the company. How did you get the idea for it? How did you birth it? Birth birth is actually really interesting here. Like I think the question is how far back do we go, because as far back as it's interesting. Oh my God, so we go back to sometimes a fertilized egg split. Now, so I'm an identical twin and together with my twin brothers, so we started a company that was in and we've been working on different start tips ever since. Have pivoted a few times. But to come back to actually your question. So we were running a company. It was called smart hires and it was like a candidate sharing network between like minded companies. And we noticed that one of our customers changed their job and we tracked them down turned them into a customer again, and we thought, Hey, this is really easy, and then we said, Hey, maybe we can program this for us, locked ourselves actually into the Austin Alps and developed like a very prototype of this and and this prototype we then told other companies about and they were much more interested in this version, like in this new product that we're having, than the existing one, and that's when we decided to completely switch to that. And you, and you became user Jim's in and you raised twenty million dollars from craft. When did you close that round? So we did a seed round beginning off last year. That was like two and a half million and then we did the series a end of last year, so in October. And do you do you feel like that was well timed? Are you excited that you close is in October, or do you feel like the company's valuation has taken a hit so you're not sure if you're excited so that. I think there are two things here. I think it was the perfect time to raise Um as long as you're doing it in a realistic fashion. I don't think that our revenue multiple was ridiculous the way you hear it in some stories. So we've actually grown, even this new economy like already grown back into the evaluation and I would think that we are now already at the high evaluation than we work when we raised a seriously. Well, that's great. And and so talk to us about some of the lessons that you've learned, because you've been working on one form of this company or another for close to ten years. It will be ten years next year, nine years now. What have you learned in terms of like the biggest lessons from building companies and running startups? Yeah, I think I think the biggest one is really knowing when to give up, but also knowing when not to give up. And when we were working on startups that that work, I was always reminded of the B...

...and b they talked about the thousand days of pain. So it took them a thousand days where there was no growth at all until they did something right and then the growth accelerated. And I think this is always the reminder that, like so many of these things, actually they take time. Like so often I remember myself being super excited. Okay, this is it, this is phenomenal, and then the market response was like man, and then you you change things. But the important thing is, when are you so close that changing can help, and when is it actually so far off that it's better to just stop doing and do something completely different? And how do you know that? Like what? How do you know that? Because that is the hardest thing. Some people might struggle for a thousand, for two thousand days and feel like well, I listened to the podcast with Christian and he told me to not give up and they might be on the wrong track, whereas somebody might give up after five hundred days and the five first days when the right market or the right opportunity presented itself. The market is a hard one, but the way we always did it it. At what point can I say that, a, we've tried every crazy variation of this, like how crazy can we go? And let's try this, like this comes back to do things that don't scale. So how crazy can we go in this? Even if this, let's say, even if it works, this might be too crazy in terms of like how much effort is required. So we always went all the way, and if it then still didn't work and we were convinced that even another person wouldn't be able to turn this into something that works, then we knew we this is the time to stop. And how do you think about capital efficiency and cash flow management as you're working towards product market fit, versus now, when it feels like, Hey, if you've already grown into your most recent valuation, things must be going really well? These were probably paying for lessons, but we've always been very capital efficient because we had to. There was no other option for us. So it was always how little money can we spend on giving this a try, and I feel like this actually helped us quite a bit. Even now that we are well capitalized, we still have that mindset and we're still not spending and I think that lesson actually once again became very valuable in the last few months. Were now capital drives out. Have you shifted your growth plans in any way as a result of what we will call the economic uncertainty? How do you think? You know, have you adjusted things, or you're saying no, we we built the plan reasonably and we're I'm just we're just gonna stick to our knitting the two answers to this. I think so. We our plan by definitions. Always we wanted to be in the like eighties, nineties percentile of similar companies when it comes to company growth, and that part didn't change. But I think what changed over the last few months is more what does it mean to be in the eighties or nineties percentile? And for us this means that, because companies are saving a little bit, like we were, tusted a little bit, but more in the range of like five ten percent lower growth goals, that still put us into this this high riser category. And you are your portfolio company of craft. So you're probably on the famous...

...zoom call with David Sachs where he said you're gonna need what did he say? Like thirty, thirty six months of runway? Did anything change after after that guidance, or you felt like you know what, we're doing things the way that we want to do them? I think there's there's certainly a realization about the importance of that guidance. I think that that really hit home after that zoom car. I think what actually is really interesting and I think it's actually logically but it still needs to be thought through, is so our our run rate right now gives us many, many, many months. But on the other hand, the more you're growing, and even if you're looking at this very famous burn multiple, which means how much money are you spending to generate one dollar in revenue? As you grow and as you generate more new revenue per month, even if the burn multiple stays the same, it means that you're now spending more dollars per month. And I think this realization means that maybe I have a really long run rate right now, but if I continue growing and continue investing, then actually that run rate goes down every month by more than one month. And so I think this realization just tells us how to think more about how we invest our money and what does it actually mean for our run rate? And and for you it's like hey, we'll maybe, well, to your point right, we'll sacrifice a little bit of growth so that we can continue to be a company into perpetuity. Yeah, I think for us, like our goal is to be good enough that we could raise money, but frugal enough that we don't have to. And when you think about you've mentioned you know it's time to bring out the wartime CEO, which I would imagine as a Ben Horowitz reference, but tell us how you think about that relative to sort of like a peacetime CEO. Yeah, I love I love that articulate by Ben Horrowitz, wartime versus peacetime CEO, and it's all about, I think, in a in a peacetime, it seems like you have more time and actions aren't as critically like there's so many companies that can buy from you, there's so many actions that you can you can be doing and you're still going to be successful. Like everyone in a boom time, everyone looks like a genius. In in the recession time we're right now, I think everyone must be much more deliberate, you must act much faster. So it's it's much for us. It's much more focused on the vary essentials in product development, in selling, so that everything we developed we developed quicker. There's an urgency behind it and we can go to market faster than maybe it was necessary before. Are you continuing to invest in, you know, building out the sales team? Have you shifted or reallocated any resources? We're thinking through for which positions we're hiring right now. We had a really we hired a lot of people over the last three months. We certainly still want to. We're still hiring a ES. We have seven e s right now. We're still hiring probably four or five more over the next six months, like this year. So I think there's always the thought should we hire a little bit slower than we did before, but certainly we're still hiring and growing the company awesome. Now one of the things. I think it probably relates to the mission of the company, but you have this concept which I've never heard before, so I'm excited to hear you tell us what it is. Champion LTV, champion lifetime value. Talk about what that means...

...and why it's so important. M I think so. Obviously it applies very much to to our company, to what we're producing, but I think it's actually the shift from B two. B was always like it was businesses by, but I think because of B two, b always emulates B to see, so it changes more into it's actually not companies by, it's actually individuals by. It's kind of like companies paid, but the individuals actually buy the product, the champions by the product. So it changes from selling to constitute two businesses to actually selling individuals and what this that means for us is that as you create products, as you sell product and you get new users, these users change their job, these users or arrive at new companies, and then they actually can buy your product again. And for us that's actually really the indicator. Do you have a successful product? Because as these people move, they see they need again, that they want to purchase the product. So for us, lifetime value previously was always focused on companies, like how long does this company stay a customer? But when you can actually think about like one customer that I'm getting and if I'm getting ten users out of that customer, these ten people moved to new organizations, then actually, because of this one sale that I made, I now make five additional says as they move on. I love that and that's obviously what user jumps can help you track. Right. Absolutely, and I think that what's really interesting here is that it actually it becomes then a product decision, because this is how product can actually help says directly. Like if if product thinks about how can it make this not only useful for the organization that buys the product, which right now was to focus, but rather how can it make this useful to more and more end users, then as these end users change, my sales team has a much easier time. There's almost an argument. I'd love to hear your perspective on this, for it's sort of like the boundaries between company and individual it shift, because you might want to create some kind of user profile for the user that is persistent across multiple companies, but I'm sure the companies themselves probably are sensitive about their data. So I'm wondering how you think about that. Yeah, and I think, once again, that's because we've seen that people stay for a short amount of time at each company, that they change way more often, which means that, yeah, totally, this person that like three years ago purchase a product here already changed their job two more times, and it's for me, it's really interesting to see how did they use the product across all of these companies. What's your success? So, as you're saying right now, I maybe have all this product data from let's a panda on how they used it, but actually, can I combine this with the previous data I already have about this person, with the NPS score that I already have from this person from the two companies that go? So I think it requires like a kind of like a almost you know, which maybe like as a blockchain reference or something, but like a person as to...

...notion of a human. That trend that GOES FROM COMPANY TO COMPANY TO COMPANY IN A B two B context. Yes, absolutely, and I think that that requires the rethinking of even how the crm handles data, and we do see our customers already thinking about this. We have several customers that treat a person as a person and then, like, even if they were at three different companies and then you just associate this person with those companies in this year M I love it. One of the things that that you've said is, Hey, if you're not ashamed, you launched too late. Tell us a little bit about what you mean there. Now, I think it's it's really interesting because it's it's this one advice that everyone repeats were you always want to get feedback from the market. So the earlier you can go out to the marketing then get the feedback, the better it is. Put a product development. I think where I have the problem with is everyone in retrospect says like, I should have launched earlier, and if you're not ashamed, then you actually launched too late, and this means like if you if you waited until you actually had a decent product, then you wag it too long to get the FEEDBA from the market. I think this is always advice given and I think this is always advice that I've actually never seen being implemented, because if your product is sometimes you can launch too early and it can be that the product is so bad that you actually not getting good advice or not good customer feedback from something that got launched too early. So how do you know? How do you know the right time? I guess it all comes down to judgment. Yeah, I think there is a time where you need to talk to the customers in the prospect in the first place and you need to get their input on your ideas. But going out there and then showing the product and, let's say, launching on a product hunt is a thing that you can't do that often. So it needs to be something that already worked. So I feel like the the idea is more get the customer, to get the prospect feedback on your idea, then develop and then you should have something that actually works and then go up. Let me ask you a question of just being a CEO what anything? You and your twin brother have been working on this for for a long time and I'm sure many stages, to the point of frugality. Right it was just you and him and now you've got forty five people at the company. Anything, any skills that you find are underdeveloped in you that you think you need to improve upon, or parts of the job description that sort of surprised you that you're working on? I think that I don't know if I can pinpoint to a specific thing because there's so many, in the sense that in every stage of the growth of the company I'm expected to do different things, right from like I was the first developer, then I was the first sales person and now managing a sales team or managing a customer success team. And I think the hardest part for me is actually letting go of these tasks that I did in the previous phase of the company, and so I'm always I always need to reevaluate the things that I'm doing. Are these actually the things that I should be doing, or is...

...just someone else in the team that maybe can do even much better than than I can? That makes a lot of sense. Is there any is there any new function that you've actually been surprised that you really enjoy maybe it's like running a sales team, for example. I think it's the whole sales process. Is actually that what surprised me, how much I enjoy it, mostly because I'm an engineer by heart and engineer by trade. I remember the first time I started my work at Microsoft, and and with me there was a colleague that started in sales and this it looked to me like a very different function where I wouldn't feel comfortable and because I was like this introvert is more in tech than actually the personal interactions, and I think it's very easy for me. It's very interesting for me to see how sales can also be trained, and now I actually really, really enjoyed in talking to prospects, talking to customers and finding out can we help them or not? It's really interesting because you've got these users that are moving around. That's what you sell, right, the ability to track people over time. What's your perspective on, you know, the next six, twelve, eighteen months? Are you? You mentioned sort of like wartime CEO. Are you? Are you optimistic or pessimistic about the overall kind of market conditions, or do you find them irrelevant to what you do. I don't find him irrelevant. Like we're certainly not in a vacuum, and as companies maybe need to tighten their budget, it also means they can spend less than new tools. On the other hand, I think we're in a position we help companies generate the pipeline and we help them generate new business, which I think might even be more important now than it was even before. Like we've heard over the last two months that the pipeline decreased quite a bit. So we can go in and can actually help you generate pipeline immediately, and that's maybe exactly something that you need for your next board meeting. So in that sense, I certainly see us as a need to have in this economy. That makes a lot of sense. We're almost at the end of our time together Christian and one of the things we like to do is sort of pay it forward a little bit. Understand who are the people that have influenced you that you think we should know about? Any particularly big influences? They can be authors or famous people, or they could be board members, but who are people that have played a big role in your life? Do you think we should know about. I think there's so many, just from it, because I've worked on this, on the different start tips for so long. There's so many people like that. It's always the first person that that helps you with anything, and that could be like I'm thinking of when we started to start, that we were part of an accelerator. That was even before why Commanda. There was the founder of open table, Chack Templeton, who took a chance, at risk on us, helped us figure out how do you actually run a start of? What do you actually need to do? And then, I think this at every stage, there was Y C, where a lot of the partners that helped us in developing this new product, the new tool, developing ourselves and then really even going as far as to say our first customers, like even now, like when we have hundreds of customers, I still think back to the ones that were. I was the first days person were. They actually took...

...a chance on us, and I think these are actually the ones that are most valuable, the ones that take a chance on new startups. Well, let's let's give them some recognition. Who is your very first customer? What company or person? Paris cupe data was the very first one tom and Harry at the Great Company. Christian, if folks want to reach out to you, maybe they want to purchase user gems or maybe they have a question for you. What's the best way to reach you? It certainly is email. I think that's the only thing. That's the one I'm trying to get too in book zero every day. So it's Christian at us a gems dot com. Wonderful, Christian. Thanks so much for being our guest on the show this week and we're going to talk to you on Friday for Friday fundamentals. Awesome. Thank you so much for having me. This was really great. Everybody, Sam Jacob, SAM's corner. I really like that conversation with Christian Kletzel. He's he's an introvert that was braving the podcast world. I think he did a great job and he's really built a really cool company, because it's so true. Everybody's been in that situation where your buyer, your champion, leaves the company all of a sudden. There are a major and risk whereas, where did they go? Let's make sure we find them wherever they went, so that we can sell them something, hopefully again. And it also sort of speaks to this notion of like, as Christian mentioned, like the consumerization of the B Two b enterprise world, of thinking of individuals as sort of like part of the gestalt as opposed to thinking of the entire organism as a quote unquote company. So it's a really cool it's a really cool idea. I'm sure clearly they've been doing really well. And then the other concept, you know, relatedly of course, is this concept of champion LTV. What's the lifetime value of a person that loves what you do if they go from company to company to company, constantly purchasing your product? And there's so many people that are they're so excited to be one of those people. They're excited to be the person that bought, you know, outreach three times at three different companies or bought pavilion three times at three different companies. So I think it's just a really cool concept and it sort of gives a fuller perspective. But it again, of course, it puts the emphasis on making sure that all of your individual users are delighted so that when they go to different companies they can advocate for the purchase of your solution. So that's cool. Now of course. If you haven't given us five stars on the itunes store, please do so. You'll hear from our sponsors in a second and we appreciate it. And if you want to get in touch with me, you Ken, you can email me Sam at Joint Pavilion Dot Com. You'll hear the pavilions, one of our sponsors. But you know, we've got these recession education packs, basically selling through a downturn, marketing through a downturn, customer success through a downturn. So if you're worried or you're thinking about your team and how they're going to navigate the coming economic volatility, I think this might be a really good solution for you. You can learn more at joint pavilion dot com or you can hear about it if you follow me on Linkedin. Otherwise, I'll look forward to to talk in you next time. Thanks again for listening. I hope you have a great week. This episode of the Sales Hacker podcast had three amazing sponsors. The first is outreach. Outreach the first and only engagement and intelligence platform built by revenue innovators for revenue...

...innovators. Go to click dot outreach dot IO, forward, slash thirty NPC were also brought to you by pavilion. The key to getting more out of your career en role in sales school, Sales Development School and Marketing School, and our upcoming recession education pack, including selling through an economic downturn, marketing through an economic downturn and leadership through an economic downturn. LEARN MORE AT JOINT PAVILION DOT COM and, of course, Verissin high performing revenue organizations have a game plan for growth. Learn how verissent can help you create a predictable growth engine at verissn dot com. FORWARD SLASH SALES HACKER.

In-Stream Audio Search

NEW

Search across all episodes within this podcast

Episodes (407)