How Robbie Traube is accelerating growth by focusing on selling in ways that create customer value
Our team of experts from the Revenue Enablement Institute studies how leading organizations are transforming their commercial models to accelerate revenue growth. We profile growth leaders – CXOs – who are at the forefront of defining and enabling the 21st Century Commercial Model.
Robbie Traube is the Chief Revenue Officer at Zuora (ZUO), a company that provides cloud-based software that enables any company in any industry to successfully launch, manage, and transform into a subscription business. Zuora’s mission is to help every company to win in the “subscription economy”- where some or all of their income comes from recurring revenues based on product usage, users, period, utilization, consumption, or other measures of value received.
Enabling the “subscription economy” represents an extremely large and growing market. Research from UBS predicts that this “subscription economy” will double to $1.5 Trillion by 2025 as people buy everything from software, socks, and razors to gyms, entertainment, and restaurants to cars and car washes on a recurring basis.
It is likely to continue to grow. Subscription-based businesses have grown almost six times faster than their “product-based” peers according to the Subscription Economy Index, an analysis conducted by a Zuora’s Subscribed Institute. Most (53%) boards of traditional businesses are pushing their CEOs to repackage their products and services as subscription pricing models, usage-based models, or cloud-based offerings according to a report by CFO Magazine.
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This has made driving top line organic growth a top priority at Zuora. “Driving growth is a top priority for us because of the size of the market we are leading and investor expectations that we are a growth company,” says Traube. “But it cannot be growth at all costs. We need to stay committed to long term growth and customer success. To do that we focus on selling in ways that create customer value.”
To realize the potential of this large market, the company has invested in product innovation along the entire subscriber lifecycle – from quoting, to billing, to revenue recognition and collections. “Revenue automation requires many capabilities,” Traube points out. “Billing is important. But finance teams have learned that revenue recognition and visibility (forecasting) of complicated subscription packages is very hard to do on a spreadsheet. Salespeople need tools to quote complex combinations of subscriptions, products, and services based on a variety of timeframes, terms and frequencies. Also, shifting to recurring revenues changes the cash flow profile of the business so collections become even more important.”
Introducing these innovations to new and established clients while maintaining high levels of customer success and adoption can be tricky. Traube has worked with his peers in engineering and finance to define and enable a “land and expand” selling motion and a go-to-market organization that emphasizes long-term strategic relationships that are unique in the industry.
“We’ve been through an 18-month transformation where we are getting the customer success side and the product innovation side working together in concert,” reports Traube.
“It’s been truly a team sport where my team works very closely with engineering and finance to create an optimal go to market,” he continues. “We are a product-led organization because innovation is such a critical growth driver for us. So it’s important to have engineering work with sales. Finance has also been a big part of the process because we need to present accurate forecasts and efficiently allocate our resources in a very dynamic marketplace.”
Over the past two years Robbie Traube has transformed Zuora’s commercial model to meet the evolving needs of new subscription-based businesses and help traditional businesses migrate to subscription-based selling.
“Developing your core customer base while adding new business accounts is difficult,” says Traube. “It requires mixing in new business motions (customer acquisition, upselling, and cross selling actions) while maintaining customer satisfaction (like client education, onboarding, and adoption). That’s hard to do. In a sense it’s like rubbing your stomach and patting your head at the same time.”
“All of our customers are going through transformations in the way they sell, price, and bill,” he continues. “They are all at different levels of maturity. Some are born and bred on the cloud. Others are traditional businesses that are transforming some or all of their revenues to a recurring model. It’s important to us that we meet our customers where they are in their transformation journey to a subscription model. Sometimes that means helping them walk before they can run.”
According to Traube, understanding where customers are on the maturity curve is important because management teams can sometimes be overzealous about moving to recurring revenues before they have established an “order-to-revenue process” to ensure their revenue teams can configure, bill, recognize, and collect recurring revenues without errors, inconsistencies and cash flow issues.
“The key for us is adding value at every step of the maturity curve and every stage of the relationship – from implementation to innovation,” he continues. “We have developed a well-defined and highly optimized workflow across the customer lifecycle that ensures we deliver value in every aspect of the implementation – from the time it takes to go live, to the time it takes to realize value from the solution, to the process of continually improving the performance of the client’s monetization process. Introducing product innovations that help the order to revenue cycle is part of that. You need to keep adding value.”
Traube relies heavily on his sales operations team to inform and enable these highly prescriptive sets of sales motions. He regards operations as the heartbeat of the business – because of their role providing insights and prescriptive guidance to revenue teams. “We have well defined sales motions for developing accounts in the short term (in quarter) and longer term (a one year account plan),” says Traube. “There is a clear point in time in the customer lifecycle when you can upsell and cross sell. You need to know when that is.”
To help their revenue team zero in on the right actions to add value at the right time, Zuora has become very data-driven in its selling approach. Traube’s operations and enablement teams have enabled data-driven selling with a robust set of customer engagement data from recorded conversations (Conversational Intelligence), Customer Success, CRM and Account-Based Marketing tools. Product telemetry data from Zuora’s SaaS solutions helps them understand both how to help their customers and how effective their solutions are delivering for their customers’ customers. This gives them a 360 degree view of where they can add value in accounts and when the time is right to introduce new product innovations.
“Our Sales Operations leader, Ted Gumerson, does an excellent job of aggregating customer data from our customer conversations, sales transactions, CRM and our products to inform those selling decisions,” says Traube. “We use this information to direct account teams – or what we call pods of account managers, marketing and sales engineers – about next best actions and to execute Account-Based Marketing. This helps our front line sellers to think globally, act locally, and respond to the market in real time.”
The results have been strong. By focusing on long-term customer value and adding value at every stage of the relationship, Zuora has achieved a blend of healthy long-term relationships, recurring revenues, and relationship expansion that is remarkable. In the last quarter, Zuora was able to deliver a dollar-based retention rate of 110%, eleven points higher than the last year, and five points above their goal to exceed 105% dollar-based retention rate by the end of the fiscal year. It’s also the highest level the dollar-based retention rate has been over the last 10 quarters. Annual Recurring Revenues (ARR) grew 19% year over year, two points over Zuora’s 17% ARR objective for the fiscal year. Zuora’s ecosystem of global system integrators and strategic partners also continued to grow in Q3. Now with 200 globally certified consultants, over 40% of Zuora go-lives in Q3 involved a system integration partner.
Robbie Traube is the Chief Revenue Officer at Zuora