Joey Knecht, CEO of Proteus talks with SaaS Backwards host, Ken Lempit from Austin Lawrence about how he manages his SaaS to success. He measures a lot but is unusually focused on the value of relationships. In this wide-ranging conversation we cover buyer enablement, the role of the CEO as the company scales up and what's working for his BDRs today.
Click HERE to listen to the full episode.
Ken Lempit: "Our guest today is a serial and concurrent entrepreneur, Joey Knecht. Welcome Joey."
Joey Knecht: "Morning."
Ken Lempit: "Today, we'll be focused on his SaaS for Buyer Enablement, ProteusEngage. Proteus is interesting and that it's a SaaS that sells often to other SaaS firms. So he has insights to share on the internals of marketing and selling, as well as what it takes to close a deal with a SaaS buying group. Hey, Joey, before we get going, could you tell our listeners a little bit about yourself and your company?"
Joey Knecht: "Yeah, you bet Ken. I appreciate the time. Yeah, a little bit of background on me. I grew up on the East Coast, but now have the the fortunate pleasure to lead a great company called Proteus based out of the Midwest. We're based out of Lincoln, Nebraska. I've been with the firm now almost 22 years. And so I've personally been involved in hundreds of SaaS products, plus we've been investors and part of scaling 13 plus SaaS companies. So really been involved in that high growth software as a service industry for a long time now, before it was even popular. As you know, back in the day was what, 'What? It's all going to be virtual? No server sitting in our office.' So it's been a fun run. And most recently in the last two years, I've had the opportunity to lead our new product called ProteusEngage, which is a buyer enablement product, which ironically has germinated from just how the B2B selling process has dramatically changed. And this is environmental. But one of the leading indicators of it was just how many people are involved in a sales transaction. And I know your listeners definitely assess companies when they're selling something, there's anywhere from 3 to 8 people on the selling side and now 5 to 20 people on the purchasing side. And so this many to many relationship has caused a lot of problems for marketers and sales into SaaS companies just because of the complexity. And how do you get all the stakeholders on the same page? And so look forward to talking more about that. But really, that shift has been a main indicator of what's been changing in the SaaS industry itself, selling into SaaS."
Ken Lempit: "That's perfect. Thanks so much. Let's dig right in here. One of the things that's often elusive is having a proposition that resonates with the prospect. So how did you guys get to your value prop that buyer enablement is the new sales enablement?
Joey Knecht: "Great question. You know, and I think naturally people are afraid to talk to their prospective customers or their current prospects. Right. But one of the things we did Ken is we actually were honest and said, hey, what are what are your number one bleeding points in kind of your sales or marketing process? And it germinated up that that was really a qualified to close issue. Many groups were working on lead generation and we're finding solutions for that. But they were really missing this, qualified to closed. And we said, well, why is that? And they said, well, a lot of sales enablement tools are more for just pushing out content really, really fast. How quick can we get a PowerPoint out? And I get it, that was more from a sales rep efficiency perspective. But what they really were saying to us is we're missing developing relationships during the sales process. We're really not developing deep, trusting, relationships with our prospects because they're going ghost on us and they're disappearing. And we're not getting enough feedback to align our value proposition the right way with them. And so we said, well, why is that? And then they're like, well, there's so many people on both sides, it's hard to get everybody together. So naturally, we started to figure out our prop was really germinated from talking to our clients and then coming back to them and saying, here's what we're thinking. What if we did this? Could we help your buyers buy? Can we help your buyers buy? And they're like, well, yeah, that's exactly our problem. We want our buyers to buy easier from us and have a relationship with us. And so we were very candid in using our clients and initial customers to help us figure out. And of course, it wasn't right at the beginning. It evolves over time. But that openness of them helping us figure that out and then support us selling into other companies was a huge benefit for us as we tried to align our fit in our sales process. And remember Ken, it's kind of unique. We drink our own Kool-Aid. We're selling a product to SaaS companies, and we also use the product ourselves. Right. So we're actually users of the produce we're also trying to sell. So it's a unique circumstance where we're able to be very transparent about helping us be more successful."
Ken Lempit: "So everybody is your product management experiment, right?"
Joey Knecht: "Yeah, you know, that's the fun of it, you know, and if you can't pivot on every comment either, right. You've got to look at it in more of an aggregate, you know, taking in the feedback, but really listening for what they're saying and what they're not saying. And that really navigated us to really figuring out that this really this ecosystem of where in B2B sales and especially to SaaS companies, there's so much complexity in a SaaS sale now and it requires so many stakeholders.How do you equip your internal champion for success? Right. So everybody listening, the marketers, the sales. Right. They're selling into SaaS companies or they're trying to sell their SaaS to another group. It's very complex and you know, everything about your product. And then you're meeting this internal champion and that internal champion is trying to sell your product internally. How do you equip that person for success? And this is where we kind of get to that buyer enablement side. It really isn't about empowering the sales. A lot of that is done online, prior to the interest in your SAS product. 70 percent of the research is done online about your SaaS product before they even reach out to you. They've already narrowed it down typically to three companies. So the expectations of your buyers is to take them through a consultative sell to align fit of how your product and or SaaS service can help their business be more successful. We have to shift the thinking in SaaS sales from thinking we're selling software. We're selling success, we're selling growth for them, we're selling opportunity for them and how that makes their whole business successful. Not just a plug in to one little area of that, how can you help us be more successful? I really think of it as more consultative sales now."
Ken Lempit: "I love that idea. We sell success. We're going to help you achieve what's important to you. And oh, by the way, that helps us too."
Joey Knecht: "100% and that's not just by pushing brochures out to them. It's about understanding their needs, wants, desires. Their 3 to 5 year plan for growth. Right. How can you align with that? And in some circumstances, it's not just introducing them to your product. It might be introducing them to complementary products that they weren't aware of that could also help them in their success, ultimately trust. Right? How do you build trust and relationship to help them grow that? Because SaaS is very complex. Software is very complex. There's a lot of risk to it, again, depending on the the price of your SaaS. But if it's a typical B2B SaaS software that, lets say the client is investing more than $30,000 on. That's going to bring a lot of people to the table. I don't want to say Ken, how old you and I are. But back in the day, we could sell $200,000 deals by shaking one person's hand. Now you sell $25,000 and I got 20 people on the deal. And so the world has just dramatically changed with the amount of influencers and stakeholders in it. We also found with a lot of SaaS companies was their deal was being killed by this mythical person. You're talking to 2 or 3 people and they love what you're doing. But this fourth person, that you've never met, is killing the deal. And we were trying to figure out why. And that was because those people weren't properly positioning the product in deeper into the organization, a.k.a. those go stakeholders that are killing your deals. That's a big thing. You need to figure out and figure out how to get that communication and equip those people with the right marketing to get that person on board. It's complex, but it's a big challenge."
Ken Lempit: "So we've uncovered a new actor here in the SaaS sales team, the mythical deal killer."
Joey Knecht: "Yeah. And their there trust me. It's commonly known in sales as ghosting. Ghosting blames the people you're talking to. Most of the time, it's not the people you're talking to. They've been told to stop talking to you. And so you have to understand a lot of time. That's why when you call them and you're like, 'How are things?' and their like, 'Oh, it's going well.' And you're like, 'Why isn't this deal moving forward?' Well, I don't know. It's because someone else is misinformed about your value prop and they're tampering down your opportunity. And so that person is just getting quieter and quieter, even though they might like your solution. We've seen it a ton of times and we work with partners, obviously, to help figure out how you can communicate that in and build that trust overall."
Ken Lempit: "So let's move on a little bit and talk about fit. What are the buyer pain points that make a prospect a good fit for ProteusEngage? And maybe a little bit of time on that. But more importantly, how did you suss that out? Probably one of the one of the pain points our listeners truly can relate to.
Joey Knecht: "Yeah, you bet. So, like anything, we've been involved in a lot of high growth companies. And for me, it always starts with finding a root problem. So any time we're looking at building a new technology or solution, we want to make sure we're solving a true problem. So that starts a lot of times and just having candid conversations with no intent to sell anything and to get research going. So when we first started our opportunity and this was only about two years ago, Ken, so we started interviewing more than 100 client success officers and COOs and marketing leaders and kind of walk through the challenge and their pain points. And again, as I mentioned earlier, we kind of aggregated those pain points to come up with this model of what buyer enablement could be. How can we equip buyers to be more successful? And this is all because there's a seismic shift going on from people wanting to consume. Buyers want to consume information on demand, on their schedule. Everybody listening here has a Netflix account and a Disney+ account and everything on their phone. It's a consumer led, buyer led journey now. So the power has shifted dramatically in SaaS sales. So we have to be able to equip the buyers with the right information to make the right decisions internally and their organizations. And that's by having a strategy to do that and also recognizing you have different types of people on the deal. Right. So we have partners that are selling into health care. Well, you need to understand that there's a compliance per view, right a persona. There's a CFO persona. There's all these different personas that aren't. So one size does not fit all. And you need to have a strategy around that to do that. It's not by accident. You have to figure out what is your strategy to secure those deals and make them successful. And we do the same exact thing Ken, on on wallet share basically current clients and educating them and taking them over the line with up sell opportunities, because many groups just don't have any strategy around that. They're hoping and praying that the clients are going to buy more. So our typical archetype of client is someone selling something $50,000 or more in lifetime value and typically involves obviously multiple decision makers and typically has a longer sales cycle, which pretty much every SaaS company that is selling into enterprise or mid-cap business. That's the opportunity. And we work with tons of them already. And it was easier for us to get to this point because we were a SaaS company and involved in so many SaaS companies. This bleeding point was actually one of my own pain points, and that's how we originally came up with the idea and and validated it."
Ken Lempit: "Awesome. So starting with the listening, getting the feedback, and then building that in."
Joey Knecht: "Again, customer advisory boards, looping in your customers as much as possible into the experience from a marketing perspective, sales perspective, and product perspective. Don't forget those first two. Everybody thinks customer advisory board is just for features on the product. We are very transparent about what's working with our market. How can we do better follow ups? All of that stuff. Let me get feedback from that. People are empowering to help you become more successful. You know Ken, the power of the ask nowadays and being like, 'Hey, can I have 10 minutes of your time? I want it to be valuable, but can you give me feedback on how our meeting recap was or how our sales process was or something about our product?' And people feel empowered and they want to help you. People want to help. And so we always say, don't underestimate the power of the current base of customers you have or even people who said no to your product, go back out to them and say, "Hey, quite frankly, why did we lose this deal?'
Ken Lempit: "Closed Lost is a big source of information. And people that churn also. Also, if you're self-confident enough to ask, 'Hey, why did you leave us?' Right? That's hard for a lot of CEOs.
Joey Knecht: "It's hard. And then it's also, what can you learn from that? And how can you apply that to your overall model so that you can have indicators of potential churn and a lot of times churn happens because they didn't recognize the true value of your product. Now, that can kind of in a SaaS world, be utilization problems or they weren't aware of features. There was turnover. And so there's lots of key indicators you got to watch out for specifically in SaaS. There's lots of tools for measuring utilization. And so as you watch those indicators, you can kind of jump in early to solve those problems."
Ken Lempit: "Let's talk about kind of contemporary concerns. How is your messaging evolved over the last six months? What are you doing to ensure that ProteusEngage is perceived as strategic to prospects and customers?"
Joey Knecht: "It's definitely been an interesting 10 months here and right as this all started to happen, I did a lot of calls with with leaders and our current customers and quite frankly, just relationships over the years that I have. And it all came back and it still is for me and a lot of our partners is empathy. We have to understand that that the world is different right now. And from a sales marketing perspective, you want to make sure that you first lead with empathy and understand that people's lives are very dynamic right now. So we always try to keep that in mind when we're talking about this topic. The second piece of that is when we strategically built out the product. Our product is used in two distinct manners, new business development, which is obviously nailing new logos. Now, we all know that has slowed down some industries. It's still there and growing, but a lot of industries have definitely slowed down. So where we saw a lot of interest and where we're helping a ton of our partners, is capital preservation. So for all the SaaS companies, obviously your listeners, a lot of them switched. And if they're not, they need to be thinking about having a strategy for redeploying their assets in marketing and sales to capital preservation of their current accounts and figuring out strategies. Because if there is going to be net new revenue in 2020 and 2021, you're looking at a lot of harvest can come from your current customer base. So figuring out a strategy for that marketing and sales and executing that against the current accounts. We've seen a shift definitely. We do see a bigger increase now in the new business side, though, we're seeing that turning on. But we're seeing, the intent of it being a little bit different. Very transparently, as I talked to, see COOs and CMOs around the country, a lot of them are looking at this as still as high relationship, period. They're looking at building relationships. And really successful groups, if you're in the boardroom now of what I'm hearing and seeing is companies are now talking about 2023. The important thing about that is, what you're doing today is going to determine whether your company is extremely successful in 2023. And that sounds a little far out, but it really isn't. What we're talking about here is building your funnel now, building your relationships now. They will turn into revenue at some point in time, but make sure you're adjusting your close, push to accommodate basically budget lockdowns or other things. Sales and marketing is is so hell bent on conversion time. Right. Time to close. Well, reality is, that's going to be longer now. And you have to adjust some of the processes you have around that to take that into effect, to build a lot of these relationships, because we're seeing a lot of companies very bullish in Q3 2021, 2022, and 2023. It's a long play now, instead of a short play."
Ken Lempit: "I'm listening to you and I want to highlight for listeners this idea of relationships to revenue. Maybe that's sort of a new sales KPI is some way to quantify these relationships that are going to take some time to develop, but could yield fantastic fruit down the road. And how do we manage that and how do we treat it as an asset and a future revenue opportunity? That's really kind of interesting. And first time I've heard that. So thank you."
Joey Knecht: "I appreciate it. And I think the other key thing, from the strategic perspective, is looking at your SaaS product that you're trying to sell in, and how can you align that to the strategic vision of these companies as they're continuing to grow. Is it that they're being more virtualize now? Are they selling into different industries? Redeploying and rethinking how your product might be able to be leveraged to stay on that budget item. As everybody's looking at 'must-haves' and 'nice-haves,' you've got to make sure you're in the 'must-have' category. So how do you align by creating value? And just like we were saying Ken, if you can align your product to heavily building relationship and maintaining those relationships for the long haul of revenue generation, then you're going to be a 'must-have' solution."
Ken Lempit: "I want to shift gears just a little bit and ask you what you believe the role is for SaaS CEOs as the scale up starts. So maybe you've gotten some investment or you're growing it just based on your internal growth. But as you start to see some acceleration, what do you see the role of the SaaS CEO? And you're a very hands on guy. If you can just offer some perspective on what you think you need to do versus what you need to manage."
Joey Knecht: "You bet. And I've been involved in a lot of growth. So I would say there's like maturation of the SaaS CEO. So a lot of proof is depending on what kind of product you're selling. But typically it's recommended that the first 50 or 100 sales are led by the CEO so that the CEO can hear the feedback and adapt the product. Then you start building out your team underneath you. But probably the most number one thing, through success and failures of myself, is making sure as a CEO that you're working on the business and not just in the business. And so, as you mentioned Ken, I like to be involved in a lot of elements of our sales process. But ultimately, if I don't think more strategically, to your question, about how does our product fit in the overall mix of our client base and how can we be strategic to get stickier application of our solution? A lot of times CEOs are kind of missing that boat big time. They're so hell bent in operating the company instead of stepping back and saying, 'How do we strategically align?' We call like a visionary kind of model of how do we make sure, how do I make sure, the company is going in the right direction and really hitting that alignment and fit that we're needing. And a lot of that is having some of those transparent conversations with peers. Right? So CEO me calls another CEO of our client or vice president or CCO of one of our client. They're going to be more willing to be transparent with me because they're going to feel like it's an OK conversation. So that's where I do a lot of that research. I'll talk to our partners and kind of help align the vision and the growth of our company. And then, remember, always work yourself out of a job. So even though you might be involved in sales in the beginning, the idea is to hire great people and have them be empowered for success. And so ultimately, it's about building out that sales process. It's about building that strategy that we keep talking about here. A lot of times people are so excited that they're buying their product that they just hire an SDR and they're like, 'Let's go.' And there's really no strategy behind that, no marketing plan around that. You've got to build the plan, but then execute the plan and be involved in the measurement of that plan, but empower others. I really think a lot of times SaaS CEOs get too much in the trenches. They need to empower others, give them a playbook, and let them attack. Let them attack and coach, let them attack and coach."
Ken Lempit: "Got it. You are still growing, even as the economy has struggled. So what are you doing to generate growth? I think if we can be as pragmatic as possible, what's working for you that we can share with your peers out there in podcast land?
Joey Knecht: "As I mentioned, we drink our own Kool-Aid. We know it's a long sales cycle. We really aren't pushing any of our prospects to close. We are high, though, on personalization. So I know a lot of SaaS companies have a tendency to churn and burn, send out the 100,000 emails and hope that starts to convert. I'll be transparent and give some of the things we're doing. So we have a high touch, personalized process. And what I mean by that is we're doing extensive research on each account. We're finding seven to ten people within that account and really, really researching each one of those, developing meaningful relationships and transferring a lot of value in that. So we're sharing a lot of research of the things we're doing and also fun things, knowing that after we have a conversation with them, maybe their kids are in soccer. So we're sending things around soccer dads and soccer moms, right? People are people. Relationships are key. So we're just building tons of those relationships. And then organically, they're starting to see that as things start to shift in the economy or their needs are now aligning with us. We're able to then begin that sales process. And then, of course, our sales process is no different than anybody else's. It's 4-6 months. We're involving anywhere from 3-5 people on the Proteus side. And on the decision making side, we got 5-10 folks there. We're taking them through and obviously leveraging our platform to help bring them together, build that trust and collaborate for alignment and success. But ultimately Ken, strategy is king, measurement is king, but then also empathy and personalization. I think we've seen a lot of success. And then other companies that were investors in, and have been a part of, have seen a tremendous amount of success in this approach. It is more disciplined. It takes a little bit more time. It definitely takes a little bit more capital, but the ROI is there. And you then have measurement and understanding of what is working and what isn't working during that journey. So we've seen a lot of success with that."
Ken Lempit: "And you're targeting a specific SWOT?"
Joey Knecht: "Yeah, a lot of our clients are SaaS companies typically generating $10 million or more in revenue. And then we go all the way up to about $2B. But we do have whales bigger than that in our portfolio. But for us, a lot of the time, especially in the economic cycles that we're in right now, some of these mid-cap companies are able to make decisions faster. They're quicker to recognize they need to do something differently with all the things that are going on. So we kind of looked at that. So I also encouraged the SaaS owners, you might have a portfolio and let's say you're selling in the hospitality, health care and financial services or something. Look at your verticals, because a lot of times, out of those verticals, one might be a lot hotter than the other verticals are right now. So redeploying assets and doubling down in one industry. But then don't also forget about the other industries. But I do see a lot of our partners kind of getting more focused and maybe one of their verticals just because of the financial challenges and some of their other verticals."
Ken Lempit: "So it's really interesting. So if hospitality and travel are a vertical for you, those folks are really struggling. Here's an opportunity to really build relationships, right? What can you do to help these people in any way be successful? Even if has nothing to do with your solution, gives you an opportunity when that business turns around and people will travel. I hear reports now planes are half-full to two-thirds full. So things will change. But you have the opportunity to build some relationship there, but maybe not expect any revenue and not plan for any revenues, but expect to build relationships and maybe you can manage to that. And then all the opportunities where things are hot, maybe financial services, mortgage or real estate, where things have been on fire. That's gone hunter killer. You change what you're measuring depending on the real situation and the vertical."
Joey Knecht: "You got it. Yeah, we're seeing a lot of partners doing that. And we even have one of our partners is a very large food service company in the US and they figured out some things and they were supplying that to restaurants that aren't even their clients. They were providing things to restaurants, resources and things that weren't even their customers. And ultimately, that is what America's about. Right? As a CEO, that's what this is about. We have a blessed opportunity to be growing companies, but we also have to realize we're blessed that we have companies and we have employees and how can we create value? And sometimes that value is not getting cash coming in the door. It's about building those relationships and those relationships, if and when you do it right, will pay off at some point in time. And it's not going into them looking, how can I make money off of you? Just be a good person and help others and they'll help you back. Right? Let's just keep it simple here. Relationships are king."
Ken Lempit: "Wait. Are you advocating being a good human here?"
Joey Knecht: "I know. You know how it is Ken. Let's keep it simple. Sales is still about relationships, right? It's about building trust. And ultimately, over time, those will provide value in both ways, hopefully for the partners.
Ken Lempit: "Yeah, sure. I mean, I play the long game of relationships that spanned decades. Absolutely hear what you're saying. You know, you might spend ten years with a business friendship and it never turns into anything for either of you except, a cocktail, a coffee, or a conversation. And then all of a sudden somebody moves to a new place and they need some help and they think of you or you need them. I think the key finding here is, how can we make more of an effort and be empathetic when the only thing we can build is relationships? What do we do about that? So I think that's great. We want to know if there are any benchmarks that you're most focused on today. I mean, this situation is very different than it was this time a year ago. You have your KPIs changed? I mean, we talked about relationships, but what else you got?"
Joey Knecht: "Yeah, we're really sticking to the plan and the strategy because ultimately it is still about reaching people and building trust and relationship with them. We do see obviously closing cycles getting longer in some verticals. Not all. Some are closing way faster than we used to. So there is some updates in closing times there. But ultimately for our team, it truly for our SDRs and our AEs, we're really still focused on identifying the right archetype clients. Again, going back to strategy, our Glengarrys. Who do we want to go after, this client? Ok then our 7-10 people underneath that and, with discipline, start to build relationships with them. From that perspective Ken, we haven't shifted course there. We're staying with the path of building trustful relationships. Some of the downstream KPIs, obviously closing time and use case of the product. For us, we had a bigger shift to clients using us and buying us right away for current account nurturing and cross-selling. So we did see kind of a bigger emphasis of that. And we're starting to see that level out now a little bit back down to almost 50/50. So we are seeing the economy as a whole come around and people believing more in new business development now, which is a great sign. So overall, that's really just been our shift. We believe in our strategy. We execute against that and we're still having success."
Ken Lempit: "Awesome. Awesome. Hey, was there anything that I didn't ask you about that you wanted to bring to our listeners today?
Joey Knecht: "I think the important thing, as a SaaS CEO and being involved in a lot of these things, I like to say never settle and basically always be looking at how to improve. And a lot of that comes down to candid relationships. And I know Ken, you and I talk and I have another sphere of influence friends. You go out and you and you tell them really what's going on. Be honest. Tell them here's where our company is doing well, here's where we're struggling, and here's where the opportunities lie. Can you give me ideas and can you help me be successful? Can you help my company be successful? And that power of community is something a lot of SaaS CEOs don't really think of. They think they're in the grind and it's midnight and we're punching out stuff. But the reality is, there's a lot of us. And by going out and talking with others, that can really, really help grow your business. Even in a peer industry or something of that nature. It's helped me a lot continue growth of our enterprises by just doing that. Talking to friends and other CEOs of SaaS companies and saying, 'Hey, this is where I'm struggling. What did you do to be more successful?' And it really, really helped out."
Ken Lempit: "Awesome. I think we're going to land it there. I want to thank our guest today, Joey Knecht of Proteus, for a revealing and really valuable conversation about how he's engineering success for his SaaS product ProteusEngage. Hey, Joey, how can people learn more about ProteusEngage?"
Joey Knecht: "Sure. Our website, www.proteus.co. Everything is there. Sign up. We have a lot of great whitepapers there about buyer behavior and buyer enablement and the shift that we're seeing and being validated every day. So hopefully those nuggets of knowledge can be applied to your businesses."
Ken Lempit: "Thank you. OK, that's a wrap for the first episode of SaaS Backwards. We hope you enjoyed this conversation with Joey Knecht and that you'll tune in again soon."