At this year’s SaaStr Annual, Rippling’s CRO, Matt Plank, chats with Sam Blond, host of the SaaStr CRO Confidential and former CRO at Brex, about Rippling’s top 3 growth tactics, which have led to the Rippling becoming a $14B company with several hundred million of ARR.

A few years ago, Matt was making cold calls from CEO Parker Conrad’s basement … and he’s helped bring Rippling to where it is today.  All the way to CRO today.

The three growth tactics that worked for Rippling can be categorized into three different stages:

  1. Outbound
  2. Increasing closed-won revenue rates
  3. Serving customers and expanding revenue in the base

Let’s start with outbound, where most of Rippling’s revenue comes from attribution-wise.

Growth Tactic #1: Outbound Is Not Dead

In the early days, Rippling leaned into programmatic outbound. Programmatic outbound makes sense when you’re a small company because it’s essentially free. You have to build a database and buy the right tools, and you don’t have to staff an entire SDR team. You have a virtually unlimited TAM with hundreds of thousands of accounts you could go after.

Rippling did this up until about two years ago when they ran into the constraint of not having enough accounts in the database to get the yield needed to hit growth goals for the next year. At the time, they’d reach out to a thousand accounts and get about 5-10 demos. From there, inbound SDRs would engage them. Those SDRs had quotas of 50-60 demos per month. It was a very transactional, CAC-efficient model.

Fast forward to today, 18 months after changing things up, they have about 150 outbound SDRs, and conversion is between 3-7% on those same accounts that were getting 1%. Who wouldn’t want 30-70 demos on the same accounts that previously got ten demos?

The reality is you have to find a way for your business to support the kind of investment needed to build an entire outbound team: SDRs, managers, directors, the whole machine. The average deal size and win rate have to make sense, too.

For Rippling, building an outbound team was the single biggest thing they’ve done in the last 18 months.

But couldn’t AI eliminate the need to build such a big team and be more effective than having a 22-year-old figure out how to treat an account and generate a demo?

AI vs. an Outbound Team

Many reference that outbound is dead, and AI will replace SDRs first, followed by AEs. Matt doesn’t believe that. Why? Because 50% of Rippling’s demos are booked over the phone. AI can help with a bunch of the process pieces for outbound along the way, but it hasn’t quite gotten good at booking demos over the phone yet.

There are a few reasons Matt thinks humans will always be more effective than AI for outbound.

  1. Account fit. AI helps filter out who might be a good fit to go after and why, but a person still needs to engage with those accounts.
  2. Reach. Who do you reach out to? TAM is constrained by number of contacts, not number of accounts. If you have a million accounts and one person to reach out to, you have a million contacts. If you can reach out to 6-7 people in an account, that massively expands your TAM. AI can ingest contacts into a database, but they go out of date quickly. You need humans to verify in real-time.
  3. Personalization. This is more important today than three years ago, but it still requires a human to review an AI-generated templated email. For example, an SDR had a template generated by AI. The prospect had posted on LinkedIn that their father had passed, so the AI template said, “Saw your father passed away. Sorry to hear that. You should check out Rippling.” That won’t work.
  4. Saturation. If someone comes to you from every channel, eventually, you’ll remember their name. You need to email people, call them, send a LinkedIn request, and visit them in person. AI can’t visit people in person.

You need the right accounts and the right contacts, to personalize everything and saturate communications.

Rippling’s Most Successful Outbound Tactics

Is Rippling on the cutting edge of any outbound tactics? What works best for them? The answer might surprise you.

In an average month, Rippling books about 1300 outbound demos across their various different outbound teams with about 50% of demos coming from cold calls. So,

  1. Pick up the phone and call someone. It’s harder than clicking a button to send a programmatic email, which means it is more impactful.
  2. Marketing alignment. You need a tight partnership between marketing and sales without caring who gets the credit. This allows them to allocate budget towards things that generate outbound, too.

Growth Tactic #2: Closing Customers

Rippling is famous for the concept of a compound startup. Watch the deep dive on Rippling CEO Parker Conrad’s Theory of a Compound Startup. An example of a compound startup is Rippling, a company with 30 individual products or SKUs today. They started with four at launch and have grown into the concept of a compound startup, launching new products regularly vs. being a point solution.

For this growth tactic, we will dive into the evolution of the GTM organization. How was it structured at the beginning, and what has it become today on its journey from 4 to 30 SKUs?

For the longest time, the Rippling team convinced themselves that if a rep couldn’t keep up with the velocity of the product launches, maybe they weren’t cut out for the job. If you train a new rep on every product, they should be able to sell each one as effectively as the last, right?

This was a painful learning at Rippling. Even the best reps couldn’t absorb any more information about a new set of products. The reality was that the first 15 SKUs had a similar set of core buyers and product suites. Once they launched their finance suite, and they were directly competing with new and successful companies like Brex and Ramp, it was a different ball game.

Rippling couldn’t iterate fast enough, so they built a product account executive organization. The easiest way to visualize this is three teams selling stuff at Rippling.

  1. The core new logo rep who touches every single new logo on the way in the door.
  2. The account management team who owns every customer post-sales.
  3. The product AE org that straddles the middle. For some products, a new logo rep closes on their own, and sometimes, a product AE is tagged in to sell together.

Making a Product Launch the Most Effective

How do you determine whether a new product launch receives a dedicated sales rep vs. having an existing sales rep or team just add it to the suite of what they’re selling? You can’t have 30 product teams because that’s too much complexity, so you need a framework.

At Rippling, for every new product they launch, they determine what path it goes down:

  1. The first principle question is, “Who is the buyer or persona you’re selling to?”
  2. The second and equally important question is, “Do the unit economics work to build a sales team around the product?” You have to make enough money to fund the team.
  3. The third consideration is whether the product can stand alone.

If you have a new buyer’s persona, the unit economics make sense to hire a dedicated sales team, and the product can stand on its own, you could start with a dedicated sales team rather than attaching to your existing suite of products.

Growth Tactic #3: Servicing Customers

We’re moving down the customer lifecycle, so let’s look at how Rippling has serviced customers as they’ve introduced this product complexity and how it’s evolved. Should you go the CSM route, focusing solely on revenue retention, or go the account management direction where someone owns upsell and optimizes for revenue? You have to pick one.

When trying to get your first 100-200 customers, it’s important to have CSMs. They’re empathy-oriented, and ideally, they don’t own new revenue quota. An account manager owns a dollar quota like an AE.

Different motions make sense at different times, but Rippling went the CSM route initially because they sold all four of their products to almost every customer, so there was nothing to upsell after.

They followed this model until about four years ago. By that point, they had already launched a lot of other products, so the CSM, who owned the post-sales customer relationship, would float it back to a new logo rep when someone wanted to buy a new product. The deal sizes were smaller than new logos, so they didn’t get prioritized.

Transitioning from CSM to Account Manager

Rippling transitioned to CSMs owning cross-selling and cutting off new logo reps. Transitioning the CS team to be Account Managers without the title didn’t work, though. They didn’t want a quota. They tried integrating them into the sales team, and at the time, the CSM org reported into the VP of Customer Experience, who owned implementation and support.

They moved them into the sales org two years ago. There is one problem when you transition a customer success team to quota-carrying reps reporting to sales, and that’s when you don’t make them carry a retention quota. Retention isn’t prioritized, and churn increases.

As CSMs, they only owned retention. As Account Managers, they only owned revenue. There was a stick but no carrot or incentive tied to retention. So, in Q4 of last year, they decided to make this team own a retention number.

The reason they could do this was because they have a Product AE org. The Account Managers own the relationship, and if they need to sell a product, they tag in an AE who does the demo, evaluation, and negotiation. With that opening up of capacity, they focused on and tied compensation to retention.

“If you have to choose between a CSM profile that owns revenue or an Account Manager profile that needs to be CS oriented, 100/100 times I’d choose an Account Manager that needs to be customer-oriented because you can teach a revenue-oriented person to have empathy for a customer. You can’t make, at large, a CSM org want to be a quota-carrying, revenue-generating team,” Matt shares.

 

Related Posts

Pin It on Pinterest

Share This