The unstructured data revolution in CRM - Interview with David Roberts of SugarCRM

0:00So welcome to the next edition of the Punk CX podcast. With me today I have David Roberts who is the CEO of SugarCRM. Hi David, how are you doing and welcome to the podcast. Thanks Adrian, thanks for having me. It's great to be with you. You're very welcome. Now David, could you give me a thumbnail sketch on Mr. Roberts just for the benefit of our listeners and the readers of the highlights I put together just so we get to know them. The man of the hour, let's say. Yeah. Well, I've had a little bit of an interesting career. The thing that's kind of been consistent throughout all of it is a focus on customer.

0:37So I started at Accenture. I spent 17 years there and was part of a CRM practice there. I did something a little different and some people felt a little crazy and left Accenture to help the mayor of Denver run the city of Denver all around a kind of customer focus and focus on citizen resident services. So that was a fantastic couple of years before he went on to be governor and the senator from the state of Colorado. And then now this is my third software CEO role. And again, all of those have been in and around to focus on customer and front office and engaging with business buyers. So it's been a really fantastic 30 years.

1:18Awesome. Now, I often have conversations in the run-up to actual real live podcasts. And the reason I do that is because just to try and get under the skin of some of the perspectives and things that people can share with me. And it also gives me almost jumping off points for these conversations. And so when we were talking in the run up to this podcast, you share a number of things with me that I wanted to explore because I just thought they were interesting and worth kind of talking out as it were. And so I asked you if sellers and or salespeople get any value out of the CRM systems. And you replied, nope, probably with an exclamation mark kind of following it.

1:59And I thought that's a pretty shocking admittance from the CEO of a CRM vendor. And I wanted to ask you, explain to me what you mean by here, what the problem is. Well, I think there's been a promise in CRM all the way back from my early days with Siebel Systems. That's never really been fulfilled. CRM is largely a management tool. Right. And those of us in management have this kind of illusion of control that by going into CRM and looking at your account base and your pipeline and your forecast, that we all can control the output or control the result. And I think that's not often the case. If you ask most sellers, do you love your CRM?

2:40I think they'd say, well, I block Friday afternoons and I spend an hour updating everything before I get a kicking on Monday from my manager because not everything's where it should be. I don't think they think that the system is working for them as sellers. I don't think it's helping them cut through the noise of their demanding and busy jobs. and when we're in this kind of era of ai and inverted commas kind of right now i mean does that make things any better i think it's going to completely change the game actually okay i think ai makes this promise possible okay and i can explain a little bit why i'm sure ai is huge to sugar we're spending so much time talking about it it's going to be a big part of our identity.

3:25Everyone thinks AI stands for artificial intelligence and it certainly does. For us, there's so many other things it can represent. It can represent actionable intelligence. It can represent real account impact. I've spent a lot of time over the last six months playing with the letters A and I and what they really mean to sugar. So here's why I think it changes the game.

3:50first structured data this is something that an engineer said to me once i love it structured data is the language of business and unstructured data is a language of relationships and a lot of sellers thinking in terms of unstructured data in fact they don't think of it that way they just operate that way so like emails conversations zoom calls text messages all unstructured what ai is going to do is allow us to ingest all that unstructured information and make sense of it and not ask the sellers or the account managers to sit down and like type 30 fields in for every account or type fields in for every opportunity so it's going to help on the way in and then the other thing it can do is recognize patterns that exist make recommendations to sellers on where they ought to go focus their time and energy right so it's going to change the game on the output to both in the ingestion and in the kind of recommendations and guidance that the application can provide to account managers or sellers.

4:48You said something interesting when you talked about kind of that salespeople block out their Friday afternoon to kind of like input their data or their conclusions or their feedback or their notes from the meetings they've had that week with their prospects or their accounts. And it seems to me with the advent of these new technologies, And this is something I've been, if you like, noodling on. And I just went to a couple of people about, and I've done that for the last kind of like wee while. And it seems to me that there's an opportunity to use some of this technology to almost like proactively, have a system proactively call a sales person following a meeting.

5:27So you can draw on the calendar. You understand when things are finished. you could possibly do an outbound call using kind of voice ai and have a almost a structured conversation with tell me who you met with how did it go what we're talking about how do they feel and then use all those you know great sort of text analytics and sentiment and intent sort of deriving sort of like kind of tools to be able to populate a lot of the a lot of the knowledge and because also you can do it in the moment when it's fresh and then you can then action things at the back of that. And it always struck me, it always struck me that how many of these, like to your point, many of these systems are designed as systems of control or record or whatever for management rather than for salespeople.

6:11And they lose the relationship bit that's the middle kind of part of the CRM. And I wonder if CRM providers like yourselves are moving to that type of dynamic if you like interface with kind of sales people it's because i know that people will say oh we can do that now because we can do that we can record kind of like zoom calls like like this and we can parse out kind of data we can do it that way but that sort of ignores the army of field sales reps that are out in the field going from appointment to appointment across different industries. And I just wonder if that feels like it's a thing that's on the horizon.

6:54Yeah, I think it's here. I think account managers or sellers, after they walk out of a customer, they could just record a five-minute audio or video that gets ingested back by the CRM system and made sense of. But I love, Adrian, how you talked about prompting the sellers to actually engage in certain conversations like, what'd you learn about the decision makers today? There's so many, I think the real strength of selling is in discovery, being a fantastic listener, really understanding what's going on. And I think if as a sell, you know, you're going to walk out and it's going to be the same 20 questions built on the methodology that really drives your organization, it keeps that front in mind.

7:42And early on in conversations, I think sellers ought to be talking 20 % and listening 80%, right? So what if after those conversations, it's saying, you know, what's the compelling event that's going to make this customer make a decision or who's the competition? What are the decision makers thinking about why they might select you? Like just really probing and letting the person talk out loud about what they learned during the course of that meeting. I'll tell you a story. In the early days of Anderson Consulting, we had a system called Octel, and it was a voicemail system. And we used to do all our business by recording voicemails back and forth to each other.

8:22It was so easy. Tapping out emails is such a pain for all of us who do it. Updating systems is a pain. Why can't we just talk back and forth in a way that humans interact and the way that's easy for all of us? And I think that's where CRM's going. It's certainly where Sugar's focused. Awesome. And I mean, that's good to hear. I'm sure there's probably salespeople that might be listening to this going, that made my life so much easier. Hallelujah. Right. Particularly if they're kind of having to walk to the next appointment or they're in the car and you have like somebody kind of call in or you can do an outbound where you just kind of like kind of think through kind of like all the things that just go straight in the system and the system kind of parses out all the, to your point, actionable intelligence that you kind of gather from those kind of meetings that's it um but there's another thing that you can like said that i wanted to ask about because you talked about in the nature of all of this crm just building better relationships with your customers you thought you suggested there was a possibly a bigger problem at play where organizations are taking a tool first problem second approach and i wanted to better understand what you meant by that as well?

9:34Well, I think in the software industry, we all get trapped into conversations about functionality and features. Everywhere I've been, it's something that's sort of embemic. I think what we aspire to do is have a thin CRM layer that's ingesting the information like you talked about, but then collecting everything we know about a customer from, it could be the ERP system. It could be from the quality management system, the back office that knows so much about the business and putting that in context for a seller so they know where they need to go focus. Right. One of our solutions, for example, allows you to ingest tons of order data across a massive account base, a massive product catalog, and to say to a seller, did you know that this customer isn't reordering at the same rate they historically have?

10:26And maybe you ought to go sit down and talk to them about it right so just give them go beyond the insights in the dashboards actually give them the the the prompt on what they ought to go talk about with which customer and why yeah give them all the context of what what led the crm solution to suggest that as a potential next step so i i think we can i think we can leverage ai to accomplish that as well and that Phil's linked to something else you mentioned. It was this idea, the role of, is what you're talking about there contextual intelligence? Because I've heard that around the place. Everybody's talked about context and contextual intelligence.

11:05Is that what you're meaning here? What are your plans about having the systems surface some of these insights and then prompts subsequent actions? yeah a year ago i started talking about the abcs of intelligence artificial intelligence business intelligence we spent a decade building dashboards and bi systems and what's led to contextual intelligence and i think that's i keep hearing it now everywhere i go everyone talks about contextual intelligence because without the deep context ai isn't specific enough about where people ought to go focus i think we've got to narrow the aperture a little bit and provide a ton of context so that people, so that the AI solutions have a hope of actually guiding people toward a specific idea, recommendation, or action.

11:52And I think that's all we're going to hear this year is contextual intelligence. But I'm also going to hear that some people are talking about that, the contextual intelligence and building these contextual intelligence kind of like layers. And many people are trying to sort of that. And some of them have been predicting that CRM's days are numbered because of that, because you end up with this static system of record, but actually context is kind of where it is really at. You also said to me that you think this is going to play an increasingly important role in enterprise applications because it's moving forward.

12:30Can you lay that out for me in terms of what you mean? Yeah. You mentioned it's a potential threat to CRM. I think people have been talking about it as a threat to enterprise software, right? You go look at valuations of enterprise software companies right now, and everyone talks about the SaaSpocalypse. I think that's all a bit overblown. I think businesses still need to work within business workflow, right? It's not like a company who wants to run with predictability is going to allow workflow and process just to be dynamic and everyone doing things a different way. I think there's too much required in the workflows that drive business, not only within sales, but throughout the entire enterprise, that that workflow is still going to matter.

13:14I think where AI is going to deliver a complete revolution is within that workflow. So ideally, people don't even know it's AI. They're just continuing to engage in a sales cycle or in a buying process or in a fulfillment cycle. And AI is making them better at what they do but but i don't think that changes the fundamentals of the business workflow yeah no it's it's fascinating because it just it as you can like rightly pointed out is that the strength of these systems is that it can sift through and find kind of patterns and in gargantuan amounts of kind of data that this wouldn't be possible otherwise and so if that spurs kind of better actions and then better relationships, then that's only ever going to add value.

14:05Yeah. I think selling is about a human connection and I don't think AI replaces sellers. I've said it a whole bunch of times now, but I think AI gives the sellers an Ironman suit that allows them to be faster and stronger and more powerful, but it's still the human inside of all that that's going to convey belief and engage in discovery and listen and understand. I think AI actually makes the human parts of the selling experience more important and more valuable. I mean, so it's always good to kind of like, it's always interesting, you know, so when I embrace my, I get to embrace my inner nerd and kind of explore some of this sort of stuff but i think also it's useful to you know to explore where people are making changes and getting value and delivering kind of results and so do you have any examples of brands that you're working with that you can tell us about that you think these guys are getting it right you know they're they're they're spot on they're leading the the charge and and if so you tell me a little bit about them some of the challenges that they face what they've done and how they're kind of benefiting the sort of outcomes that they're driving?

15:24Yeah. Well, I think maybe it's a little bit of a long answer for you, Adrian, but I think that we haven't yet cracked the code largely on how AI really drives business results, right? And I had somebody say to me the other day that it's almost like you need AI agents to have a role on your org chart to have a job description in terms of what they're supposed to be doing. I think the thinking in the last six months has become more specific about how AI is going to drive a specific result. We've got a customer in Florida that does auto parts for large tractor trailers or lorries, as you might call them over in the UK.

16:07And they've got distributors all over the place and they've got auto body repair shops all over the place. And they're dealing with a catalog of 10 ,000 different parts. And it's really, really hard for that seller or account manager to know what they should talk to which customers about based on what needs and what buyer implying patterns. And that customer is driving pretty significant results in having those sellers get insight from the order data that's happening across their distribution network and across their product catalog and being able to have those more specific conversations about most customers that look like you buy rotors, brakes, and pads from us, but you don't seem to.

16:46What's going on? Sellers always want to have something specific to talk about. They're desperate to be in front of a customer having a meaningful conversation, and they're kind of wondering what they should go say next. We've got a dozen different examples of customers that are using our solution to have those more specific conversations and seeing great results from it. Okay. No, that's interesting. I mean, and as you say, I think we're already in the stages of driving definitive kind of ROI and outcomes. Because I guess the application space is just so large. But I think that's definitely where the pressure is on, is actually to deliver that sort of demonstrable sort of value kind of like right now.

17:32It is. It is. I think we keep thinking about AI like we use it in our personal lives. I call it the ask me anything approach, where yes, I can go in and ask a really long question at Chappie GPT and get a really rich answer back. I think that's somewhat helpful in business. I think it's more helpful if there's a specific job to be done and we're thinking about what outcome we're trying to drive to and we're building AI to achieve that specific result. And so finally, I know that you're deeply immersed in this space. What sort of trends or things are you expecting to see or emerge over the coming kind of 12 months because you're kind of like you're very you know you're very close to kind of this and you're seeing how people are adopting the technology adapting to the technology or not um and i just wanted to see what you're kind of seeing sort of sensing from from the ground yeah well i'll share two things i think that are are happening right now one is i think people when they've thought about implementing enterprise software, they've thought about processing data.

18:40That's what they've thought about, processing data. I think what we're going to see is a huge uptick in our focus on content. So when we think about implementing CRM, it's not just what your account data look like, what your sales process entrance and exit criteria for sales stages look like, but we're going to now, as part of an implementation, upload a sales methodology, upload objection handling, upload competitive battle cards and intelligence. Like the things that become part of the context gets well beyond just process and data. Okay. The second thing I think we'll see is people are both really excited and slightly freaked out about the privacy and security issues that come along with AI.

19:24And I think we're going to, just like back in the year 2000, where people were all worried about hosting things on the internet. I think we're going to see a lot of focus on how we build more trust in containing the data sets and content within analytics or AI solution in a way that builds confidence with customers to be able to take on and try these technologies, which I think people are still a little skeptical about when it comes to those privacy and security concerns. So tell me a bit more about that. sort of uploading the sales methodology and the objection handling sort of thing. I mean, I guess what you're going to have to do is you're going to have to then map out what your process is and there's different sort of like stages of it and then there would be certain documentation or manuals or artifacts that are going to help in that sort of regard.

20:21Is that how it's going to work? So you're tying all these things to different process sort of steps? Yeah, I think that's exactly it. We call our platform a precision selling platform. And the only way it's going to be precise in the world of AI is if the underlying LLM and conversational AI platform knows a ton about the business, the products, the customers, the distribution channels, the fulfillment model. The more it understands, the more precise it's going to be able to be. So instead of just going and implementing integrations and data connections and fields, I think we're going to be spending a lot more time, which is going to mean that customers have to be a lot more prepared in also implementing all that other content that helps inform what you might have thought of as sales enablement or rev ops in the past.

21:11And now it's going to be core to what our CRM solution is going to be built on. I guess that would also kind of give you insight into one performance management, but also process performance management as well. Because I think there's always a danger that people make assumptions that the process that you think that you work to actually works. And I guess this will give you clarity on whether it does or not. Well, just like being a seller's hard, being a sales manager is incredibly hard. Like they're expecting to like monitor whether their salespeople are following the sales stages and following the sales methodology and, and doing good discovery and doing good solutioning.

21:52These are all things that are incredibly hard for sales managers to stay on top of. Again, I think AI, just like it gives an Ironman suit to a seller is going to give an Ironman suit to the sales manager as well and help them do a better job of knowing, you know, which reps need to be coached on which things. And they can spend more time getting right to the core of what, what makes a difference to that seller. Yeah. And it also, I guess it would also give you the opportunity or give you some insight to understand whether or not your maybe hard and fast process actually still should be hard and fast.

22:26I mean, because there might be somebody that does something which is just different, but is producing way better results than your other collecting members. and and so it gives you that it'll shines the kind of the the light on oh this this is a this is a different way of approaching it maybe we should take that or and evaluate whether or not we should change in line with that because it's getting is driving better results yeah and i think to your point it can go beyond anecdotal because i think a lot of people say hey my process is better um i can get to this answer better and it's anecdotal but if but if ai is helping monitor and manage the sales process, you can actually see that a different way of doing things is having a tangible result.

23:08So I think it takes it beyond the anecdotal approach you might get from a certain seller or a certain manager. I think also the other thing I remember, oh, I forget the gentleman's name, but there was Matthew Dixon wrote a book. I think it was The Effortless Experience and then some sales ones as well, but he wrote a new book and it was called the the jolt effect or something and what he realized in particularly in enterprise sales or business to business sales the one of the biggest things the biggest blockers for decisions is just customers in customer indecision or and and they're almost their their tendency to default to the status quo i i'm not quite sure therefore i'm not going to do anything um but then he showed that that through his research and this was analyzing like a million plus sort of sales calls that there were certain sellers that did different sort of things that just moved them way moved that took that customer decision indecision away by doing certain kind of like certain things almost a de-risking the process um and i guess you could then start to think about some of this theory, if you like, this empirical sort of theory and start shining a light like that onto some of your own results to see, well, actually, what are the things, what many things which might be put down to, ah, it's just the way that things are at.

24:39Maybe there's something extra that you can do just by being a bit more empathetic for where people are at. Yeah, I think that's right. We lose more deals to indecision than any other reason. You should read the book, maybe. Sticking with the stance. I know I just took a mental note, Dixon, so I can follow up and take a look at it. But I think indecision's a big challenge for us. And the best sellers create some sort of compelling event that's not tied to a quarter end or a financial deal you're running. It's actually tied to that customer's business objective and their effort to make a difference in their own business.

25:18So I'll take a look at it. Well, I'll definitely send you the reference, at least for the podcast. But David, that's kind of really interesting to learn a bit more about where you're going and what you're trying to do, particularly around that sort of the whole, the rise of the contextual intelligence and how we try and make some of these applications a bit more user-friendly, let's say, and make them work for people. But before I ask you some sort of quick fire questions to wrap up, is there anything else that you'd like to add or anything else that's top of mind that they'd like to share with us before I move on to these quickfire questions?

25:55No, I'll just say that I think CRM's lost its way a little bit. Right. And no one's quite sure what it means. Everyone thinks it's a 360-degree view of the customer. It's the customer system of record. But this promise we talked about at the beginning of the conversation, actually helping sellers sell, which there's a bell curve in every sales organization. The top 20 is always going to hit the number. The bottom 20 is kind of hopeless. The middle 60 is where you make it or break it. And if you can just move that group 10 % to the right, it has a dramatic impact. And I think that's what ought to get leaders like me or sales managers excited is that you can actually impact the performance results of that middle 60.

26:38And that's, I think, the holy grail of CRM. Awesome. So let's see if we can kind of move the bell curve to the right a little bit. So here's some quick fire questions I have. I have three. And the first one is, which I always ask, it's about boiling things down and asking people for their best advice. And so here's what I'd like to do. I'd like to ask you to complete this sentence. And the sentence is this. if you want to improve your customer experience, David says, do this. Dot, dot, dot. Complete that sentence. Yeah. Listen, have great discovery. Really be curious about your customer's business.

27:22Understand what motivates the person you're talking to, how they're successful in their own role and figure out how what you do can help them achieve that. Awesome. Thank you. And the second one, it's a punk one, obviously. it's a punk cx podcast um so tell me what company or brand do you think takes a more punk approach to customer experience and why punk experience i'll tell you my wife is a huge punk rock fan and uh we've uh it's been a big part of the music that we're helping our 14 and 16 year old boys appreciate um i think i don't know if this is a punk experience but i love the brand sonos which is a okay uh a music speaker system and what i love is they take a massive amount of complexity and they put it into a super super simple user interface right and i think like where where uh where companies can do that they can abstract the complexity of what they do and make it really easy for the the the customer consumer to be able to interact with it um they uh they leave everyone else behind so i'm not sure if that's punk adrian but well i mean that's a brand i think that does an amazing job well i've heard great stories about their uh particularly their service and their support i don't and also i've heard people kind of mention sonos to me before and and they rave about their about their products quick sub question what's your wife's favorite punk band man i think london calling by The Clash might be her favorite.

28:54Good choice. It's not bad. Good record. There you go. I don't think that people listen to records anymore. It's a complete piece of work, right? The entire thing hangs together. And now we all listen to songs and we're dialing up specific playlists. I think the beauty of an album or a complete piece of musical work is a lost art of it in our current generation. I think it might be, but I'll still refer to them as records and albums because, as well i've got the gray hair to approve it well you know what's funny and i've gone from records to cassettes to cds to online and for christmas last year my my wife brought me bought me a turntable and i'm back to buying lps again so it's come full circle love it love it so my final question before we before we wrap up and and i've been asking people to to do this for me for the last kind of like wee while because you know the world's in a weird place and so i've and ask them to tell me a good news story, David.

29:52So tell me what's the most interesting, positive or exciting thing that you've seen in the last week? You know, I was in Australia, as I mentioned, and I went out for a run both mornings or a few different mornings. And one of them was along the river in Melbourne. And I sat down with a customer later that day and they talked to me about what the Australian Open has been able to do to create an entire experience events around tennis. It's becoming a big cultural event throughout all Melbourne. And the person who's led it over the course of a number of decades has just had a huge impact on that city and on tennis broadly.

30:30And it just was, it was a really fantastic and inspiring story. Well, I love it. Something like a sporting event has turned into a community and cultural event. Exactly right. Well, that's great. David, thank you for that. That is all I have today. I just want to say Thank you for sharing your time and your insight and your expertise with me today. That's been super cool. Yeah. Well, I appreciate it, Adrian. Thanks for having me.

31:00Wow. What a great interview. I hope you enjoyed it. I know I did. Find out more about me and the work that I do at adrienswinsko.com. Do leave a review on your favorite podcast platform. And if you have any comments, feedback, or questions about the podcast, then feel free to send me a message to podcast at adrianswinsco.com. And do tune in again. Thanks very much.