#115 Building a Customer-Centric Revenue Org

Janis Zech: Hello, and welcome to another episode of the RevOps Lab Podcast. I'm here with Philipp. Hey, Philipp. How are you doing?

Philipp Stelzer: Yeah. Doing well. Doing well. Excited for a new episode. It's been due for, like, some time now.

Janis Zech: Yeah. That's true. We're way behind. And, yeah, our guests today are Robert and Christoph. First time we do two guests at the same time from Tacto. Welcome, Robert and Christoph.

Robert Kaiser: Thank you so much.

Christoph Dünhuber: Yeah. I'm super happy to be here. Maybe just should we kick it off with the intro right now?

Janis Zech: Yeah. I think it would be great. I mean, I would love to hear a bit more about you, and, if you could share what Tacto is doing, that would be awesome.

Robert Kaiser: Yeah. Yeah. Of course. I'm great. Happy to start here. My name is Robert. I'm responsible at Tacto for our revenue functions. I joined Tacto five years ago approximately when the company was still, like, very, very small. We had, like, two to three engineers plus the three founders. And then I, first of all, built up, like, the sales process from scratch. I closed a large portion of the first million, then took over our whole customer experience department, set up processes there, managed the customers that were, like, at the beginning, not always that happy, but I think we, right now, did a great job in building, like, a very customer-centric org, and that's what we wanna talk about today. And since approximately one year ago, I've been responsible for all revenue functions as also sales and BD and acting there as a managing director. I'm super happy to be here.

Janis Zech: Yeah. Awesome. Christoph, who are you? What do you do?

Christoph Dünhuber: So I'm responsible for revenue operations at Tacto. And I think right when Robert switched over to CX, I pretty much came in and started in business development. So we were, I think, like three BDRs at the time and they understood how business development works, the intersection of marketing and business development and also business development and account executives. And yeah, pretty much focused on that for my early time at Tacto and then did more of sales ops and built up processes reporting with our head of sales. And when our head of sales pretty much left the company to join an earlier stage startup, then Robert took over the whole revenue function and then it became more of revenue operations. And so I'm more focused on the CX side of things now as well. So, yeah, just supporting a lot there.

Janis Zech: Yeah. Awesome. I mean, we already — Robert, you already mentioned that our topic for today is how to build a customer-centric revenue org. I think it's a term that is widely used and widely not lived day to day, so I think really excited to learn a bit more about that. Maybe before we dive in, Robert, how big is Tacto now? I think it's one of the superstars in the German startup scene. I know you've been growing a lot. You work with a lot of enterprise manufacturing customers. So maybe if you share a few more stats and then we'll dive right into the topic.

Robert Kaiser: Yeah. Yeah. So first of all, and I think that's probably also gonna be the summary of the whole episode. I think if you wanna build a customer-centric org, it's all about value in the end. And to understand where Tacto delivers the value, maybe we can start with a few sentences on what our company actually does, where we started, and also what we do today. So we optimize the supply chains and the procurement processes for our customers. And our customers are, as you said, in the industry. So those are hidden champions. Those are companies delivering to the OEMs. So tier one automotive suppliers, for example, manufacturing companies in general. Some logos include today, Raffensperger that probably everybody knows who grew up in Germany. Augustina, everybody who loves to drink beer knows them. Fischer Sports also like a very well known brand here in Munich. Everybody, yeah, skiing probably used them once or likes the skis from Fischer Sports. And those are like logos that everybody knows, but nobody actually knows about the company itself because they are not that present. They are, like, classic hidden champions. And what we found when I joined, like, five years ago, and the founders did that, like, a little bit before even, that they found that their procurement runs on Excel and spreadsheets. A lot of the communication is done via email and it's all really manual. And that's — for me, at least it was really surprising because there's so much unlocked value in those processes. Like a typical customer of ours, they would do like one billion of revenue, for example. Then in manufacturing, usually more or less fifty percent of their revenue directly gets spent on procurement. So they buy materials. In the end, they assemble them to the products that we all know and that we love. And, yeah, if you take the example, one billion of revenue, five hundred million of procurement spend, that's crazy that this is still managed in Excel, and there's no specific tool managing that. And what I thought back then when I learned about Tacto and the idea behind it — hey, back then everybody was talking about big data and nobody was speaking about AI. And now, of course, it's AI. But, like, in procurement, you have such great data and you have, like, one of the few verticals where you have direct revenue or, like, direct bottom line impact. And if you just manage to save one percent of those five hundred million, which is, to be honest, after looking at the data, not that ambitious, you would directly have a five million bottom line impact. And that's a super attractive business case, a super attractive vertical also. And that's why we love working with our customers because they also know that there's so much potential hidden in there. They know they can't manage all of their suppliers with the same care and with the same attention that it would require to run all of them at the optimal level. And that's why a lot of customers and companies decide to partner with us. We help them to optimize their spend. We say one to five percent is realistic in the short term. And in the long run, we want to go for ten percent of procurement optimization. So in that same example with one billion of revenue, that would mean up to fifty million — five zero million of savings that we could achieve with them every year, year over year. And that's why, yeah, we are being quite successful in the market. That's why we keep growing because we manage to deliver those results. Those results are tangible. Customers can see it. CEOs and CFOs can directly feel the impact. At the same time, we, of course, also optimize the processes for our customers so that the operative users that in the end use Tacto, that they do no longer have to do the manual work, for example, manage certificates, manage their suppliers, do the onboarding, all those manual processes that nobody really likes doing. We automate for them, and at the same time, we provide them guidance how they can use their time to save money for their company and to have a bigger impact of their work. That was the idea behind it, just to finish that off. And that brought us into a very strong growing motion. Right now, we are at around one hundred and thirty people working at Tacto, three hundred customers. And again, a lot of the brands that you might have heard of, but you probably don't know the company behind them.

Janis Zech: Yeah. Awesome. I think this is super great context, especially for the topic. So you basically obviously saw a lot of the good, bad and ugly of being customer-centric. As a startup, you typically start with a product that might not be complete. And so there must be a reason why this is so important to you. And also when you think of customer centricity, what does this mean for you? Why do you think it matters so much?

Robert Kaiser: I mean, in the end, you don't wanna be a product that somebody from the top management tells the operative users to use. You want to be the product that the users like using and at the same time be the product that CEOs and CFOs love because it saves them money and it makes the company more efficient. And that's why I think that we are successful because we address both. As I said, it's always a two-sided bridge or two-sided coin for us. Same like, one thing is that we optimize processes and at the same time we help customers to save money. But of course, that path wasn't that easy. And from the beginning, we managed to deliver successes in both areas. And there at the very beginning, I think the customers that trust you and that are willing to take the risk — I think those are probably the most crucial moments in developing or growing a software company to also lay the basis for scaling because, I mean, everybody always is so focused on investors. Yeah. It's great. We have Sequoia and Index on board, and they help us a lot. Yeah. Don't get me wrong. In all those board discussions, super helpful input. But at the same time, it's their business model. Yeah. A few companies will fail in their portfolio. Others will probably be the next, yeah, I don't know, Nvidias, and that will drive the returns. But in the end, the customers — those are the ones that really risk their business and risk their career for you because they believe in you. They believe that together you can achieve something great, that you can make the work of the day-to-day of the employees more successful and better. I think those are the people that we are the most thankful for for their trust and for their collaboration. And because we, at the beginning, didn't know a lot about procurement. We knew about software. We knew about, like, our vision. But at the beginning, there wasn't a lot more than a vision and ambition. And then you need customers that trust you on a personal level, but also trust the idea that something great can develop from that.

Janis Zech: Yeah. Yeah. I think that resonates super well with me. I think also, like, because, like, we build Weflow the same way. Right? Like, just like the last couple of weeks and months, like, there was, like, a bigger part of the product where we, like, cooperated closely with a couple of customers on, like, really making sure that we move it to, like, useful to, like, you know, very, very useful and, like, trying to get to, like, best in class together with them. And I think it's just so important to listen to the customers and closely partner with them. Like, and of course, in order to do that, you need to convince them to trust you first. Right? So, like, the whole relationship building plays, like, a huge role. Having said that, like, how does, like, a typical customer journey nowadays look at Tacto? How do you build that initial trust and, like, keep building it and yeah.

Christoph Dünhuber: Yeah. I mean pretty much how it starts early on is with marketing and growth. We have a great team there that pretty much hosts webinars each week and we have about two hundred to five hundred attendees each week. And so a lot of the top of funnel comes in there. And then obviously, on top of that you have from our website, some inbound. We do a lot of regional events. Last week, we actually had our flagship event Atoms and Bits here in Munich, where we rented Knockerberg and had like about four hundred people there, which was pretty cool. And I think like speaking of customer centricity, it was all about the customers. A lot of customers got their awards there and we're celebrating procurement, which pretty much wasn't the case over the last couple of decades. So like that's a component, not only the online side of things, but actually like in person doing regional events at our customers as well. And yeah, this is pretty much how our early funnel works. And then we have our business development team and they nurture our customers strategically. I think it has changed a lot over time. Like when I came in, I had like seventeen hundred companies in my territory. And if I wanted more companies, our head of business development just gave me more companies. And now it's way more of a strategic approach. And we just try to provide value and show them how Tacto can help them save costs and automate their processes. And they go into the early discovery. So they set up the first meeting with the account executive or they do this discovery call themselves and then from first call discovery call or demo until the signature is pretty much all our account executives. We also have a value engineering team that helps build up the business cases and then the handover works with our solution engineering team. They do the whole implementation. So we sit on top of the ERP system. Most of our customers have SAP and then we have data pipelines where you pretty much onboard really quickly. And yeah, then early on in the process, we also do an assessment of where procurement within those industrial companies is right now. And then we have our customer value managers that actually provide value and save costs with them. And you have to think about it in a way that they're really qualified to help those customers because they come from procurement consultancies like BCG and Bain or other consultancies and they work with our customers strategically and are procurement advisors and help them pretty much expand and have the opportunity to use Tacto to their advantage. And this is where customer centricity happens when they are customers. But I think it's along the whole journey.

Janis Zech: Yeah. Like, on that, like, curious actually, like, so who owns expansions and, like, renewals, if that is, like, a thing. I'm not sure if, like, it's more, like, consumption based or if there's, like, a baseline fee or how the pricing model sort of, like, works there. But curious, like, about that piece as well because I think it's so critical, like, who actually, like, manages the actual, like, expansion of the account. Sometimes it sits sort of, like, more with the seller that initially closes the deal. But it sounds like with you it sits really with the account management team.

Christoph Dünhuber: I mean, pretty much we have some strategic upsells where our account executives go in as well. And our customer value managers are also involved in the expansion of the customers. But we just hired a customer expansion lead that is really focused on account management and we do a way more structured approach with that now. To be honest, we also haven't figured out the final setup. And I think during growing from five million to one hundred million, everybody who had done that journey before will confirm that you will probably change it a few times.

Robert Kaiser: I think in the end, like it's not the most important thing to set up the responsibilities in the right way, but rather to make sure that the customer gets the value from the product and from all interactions with the company. And then everything else that follows, like, that will — you'll find a way to also convert value into revenue. Everybody in the org should be very revenue focused and very customer centric. Yeah. I think those are the two components that will drive a successful business. If you manage to get that right, you'll also get the business numbers right. And who exactly owns what part should be clear for the moment, but that can also change over time. And I think that's like the clear priority three in that equation. Priority one is always customer value. Priority two is a revenue-centric org. And priority three is on how exactly you align the responsibilities and who's basically taking care of what.

Philipp Stelzer: And just a question on the persona. Is it a strong focus on the procurement persona itself? Because it sounds like in marketing and growth, you're very much building a community. Webinars with two hundred to five hundred attendees sounds like a lot. How do you do that? And what's the approach to that?

Robert Kaiser: So most of the time, we sell to the head of procurement. And, also, increasingly, we get the managing directors on board earlier in the sales process. In the end, it's almost always that they have to sign off the budget. But we try to also address them directly and go the other way around to tell them, hey, look, we can save you up to ten percent of your spend. At the same time, we will get your procurement team on board because we have a solution that also facilitates their day to day. So sometimes we also go the other way around from top down to the head of procurement. And then at the same time, the community is built around primarily the procurement teams also. So, of course, the head of procurement is engaged a lot there, but also the operative users or, like, operative buyers that they also take part in those webinars. We always try to, again, produce value for the customer — content in this case. So content that the customer really likes, not to just spread something that is not really interesting and just makes noise, but rather that the customer or like the lead or the buyer leaves the webinar and says, hey, that was a well invested hour. I learned something new. I got some inspiration. And then, yeah, I think that's what keeps them coming back and keeps also the webinar attendee numbers quite high.

Janis Zech: Yeah. Yeah. It's — I mean, it feels very high, and you probably hit interesting topics that they care about or interesting problems that they want to solve for, and you think from the customer. Right? It's a bit like what we do with RevOps, right? We have a podcast. We have a community. We do a lot of LinkedIn. We actually don't really care about Weflow very much. We only care about what's valuable to the audience and how can we share those learnings with the community globally, which is actually very aligned. I'm curious on the business development piece, sometimes calling people cold, that feels a bit off when you think about customer centricity. Is there something you do there that basically incorporates that? And if so, how? And maybe not, right? But just curious how you think about that really.

Christoph Dünhuber: I think with business development, it also changed a little bit over time because we have more awareness in the market right now. And when we were earlier, that wasn't the case as much. Then it sometimes might have seemed a little bit more pushy. But we had so many webinar attendees early on and had that as a really great channel that it was possible to ask them really friendly. Like, what did you think about the webinar? Why was it interesting to you? Why did you even get hooked in the first place to attend the webinar? And then it's just a really natural conversation and it's not as pushy, you know. Then I mean, obviously if you have some cold leads that are unaware, you have to get in touch with them somehow and then you can use sequences that can provide value for them in their specific industry. For example, we have a lot of machinery manufacturers and then you might tell them about a problem that other customers of ours had and you warm up the account and you try to provide value there. And this works really well for us. Then you can just like call them and tell them, yeah, I sent you an email. I was just curious about if you have the same problems and then you get into the discovery and it's not as much just like selling, but really trying to understand your customer and asking what's important to them and then helping them along the journey.

Philipp Stelzer: Yeah, I just want to add a short thought here, because I think this is something that we see across the board with a lot of different companies that marketing and outbound are actually converging. And you have to really think about what's valuable to your core persona. And then you can lead all these different areas with a lot of value, and you obviously lay out the signals on top, so you know a lot more about the companies you're approaching, and then you do it strategically in a way that it feels very natural. This is very different to some tactics like, hey, we just send cold calendar invites and we provide some context in the description, which in reality people also do sometimes, but it feels very off. So I think this is a great point. Brand matters a lot. If you have a webinar and there's a topic, you call them and it feels almost natural, then you basically just discover, there's a reason why they go to the webinar, there's a reason why they might attend your event, they might know your company, and this opens up the conversation. And then if you have a high quality conversation, they might be willing to spend thirty minutes of their time to learn something and see whether this would make sense to them. Obviously always centered around a big problem set. And I think the problem set you alluded to — I think probably many procurement teams are aware that the way they work today is changing. And so they are also interested in learning about new solutions and how they could do this more efficiently and with better results because that's essentially also their goal. And so it basically aligns with their career incentive and their career goals, which is, I think, really, really important always. Christoph, I think you have a thought.

Christoph Dünhuber: I think what's also really important is that we invest a lot in everyone at Tacto really understanding our customers. And Robert has created a format there which is called customer internships. And I think the both of us did the first customer internship. And that's a classic machinery manufacturing company. I mean Robert is one of the first employees — like he understands procurement really well. And when I came in about two years ago, I didn't understand procurement that well. My mother is actually a purchaser herself, so I got a little bit of that from her. But really understanding it for a machinery manufacturing company and sitting next to them, seeing how their processes work, not only how the head of procurement works, but also the strategic purchasers, the operative purchasers — that's really cool to see all of that. And then also build a personal relationship with customers because the head of procurement at Schwertzeugmaschinen, Matthias Schlotter, he's just also a cool guy. And it's really fun to hang out with them because last week at Atoms and Bits also, those are cool people that you wanna hang out with. So that's pretty much just the personal component there as well.

Janis Zech: Yeah. Robert, what is this? Like, can you share more about what it is?

Robert Kaiser: Yeah. Yeah. So I mean, I really, I love our customers. I have total respect for the business they are doing. Maybe like those — well, like, this group of companies, they were basically the main factor that Germany could recover from World War Two. The economic miracle that we had in Germany that our parents probably lived by and also, like, brought them the uplift of their living standards in terms of education, in terms of, like, society, infrastructure, and so on. That would not have been possible without thousands of entrepreneurs who founded companies after World War Two or even before that contributed to the development of the economy and the society. And that's like typical German, typical European approach towards, yeah, the economy in total, and they play a way bigger role here for the overall society than they do, for example, in the US. And I have total respect for that. And I also just love interacting with those people because I can totally relate to it. And what we thought, like, around — I think it was two years ago when we introduced that — our employees, they also need to understand how our customers actually work because not everybody has a background where the family was working in a Mittelstand company. So we said, hey, everybody should do — well, like, first Christoph and I tried it, and then the response was so great from the company, but also from the customers that we decided that everybody should do one of those customer internships at the very beginning of their journey at Tacto so that they really understand how the customer thinks, how the customer works, what their issues are, how they work with Tacto, how they think of the future, how we can even help them further in the future. And by now everybody who joins Tacto has to do an internship. And I think we already did more than one hundred of them.

Janis Zech: So basically what does it mean? Like, it's like a day? Is it a week? Is it like a month or like six months?

Robert Kaiser: Probably not six months, but two to three days.

Janis Zech: Yeah. Two to three days. And then they sit in the office with the folks in the procurement team or —

Robert Kaiser: Yeah. Yeah. Exactly. Yeah. Just like a regular intern. Yeah. They get, like, one on ones with a lot of the key people in the department. They just observe them for some time. Like, there's no real standardized approach. It's up to also our customers. We send them, like, a one pager with ideas, what they could discuss with our employees during the two to three days. But, yeah, it's like the first few days of an internship.

Janis Zech: Yeah. Yeah. So I saw in your team, you hire a lot of smart young people that come straight from universities. You build a path to make them successful. Like, I mean, so they do this internship. What else do you do to get them into the persona?

Robert Kaiser: Yeah. So first of all, I think you have to be really careful when hiring also for a cultural fit because coming back to that point, what you just said earlier that you always want to basically have warm leads. Yeah. If you really cold call somebody, it's not fun for the person being called and it's not fun for the person calling. And, like, you need to have the people that also understand that and that also are not only numbers driven, but really have a deeper sense of bringing value to the customer, that really are capable also of running a high quality conversation with the customer. So we, first of all, select them very carefully, then they usually pass a cold calling academy that is more of a warm calling academy, I would call it. And then we also provide them, like, regular training on a very regular basis, internal as well as external, you know, to educate and to give them a clear path so that especially BDRs — that's our, like, standard joining track after school — that they can then develop into an account executive. Some of them did that after just one year being in the job, and that, of course, you can only do if you have, like, access to the very smartest people.

Janis Zech: Yeah. Yeah. And, I mean, it's crazy to me that, like, customers allow you to do internships, like, for all your, like, new hires there. That's, like, insane. I mean, that's, like, a crazy level of, like, trust and commitment from them also to you. So kudos. Like, that's really amazing. It's the first time I hear something like this. And then also, like, makes me wonder, like, how big are referrals for you? Because, like, I mean, if you have, like, such a tightly knit community, if you give out awards, if you run, like, these big events — like, Atoms and Bits, that's a great name, by the way — then, you know, this must have, like, over time also turned into a revenue channel. Was that something that you're still, like, working on and trying to improve?

Robert Kaiser: Yeah. I think in the end, it's really hard to depict, like, what is a referral. I would say that, like, seventy to eighty percent of our new customers at some point during their sales journey, they speak to one of our existing customers. So it's a very important, like, element in closing customers. But I think also that that's specific to our target group. They would not call us up and say, hey, I just spoke yesterday to person x y z. Could we just run the call? But the majority of our customers, they are super happy, and they're willing to do reference calls for our leads. And one of our customers just like, recently — I don't know, like, we had a call or a meeting or whatever. And then I think it was on a Friday. And then he said, yeah, he needs to stay until two PM. Everybody in this company usually leaves around noon and has lunch at home, but he needs to stay until two PM. And I was like, yeah. Why do you stay longer? He was like, yeah. Because after afternoon, I always have blocked for reference calls for Tacto, and he does it every week.

Philipp Stelzer: Yeah. Look, I think this is what customer centricity really means. I think actually word-of-mouth always plays a role. And community always plays a role. And so, right, it's this typical question of, you have a persona, which is your power persona, and then you have the economic buyer and then you have your users. And they might not actually be the same. And so you have to pick and choose. If you basically create content for the managing directors, the story is very different. You talk about how you save costs, how do you drive efficiency gains. But the procurement team, they want to know how exactly they work with it. What's their day to day? Is there a risk if they introduce that tool? So they are probably a lot stronger persona. And I think almost every AI SaaS company has this. And it's a very important strategic decision you have to take and then really execute on it. Because the ripple effects of this is what webinars do you do? What do you create on LinkedIn? What are the events you're creating? How do you speak to them? What are the words you're using? So what's the messaging positioning? And then it triggers down to the sales and CS journey. So it's really, really crucial. And it's great to hear that you're having so much success with it because I think that's where you came from — the CS background, right? Or the customer experience background. Would you say that helped you in having that kind of mindset throughout the entire revenue life cycle or no?

Robert Kaiser: Yeah, definitely. I mean, when I got the responsibility for the customer experience department in the first place, it looked like the CS departments in most organizations. So we had people that were good relationship builders that also worked well with the customers that explained them how to use the product. But I have a consulting background also. I thought, hey, this is not the level that we should provide to customers in order to maximize the value. And that's when we thought of a concept on how can we actually maximize the impact and the value for the customers. And then we thought, okay, like the software is getting better and better. By now it's a great product that really helps customers to save millions of euros. But like the transition of having those insights into putting them into practice, that was a piece that was missing at the beginning. And there we then came to the conclusion that it makes total sense to have people that are super smart, that know the topic, that also know the customers, that also are willing to work really, really hard to achieve that value for the customers. That this is something that we should put on the front lines of our being. Yeah. That we really make sure the customer achieves the outcomes. And so it was kind of a — what people right now call forward deployed. But that's what we brought in as a concept there. And that then also, of course, was something that we again used in sales because in sales, it's a totally different story. If you say, hey, we optimize your processes. We don't know if it's like ten percent or twenty percent. Okay. You have five people in your team. Probably you won't let go any of those. Okay. So how much money do you save? Well, like there, the conversation starts to stall. And like this centricity on value — yet to really create tangible procurement value to achieve savings — that's of course a concept that we then also transferred into sales, that all the conversations right now are around value that we can extract from the ERP systems from the customers during the sales process totally for free. We run our AI over it. We tell them, hey, here's money that you can actually save. Yeah. We bring somebody also with procurement background into those sales calls so that they can really have a conversation eye level. And that's something that totally originates and roots in, yeah, the customer experience department and the customer experience function. And the concept that works there, that produces tangible value, we basically implement in our sales processes and that works super well.

Philipp Stelzer: Just a quick question on org design here. So you have the AEs, right? You have solution engineers. Do they join? Are those the procurement experts or is there a different function? And then how is the CS or the onboarding to renewal expansion? How is that structured? What kind of roles do you have in these?

Robert Kaiser: Yeah. Of course. So maybe it's easiest if I run you through the whole journey. So we have BD, then we have sales, then hopefully the customer closes. Then our solution engineering team, they were primarily responsible for the onboarding and for setting up the data pipelines into the ERP systems of our customers. Then we have the customer value team. They're responsible for the long term customer relation. So they own renewals. They also own the generation of upsell opportunities. And then either depending on the nature of the upsell, either an AE or the account management takes over to expand this customer. But the renewal is owned by the customer value managers, and they are also the ones with the most procurement expertise. Then we have also for AEs, for sales, we have a value engineering team that is dedicatedly responsible for really demonstrating value to the customers during the sales process. So the naming might be a little bit confusing, but we make sure that we have the procurement expertise and the right people in all functions in order to really demonstrate to the customer that we understand their business, that we care, and that we bring them value no matter if they are a customer already or if they are still considering to introduce Tacto.

Janis Zech: Yep. Awesome. Yeah. I think that's super helpful for context. Look. I think I have to jump soon, so I don't want to make it too long. I think this was already really, really insightful. Customer internships — heard the first time, similar to Philipp, awesome. And I think that's exactly the idea of this podcast, to have you all listen in and maybe take some inspiration. Do you get to two hundred to five hundred webinar attendees or four hundred people attending real life events — those are things that are possible