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In this episode of Paris Talks Marketing, host Paris delves into the world of SaaS marketing strategies with guest Arun Lal, a seasoned marketing executive.
Arun Lal has 18+ years of experience as a Marketing Executive across enterprises: Microsoft, VMware, and multiple startups: Productiv, Climate (Unicorn acquired by Bayer), Contiq (as Co-founder). He has a track record of taking products from 0 to 1. Currently, he is the VP of Product Marketing at Culture Amp, an all-in-one intuitive employee experience platform. Arun has been voted as one of the Top 100 Influencers in Product Marketing for 2023 by the Product Marketing Alliance community.
He introduces the 'B Mantra' framework, a comprehensive strategy for SaaS product marketing and go-to-market strategies, and discusses the impact of AI and the trend towards consolidation in the SaaS industry. Additionally, Arun provides insights into the challenges and opportunities in the HR tech space, specifically around employee experience platforms and the role of generative AI in transforming SaaS marketing and product strategies.
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Explore: https://hop.online/
Connect with Paris Childress, the Host: https://www.linkedin.com/in/parischildress/
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Timestamps:
00:00 Introduction
02:38 Arun Lal's Journey to Product Marketing
12:58 The B Mantra Framework: Revolutionizing Go-to-Market Strategies
26:12 Cracking the Code on Buyer Intent Signals
30:12 B Mantra Continued
34:30 How to Apply the B Mantra Framework for Startups
39:06 Navigating the Crowded Landscape of HR Tech
41:31 Embracing AI as Part of the Future of HR Tech
45:22 Final Thoughts
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Every #SaaS company plays for high stakes, but what does it take to dominate the market right now? 🚀
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Hosted by Paris Childress, we’re featuring deep dives into the latest industry trends with the top SaaS B2B founders and marketing leaders who reveal what it takes to succeed in B2B SaaS marketing.
Join us as we share insights on testing new tactics and uncovering the latest developments from digital landscape giants like Google, Facebook, and LinkedIn. Tune in and conquer the SaaS market today!
Arun (teaser): What I've noticed is for companies to be most effective at selling, the ones that are doing the best, they have this innate ability to identify signals, purchase signals or buying signals very early on. So, for example, in one of our companies, one signal that was very powerful was whenever a manager was hired for employee experience and we could detect that from LinkedIn, we knew that we were going to get a meeting for an employee experience platform because we clearly knew that was an initiative within the company and we could get a meeting with them. So the sooner the companies are able to identify these purchase signals, observable behavior signals across all the digital data and the digital footprint that gets created, those companies tend to do really well. They're basically the first to punch.
As a result, they can create more market momentum.
Intro: Every SaaS company plays for high stakes, but what does it take to dominate the market right now? Welcome to Paris Talks Marketing, the podcast where we dive deep into the latest trends and strategies in SaaS marketing that are really working today. I'm your host, Paris. and Our guests are SaaS CMOs, founders and specialists, and we discuss one trendy topic in the industry per episode.
Ready to unlock the true power of marketing strategy? In this theme, we'll explore the world of cutting edge marketing strategies and tactics that are shaking up the SaaS industry. We'll share insights on testing new tactics and uncover the latest developments from digital landscape giants like Google, Facebook, and LinkedIn.
We'll also explore how AI is revolutionizing the digital landscape and transforming marketing tactics. So grab your headphones and get readyfor a marketing strategy masterclass with Paris Talks Marketing.
Paris: Hi everyone. Welcome back to another episode of Paris Talks Marketing. Today I'm with Arun Lal. Arun has spent 18+ years of experience as a marketing executive across enterprises like Microsoft, VMware, and multiple other startups like Productiv, Climate, which was a unicorn that was acquired by Bayer, Contiq as a co-founder.
He also has a track record of taking products from zero to one. Often that's the hardest step. Currently, he is VP of product marketing at Culture Amp, which is an all in one intuitive employee experience platform. Arun has been voted one of the top 100 influencers in product marketing for 2023 by the Product Marketing Alliance community.
Congratulations on that Arun and welcome to the show.
Arun:Thank you, Paris. Very excited to be here.
Paris:Excited to have you. Now, when I read through your bio, your experience is so rich. You've got big companies, you've got startups, you've got from zero to unicorn. Most of this you've been in product marketing roles. Can you just walk us through your career journey and particularly what are really the primary lessons that you took from all these various experiences that you have and how has that shaped you as a marketer today?
Arun:For sure. But before I start Paris, I want to thank you for the opportunity to speak with you. I'm very excited to be here. And with that, let's get into my background a little bit.
So Paris, I grew up in New Delhi in India. And after having spent some time there, having completed my Bachelor's, I decided to move to the States and started my Master's program at the University of Washington, where I learned some computer science and also design. Right after that, when I got to the States, I was fascinated with the idea of startups. So I decided as my first job to actually work with a startup called Ask Me as an engineer. Because that was the most concrete skill that I had at that time. And this was during the dot-com era.
And right after that, transition to Microsoft because the company was having some tough times. I joined as a developer in Microsoft and Microsoft office. And then as a developer I loved what I was doing, but I also felt like I needed to be closer to the business and to the customer. And with my background in design, I had this passion for designing interfaces and how, you know, customers interacted with the software that you were producing. So I decided to make the switch to product management at that time. And got very lucky because Microsoft was starting a new group called Dynamics CRM at that time, and I became part of that team as a founding product manager.
Paris: This is the Microsoft dynamic CRM that we all know today. Same product?
Arun: That's the CRM that competes with Salesforce. So I was part of that journey, and initially did the market requirements document for dynamic CRM. So got to really understand how customers use software and developed a lot of empathy for product management and the challenges associated with it. So that was my biggest learning, like, you know, to market a great product, you need to have a great product, which is well-designed and that customers really appreciate this real true customer value. So those were some of my beginnings into how technology products can really transform the experience for customers. So that released three versions of CRM. I think at that time it was close to a 600 million ARR business. And then I got an opportunity through Microsoft to attend the Kellogg program for marketing through the executive sponsorship. So attended the exec program from Northwestern through Kellogg. And that was my first foray into marketing. And once I got exposed to all the knowledge of marketing, I was just fascinated and dazzled by, you know, how positioning, how messaging can truly impact value creation for customers and this whole notion of value and how you explain value, how you position it, how you differentiate it. I mean, my mind was just blown away by all you could do with effective positioning, messaging, competitive research strategy, and go to market processes. So I decided to actually make a hard pivot to product marketing. Even within Microsoft, it was pretty hard to make that pivot.
I do many interviews and convince many people. And finally, I got my opportunity at a newly formed group, which was Office 365 for the enterprises where I first got a break into product marketing. And since then, I've just been absolutely enchanted with product marketing and I've been there.
Paris: You were in on the ground floor of Microsoft Dynamics CRM and then a couple of years later, Office 3 65 suite?
Arun: Yeah, absolutely. Essentially because Office 365 was a collection of products from the Microsoft suite, basically, we were taking all the office products online. So there was a version before it called the Business Productivity Online suite. That was the previous branding for Office 365. And it was essentially a team where we said, hey, we're gonna take the same concept of an Office suite and make it compete with a Google suite online. So I was part of that team, and got to work with some amazing people and got, to see how strategy is done for product marketing, in a very complex business. So I ended up spending close to nine and a half years at Microsoft. And primarily, I mean, one of the big reasons I was at Microsoft for that long was also because I was getting my green card and knew I really couldn't move. So that was one of the big reasons as well. But since the beginning of my career, I've always been fascinated by startups. And then I decided, hey, I think I just got my green card, let's move to the Bay Area and the, you know, the center of the universe when it comes to startups, and decided to join VMware at that time, and luckily enough, I got to be part of an amazing 0 to now a 9 billion business, which was the software defined data center. So at VMware was where I really went deep into product marketing and saw like how, you know, infrastructure and data products are created from scratch and how you take them to market. So I worked very closely with my mentor Bogomil Belansky and Ragu Rajaram, who ended up becoming the CEO of VMware, and got an opportunity to work very closely with them and learn from them. At that time, VMware's vSphere business, which was the compute virtualization product, the revenue was actually declining for that product, and the situation was Amazon and AWS and GCP were launching, and Azure was launching. So this whole world of cloud data centers was starting, public clouds were starting, and VMware needed a response to that. So at that time, we made the acquisition of Nysera, which became the network virtualization product. And then another product was created internally called vSAN, which was a storage virtualization product. And through many acquisitions, we also created a management or control plane for the data center, which we eventually packaged as the vCloud suite later branded as the vRealize suite. And then we packaged this all as a response to public clouds and like AWS and GCP as the software defined data center. So I actually ended up writing the messaging document for the software defined data center, and it's now become an absolute industry term. I ended up actually creating a Wikipedia entry for the software defined data center and amazingly enough, we were actually able to scale that business from literally zero in ARR to close to a billion in ARR in less than two years. And we took that entire product to market through close to 5, 000 sellers at VMware and 50, 000 partners that we had. And the beauty of this technology was that it gave control back to the CIOs as a product that could be built into a private cloud, or it could be turned into a hybrid cloud, and it had the economics and the benefits, as you would have with AWS, with APIs and developer access and so on and so forth. So very successful lending and, I recently heard, I think 80 percent of VMware's revenue still comes from the software defined data center products within VMware.
So definitely a fantastic experience and I got to essentially position something that's had very strong impact in the industry. After that, I said, hey, I'm ready for startups, and I got an opportunity to join Climate Corporation, and work on a data and AI product, and I was there for about two years, set up the product marketing organization, and helped the business eventually get sold and acquired by Bayer and integrated into a much larger company. After that, I decided to foray and start my own business, which was Contiq and this was an AI product targeted to measure the effectiveness of B2B content and sales processes and sales motions and recommend the right content to sellers based on effectiveness and with the intent of accelerating the deal velocity and shortening sales cycles. So that was a fantastic experience, I learned a lot raised money for the business, but right when we were trying to raise money and the pandemic happened. So right in 2020 is when we were about to raise a bunch of money and unfortunately the whole market dried up and as a result my ego got crushed to powder. I learned a lot. But at the same time, we were able to exit the business. And then I transitioned to productive, where I helped the business scale to 4x in ARR in about two years, lead the product marketing function, helped build the product marketing function from scratch, and helped find repeatable sales motion for the company. And since then I've joined CultureAmp where I've been for a little time under a year.
Paris: Well, that's some story. I've jotted down a few notes and I'm recognizing some patterns and I want to ask you about that in your big company enterprise experience, which is mostly with Microsoft and VMware, I've noticed that you were in on the ground floor in some major categories where you were not first to market, but you were coming on the heels of another big player or a couple of players. So CRM, you already had the Salesforce. I presume that was out on the market. And then later with the online Office suite came after Google's G-suite.
And then with VMware, as the world was migrating to the cloud, you came in with this interesting positioned software defined data center. So you were a kind of fast follower in that. And what are the product marketing insights that you gain through being able to come into a category that was emerging with an existing leader or a few leaders, and then to build something that could catch up quickly.
Arun: Yeah, the biggest insights are really around positioning for me. I actually use a very structured framework around positioning or actually not just positioning go to market strategy for any business and I call that the B mantra. Most of my insights have been summarized in that framework. The first insight is really around clarifying the ICP, then applying the B mantra framework around it. So, often we find that, when you're the second, person or a fast follower, you look for an ICP that's differentiated or what we call the ideal customer profile. So there might be an underserved segment of the market, for example, Microsoft's markets always been the enterprise. And when Salesforce started, it was actually focused a lot on SMB and mid-market. So clearly there was a distinction in terms of where Microsoft was focused as a business. So clarifying ICP and finding underserved segments of the market is very important.
And they might be based on use cases as well. There might be underserved use cases even in the same demographic segment, if you will. The next sort of process or thinking that I apply across when I'm positioning a developer go to market strategy for a product is to apply the B mantra framework. So the B in the B mantra stands for the budget. So the next thing is you have to better understand whether you're going after an existing budget or the product has to create a new budget. If you're going against an existing budget, and there's a set process around how that budget is allocated, that thinking has to be done correctly and really helps you position the product well. For example, if there's an existing category, there's probably an RFP and you're competing against multiple vendors. So in those cases, you have to really uplevel and talk about your differentiation or deposition the competitors in that space. That could be one strategy. But if you're actually going and creating a new budget category, you actually have to create the need for that budget to be spent, which requires that you really get alignment from your buyers on the problem, really have spent a lot of time explaining the problem and why it's such an urgent problem that needs to be solved and why it needs to have a budget allocation. So, from a surface level, even software defined data center AWS might look very similar. But when you go into these details, they're very different positioning, and serving very different needs as well. So that's the B.
Paris: One quick question on the B, on the budget, are you competing for an existing budget or are you creating a new budget, which one in your experience is harder?
Arun: Creating a budget is always harder because essentially, that means that category doesn't exist. It's a signal that that category probably doesn't exist, or it's in very early stages. So the amount of momentum that you need to build to have a new budget allocated to it is very complex and requires a very different kind of thinking. A lot more thought leadership work, a lot more momentum creation at the buyer level before it really turns into a category.
Paris: And I suppose you need to sell higher up in the org chart as well to try to get the decision makers who have the authority to allocate the budget.
Arun: That comes to the second point of the framework, which is the M, which is around mandate.
So the big thing in B Mantra is you're always settling against a mandate. A mandate usually exists at the C suite level of this. So if you look at our organization, any B2B, by the way, this really applies to a B2B context.
So you've got the C suite, you've got the VP layer, you've got the director layer, you've got a manager layer, and you've got essentially a bunch of practitioners. So a mandate at the C suite level, let's say a mandate, which is very common right now, is cost optimization. For example, a lot of CIOs and CFOs have a cost optimization mandate. So the way that mandate essentially decomposes itself at the VP layer, let's say in the context of I'll talk about SaaS management because working with productive that was an area that I recently worked on. The way that mandate boils down at the VP level is basically governing my SaaS portfolio, procuring my SaaS portfolio and then optimizing my SaaS portfolio.
So these are what you would call initiatives at the VP level and the way these initiatives decompose at the director level is I need a system of record for all my SaaS products. I need to get all my shadow SaaS apps, basically accounted for. I need to measure the usage of individual SaaS applications. I need to measure the ROI that's getting delivered. So these are some examples of how initiatives decompose into projects or even use cases or jobs to be done at the practitioner level. So, essentially, what you end up building is a connected framework, a parent-child relationship between mandates, initiatives, projects and use cases or jobs to be done.
And once you develop that framework, that becomes sort of the structure that you're selling against. So a mandate, for example, you need a messaging and positioning framework. The reason for that is that when you're talking at the practitioner level and you talk to them about mandates, they get very confused. And then when you're talking at the C suite level, and you're talking about jobs to be done and use cases, they get very confused. So you need basically a storytelling framework, through which you can have forest level conversations as well as tree level conversations, and they connect with each other. And based on the persona that you're talking to, if you have this interconnected framework, then you could have very strong conversations and enable your champions to go and sell for yourself across the various higher tiers of the organization. So that's why this mandate concept is very important and to really decompose those mandates down to use cases initiatives.
Paris: And the mandates are connected with the ICP, correct? Which we initially defined upfront.
Arun: Absolutely. The ICP is sort of the first thing that you do in the SOAR process.
Paris: Yeah, I think, I understand that the mantra has a storytelling framework, and you need to be telling the right story to the right ICP, based on where they are in the hierarchy.
So budget practitioners is kind of a jobs to be done level, where the VP, that might be a major initiative or a C level can be major initiative.
Like we need to move from spreadsheet-driven CRM to some type of a real software solution.
Arun: Yeah, it really could be. And the problem at the C suite level might be improve win rates or shorten these sales cycles. So you need a framework that connects jobs to be done all the way to mandates. And once you have that, and you create the right messaging for each tier and each persona that becomes a very powerful framework for internal selling. And usually you'll find the champions are at the practitioner level and they have to do a lot of the selling for the vendor.
Paris: Right. You've got to sell internally up the chain.
Arun: Up the chain. So that's the mandate. The A is for the access or the approval process. Now that you've understood, hey, what mandates are driving what use cases and needs and so on. Now you need to understand who are the players, who's going to be your champion and who are all the people that are going to be involved in the buying process. So this is essentially your buying committee and what relationships exist within them. And then what's the journey that you have to take to navigate from one influencer to the next?
Usually you have to really empower the champion and that's where a lot of the DG efforts really focuses to enable the champion to go sell for you within the organization. And that also determines what kind of content strategy you develop and what questions that most buyers will have during the buying process that you need to create content for or objection handling documents or pitches for.
So access is very important aspect of this too.
Paris: Yeah. Often it's, I presume harder to get access to C levels and VP levels. So are you typically working more bottom up to try to identify the champions, empower them, educate them, and then figure out how to help them sell internally.
Arun: I'm a big believer in multi-threading. Yes, we should absolutely empower the champion but deal risk gets very high if you're not multi-threading. So we should try and develop threads at the VP level and at the C suite level. And the more you can multi-threading, the better the deal velocity and the probability of win. That's my general advice.
Paris: Does this framework jive with what's today known as account-based marketing, where you identify a target organization and then you multi-thread people at different places in the different ICPs throughout the organization and then apply the storytelling framework.
Arun: Absolutely. This is, in fact, designed for ABX or account-based marketing and account-based selling. So multi-creating content by persona, making sure you have articulated process on how the champion is enabled to sell within the organization. All those are aspects of ABX that this framework can really help with. Let me move on to the next one. The N is the need. So N is essentially the need or the job to be done that's causing real significant pain that's driving this purchase. So, for example, you might have many jobs or many initiatives and projects your technology can support, but it's very important to identify what is the most urgent and painful thing that a company is experiencing. I always have this example that, when you have a leak in the roof, you get a fix for that that day, you start making calls that day, but let's say you want to change the handles on a door, those kinds of purchases keep getting postponed for the next month, then they're not that urgent. So it's very important, especially from a product marketing perspective to identify the need that's urgent. And it could be a carrot or a stick need like there's something that's really hurting you or also there might be something that can create immeasurable value or create a new value that you really want to uncover.
So you can have those kinds of, you know, carrot and stick needs as well. And if you use the framework I talked about, I call it the unified messaging architecture framework around the mandate connected to jobs to be done. You can identify which are the needs or the jobs to be done, and they could be across the entire spectrum, which costs a deal to move forward the fastest. So that's where you can understand and articulate the need. And the next, the T is very closely related to need is the triggers. Basically what you're doing is you're trying to identify signals that are telling you that that need exists in that account. And what I've noticed is for companies to be most effective at selling, the ones that are doing the best, they have this innate ability to identify signals, purchase signals or buying signals very early on. So, for example, in one of our companies, one signal that was very powerful was whenever a manager was hired for employee experience and we could detect that from LinkedIn, we knew that we were going to get a meeting for an employee experience platform because we clearly knew that was an initiative within the company and we could get a meeting with them. So the sooner the companies are able to identify these purchase signals, observable behavior signals across all the digital data and the digital footprint that gets created, those companies tend to do really well. They're basically the first to punch.
As a result, they can create more market momentum. So one thing I've done in a lot of businesses or the companies have been at is use data scientist teams to identify the right signals and work very closely with business analysts to automate the process of signal detection to which are good, strong purchase signals.
Paris: Can I stop you for a quick second on the signals? Cause there's a whole SaaS category now around buyer intent signals and big players out there like ZoomInfo and 6sense and a bunch of others come to mind. What is your take on this category? Is it effective and is it really trying to put a spotlight on these buying triggers?
Arun: I think they're absolutely effective, but at the same time when all these signals are available to all the vendors, you don't have an advantage.
I think the problem is to identify more unique insights about your buyers and some nuanced way of detecting signals that only you know about that can create a tremendous advantage in your imagined strategy or your growth strategy. So that's what I try to do is do the normal stuff, but know that everybody has access to that information as well. One strategy I often use is in any company, you have these outstanding SDRs, you know, SDRs who are performing well above all the SDRs in the group. So I often have conversations with them like, hey, what do you do to get that meeting? Or what do you do to keep the interest of the buyer? And you can discover very good insights about what the buyer signals could be based on those conversations.
Paris: Are these buyer signals that someone is going to vocalize or is it signals that you can pick up on before even meeting the prospect?
Arun: Yeah, you can pick these signals up. For example, one of the signals I noticed at a previous company was if a buyer came to the website and there was some sort of a community event that they also attended, those two things in combination was a very strong signal that would get them probably building a champion. And also on their content consumption pattern, for example, if they're just consuming basic white papers or videos, that's one signal. But if they go and try out the product or they attempt to set up an instance, those are very strong signals that you're really creating a champion. Also once you cookie them, the amount of time spent on the website interactive. Those are all very strong signals.
But a lot, at least in some of the businesses, I've been the buyers or the champions tend to be very technical. So really you're trying to find that red thread of content that starts from the high level and keeps getting more and more deeper and deeper and deeper. And when you see that thread happen with the user, you know that you have a potential champion. So very important to capture the right data and sort of the footprints of your champions so you can get those insights.
Paris: Yeah. What you're describing is following that thread all the way through. It does demand that you've got a unified customer view into the whole journey of every single user.
Arun: Absolutely. That is actually companies that invest in that I've seen like they have a huge advantage over the ones that are using fairly static systems or like batch systems of understanding what the customers are doing or by prospects are doing on their website and other assets.
Paris: What do you think are the best systems or tools for unifying the customer journey and having that insight?
Arun: I've seen mostly custom systems we developed for this purpose. So, just gathering data from multiple sources, using Snowflake or like DB, like the standard sort of databases like Snowflake or even Databricks and using. Some companies are using data streaming systems to get real-time data, and then streaming all that data into a Snowflake, and then using either Tableau or Looker for the insights and working with a data scientist.
A lot of these systems are custom built, but I do believe that these are the right investments that really help you optimize your marketing spend, lower CAG, improve customer retention, and shorten sales cycles in a big way.
Paris: Great. So back to B mantra. We were on the T.
Arun: Actually, we covered the T, which was the triggers. Let's talk about R. R is really about risks. So, no deal is without any risks. And one thing that you got to assess and which you can uncover these risks through win loss analysis is what are the risks to the deal? And often you'll find, at least in a lot of the businesses that I've been in, one of the biggest risk is no action, you know, there's no decision taken. Most of the deals, like 60, 70 percent of the deals, people weren't making a decision. And I always wondered about that. Like they 're making this massive investment in marketing and sales, and then you're ending up with a no decision sort of outcome in the deal. And that was always kind of surprising. And I like to always double click into what are the reasons around that. And I found that usually it's something related to do with the previous factors. Not having clear budget, not having enough urgency, not having clear access. So if we work on all those areas and you address sort of the prospect of customer issues there that no decision bucket goes down quite a bit. Another area of risk for customers is how does it integrate into my existing stack or my framework? So having good reference architectures, having good ideas around how it's worked well in other similar companies, that kind of content and that kind of thinking is very important. And then how do I operationalize?
It is another big risk. Like, okay, I bought this, like how do I get value out of it? So having strong customer success models, operational models are generally things that I've seen in B2B deals quite a bit. And there are obviously other risks as well that are very specialized to the business. And then the final thing that is, what's your unique, it's around advantage is basically what's your unique advantage. Like what is that extra value that you can create that separates you from anything, from taking no action or from what other competitors might be doing in the market. So yeah, that framework and that thinking is what I consistently apply. And that usually feeds into creating a go to market plan, positioning, messaging, pricing, packaging, launch, customer retention, expansion, it feeds into all the sort of the metrics and all the go to market aspects for business.
Paris: That's great. Is that documented anywhere that we can find the B mantra framework? Have you posted that somewhere?
Arun: I have not, but I'm planning to do that. I'm planning to write a blog post on it at some point in. There is a B manager framework, which is used slightly differently. It's a sales methodology. But it's never been used as more of a go to market framework.
So basically, it's kind of an evolution of that thinking.
Paris: Yeah. So it's certainly it's an SEO opportunity but you also need people to search for it as well. I think that goes to the need maybe. Where does search marketing fit into the B mantra framework when people have a need that they are searching, right?
Arun: Some kind of trigger, yeah. There'll be like high rates or something. Yeah. Or what do I do when there's no decision? So, yeah, those could all be triggers. T is very important. You've got to find the right signals and triggers. And that leads to kind of the whole process being adopted. But yeah, I'm thinking about writing something on this at some point in time.
Paris: Yeah. It's a great framework, very comprehensive. And at what point in your career did you discover this and start to implement the framework?
Arun: You know, I had elements of this, even at VMware, kind of in my mind. We use the medic framework there and we had a value selling framework there as well. That was very popular across the Salesforce, but really it all came together when I was doing my own startup and I was trying to figure out like, Like, how do I get repeatability in our sales motion?
How do I drive shorter sales cycles? How do I drive more engagement with the buyer? So I was doing a lot of the, like the first two, three deals in my startup, I had to do those deals and I was struggling to find a framework that helped me kind of think through the go to market process and how do you like actually drive engagement in a sales process. So that's when I started writing this down, and came up with this.
Paris: How does the framework apply to startups with much more limited resources as opposed to large enterprises, what are the nuances of applying the B mantra framework to let's say your startup Contiq versus VMware?
Arun: You know, the framework actually applies across all big, medium and small companies. Really the amount of resources that you need to apply towards it can vary dramatically. For example, if you're at VMware, you know what budget you're going for. For example, if there's a data center consolidation budget, that was something that we went after quite a bit. The budget was very clear. We knew who the players were, but the amount of content that we can create, the amount of frameworks we could create to identify it, to run a POC on it, to kind of explain our unique advantage. The amount of resources that you could throw at that problem were massive. In the case of productive, when we were trying to create a new budget, the, for example, we ended up doing something called the State of SaaS report, which had unique insights about how SaaS apps are used within companies. We actually ended up publishing a paper on how Slack versus Teams usage varies and engagement varies across companies. So that was a thought leadership piece that a company could do with more resources. But when you're a small startup, you try to extract as many insights as you can anecdotally or through secondary research and create some assets around that to drive market momentum. So it really depends on how much investment you make across all the various factors or variables in the framework.
Paris: You mentioned something earlier. I think it was the mandate. Certain buyers have a mandate to either have a system of record, as you said, for all SaaS products and I want to ask you this question because around the time Salesforce started up until a few years ago, I think there's been an explosion of SaaS products that can do practically any job that you need to be done, but the result was that companies and particularly large companies with big SaaS budgets built up an enormous and fragmented SaaS tech stack.
And at some point it just became so unwieldy and not everything was talking to each other. You'd also be asking your teams to be working on an opening simultaneously multiple apps at the same time. But there was this huge fragmentation and now I'm starting to see more of a consolidation in the industry and it's a certain larger categories like marketing, automation, CRM, project management. I'm seeing more of the all in one, and I'm thinking of ClickUp as an example, which we use. Is that a thing? Are you seeing this kind of consolidation and is that a legit mandate now for SaaS to make a consolidation play?
Arun: Absolutely. In fact, productive that was called product is whole value proposition is around SaaS cost optimization. In fact, we had some research that as much as, I would say 65 percent of your applications are severely underutilized. And there's a long tail of applications that have like single users or very low usage. And there's massive opportunities. And on average, I think we did the research, there's about $10, 000 spent per employee in most tech companies around SaaS. And there's opportunities to cut that at least by 30%, if not more.
And that was the value proposition that productive was going after.
Paris: And I think these last couple of years post-COVID we've seen the SaaS, I think was pretty overheated and now it's coming back down to earth. And I think there's also an initiative now for companies to look at their tech stacks and say, what are we really using? What are we not using? Let's cut some of the fat, but then also let's look to merge and simplify things and consolidate things.
And I do think that seems to be the trend now or is category consolidation.
Arun: Absolutely. For example, in a lot of companies you'll find people using Google Drive and Dropbox and OneDrive and Box, you know, they all kind of do the same. And then there's an opportunity to collapse these or consolidate these, and that also leads to better collaboration. Like, for example, if you're sharing a doc from Google Drive, then everybody else can comment on it, and there's a structured process around it. So, the benefits of consolidation not only limited to cost savings, they also improve collaboration and improve the overall employee experience, if you will.
Paris: I want to share my screen for a second and show you the G2 competitor grid for the category that you're in which is called employee engagement. And I think you describe it as employee experience. I think these are similar. This has got to be one of the most crowded.
I look at G2 grids a lot and it's very geeky, but it really helps a lot to understand the landscape first and the positioning. This is one of the most crowded grids with the most logos I've seen in employee engagement. There you are actually. So you're at the top right. That's awesome. Now what's happening with this group? Because at what point does a category become oversaturated? I mean, one thing is to look at this picture and when a category gets oversaturated if you're the leader, then great, because you're probably going to survive while a lot of the others are going to die out.
But what happens in this category? What will this category look like two years from now? Will there be new categories, subcategories? Will there be consolidation of this category up one level into a broader category? And what do you think is going to happen?
Arun: Yeah, actually, we're noticing two big trends. The first big trend is around consolidation. So there's a whole category of HR information systems. Also known as HCM systems. And those companies are actually leading the consolidation in this category. So you're going to see a lot more consolidation, and they're also extending their suites to kind of have the capabilities that many of these companies are offering here. So that's one big trend that we're seeing as we speak. So consolidations absolutely happening and they're going to be a few winners as a result of that. The second trend that's happening is that a lot of these vendors are transforming their value proposition to be around insights, data, benchmarking, and like, AI based insights or recommendations as well. So I think that you're going to see two groups of competitors. One are going to be the consolidated vendors that provide large suites of products with a lot of these capabilities, and then you're going to have a breakout group of competitors that are going to leverage data insights, benchmarking and things like that, and they're going to essentially become the insights providers in the market. So those are the two big trends that I expect to see in this market.
Paris: Interesting. I see. You mentioned AI, and there's no way we can finish this without getting into AI. How do you think particularly generative AI, will impact the HR tech space? Before you answer, I'll give you one example that we had in our HRVP showed to me just today.
We turned on Gemini for business a few days ago, and we're trialing Gemini for business, which was formerly called Duet AI, which is Google's AI baked into Google workspace. And it has applications primarily for email, docs, spreadsheets, and slides and Google meet calls. So we did employee NPS survey a couple of months ago for the whole company, and we got all the results in a really nice spreadsheet.
And we have a lot of free entry fields. And these are often the best feedback when you let people write and express themselves freely, but this was tens of thousands of words of text across lots of different questions and dozens of employees. And we needed a way to summarize that.
And we tried to use the feature inside of Google sheets pretty much to summarize these results in some kind of meaningful way. So at least for me, I could get a high level view what are people generally happy with? Where do we need to improve? What are some of the blind spots?
Long story short, it failed miserably. It actually said, I can't do it. That's moments when I think that AI is still more of a promise than a reality in order to take a lot of data from a spreadsheet and summarize it in a nice succinct way, but let's apply this now. And I was talking about the ENPS example, because I think it's a nice example where different levels of the organization will want to see different lengths of summaries or different focus areas of those summaries, but what do you think AI, the impact of AI will be on HR tech?
Arun: So, on that note, we do have an AI commenting summarization feature that's getting launched very shortly. And it works perfectly. So I definitely see the AI improvements in two categories. One is definitely, you know, applying AI productivity improvements with existing features, like summarization one. But beyond that, I think AI has the potential to solve more higher level mandates of the C suite level as well. For example, one of the big mandates in a lot of companies is how do we get more value creation and more satisfaction from our employees? How do we create a culture of sustained high performance? And how do we provide our leaders with the right mentoring and the right habits that drive greater business impact? And that's where I see a lot of generative AI and even combined with people, sciences, insights heading towards. So I think there are like higher level mandates that can also be addressed.
And that's where I feel like a lot of innovation happening in the new era of AI.
Paris: Yeah. And are you and any other members of your team using either ChatGPT, Gemini, are you using that on a regular basis now? And if so, what sorts of tasks are you using it for?
Arun: We're using ChatGPT regularly. I use it every day, pretty much. Primarily I'm using it for summarization. I'm using it for idea generation. I would take a piece of like my messaging and I would like, hey, can you tighten this up, make this more professional oriented towards a certain ICP, or generate ideas if I'm trying to do some naming or branding for a feature. So I'm using it as an assistant, on a daily basis.
Paris: Yeah. I find also as a thought partner, it can be great on a strategy level. Summarization is great as well.
Arun: Competitor research is another one. I also do a lot of who's talking about this concept, that concept, what are they saying?
Paris: Great. Well, Arun, I do think we've got to wrap up. This has been fantastic. Is there anything that I didn't ask you that you wished I would have asked, or is there anything else that you feel could benefit our audience?
Arun: No, I think we covered all the topics, so I'm pretty excited about it.
Paris: Yeah. And in particular, thank you for sharing the B mantra framework. I think that's great. I personally love frameworks because I think, especially with marketing, things can get really disorganized quickly. And I think frameworks help you to keep your focus in the right areas and follow a blueprint for success.
And I think this B mantra framework is one of those. I've heard so many, but it's so refreshing to find a new one and for it to really click and make sense the way that one has. And I hope you don't mind I'll try to use it myself and I'll share it with a few others.
Arun: I would love for you to use it.
Paris: Great. Well, as we wrap up Arun, where can people find you online? Where's the best place to connect?
Arun: I'm on LinkedIn. I think that's the best way to reach me. So just search for my name and you can easily find me there.
Paris: Great. All right, everyone. Well, thanks. We're going to wrap up great conversation with Arun Lal, Culture Amp and Arun, thanks again. We really had a great conversation.
Arun: Thank you, Paris.