Episode 75 Apr 26, 2023

CEO Summit: The Vision and Value Behind Digital Sales Transformation

Logik.io CEO Chris Shutts returns to the show, this time to connect with Pascal Yammine, chief executive officer of Zilliant. They discuss the transformational digital shift occurring in industries like traditional manufacturing, high-tech, software, and business services, driven by customer demand for self-service product discovery and buying.

Drawing on recent conversations with customers and prospects, Chris and Pascal paint a vision for a headless, end-to-end commerce and pricing solution that goes far beyond traditional CPQ: bringing flexible, frictionless, and profitable sales motions to life.

Listen to Chris’ first B2B Reimagined appearance: How to “Consumerize” B2B Manufacturing

Pascal Yammine

Pascal Yammine

Chris Shutts

Chris Shutts

As fast as you can decide what you want or do your own level of discovery and do iteration and keep picking permutations, the system immediately tells you a response in an answer that's priced correctly. Those expectations every year are getting much, much higher for end users using these technologies. As technology suppliers, we need to think of our job as making usability, almost like an Amazon-like or video game-like experience for our customers.
- Chris Shutts

Episode Transcript

Chris Shutts: When I talk to prospects, one of the things I mentioned is like, if Amazon took five seconds to complete a search for you, you would probably stop using Amazon to buy stuff. And the problem is when you look at previous-gen CPQ tools and even pricing tools, I've seen this in a lot of cases where they take five seconds, 10 seconds, 20 seconds to get you an answer.

That is not a user experience that your sales reps will put up with any longer because they don't put up with it in their personal lives. Also, your end customers won't put up with it either when they go to your website.

Barrett Thompson: Hello everyone. My name is Barrett Thompson. I'm the General Manager of Commercial Excellence at Zilliant, and I'll be your host for our podcast today. I'm joined by two guests on our show. First we have Chris Shutts, the CEO of Logik.io. Also, joining us is Pascal Yammine, the CEO of Zilliant.

Chris and Pascal, I want to thank both of you for taking the time to have a conversation today. [00:01:00] Before we get started, Chris, I wonder if you could tell us how you came to know Pascal?

Chris Shutts: Yeah, it's kind of an interesting story. So actually I've been working with Pascal for a couple years now.

I originally met him when he was General Manager of Revenue Cloud at Salesforce. And at that time I had retired from Oracle after selling my first company, Big Machines, to Oracle. And then I'd retired and Pascal and I connected and we started talking about what was happening in the CPQ market and product configuration.

And the more we looked at it, the more it looked like there was some opportunity to start another company to really revolutionize how people sell their products and make selling experiences a lot better for our customers. Those conversations two years ago was a driver for originally, starting Logik.io.

Barrett Thompson: Fantastic. Pascal, anything that you would add to that?

Pascal Yammine: I remember those conversations and I remember that conversation around if we were to build it all the, decades of experience Chris has had, how would he build it and, opportunity to build it the right way. And I'm excited two years later to see what Logik has done and what [00:02:00] Chris has done and the impact it's already had on the market.

Barrett Thompson: Chris, one of the ways you've characterized your solution is that it's a headless solution, and I wonder if you would expand on that theme and help our audience understand the power of headless solution design.

Chris Shutts: Definitely. And some of the analysts in the market, they call it composable. I see. I think technically there's a difference, but I see the term headless and composable being interchangeably used in the market. What that concept means is it allows our customers to take our configuration engine, which we call the Commerce Logic Engine, and they can take that functionality, they can install it throughout the organization, so they might want to use it inside of their CPQ tool.

They might want to use it inside of their e-commerce engine. They might put it inside of a service experience. They might even put it on their corporate website and allow their customers to go to their website and do their own discovery of product options and get the correct pricing. And do it real time as a lead in to actually starting to transact and buy those products, from our customers.

So the advantage is it gives, buyers of [00:03:00] headless technology, the ability to put the technology anywhere they need to in their business. And as things change in the future, they may find additional places they want to use pricing or product configuration, and it gives them the ability to do that, very easily without having to do another gigantic, monolithic implementation.

Pascal Yammine: I think that the concept of composable units is getting a lot more attention, period. I think, as Chris mentioned, headless has been a term used, especially in commerce, but I think the concept of composable units are headless, is being misspoken across a lot of different capabilities, a lot of different channels.

To me, just one of the most important parts of it is interoperability. It's what allows Zilliant’s pricing engine and Logik’s commerce engines to work together really seamlessly. We've recently done a couple concepts and demos. To have them work together allows our customers to get the best of Logik and the best of Zilliant, for example, in a much more effective way, and that capability gives our customers a lot more flexibility and impact in the transformations.

Barrett Thompson: Speaking of transformations, Pascal, when a business is embarking on a transformation, they may [00:04:00] not start with this idea in mind, the headless solution approach. So what can we do to shift the conversation or introduce that idea into the transformation discussion so that they're not just out shopping for gap filler technologies at the end of that?

Pascal Yammine: That's one of the hard parts, real proud of the brand and the reputation that Zilliant’s created as being deep in pricing. But we serve a very specific purpose and we are often part of a larger transformation. And so how do we position ourselves in those larger transformations? I think number one is just making sure that we communicate that way and have those partnerships like, where we can provide a solution.

I think that's the hard part is customers want to see an end-to-end solution; when they see Zilliant by itself, it's not an solution. When you see Logik by itself does not have an end to end solution. Showing them how the solutions work together. The example I mentioned earlier about creating a demo with Logik that we can show customers, gives them the ability to see and actually touch the vision that we're describing, because it is part of a vision that is core in many of our customer's transformations.

So we need to take it from being abstract and actually make it real for them together.

Barrett Thompson: Chris, anything you would add [00:05:00] to how we make it real?

Chris Shutts: Well, I think the way we make it real is we try to drive as much value as we can with our customers, which I think is what's so interesting about putting Logik and Zilliant together.

We take a lot of friction out of the sales process. We make it very easy for all the different personas, whether it's the end customer, the direct rep, the channel partner, et cetera. And then doing that with these two composable solutions working together to be able to see the correct pricing, the optimized pricing, the self-service pricing.

As you're doing that, it's a pretty magical experience that I think now is something our customers buy to differentiate, but I think shortly it'll be something they'll have to do to really survive in the marketplace.

Barrett Thompson: Chris, your business has had tremendous success in manufacturing, and Zilliant also serves a large number of manufacturing customers as well as some other industries.

Can you share with us the trends that you see in manufacturing?

Chris Shutts: Yeah, manufacturing is a big vertical for us and we actually look at manufacturing, I like to think of it as like heavy iron industries, so these are companies that do, make like off-highway equipment, [00:06:00] vehicles, processing equipment.

They're great companies to work with because their selling challenges are significant and we can usually create a ton of ROI for them. And they have a lot of pricing challenges because their channel delivery systems are complicated. And, some things we're seeing with these manufacturers, I think one of the biggest trends that we've seen is that they don't want to sell collections of parts anymore.

So I think traditional CPQ has said, here's the parts and CPQ is going to say, here's how they fit together correctly. It doesn't really help manufacturers, sell more and sell faster the way, we like to call it. So what they're trying to do is they're trying to sell complete solutions.

And what that means is they'll still do a large capital equipment purchase or sale, but then along with that they'll sell a collection of software, those on the equipment and or services that go with it. That could be service plans, calibration services in the future, product check-ins, and then some of the manufacturers we work with are even taking it kind of a step further.

They're avoiding the CapEx purchase or sell at the beginning, and they're [00:07:00] actually selling the entire piece of equipment as a subscription. And then some of them are even selling it on a consumption basis. So like machine tool companies are selling hours of run time. And I think that is a trend that a lot of these businesses are going to because the consumers like it because it avoids the significance capital purchase.

And then it also creates a nice recurring revenue stream for the manufacturers. And it also allows them to be positioned a lot more value for their customers so they can offer complete packages of services, and their customers may not even know that they offer those particular services. We're also seeing with manufacturers that they're really pushing to modularize the way that they design their products, so they want to be able to drive costs out of their business.

They want to be able to have preconfigured engineered portions of their equipment that then fits together to create a solution. And that makes it a lot easier to, I'll say, manage the product definitions that they create, because there's a lot of engineering that goes into them. But it also puts more challenges on the sales process because it makes a lot more permutations to price.

It [00:08:00] makes price elasticity and price calculations more complicated to be done correctly. And it also means that their products change a lot. And so the digital solutions they're using to sell their products have to be very flexible and very easy to maintain.

Pascal Yammine: Those are really important trends and it's trends that we see where, companies were used to selling parts or components.

And have these complex build materials that they use are now trying to learn in different muscle and how they price things and how they value their products and define their margins. And so, as manufacturers do transform their businesses to more solutions and to more modular parts, and ultimately as Chris mentioned, subscription models, they have to learn how that impacts their financial models or revenue models or profitability, it's a different muscle and I think it's an opportunity for us to help our customers who are often, again, manufacturers, like you said, to learn how to monetize their business in a different way.

Barrett Thompson: Speaking of new muscles, we've had conversations on the podcast in prior episodes about the prevalence of e-commerce coming into many traditional businesses.

The [00:09:00] idea there is to allow a greater self-service experience on the part of customers. And I wonder what's your point of view on how that self-service idea might apply in a configurable modular equipment situation and how the technology could support that?

Chris Shutts: That's an excellent point, Barrett. It actually goes back to kind of the original question we were talking about, which is this concept of headless architecture and what a big trend we're seeing in the market across kind of all verticals.

Whether it's manufacturing services, med device, high tech software, is that the current date buyer of all of these products and services wants to do a lot of self-discovery before they even engage with a rep from a company. And in some cases, they don't want to have any engagement. They want to just do the transaction.

And most of the deals that we're doing now at Logik, our customers are buying our technology not only to use it in e-commerce as a SKU, but they actually want to put it on their website. And they want to let their customers go in and do what we like to call digital discovery where they can go, see the effect of

[00:10:00] pricing real time. Interact with the different upsells, cross-sells, do some self-service solution selling in that environment, and kind of decide what they want, and then either transact right away or if it's a very complicated deal or something, they can then send that into the inside sales team.

Of the manufacturer, let's say, and then the manufacturer reply like in an hour with a very thoughtful proposal accurately, correctly priced and optimized for margin, and then send that back to that customer as a very thoughtful proposal be able to do that quickly to show that you're a well-run, organized business with a great product means a lot I think with today's buyer.

And so the net effect is a lot of the traditional transactions that would go through CPQ are actually starting to be what I'll call semi cpq. So they might finish in CPQ from your website or they may not go through CPQ at all. They may just go direct through an e-commerce tool, and that's, that I think is a trend that is going to continue to happen and drive more and more of these transactions to a [00:11:00] concept of self service.

Pascal Yammine: That trend is a really important one in a lot of industries. Obviously manufacturing is newer, relatively speaking, but even magnifies it when you add like resellers to the mix. So now you have a customer who may be going self-service discovery, maybe they go from that and they want to go direct to a sales rep without losing the context.

That's the important part of the work that they did and the discovery. They don't want to start over yet and go back to the beginning. Wherever they left off, they want to continue that and obviously the cost and the pricing has to come with it. And oftentimes you add the reseller channel as well and it gets even more complicated.

And today's enterprise solutions, you have different tools for that. And I think that again, the idea of modular or composable abilities that Logik has and that we have at Zilliant with our real-time pricing engine, allows us to have one solution that can serve all the channels effectively.

Barrett Thompson: It seems to me that digital discovery really raises the bar on the elegance and ease of the user experience for going through that configuration exploration.

Chris, and I'm just comparing that to what I think is happening with sort of the last [00:12:00] generation of configuration tools. Where imagine it's a little more arcane. You have to know the special keystroke can only be done by an insider, right? So to unlock that value, you've really got to change the paradigm.

Have you experienced this? If you want to change your seat on a flight, if you do it at the gate with the gate agent, there's like 200 keystrokes they have to do on a terminal. But on your mobile phone, you could do it with two clicks, right? And I don't want to learn the 200 keystrokes, right? So our, the customer of the manufacturer doesn't want to learn arcane bits about the old CPQ.

They want an experience that makes it natural for them to be able to go through and explore those options and quickly ideate and get down to the configuration that’s going to serve them, and then carry that context, as you said, Pascal, and pick that up in the commercial conversation and just get her done.

That's a transformational vision.

Chris Shutts: You bring up an excellent point there, Barrett, that the buyer persona, whether it's a B2C buyer or B2B buyer, has very high expectations, and this is just a natural extension of the way we live our lives. When I talk to prospects, one of the things I mentioned is like if [00:13:00] Amazon took five seconds to complete a search for you, you would probably stop using Amazon.

To buy stuff. And the problem is when you look at a lot of modern, not really modern, but previous-gen CPQ tools and even pricing tools, I've seen this in a lot of cases where they take five seconds, 10 seconds, 20 seconds to get you an answer. That is not a user experience that your sales reps will put up with any longer because they don't put up with it in their personal lives.

And also your end customers won't put up with it either when they go to your website to try to learn about your products and services. And so that's sort of a critical foundational element for both Zilliant and Logik.io, where we want customers to interact with our products. And I like to think of it as almost like a video game type interaction where it's completely instantaneous.

So as fast as you can decide what you want or do your own level of discovery and do iteration and keep picking permutations, the system immediately tells you a response in an answer that's priced correctly and guides you through how to fix a configuration if there's an error in it, and that's [00:14:00] super important.

Those expectations every year are getting much, much higher for end users using these technologies. And we really, as technology suppliers, we need to think of our job as making usability, almost like a, an Amazon-like or video game-like experience for our customers.

Barrett Thompson: For a business that's taking this approach and composing their solution with best of breed technologies like Logik and Zilliant, how does that combination add value?

How does that solution approach create value for the business versus merely allowing them to complete a task?

Chris Shutts: I can start on that. I think the key thing is running the solutions together as a mashup. It’s really important because it gives either the channel partner, the direct rep, the end customer, it gives them everything they need to know kind of immediately to solve the solution that they're trying to solve.

And having both of the products working together allows the user to answer all those questions immediately versus having to do some work in step one and then wait, and then do step two, and then do step three, which is sort of the way a lot of these tools have kind of looked at the buying process in the [00:15:00] past.

So I think that's the important thing is, as you're picking options, getting that real time pricing feedback as you're iterating and doing that level of self discovery.

Pascal Yammine: Overall, we're creating value by driving more effective sales, our customers are getting better results, their customers are buying more because it's an easier experience and more effective experience.

Second to that is obviously profitability. By having the technologies working together, it could drive what parts are positioned more effectively with the end customer parts that maybe have the higher profitability or higher margins. I mean, there's ability for us to take price and cost as well into account to help actually create the right solution for the customer.

The end customer and also create the more profitable outcome for our joint customer as well.

Barrett Thompson: Those are great value drivers, ease of doing business and profitability. Appreciate that perspective. Chris, earlier you mentioned or characterized manufacturers as heavy iron. Manufacturers that you mentioned is one area, and our conversation today has been in the context of manufacturing.

Curious to know are there other verticals beyond heavy iron or [00:16:00] traditional manufacturing, industrial manufacturing of any type where you see these ideas taking root.

Chris Shutts: Yeah and I think that's one of the things I really like about our two businesses is that we work with a lot of different verticals.

It makes it interesting for us. It also helps us expand capabilities of the solution because yeah, we work with manufacturers, high tech businesses, software companies, business services companies, which could include like, payroll companies, rental companies, even other services like garbage collection.

We will put all of those into like business services, it's a lot of interesting things in there. Med device is another, a really big one, which has a lot of interesting complexity in their deal cycles. Very much pricing for med devices. Oftentimes subscription-based pricing also goes into play there.

And what's interesting is they'll, all of these verticals have their own sets of challenges. Obviously when you work with a manufacturer, they're heavily worried about the shop floor and bills of material and routings and making all of that correct. When you go [00:17:00] into like more of a high tech or a services business, it's more about speed, responsiveness, self-service, and heavy users of price optimization, pricing analytics, and oftentimes those companies have very sophisticated pricing algorithms that have to be implemented that can make or break those businesses in terms of creating a ton of value to make sure that they're pricing everything correctly and understanding elasticity as they discount deals is really important. So I think we're very fortunate that we get to work with all these different types of businesses. It's really a lot of fun.

Pascal Yammine: I mean, similarly, the industries that price optimization has historically been really dominant in, there's still relevant, but I think that the capabilities that we have are becoming more important across a lot of industries that have never really thought about it in the past and now need to.

Business services is a great example, especially with the change in work. For example, business services oftentimes relies on people and resources and the dynamics of the cost of those resources is a big part of the revenue model, and that's changed significantly. So there's a lot of really unique examples of where pricing or price complexities and [00:18:00] optimization wasn't that important in the past and is now a lot more important. And will continue to be for the future.

Barrett Thompson: So thank you for sharing today. I want to give you each the opportunity to leave any parting thoughts with our audience. Chris, how about you?

Chris Shutts: So thanks again for the opportunity. Barrett. Always great to talk to you too, Pascal, thanks for your time today. We're really excited about the opportunity.

We see a lot of situations in the market where our products together, one plus one could equal four or five. We're excited to continue to go after those opportunities and drive a ton of joint customer success.

Pascal Yammine: And it's so great to see the vast success you guys have had and the impact you've had and I'm glad I've been able to be part of it from the beginning and I'm really excited about being part of it now in the continuation and partnering with between the Zilliant team and the Logik team.

It's exciting. I know the value that we'll create for our customers together.

Barrett Thompson: Thank you, Chris and Pascal. I want to thank both of you for taking the time to have this great conversation today. We really appreciate you sharing your perspectives with us. Also, let me thank each of you, our podcast listeners for being with us today.

Please check the show notes for [00:19:00] links to valuable resources related to our conversation. We're committed to your success, and if you need any assistance, please reach out to us here at Zilliant. Would you do me one favor and please rate and review the show in your podcast app as it helps us continue to put out rate free content?

Until next time, have a great day.

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