Chief Executive Officer demonstrates how to create clarity throughout the entire company by getting everyone laser-focused on the real drivers of revenue growth.

Mark Logan - Chief Executive Officer - WealthEngine


I recently spoke with Mark Logan, the CEO of WealthEngine. Executive with aggressive growth goals, a lot on the line and no time to waste should take a moment to study the transcript. We discussed how to develop the right corporate objectives for revenue growth. Mark and I answered questions from the How to Make Your Number in 2018 Workbook. Turn the Corporate Strategy section and flip to the Objectives phase on pages 40 – 47.


As the CEO of WealthEngine, Mark has spent his entire career leading SaaS and technology growth. His executive experience from companies like JD Edwards, Sybase, PeopleSoft, and the last few years with WealthEngine provide a valuable use case for this topic.


Why this topic today? Organizations that have too many objectives and priorities really don’t have any at all, they risk accomplishing nothing of significance. A CEO’s strategy often does not get executed because the sales, marketing, and product leaders, are in their silos pursuing what they feel is important. This causes strategic misalignment, and often results in subpar revenue growth.


Mark demonstrates how to create clarity throughout the entire company by getting everyone laser-focused on the real drivers of revenue growth. This show is a must watch for executives of technology companies with high growth goals. Those executives from outside SaaS-based companies can borrow emerging best practices from SaaS leaders like Mark to leap-frog your competition. 


Review the transcript below, or view the full video of the interview on SBI TV.


Tell us about your company and what you guys do.


Sure, sure. I joined WealthEngine two years ago, the company’s been around for going on 18 years now. Just maybe a quick snapshot on my background, I’ve spent my entire career leading growth companies in the software world, and more recently over the past 15 or so years in the SaaS part of the software world. I’ve worked at companies like JD Edwards, Sybase, PeopleSoft, and then some smaller firms that you might not have been familiar with. The common trait there, Greg, has been high growth software SaaS companies. WealthEngine, we’ve been around for a while, and we have the most comprehensive database, SaaS, and big data tools, that profile all the consumers in the United States. We have a database of 250 million people here in the U.S., and we have upwards to 1,500 attributes about everybody.


We use our analytics tools to help inform both non-profits that are doing fundraising activities targeting certain types of characteristics and certain types of individuals, and we also help commercial companies that are looking for consumers that are ideal fits for their products and services.


What are your top goals for WealthEngine?


When I arrived here, Greg, we really had three primary objectives, first of which was to really look at product portfolio, and drive the most meaningful and great products in our industry that will serve the needs of our customers, so the first one’s around product strategy. The second one’s to get WealthEngine on a path to profitability which I’m pleased to report we have. The last is to advance our two-market strategy, the first of which is non-profits. We have upwards to 2,500 or so customers that are non-profits, and they go into a couple different categories. It’s 7 or 800 different universities and colleges, we have a number of hospitals we help with fundraising, and well over 1,000 charities such as Sierra Club, Humane Society, Red Cross, many that are household names.


Our second strategy around there though is on the commercial side, banks, insurance companies, and a whole host of commercial business that are looking for better consumer insights that we provide.


That must pose some challenges, I mean, those are two very different markets, so what are some of the top challenges you face by serving two distinct markets?


What’s interesting is while they are very, very distinct and the buying habits and patterns are very different, but the common need for greater customer insight, or greater donor insight, cuts across all the above. Gone are the days in which you can do as a business heavy research on individuals, and as we say there’s 240, 250 million adults in the U.S. We provide dossiers of information to get better insights, so there are better targeting strategies. If I know that you like to travel and you like fine wine, then travels businesses and fine wineries might target you in a way that’s unique, and it helps the consumer because you’re not getting spammed with products and services that you’re not interested in. Those same keys exist over on the non-profit side.


In your business, and in particular too based on your many, many years in software, and going from the old on-prem model to the SaaS model as an example, do different types of revenue growth generated different types of returns on capital for you?


Yes, Greg, and clearly, you’ve just hit on one key. Back at former company called Rivermine we enjoyed tremendous growth, but that was one of the key strategies moving from a perpetual on-prem upfront payment scenario for our go to market to a SaaS model. Why is that revenue more valuable, well that’s because it’s much more predictable, so why perpetual companies perhaps struggle at times is its a less predictable revenue run. Recurring SaaS based revenue that’s high margin is exceptionally more valuable to a business, to an enterprise, than a less predictably lumpy, upfront payment types of engagements with customers. Consequently, here at WealthEngine we have moved a lot of our project strategy, right, goal number one was going to where our top strategies, move our product strategy to focus more on recurring, high margin software solutions.


Greg: I’m going to speak directly to my audience here, particularly my sales audience. All the sales VPs out there that want to be like Mark and become a CEO someday this is an important question, okay? Your job is to grow enterprise value of the company, you want your company to be worth more tomorrow than it was today. You’re a sales leader, you have a revenue objective, but not all revenue is created equally. There might be some revenue for certain product categories that create more value for the shareholders, there might be certain products as an example that are more strategic for a variety of different reasons. Keep that in mind, the reason why I asked Mark this question is that not all revenue is created equally. There’s certain thing that require more care and attention.


Regarding investments in R&D, so what investments are you making today in R&D that will drive valuation in the future?


We’re making heavy investments in data and in analytics. You’ve heard the much-used phrase big data, and we are right in the middle of that market as a big data provider. As I’m sure you’ll know, Greg, companies out in the market are taking on tremendous amounts data about their customers, and their prospects, and their market. What we do for them is to harness that big data, and provide a whole host of analytics to make it easy to exactly target and then advance your best customers and prospects. That holds true on the non-profit side where resources are very thin, so what we provide is really that needle in the haystack focus. If a non-profit is looking to do a major fundraising campaign we tell them out of this constituency group of 100 thousand people here are the 500 you really need to nurture and focus on. R&D investments are going on to those tools that provide our customers a greater advantage.


Can you tell me the difference between artificial intelligence and big data? I’m personally confused by this. What is the difference between those two?


I’ll certainly give you the Mark Logan definition which might not be textbook approved. Big data we put into the category, the way we think about it at WealthEngine, is it’s assembling massive amounts of data from many different data sources. For example, for us we ingest over 50 different unique data sources on consumers, and that’s everything from some of the acts which we talked about before to the cars you drive, the homes you own, et cetera, et cetera. Big data is pulling in terabytes of data and being able to assemble that in a meaningful fashion. AI at WealthEngine, the way we define that, Greg, is predicting future behaviors, and using tools, and history, and inclinations, to help to determine behaviors in the future.


Mark, what are your drivers of revenue growth?


If I look at that there’s really a two-market response to that, Greg. We talked earlier about the non-profit market and the commercial market, so in the non-profit market it is a growth market. There are 1.5 million registered non-profits in the U.S., so we have 2 to 2,500 customers that are non-profit oriented, but it is a growth business, and it’s a very, very competitive business, and we see that entire market continuing to grow. The United States, the most philanthropic country in the world, and our non-profits need to be productive and focused on those folks that will drive their missions. Where we see explosive growth however is in our pursuit of commercial markets, and I’m pleased to say that we set it as a goal and initiative when I joined the company two years ago, and we have successfully expanded in that very, very fast growing market. It’s consumer segmentation and consumer insights in the commercial markets.


Greg: There are different types of kind of revenue growth strategies, and for the audience here let me explain this just a little bit. Think of it in kind of three ways. You’ve got market expansion, so that means the current market that I’m in, high waters raising all ships, so in your world you’re now in the commercial market, it’s doing well, you use the term explosive growth, so in that market that’s market expansion. The second type of revenue growth is market exposure. In your case, you were in the non-profit world, you then got into the commercial world, you exposed yourself to a new exploding market, that’s market exposure. The third type is market share performance, so I’m in a market, it might not be expanding, I’m not exposing myself to a new market, however I think I can take share away from my competitors in that space.


Broadly speaking if we think of market expansion, market explosion, market share, as kind of revenue growth strategies, are you doing one of those, a combination of those, like what’s your view on that?


There’s certainly a combination. Greg, just to further expand with the number, for example the non-profit, with just the sheer number of registered non-profits here in the U.S. there’s an opportunity to expand in that market, and it does continue to grow, and specifically their need for better analytics and better tools. I wanted to say maybe the best way to answer the question is around the second point, market exposure, and moving into new markets. There is an explosion on the commercial market to gain better insight into consumers, so it’s known as the B2C markets. There’s millions and millions of people out there that are potential customers and target prospects for your products and services, so we help to narrow that aperture, really narrow the pipeline, so that your outreach is to only those consumers that are most likely to acquire your products of services. That’s kind of the green fields, there really is no dominant player there, so we believe we have the opportunity now to really create a beachhead for WealthEngine in some of those markets with the big data and analytics that we bring to the table.


I want to stay on this use case for a moment because this is a particularly difficult situation to solve. What I mean by that is, is that you’re the CEO and you set a direction for the firm, the company, and then your functional leaders in product, marketing, and sales, now need to create their own functional strategies, plug them into your strategy, and execute your strategy. When you made the move from the non-profit world to the consumer world, I mean that’s a big move. How did you get, for example, the sales team on board with that? Was it the same team, a different team, how did you handle that?


That’s an excellent question, Greg, and we have two separate teams. In fact, we have specialist that sit particularly on the non-profit side that focus on colleges and universities that really understand alumni relations with specialist in hospitals, and understand how to drive missions and foundations there. Then over in commercial we have specialists on the field team that focus only on financial services, banking, or in hospitality, another key vertical for us. A third key vertical is real estate, we have specialists that focus there. There are separate teams, and the training, and the rigor, and the territory management, these are all terms that are very well known to SBI, that we are very, very focused because our prospects and customers, they want to know they’re speaking with informed, engaged sales individuals.


Greg: That’s a great example. I’m going to speak to the audience here, there are two types of audiences right now, so the CEO audience, Mark’s peers, and the sales audience for a moment. The CEO audience, when you make a move in your strategy for maybe a market expansion to a market exposure, you need to make sure that you’re thinking through the go to market of that move. What Mark did was he deployed a team of specialists, and that aligned his functional organization, in this case sales with his corporate strategy, and that’s a common move, and it works very well, I’m sure it will work well for Mark.


If you’re going to make this corporate shift carry that argument all the way through to its logical conclusion, and make sure you’re thinking through all the different functions all the way to the end user.


If you’re a sales leader or a marketing leader when your CEO makes a change like that you have to respond. In Mark’s case, they went from the non-profit world to the consumer world, well if I’m the chief marketing officer, I mean, my whole playbook now needs to change. It’s an exciting change, but it still needs to change. The way that I market to non-profits versus the way that I market to consumer is a diametrically opposed to marketing strategy. We got to make sure that were staying in alignment, and were constantly refreshing our strategic playbooks.


Mark, I’m going to now go to this concept of strategic trade-off decisions. What strategic trade-off decisions have been made to prioritize long-term value creation?


We talked before, I won’t get into it in too much detail about SaaS versus perpetual, that’s a trade-off. In the perpetual world you’re getting big, upfront payments which look really terrific at the time, and forgoing those to get a more recurring revenue doesn’t appear to be intuitively obviously, but it is because it’s more predictable, and you can drive business value that way, so that is a trade-off when you make that decision. Another trade-off is with our investments in R&D, so we have an average R&D investment that is the leader in our industry, so we’re between 18 and 20% of our revenue invested in R&D.


We over-invest here because we do want to ensure that we’ve got the finest products in our space, and it’s enabled us in the non-profit side to take share away from our competitors, so all we focus is our big data and analytics offerings, so that’s an investment that we make. Short-term if we wanted to drive greater profitability we would make a smaller R&D investment, but longer term we believe it’s in the best interest of driving value in the business.


That’s a great example. If I’m talking to the sales audience now here you got a CEO who’s spending 18 to 20% on R&D investing in new products in exciting new areas like big data analytics. The sales team should take it as a personal objective every day to be taking these big data analytics solutions to their customers, and talking to them about how those solutions may benefit for them because clearly that was a strategic trade-off decision. I mean, you don’t have to spend that kind of money, that could have been held in the firm’s treasury as profits, et cetera, but that was an investment in growth. I’m getting to this issue, Mark, of strategic alignment, and sometimes you do something like that as a CEO and you come out with this new product, and the sales team doesn’t get behind it. Maybe it’s new, they’re not comfortable selling it, they don’t know how to sell it, and that friction reduces company performance, so I’m just trying to emphasis how important that is.


Let’s talk the other side of the equation now. In terms of forgoing short-term profits to earn a much better return on shareholders over the long-term, so you have great example. You went from selling the traditional software license, you collect all the cash up front, and that’s beneficial for the shareholders for the obvious reasons, to the subscription model with is ratable per month. That was a big move. How did you get behind that move, and convince the shareholders that that was a long-term wealth creation decision?


Back the first time I made that move was 10 or 12 years ago when it wasn’t an obvious decision. Now it’s a little bit easier, so let me just highlight a few examples. Now if you look at the most valuable companies, publicly traded companies, it’s firms like Salesforce and Workday, and Sasori to companies that have really proven the model. Back in the day when it was a little bit more difficult there was a whole host of different considerations, not the least of which was how are you going to compensate the sales force for selling a product that you bring in less dollars upfront in year one, so that’s a little bit of tricky, a challenging analysis.


We wanted to make it neutral so that if it was in the best interest of the business to sell a three-year contract that was routable over that period, and we wanted to make that neutral to the sales organizations, so we gained adoption very, very quickly. Theoretically it’s also easier to close a three-year deal versus perhaps a seven figure up front transaction.


My last question here is regarding investments. In your opinion, and maybe think broadly across your many years of experience here, which investments create the highest valuation? Is it investments in product, is it investments in marketing, is it investments in sales, some combination, what’s your opinion on that?


I think it all starts with product, Greg, so we endeavor to have world class solutions for our customers, and we talked a little bit about recurring products. Those solutions that become so valuable to our customers that they’re embedded in their day-to-day lives and in the workflow of their systems and processes, so that ingratiates us into their goals and strategies, but to do so we must drive value at all times. We recently held a customer panel at our sales kickoff last month, or earlier this month, and one of our customers said, because of the WealthEngine solution, because of your product, we have cut our sales cycle time down and increased pipeline throughput. We do that because you inform us about our consumers, our clients, and that allows us to close deals a lot faster, less meetings, at a higher close rate. It’s that type of investment of product that drives customer loyalty and value, so first and foremost I would suggest product is number one.


The second key area of investment, Greg, is around channels, and often in the early stages of nurturing a channel partner or an alliance there’s a lot of investment with a limited return. I’ll cite a couple of examples. We have a terrific relationship with Salesforce, so our solution resides within Salesforce, we did a lot of work and heavy lifting integrating many years ago. Now, three years later, we have 450 customers, joint customers with Salesforce, many of which, a couple of hundred of which are on the non-profit side, but we have well over 100 commercial clients in banking, insurance, and other B2C types of services with Salesforce. Last month we launched a relationship with Marketo, so we’ve made a bit of an investment doing some integration work there, no return yet, but we think long-term those types of partnerships where they have a bigger channel presence with us, our reps will work side by side with their reps in the field, and generate great value in the future.




I wanted to thank Mark for sharing his many years of experience with our audience. I think we all got a little smarter today.


Have expectations gone up and left you wondering if you can make your number? Here is an interactive tool that will help you understand if you have a chance at success. Take the Revenue Growth Diagnostic test and rate yourself against SBI’s sales and marketing strategy to find out if:


  • Your revenue goal is realistic
  • You will earn your bonus
  • You will keep your job


Sales Revenue Growth