The Exchanges

Q growing so quickly, obviously behind Todd's leadership. So Todd, you mentioned you're, you're going into new categories. You're launching additional products. That helps you kind of go deeper in terms of wallet share across your current customer base. Would you say your general strategy over the next 12 to 24 months is to go deeper in terms of wallet share across your current base or to open up new markets?

A I mean, obviously this is a combined approach, right? So I think, you know, I mentioned earlier that part of our reason for increasing our ACV and moving up market, we've added an enterprise channel. So that is a big part of our goals for the next fiscal year is how do we continue to move into the enterprise? When I see moving to the enterprise, it's not just larger businesses, it's different kinds of businesses, financial services, insurance. Um, we have a large opportunity at retail today. Um, so I think you're going to see, you know, you go to our website today, you see a lot of tech companies. Think WebPT, think Coupa, think, um, Uh, you know, companies like that. Uh, I think you're going to see a lot more non-tech companies showing up on our website next year. I'm really, really excited about that. That's a huge, um, huge push for us. Um, so that's number one.

AI assessment note: “obviously this is a combined approach, right?”

Q Tell me, can you tell me one of those stories, a large enterprise customer using you, something you showed them they could improve, that they improved and then saw X amount of lift?

A Yeah, I mean, I think the Net Promoter Score example is such a great one because people have taken these surveys, you know, how likely would you be to recommend this software? So it's a measure of loyalty. So we've, um, been working with a variety of customers. I mean, one of the more interesting ones, uh, Henry Schein, their, um, uh, Fortune 500 company, they do dental supplies, a number of healthcare products. But, um, we've actually, um, One, improve the responsive rate for their net promoter score surveys so that we've increased it by, you know, probably three to four times, um, but then also help them improve their score. So they were able to diagnose which roles when they were least loyal, target those folks with messaging and app to educate them on areas where they could take advantage of, and then increase their score subsequently. So, I mean, my perspective, if you can increase If we could help our customers increase their loyalty, that's just helping them increase their retention as well.

AI assessment note: “one of the more interesting ones, Henry Schein, their Fortune 500 company”

Q install process. It's a quick JavaScript snippet. He's tested his onboarding so many times, he's still at around four percent monthly churn in terms of logos. So, like, you're doing something unique that is, or more of your folks are installing a JavaScript code and seeing value quicker than, than you know what Hotjar is doing. You can't, can you point to anything to credit why, why you're doing that?

A Well, I mean, I think there's also different markets. You know, I think our, you know, we, we've been pretty focused on B to B companies and they're a little broader into websites and B to C so that, you know, I, I think, you know, we move more and more up market to larger and larger ACVs. We're just going to naturally see a lot less churn because, you know, it's typically what happens when you move up market, you know, the, the larger the deal size, typically you see lower churn, but, um, Yeah, I mean, we invest a lot in our customer success team. We, we have, um, a pretty reasonable ratio of customer success to sales, so we take customer success. It's part of our core values, and, um, you know, we, we measure CSAT, MPS.

AI assessment note: “we move more and more up market to larger and larger ACVs”

Q have the opportunity to dive into this kind, this kind of strategy every, you know, very often. I mean, how do you take a customer base that's averaging, you know, we'll call it a little north of three grand a month, and drive revenue up per, per, per account that much? I mean, do you have an insights playbook that just drove expansion revenue like crazy around some utility metric?

A I mean, we definitely focus a lot. So part of our growth model is to grow based on our customers growing. So some of us are customers growing organically. Some of us add new features and capabilities. So we continue to add more and more capabilities on top of our platform. Um, that's a big part of our playbook. And then we also expand across product lines as well. So, you know, if we, let's say in one of our, our part of our sales motion is look, let's not stress out too much about the land. Let's get our foot in the door. So we were, we were landing at really large customers, pretty small deals. Right. Um, and then it's about continuing to service them, show them a lot of value, prove, The ROI, and then we moved maybe the larger product line within the business. So, um, a lot of it's been willing to take smaller deals at big companies, which has led to a lot of this, um, a lot of this expansion. So yeah, expansion is a huge part of what we do. We still carry a very high net retention rate.

AI assessment note: “a lot of it's been willing to take smaller deals at big companies”

Q what do you want to do? I mean, I would usually say is the goal to IPO and a lot of CEOs are competitive and that's like a, it's an ego thing. It's a checkbox. I can't ask you that because you've done it. So like, what are you most excited about in terms of Pendo and in terms of what you're building over the next five to 10 years?

A Well, that wasn't a company that I founded. So, I mean, we did get acquired in. So, I mean, there, there is, um, I wouldn't, I wouldn't give myself full credit for that checkbox, you know, personally. So, I mean, I was part of an amazing team there, and I had my, played my role. Um, yeah, I mean, look, we, we, You know, there's a lot of interesting milestones. I mean, a lot of the way I look at it, you know, IPO, but not IPO. I think that the goal is that can you put yourself in a position to continue building a bigger and bigger business, right? So, I mean, I think loosely speaking, we talk about category leadership as the ultimate goal. I mean, you want to own your category. And what we see in markets is that the category leader gets the bulk of the revenue in that category. And we still, we still quite aren't there yet. I mean, we still have competition. Um, it's still pretty aggressive out there. So, I mean, ultimately we want to build a category leader. And can you, that's the way I think about it.

AI assessment note: “we talk about category leadership as the ultimate goal. I mean, you want to own”

Q Are your margins better? Can you afford to undercut?

A Um, uh, you know, I can't speak to our margins. I, I, I think we do have different go to markets and, and, um, we traditionally as a company have, um, Uh, been lower in terms of services and implementation. You know, I think our product, we've always strived to be easy to use, easy to implement. We try to empower users to use our product rather than do a lot for us. So it is a slightly different go to market. Um, but our prices are typically higher. So we typically are the premium product in our space. And it's because we actually have a broader platform. We're actually, Customers are getting more, and they can usually replace two or three solutions. I mean, another example is we have net promoter score capabilities in our product, and none of the other vendors really do, and so there, there is a whole category of products that just do MPS surveys. Now, they're typically a couple hundred bucks a month, but what's, you know, what's neat is that customers that adopt our MPS solution can then contextualize it looking at other usage analytics. They can create campaigns based on it, so, you know, we've always treated having a broad platform as a way to better solve customer problems.

AI assessment note: “I can't speak to our margins... but our prices are typically higher.”