Brent Bellm: Yes, I’ll take that. Let me start by saying the foundation for our new go-to-market model is customer success, customer ownership all the way through from the presale and sale process to implementation, to post implementation, then relationship building and up-sell and cross-sell. Historically we had organizational silos between marketing, sales and customer success – it’s all now part of one organization, and the AE and the solutions engineer who sell a customer are going to retain not just customer ownership through implementation and post implementation, but also the actual metrics, right? We are changing the metrics for ownership to include retained account ownership, they’re responsible for net retention, that meaning you suffer if there are downgrades or churn and you benefit when there is up-sell, cross-sell, etc., account growth in terms of volumes.
That’s really important, so I’ve gotten to the cross-functional ownership of customers and customer success as a foundation, land-and-expand including the metrics that will go and stay with sales, and customer support in that. I talked a lot about value selling, and so this doesn’t go to metrics that we manage our employees with, it instead goes to the metrics that we put on our website and that we incorporate into the sales process with customers. I would really emphasize that as we analyze our own enterprise customers across the company, they do have site-wide conversion that is 34% above the internet average in Q3 – that’s extraordinary. Checkout conversion of 61.4% in Q3, that is far above any stated benchmarks for the internet and competition.
The Feedonomics statistics of 10% to 20% sales traffic and conversion lift through the leading omnichannel ad networks and marketplaces that merchants use, we’re really bringing statistics into the sales process and into how we optimize our own product and service delivery to the benefit of our customers. A final point I would say is, historically, we’re much more of an inbound-oriented sales company, and going forward Steven’s bringing his excellence in outbound in sort of hunting and knocking on doors, in opportunity creation by the sales team, and what was really magical in the Demandware days is the way they brought their own existing referencible happy merchants to industry events and to sales opportunities, and that’s a part of the playbook that we want to leverage ourselves because we do have really great customer happiness and success.
I’ll just conclude this point by going back to two of the recent awards that were in the earnings script – one was IDC giving us a SaaS C-Sat award in digital commerce, and then–so that’s for real quotable enterprise customers, and then Trust Radius for the fourth straight year naming us top rated, which is our merchants going and saying on Trust Radius that they love our service. We haven’t historically brought those happy merchants into the event and sales process the way Steven and Demandware did back in the day, and we’re going to do that here. Thanks.
George: Thank you, that was very helpful.
Operator: The next question comes from Parker Lane of Stifel. Please go ahead.
Parker Lane: Hi guys, thanks for taking the question here. Brent, you called out certain new customers pushing launches into 1Q after the holiday season. I’m curious, is that simply a cost dynamic, perhaps trying to save money on the services side, or if there’s something else at play there.
Brent Bellm: No. These customers are so large that they were nervous about doing something–you know, doing a launch a month or two before peak holiday season. It was just their own sense of we want to be 100% ready, have 100% of all, you know, sort of regressions tested, every bit of functionality ready to rock and roll, and let’s just manage through the holiday season, nail it and then launch in January, so the hope and expectation is that’s what happens.
Parker Lane: That’s all from me, thanks.
Operator: The next question comes from Samad Samana of Jefferies. Please go ahead.
Jeremy: Hey guys, this is Jeremy on for Samad. Maybe on the macro weakness, has that worsened at all from the close of the quarter through October or November, and can you talk about what you’re seeing there?
Daniel Lentz: Thanks for the question, Jeremy. I’d say no. I’d say it’s been pretty consistent. We have seen–the dynamics that we talked about in the prepared remarks, I think we’ve seen pretty consistently across the year. I’ve been paying attention to different results that have been coming out from peers as well, commentary from economists and banks and the like. I’d say it’s pretty consistent. We’re not seeing things getting worse, but we’re also not seeing things get substantially better, which is part of why we put in our remarks and our early outlook for next year that we are basing our plans on the expectation that we need to run the business in similar conditions to what we’ve experienced this year.
What I would add on top of that, and something that I’ve been pretty pleased about, is just from a financial management point of view, we’ve really positioned ourselves very, very well going into next year, I would argue from a macro point of view. The way that we are approaching billings with customers, the way that we are managing collections, the way that we are handling costs. We’ve gotten to profitability a quarter earlier than we expected without hitting some of the top line goals that we set as a company at the beginning of the year, and that’s just been through really tenacious cost management and discipline in how we’re running the business, which is something that Brent and I made a point of stressing throughout the company, throughout the year, and we’re really, really proud of the work that our teams accomplished in doing that.
What I think that does going into next year, however, is if we’re running our business that way and we’re set up financially such that we can get to the profit expansion we talked about, re-accelerating revenue growth the way that we’ve talked about while doing so in potentially a persistent challenging macroeconomic climate, when we start getting back to our long term growth trends in ecommerce, we’re really positioned with a really high gross margin business to throw off a lot of additional leverage on top of that, once we start getting back to what I would argue are more normal revenue growth rates for us. I think in a lot of ways, this has been a year that’s been about getting lean, getting efficient, and weathering through some tight conditions that we expect to continue going into next year, and I’ll be pleasantly surprised if it gets better a little faster than we’re planning.
Jeremy: Got it, that’s useful color. I guess on a previous question, I had the same one, maybe asked a slightly different way, can you size the impact of those pushed deals on the quarter, and is there any chance of them getting pushed out further than 1Q?
Daniel Lentz: I’d say it’s probably around a point of growth, maybe a little bit less than that, not so material that it would have dramatically changed the quarter necessarily. It’s material but–I mean, it matters but it doesn’t change the overall themes of the quarters. Could it push potentially? Sure, that’s possible. We don’t anticipate that, but we’ll see how things go with these particular customers once we get out of the holiday period. The larger point is we want to make sure they are ready and they are successful when they go live, and if that’s a month later than I would want as the CFO, if that’s what’s right for the customer, that’s what we’re going to encourage the customer to do.
Jeremy: That’s useful color. Thanks guys.
Operator: Our next question comes from Maddie Schrage from Keybanc Capital Markets. Please go ahead.
Maddie Schrage: Hey guys, thanks for taking the questions. I was just wondering, my first question is could you guys comment a bit on what you’re seeing in terms of consumer spending starting in 4Q, a bit between October and November that you’re seeing so far? Thanks.
