It's no secret that high-value consultancy services can provide a huge boon to businesses of all sizes. By leveraging the expertise of experienced consultants, businesses can quickly overcome product gaps and gain a competitive edge in their industry. In this GSD Podcast, Michael Burton of Stitch discusses the keys to success when it comes to high-value consultancy services.

• Michael Burton is CEO of Stitch, a consultancy that helps marketers get the most out of Twilio and Braze.

• Michael and Jeff discussed headless tools, providing feedback loop into the product, co-selling, upselling, mitigating customer pain points with technology partners, and more.

• Burton advises against having source lead targets for consultancies when working with larger companies, advocating multiple solutions coming together with SaaS companies; trust is cultivated through successful work.

You can connect with Michael here: https://www.linkedin.com/in/michaeldburton/

Watch the video below or listen to the podcast here - https://spotifyanchor-web.app.link/e/JKqlAZG1Yxb

 Transcript:

Jeff  01:13

Well, welcome back to the podcast here with Michael Burton. And we're here that long last we're filing and talking about services again. Now, people like a 35 episode gap from Correctional Services. There's a last episode too, that I have to release that I found on my hard drive when I switched over from a new computer. But I don't know if we talked about this. But when I started the podcast, the s was to always change could be getting software done, could be getting services done, could be getting success done could also be getting shit done, which is the play on everything. And probably over indexed on on customer success over the last year or so. But today, I would love to get back in and start talking about professional services. So give everybody the quick five minute and and then we'll dive into some of the things we talked about.

Michael Burton  02:09

Yeah, I'm glad to be here. I appreciate the time. I think this it's it's also good for for me because it's it's, I'm doing this all over again. So I was a service, a services business before in the Salesforce space specifically focused on helping marketers have a great exit back in 2020. And then I'm with stitch now. So I'm Michael Burton, the CEO of stitch and co founder. And stitch is a consultancy that's focused on helping marketers kind of get the most out of, and in this case, we're kind of focusing on a couple of different stats based companies between Twilio and a company called brace. But it's all with this angle of kind of what's happening with marketers. So that's what we're doing. We officially launched back in September. And we're kind of applying all the lessons learned from our prior life and figuring out how do we go make it do it even better, which is there's so much going on in this circles right now in professional services and consultancies and the effectiveness effectiveness of internal services teams inside of SaaS company. So it's an exciting time looking forward to talking about it with you

Jeff  03:15

know, I'm looking forward. We're gonna dive right into it after I forgot to compliment you on your shirts, which I think we showed up on the first time we chatted with corresponding shirts, so I'm like, I am not going in that direction today. Very important. I think I told the story. You know, the reason why I bought the shirt was because my shoulder I was I had it in a sling and I couldn't couldn't unbutton anything. So I got a bunch of shirts, or I could just like pull off go from there. Luckily, the shoulders somewhat better. So, you know, I've seen a dramatic change, about the word professional services. In SaaS startups recently, when I came up, you know, granted, old and I've been through a new term, I heard the three wars. I heard from podcast called This Week in Startups, a bunch of venture capitals, if been through the three wars are basically the three busts essentially you have the two thousand.com combined with 911 and then you had 2008. And then you have the consider this like a little bit of a market shift, right. But like, every time gone through these wars, I've seen this tightening up on professional services aspects where where every time you bring it up, the exec teams and the boards like we don't we don't want to talk about services services will ruin our margins. It's going to make us look like we're a services company versus a software company. And I was wondering, do you get Do you bump into that coming from from your angle? Does it create more more up opportunities as a partner to be able to come in and work with with startups that don't want a services team?

Michael Burton  05:06

I do I think that what's happening is that it's not just about the margin, margin sure, like a consultancy. My background, I think we we talked before my background had been in internal services, as far as protect companies for most of my career. And it's only been in the last seven years of going and getting out understanding what like in a consultancy, but

Jeff  05:28

which I call real services.

Michael Burton  05:32

It is true, it's a whole different world. Because to your point, like you are focused on, you gotta be high value, high margin, strong co sellers, it is a tight ship, you have to run to be successful, and a services business. So if you're a tech company, like having that kind of association is super powerful than this idea of Is it a lost leadership internal class leader internally? Or is it closing product gaps? Like that's not a great long term solution to have huge internal services teams, you want to have this external consultancy. So we've definitely benefited from that from tech companies saying hey, well, let's partner with someone like a stitch like this is better for like, this is a win all the way around. And they're going to also kind of help those customers long term. And I do think that we're right now I there's even more emphasis on this, for sure. I've seen a lot of social posts over the last week talking about the sales versus the world and how much revenue there nificant

Jeff  06:36

sales forces wore, like, yeah, pretty significant.

Michael Burton  06:40

It's, it's, it's eye opening. And so this is, I think it's another great push for consultancies. And I think it is a benefit of a little bit of a downturn where we can step up, and we're able to be an extension, and also short term fixes for customers who aren't necessarily looking for a long term investment that opens the door for companies like stitch? Oh, absolutely.

Jeff  07:02

When I, my perception is always changing on this. First of all, just for some vocabulary sake, a lot of people have even started calling implementation professional services. And when they say professional service, they just mean like the implementation team, which is like, hey, if 30 days, they're gonna get you all hooked up and everything. I then say like no other professional services, there's, there's some customization going on, there may be some like data cleansing and whatnot, there may be some saying filling in some feature gaps that haven't been built out yet. Where do you think that that sort of ends in its maturity cycle as in building up in him? Because we've talked about we're we've both done time on both sides of the coin there. And there's that natural point in time where it's like, okay, we're not going to grow the services team internally anymore. Is there a, I don't think it's a revenue point or anything like that. Some type of professional services maturity model, like he gets to the certain point, and it's like, we have to start relying on partners a little bit.

Michael Burton  08:09

I think it's, I don't have like the perfect answer i My ideal. I feel like it's feeling it's probably a whole lot earlier than anyone, anyone really anticipates. Right? I think like that's, you do need it early on. I've been a part of startups, like product startups, where we recognize the importance of services immediately to help with those early wins and build up. But it shouldn't be too long before you're thinking about how do I start this partner ecosystem for all the reasons we just talked about, like all the advantages that you're getting. And an interesting point I don't think we talked about before is that the primary investor that's kind of supporting my stitch business, is a company called high alpha. And their studio capital may have had a capital arm, but they have only done b2b SaaS. So stitch was the very first time they were in the services space. And I and it was not something I approached them about, we just kind of said, Hey, this should this should work. And I was asking them why, like, why are you thinking about that as you're starting up these product companies. And it's because they're realizing that these early stage companies do need have more services at the very beginning, because they're seeing the consequences of not having that, which is you're losing the turn on these new customers, or you're striving for are turning over really quickly. And you do need that services also to kind of cover product gaps with a complementary solutions or just kind of being consultants. Right. And so it's, it's kind of funny that's in our background.

Jeff  09:46

Yeah. Do you know, just trigger something off here? Do you think it's maybe more to the shift that there's a lot more like headless and API driven tools that are out there? Are you seeing it with straight up product companies as well too?

Michael Burton  09:59

Got it. have both. So it's yeah, it's not just, hey, what's the overall strategy on what this looks like where the headless technology, but any kind of just product company, there's more and more of an emphasis to not it's not a huge army of people on the your startup, but you're you're investing more that time. And people that are better true consultants. And I think I've heard you talked about this before, you'd be careful between customer success and the consultants, like, if there's too much mixing their thought is effective as a solution. But I truly having people that understand how this technology can work are very beneficial in the early stage. And it's also a great feedback loop. Yeah, into the product.

Jeff  10:39

Nobody's gonna be using the product more than the services team like, no, they're Yeah, they everyday hammering away at it, they've got the best feature requests. They're like, Hey, can you extend the API out to do X? And yeah, maybe put a little regex thing in there. So I absolutely, yeah, yeah, they're the power users. I just now under this feeling of like, the common thing I've always said, is, in the beginning, services teams are brought in, they're like, just get customers live. It's all we care about. I don't care if you lose money a year or two later, it's like, okay, maybe just not lose the money. Right? And then it Nam, I was used to as like, Okay, a little short this quarter, actually, we need your revenue projections. And then I was going when we were going public at breakover was like, Oh, my God, I've got revenue projections, like on the street, but it's so forced, which is scary. so and so. But in that first stage that I was talking about, if you're saying you're gonna lose money, you might as well do it, because you might as well just get that time to live time to value faster. Right.

Michael Burton  11:51

So for sure, yeah, I think then that definitely accelerates with that investment in true services, for sure. So it's kind of it's for me as someone who's partial to professional services. Yeah, it is exciting to see that that there's, there's it's benefiting a lot of ways you're seeing a sharp and more startups you're seeing it now is like these independent consultancies, who are having a lot of success and supporting these technology companies that are out there.

Jeff  12:15

So let's do this. I don't want to wait. And I certainly have my own model. But I want to see what yours is. I'll start it off, right services team gets brought in, where I've usually seen this and where I actually this was my model for three different companies, which was like, not really wanting to hire any more people, I'm not sure if we have the volume, who knows if we can rely on sales projections, right. But if they do come in, I might need an extra four or five people, right? So I would reach out and I find a services company, and get them all teed up and say like, here's a point solution, can you deliver on this point solution? And I view that as sort of like, stage one, right? How does that grow? How does that relationship grow afterwards? Like, what what do you see that sort of the, you know, okay, yeah, you come in, you're doing some, you know, adjunct, you know, almost like, backfill type of work, and then moving on from there.

Michael Burton  13:15

So, it's, it's always been my preference. My personal preference is not to do that. Because I, because I, I've seen it, there's just different ways you can approach it. Now my personal preference has been, I want to, I want to go in stage one, as a co seller. So

Jeff  13:38

I just want to say this is what I was finding out in the last two weeks. This is like a new model that's being talked about, which is amazing. So So let's, let's dive into this a little bit. Yeah.

Michael Burton  13:49

And some of this is because I just didn't know any better. Like I I just started on my prior company. This was just how we started moving and saw good success. But my first exposure to outside consultants when I was I was at Salesforce, and we were using other subcontracting partners. So that exact example.

Jeff  14:13

Short contractors, yeah, it's essentially like, instead of you finding three Java developers, you went to a company and got three Java developers.

Michael Burton  14:21

Yeah. And so I would have four or five of these consultancies. And it was one of the reasons why I thought, well, I can go do this, like, I can go out there. And then my model was not to be dependent on the sub contracting. I thought I would be more valuable as a co seller. So working on the very front, to add value to help deliver on what pain can I mitigate from the seller app on my tech partner, which is how do I mitigate the risk? How do I help them close the deal faster? How do I bring vertical kind of industry expertise to that conversation, and then see it from beginning to end. And that's, that's my preferred approach. That's what we're doing at stitch all over again, is leading with that cosell be a true partner and get very sticky with the go to market teams. And I, I like that No, it takes takes a lot of work. I mean, it's constantly

Jeff  15:22

I want to jump on, I want to jump on something that you said before, you know, fades up from my, from my memory here, which is the vertical expertise. And I have had some customers where they asked us to bring in and they're like, How come you know the salespeople are relying on the partner so much and everything. There's a knot. I don't know if everybody's realized this, but sometimes you don't know jack about the vertical that you're selling yourself to. He's just like, so indica, we made the best search and browse software for commerce out there, right. But we didn't know shit about cars like, what should we do for our strategy for merchandising? I'm like a merchandising expert. So in so that's what we heard with some of these companies is that, that it's this CO selling where they're going to call up a partner like, you know, the classic ones manufacturing like, oh, yeah, we saw, you know, maybe we sell a PIM and you know, the manufacturing, people love it. And, but like our services team is only just going to be able to tell you how to configure it better. Whereas you can bring in a company that's done nothing but manufacturing for the last 20 years, it's a solution sale, which you will get a lot stickier.

Michael Burton  16:37

Yeah, that's, that's a huge benefit that the consultants can bring to the technology partner is that solution selling that they should be the best of the best at selling a solution. And so you're not just jumping in to demo and product. Like, it's, it's all about what we think about us as buyers of software, like, we just like, we just wanted to solve a problem. I don't need an RFP, I don't need three rounds. Like no, this is what my I need a CRM. I'm this size of company. Can you help me or not? That's it. Yeah. And so I think these these consultants that we know as professional services are get really strong at that and bring that strong vertical expertise. And if it's a CMO who is in a huge consumer bank, you can tell stories there, it's very, very powerful. And you're spot on about like being just because you are selling financial services or health and life sciences does not mean you're a 20 year expert inside the tech company. That's normally not the case, I

Jeff  17:39

got this 24 year old, he's great. He knows, admin panel in and out. So, but you so you talked about something when we first got together, and we're chatting, and they blew my mind. But I was like, let's talk more about this. And it was the partner helping to reduce churn and doing upsell as well, too. So just like, talk to me like a five year old on this one, because this is new for a lot of people

Michael Burton  18:12

meet. So if I'm, yeah, if I'm as if I'm, like, if I'm selling alongside So brace is one of our partners and marketing tech platform, more of a modern marketing type platform, if I'm selling alongside that account executive and bringing some experience on a streaming service, we happen to have a lot of streaming service experience, we're going to help develop that relationship and then close and help that customer go implement and then be available for ongoing services. Like when you develop that kind of relationship, you are in the best position possible, there is no one else that is as close to that customer than what you are in their business. So you have the potential not only to upsell for your own business for stitch, but also for your partner brace as you're finding new opportunities and new channels, and therefore that that's going to reduce churn. And I think that's some of the criticism of some of the focus on internal services. And these product companies is because there's just so much emphasis on launch, like, Alright, yes, initial time to value is super important. But you're, you're doing that at a loss, financial loss. And then you're out of the picture and a lot of cases. So like who is going to go do that. And the groups that are most incented to do that is the partner and the consultancy is able to go do that. So you got happy customers, we're winning for ourselves, we're winning for the praises of the world. And we're reducing that churn and that like that's, that's where the magic happens. And you're focusing a lot of customer success there.

Jeff  19:47

Who you interacting with on the renewal and then are you working with the original account exec are you working with the CS team at all on that?

Michael Burton  19:56

So it depends on every organization is a little different. and how they influence the account executive. So, you know, some, many of them are not incented on the renewal, so then you've got the renewals team, they are incented on upsells. So we find ourselves always in an interesting position, because we are a bit of the glue between renewals, customer success, and the actual account executives, which I love. Like I want to be that, that point that's bringing all these different groups together. And when you do it really well, that's where the tech partners fees, just a ton of value, like, Alright, yes, you help us with a net new logo. We're hitting ACB targets, that's awesome. But when we're growing that customer over time, and keeping that renewals, customer success team, and they ease, functioning and finding new opportunities. That's just that's the beauty. I think, under that long stir long term connections that you have with a partner, and your end customer. That's the cool stuff.

Jeff  20:58

Yeah, I agree. You know, it's all about setting the proper, you know, structures in place and letting everybody know their role. Because I've heard ces people like, Oh, we lost total control of the relationship, because the partner is in there, and they just want to keep their billable hours going and things like that. So

Michael Burton  21:15

and and that does that for sure happens. There are different incentives. But when you're when you're performing, when you've got you're hitting these ACV targets, and you're driving that, I mean that that helps a lot of a lot of things. I also do think that's there's always these different paths, you can go down as a consultancy, as far as I'm I am I going to go deep on a couple of different partners. And there are some that maybe have 20, some technology partners, and I think that's that is where it gets tricky. If you're representing competing products, and then your customer successes in there, then yeah, I think then they have a right to feel antibiotic because it does that does happen.

Jeff  21:55

I have that my office, I've tried to be platform agnostic, and everybody's like, come on, like, you must be a little and I'm like I really like, like onboarding software is an example of like, there's probably six companies out there that I'm aware of, that really do what I think should be done. And I really only have experience with three of them. And one is totally like a HubSpot thing. And so I'm like, if you're not HubSpot, go try out these other two. And like they're both good. They're both gonna do the job. It's what works for you best, but I'm like, I don't know. Because you want good relationships with all these people. And but yet, I don't want to seem like, Oh, he's just saying that because he wants the referral fee or something like that. Right. So don't get me wrong. I don't like the referral fees. But yeah. So, um, I was doing some planning with one of my customers. And they decided, and this is based on some some board conversations that instead of growing a larger sales team, they are going to grow their partner network. And basically split revenue 5050 between the partner, and sorry, the VP of partnerships and the VP of sales. And in there you go, everybody's got quotas in there after it. Have you seen that before? Where it's like, before, I've always seen as like, hey, we can't sell the coke. So we're going to just spin up like a partner strategy, and Accenture will sell to Coke or something like that. Sorry, if you're trying to sell the Coke, and and, and so it becomes this like, oh, it would be good if we got some more revenue from partners, and they're talking to people, and they're going to recommend us and things like that, that this is different. And I was curious if you've seen this and what your what your thoughts on that were?

Michael Burton  23:54

Yeah, to your point about, like, where it's not these one offs, or the tech company, maybe doesn't have coverage in Singapore, right? And then they have that, which is totally different scenario. Yeah, to go do this. But I have and I've actually from the the original idea about truly rolling your partnership team to drive sales and be a counterpart to sales. For sure. I've seen I've seen that I've benefited from that. And I think that I mean, I love that model. That's a much better way to scale. When you have a strong partnership team that understands how do you not only go develop the partnerships you have and amplify their success, but become really good at finding the next 20 to 30 partners that are there to step up. Because if you do it well, you're likely going to create a problem for yourself because those successful consultancies will get acquired, and then you have to be able to have a pool tool to go continue to go build out from your partner tool. But I mean I I love that. I mean I'm I'm I'm not super objective when it comes to that. I recognize that

Jeff  25:02

oh, well, I think.

Michael Burton  25:04

But if I, but if I'm a software company, I'm, I'm like, yeah, why would you not want to do that because you're getting, you're getting all the benefits from, that you're getting from the partner, you're, they're deeper into the business, they likely I always tell people this, because this is true. When I left Salesforce, I actually worked more closely, more broadly with Salesforce than when I did when I was in it. And I think that, you know, that's really the power of what partners can bring to the table. So

Jeff  25:34

I'd love to hear from from from the salespeople. When I ask them why they're working with these partners, they just feel like they're making tighter bonds and stuff moving on. Now, I wanted to bring up this concept might be a non sequitur, but it's stuck in my head. And it goes along with this CO selling and everything. But when I was in your shoes, and I just worked I did about four or five years that I tell us what to build modo build that type of company, and, and all these because we built some really cool stuff. And amazing architects and developers, we would have these local tech companies come to us and they're like, similar problem, like, hey, we need other people to help us deliver why oh, okay, well, how much work? Can we guarantee two or three people getting 40 hours a week? And we'll start building a little practice around this? And they're like, Oh, sure. I'm like, Oh, great. That sounds great. Everybody wins. And they're like, oh, yeah, by the way, you have a quota as well. And we're like, I thought you're having a delivery problem, not a sales problem. What did I do? Like,

Michael Burton  26:37

like, quickly changed on me?

Jeff  26:40

Oh, my God. Like, what? Like, thoughts on that? You know, is it happened to you? Has that happened to you,

Michael Burton  26:49

you know, I think I see happening in more inexperienced partner ecosystems, like where they're, they don't fully understand, like, what is partnership works out, it looks like and they're expecting, you're gonna drive X amount of sourced leads, which I always thought was funny when you're, especially the very large, fast companies when they have source lead targets, because these are multibillion dollar companies. How can we as a consultancy at 50, people think that we're somehow going to be able to drive more, so I know, because, like, you're

Jeff  27:25

one of those companies that I'm complaining about? Not gonna say them by name. Maybe they were in international business at the time. So that's the way we're gonna make an impact to really Yeah.

Michael Burton  27:39

So that's just not aware. But so it's refreshing. I was at when I was in New York this week. And it's talking about this partner, this this relationship that we have, and it was this realization that what's most important to them is that we we are co selling we're influencing, yeah, like we're helping. And then we're doing great delivery work. That's the priority. If we happen to be able to bring in some source opportunities, which would most likely come from upselling. Like it once were in a customer. They're like, that's awesome. But it wasn't like, here you go, this is the number one metric we're going to look at. And that's just, that's just not it's just not realistic.

Jeff  28:20

Like, Hey, by the way, if you get this, that would be great, right? Yeah. Yeah. Yeah, that's always been one that just really rubbed me the wrong way. So same here, obviously, because it's been about eight years since it happened. Last topic for me. Oh, man. So how do you feel about creating your own offerings and practice around some of these? Are you Is that what you're trying to do? Like, hey, this is our Salesforce practice. This is our Twilio practice and like that, or is it more more open than that?

Michael Burton  28:56

I think it's, this is a very stitches, a very different play than my prior company. And so like the lead play was very focused on Salesforce marketing. And then I think we're just in a different we're just in a different time where it's, it's like not one technology is certainly like the end all be all cure for your problems. It's more about multiple solutions that are coming together. And we happen to be in a great position to help go identify what are a couple of key things that we can bring together. So I don't not necessarily saying that I've got like multiple practices. I've just kind of identified a couple of very specific SaaS companies that can work together very, very well to solve a marketer's problem. And then that's really where we're spending a lot of our time kind of pulling together solutions around Have

Jeff  29:47

you identified as I get this, right, because you identified a problem and a solution to that problem, then identified SaaS problems that could fill in like Lego blocks to fix that problem. And then went and talked to them versus them coming to you and saying like, hey, we need some people to help out with XY and Z. Yep,

Michael Burton  30:06

that's exactly right. So we're kind of proactively kind of seeing what's out there. We know, from a marketer standpoint, access to just great data, not as close to real time as possible. One view of their customer is super important, and then having a modern marketing tech platform to go execute on it. So that's kind of what led us down this path of a company called segment which is owned by Twilio and embrace and other publicly traded companies that hate together. They're really, really powerful. Yeah. And so it's, it's, it's kind of interesting now, when we're working on pursuits, and it's all three of us ditch segment embrace that are all kind of a part of a solution. And that's, that's definitely a different story than what I've done in the past. But I'm really enjoying this.

Jeff  30:49

Who wants who's the GC on this project?

Michael Burton  30:53

Well, it's it has been the partner. I mean, if it's, if we're right, if we're doing this right, and then that's, that's how we really want it to be. And that's, that's the I think that's the magic. And so we, we, we feel I feel that kind of trust coming from our tech partners.

Jeff  31:08

It still seems, yeah. Because you're just bringing them into stuff that you want to go sell to them. And you're including them into the solution. Yeah, that's, that's magic days for a software company. For sure. Right? This has been great, because I didn't have to talk about like I didn't, the last time I taught was like fixed fee versus time and materials. Make sure W's have assumptions and everything so much more strategic conversation. So I appreciate it here. What did i What did I miss? What concepts that that we could have covered today? I think we went over the ones from my notes, but I wanted to make sure nothing popped into your head or anything?

Michael Burton  31:46

No, I think we hit all the big things we wanted to talk about. That's

Jeff  31:49

great. That's awesome. So as as we're going through, it's February now, this should be out in a few weeks. But what's your big winter hunkered down project that you know, like here in New England, people are gonna go skiing or this is going to be when I learned guitar or something like that we do have a big winter project.

Michael Burton  32:12

Why we have an ongoing project that's been like a 20 Last two year projects, because we finally it took us two years to build our our new home and we finally moved in. But there's still more and more things that we want to get done with it. And so that's that's pretty much consuming our life between our two young boys and our house that that is our

Jeff  32:34

project. Multiple Home Depot runs in a day. I love those. Those are good. Yeah.

Michael Burton  32:40

So calling our original builder Hey, this is some work here. I'm looking at the Esso W. Assumptions. I still need to deliver to A, B and C. I'm making sure that happens.

Jeff  32:51

Oh, obviously you put set milestones in there and you know, T milestone what's going? Great. Well listen to this has been awesome. I'm gonna grab all your info and put it so that people know where to contact and find out more. Just hold on one second, and I'll wrap up here. All right.