Mitch Edwards: Hi everyone, thanks for joining. Mitch Edwards here from the Alexander Group, and today I’m joined by Dan Juckniess, who is the chief revenue officer of SPS Commerce. And we’re going to have a little bit of a conversation about his role and what it takes to be a CRO in today’s tech landscape. So, Dan, thank you for joining us. Great for you to be here.
Dan Juckniess: Well, I appreciate being here, Mitch. And also, just to let you know, we’ve appreciated working with you and your team over the years, and certainly benefited from your expertise and counsel along the way on some key topics. So, thanks.
Mitch Edwards: Yeah, absolutely. Appreciate that. And I promise we didn’t pay Dan to say that at the start here. But why don’t we jump in. Maybe just a little bit of background, Dan just around SPS Commerce for anyone who’s not familiar. What’s the business model that you operate?
Dan Juckniess: Yeah. So you can think about SPS commerce as; what we essentially do is help automate the replenishment process across the retail ecosystem. And so, to say it more succinctly, think about the three players in that retail ecosystem: a retailer, a supplier and a logistics entity. We help them exchange order, item and point-of-sale sell through data across those three constituents. Knowing, of course, as everyone knows, about supply chain, if those three entities aren’t working well together, supply chain has tough times. And that automation helps provide visibility to each one of those entities to kind of track and monitor how well their supply chain is performing. That’s kind of it in a nutshell.
Mitch Edwards: Yeah, and I think from a business perspective too, right, you get a lot of benefits out of having that model and all those different groups that are connected together. Because there’s almost that relationship, that one relationship leads to many others on the other side as well, right?
Dan Juckniess: Yeah. No question. We’ve got, you know, 45,000 some customers now, and a majority of those paying customers are really the suppliers themselves. And a lot of those suppliers come from the large retailers or buying entities or retailer or distributor or grocer who is actually looking for help in that automation process. And not just our technology, but our people process expertise as well to enable that to happen. And so it’s a very viral nature. If the retailers are working well with our solution, it means that we’re also supporting their suppliers and vice versa.
Mitch Edwards: Yeah. No, it’s great that it’s all kind of connected, but maybe just in your role in your role as a CRO, Dan, maybe just talk us through what’s what’s top of top of mind right now. Obviously, there’s a lot of demands that end up on the plate of a CRO, but how do you filter through all that? What’s keeping you busy at the moment?
Dan Juckniess: Well, the time is kind of interesting because I’m probably not alone in what I’ll share. But then how it shows up in specific instances is different. But you know, I’m going to call it the three things. There’s market pressure, there’s economic pressure and there’s political pressure and they’re all kind of intertwined. And what’s keeping me up at night of late is that it’s not one specific thing, it’s all those things happening together. When it’s one specific thing, like, we’ve had the good luxury of our business when, let’s say potentially recessions in play, the way our model works is we don’t necessarily monetize the retailer per se to a vast degree. And oftentimes what we do for them is prioritize at a greater level when there’s not this capital outlay that’s necessary. That means then we get to go in and advise and counsel them and then act as an agent on their behalf to reach out to their vendors so that typically, you know, can help us during that kind of tough time. But the mere fact that there’s also this political stuff, we’re starting to see and worry that some are just actually in limbo. Potentially actually thinking to themselves, what do I do, and should we just hold back on a lot of things? So I’d say it’s just ensuring that we keep our value proposition front and center, play a different role in making sure that our customers realize we can be a thought partner with them going through this. If you think about tariffs, obviously everyone’s talking about that, but certainly in a supply chain, it’s sitting squarely in our domain. And so there’s challenges, but we think we can help there.
Mitch Edwards: Yeah, I mean there’s potential for a lot of impact around that, right? I know we’ve had a lot of clients asking us, what do we do in these times of disruption, right? And a lot of it for us is our guidance is going back to those playbooks that we developed through the Covid era and dusting some of that off to say, okay, well, we might have uncertainty with how we’re actually going to perform. Does that mean quota adjustments for sellers potentially coming up? Do we need to make guarantees at some point? Do we need to reorient to the customers that may not be as impacted? But certainly sounds like you’re doing a lot to help support those that may be impacted and kind of being that partner to them as well.
Dan Juckniess: Absolutely. I think what our team tries to do is remind our friends, our customers to try not to focus on the uncertainty, try to focus on the certainty of the things that you know and never is going to change, which is honestly this, you know, increased performance of supply chain, the ability to collaborate with, you know, the members of the ecosystem that they work with, whether they’re a retailer supplier or three PL, and just keeping that stuff front and center. At the end of the day, it’s important to have the data and visibility into when something’s going to arrive. Is it going to arrive in the way that was it was said, and the quantities that it was said? Shipped in the right way, shipped to the right spot? And so all those things, those don’t change still, you know.
Mitch Edwards: Yeah. No, it makes a lot of sense. Maybe let’s switch things back to SPS a little bit here. So obviously there’s always this quest for growth, and SPS has been very successful with driving consistent growth. Maybe you can give us a little bit of insight into kind of how you balance that shorter term, let’s meet quarterly demands, but also make sure we’re focusing on that longer term as well and driving long-term growth too.
Dan Juckniess: Yeah, the first thing that pops in our mind is we’re fairly formal and diligent and purposeful in the way we go into strategic planning each year, which really is crazy. We were just talking about it even in the last month. It’s just funny, you feel like you just start the year and all of a sudden you’re starting to plan for 2026. And that strategic planning that I’ll call it, like the formality of that is it’s always going to be tied into, what are the right strategic initiatives for the business? And we’ve been pretty deliberate about saying those are kind of your 3 to 5 year time horizons. And then what are those operating plan elements that should connect into some of those initiatives for sure. But those will be kind of the next year approaches. Right now, when I think about it, what we’re really emphasizing is we’ve got a little bit more of a balance of some recent acquisitions or inorganic opportunities alongside the organic opportunities. And I think where we’re headed now is this next iteration of a lot more potential cross-sellable elements into our portfolio that we haven’t had in the past because of those. And so that’s showing up in different ways of focus and,really trying to get the right talent to make sure we’re attacking the go-to-market properly. Does that make sense?
Mitch Edwards: Yeah it does. And that can be quite a shift, right? When you orient from we’ve got fewer products, a slimmer portfolio to as we start adding new products- that’s a pretty big shift for a go to market organization. So, what are some of the things that you’re looking at there?
Dan Juckniess: Yeah, and I think it’s interesting because to your point, we’ve had good fortune and great solutions and great customers to go to market with. And we’ve had, you know, 90 plus sequential quarters of growth, which is kind of nuts for a business, which I feel fortunate to be a part of. But over that course of time, that’s what’s interesting is we’ve amassed these 45,000 customers and now it’s about balancing. We still need to get the new logos in the door, but at the same time, we suddenly have a very solid mass of those 45,000 that we need to increase wallet share for. So a lot of the emphasis points are on distinguishing how we go after the new versus attack the existing customer base, and at the same time not introduce too many more points of contact for our customer. And I’m sure anyone out there who’s listening understands that’s a little easier said than done. Because you you also don’t want to limit points of contact if you don’t have the right expertise. So that all being said, and that I know there’s a lot that I just said there, but I think one of the key words we’ve been emphasizing is specialization. So making sure that we’ve got industry specialization, technical specialization, solution specialization, segment specialization from the small entity to the enterprise entity, but we’re still in that journey for sure.
Mitch Edwards: Yeah. And I think that’s the key, right? Ultimately, you want to make sure that a customer has a certain need. You need to have the right person in front of that customer to deliver the solution. And we also got to work out a way where we don’t have an army of SPS people showing up on their doorstep as part of a sales call. And so yeah, it’s always a tricky balance, right, kind of weaving in that customer journey and touchpoints as well as we need to make sure we’ve got that right expertise in front of the customer.
Dan Juckniess: Yeah, and Mitch, I’d say to your point too, in my opinion, okay to have an army, as long as the whole army isn’t showing up at once, it’s just known that it’s behind and available, and that everybody’s consistent with their dialogue and discussion with the customer so that there’s not role confusion.
Mitch Edwards: Yeah. I mean, that’s one of the key things we work through a lot, too. We have like decision tree frameworks around, hey, are we selling to the same buyer or is it a new buyer in the organization? What’s the level of knowledge or technical expertise that’s required to actually articulate the solution? How strategically important is that to SPS as a business, as an example, to sell this new product and then kind of weaving through that, you end up with options around, hey, is this a totally separate sales team should we have. Is this something that we just want to put in the bag of the existing seller that was working with that account? Or do we build out things like product specialists and experts that might be aligned to an industry or a particular product area, like you mentioned, Dan, too.
Dan Juckniess: That’s right. Well, your team was helpful in even allowing some of that dialogue and discussion to take place when we worked with you just even on, you know, compensation related to certain roles and is the compensation aligned to the right behaviors that you want tied to those roles? And, when you start to see all that in a single spot, you start to realize, wow, how all this stuff better work together properly to not confuse the customer for sure.
Mitch Edwards: Yeah. And I guess on the, on the compensation side too, Dan, one of the things that we’re balancing with you is the whole idea of obviously that role you have in working with retailers and their suppliers is you’re executing all of those programs on behalf of retailers. And I think one of the things we talked about is when you’re working with the suppliers, is it more of a volume based game where we want to make sure that we’re hitting all of those suppliers, or is it more the revenue based lens where, hey, we just want to make sure we’re capturing as much revenue as possible. And I think one of the insightful things that you shared as part of that process is, hey, if we’re going to meet these commitments to the retailer, it really matters that we’re getting all those logos there as well, and not just kind of focusing on the biggest revenue opportunities for SPS as well, which I think is a very interesting balance when it comes to compensation too.
Dan Juckniess: No, I appreciate you saying that. And yes, I totally agree. And not only that, yes, it’s adhering to the retailers requests when oftentimes they’ll engage with us to help them with their vendor community. But then I think the big trick is ensuring that it’s not just a compliance stick approach, but instead it’s an education and a consultation with the suppliers to ensure they actually understand the value they’re getting from that. In other words, hey, they can see what it means when they have properly given an advance ship notice. And when the goods show up at the DC that they understand that the retailer handles those goods when appropriately sent in the manner that is first class versus what it looks like if they’re not doing some of those things that provides the retailer visibility. So it’s I think it’s it’s both that retailer and supplier end. And then you got the three PL in the mix too.
Mitch Edwards: Great. I know we talked a little bit when we talked through customer touchpoints, but maybe just a little bit around the customer journey. How does that weigh into your decision-making as a CRO? How does that inform initiatives that you might be working on? How does that show up in the go-to-market? Maybe just what’s the role of customer journey?
Dan Juckniess: Huge, front and center, and then again, that customer journey, now you’ve got the three constituents I mentioned, each with their own journey, and then the intersection of their of their own journey. And I think, generally speaking, voice of customer comes into play awfully large and in many different ways. So, I don’t know, you can kind of steer me where you want, Mitch, but when I think about some key elements. Number one, at the end of the day, we’re trying to drive revenue and customer satisfaction. On the revenue front, we’re going to get that through higher retention. And then we’re also going to get it through upsells and cross-sells. So on the retention front, it’s really important that we’re paying close attention to gross revenue retention, and in looking at that, really trying to figure out what’s truly in our control versus out of our control. So think about, you know, if in the world we play if a supplier is no longer doing business with a retailer, that’s no longer a trading partner that may need the connection. And there’s not a whole lot we can do aside from ensuring that we’re educating them on, well, if you have a different trading partner, we’d love to work in that regard. And so the more sophisticated we can get around, really understanding what’s in our control versus out is helping us. And some of those in our control things are helping us build a little bit more intuition on predicting health scores of the existing customer base at the customer level, so that we can become a little bit more proactive than reactive. And um, and so that’s helping. And we’re making some strides there, which is pretty darn exciting.
Mitch Edwards: Yeah. No, that’s great to hear. So it sounds like a lot of it is, we just need to understand those different points, and hey, what does the data show us across those points of the journey? Maybe what customers might be at risk? What can we control? What are our opportunities to cross-sell and make sure that the teams are executing against that?
Dan Juckniess: No doubt. And that’s the retention thing. And then on the upsell cross-sell, and the same thing by the way; same kind of methodology. What do we hear from customers. How can we segment those customers in the right way that makes most sense? And so when you think about these acquisitions we made, now we’ve got data going through our network so we can tell if a supplier is working with a certain retailer, and based on the volume of business they’re doing with that retailer starts to indicate that that could be an opportunity for us to reach out to the customer about a different offering that we have connected to that retailer in terms of a chargebacks or revenue recovery aspects. And so it’s really getting smart at some of those opportunities that are there by understanding the existing customer base to that degree to.
Mitch Edwards: Yeah, I mean, Dan, this has been really helpful. I think some of the things you brought up, particularly around the uncertainty we have at the moment, whether it’s in the market, the political landscape, potential tariffs coming up, obviously being a connected or trusted partner with your clients is a key part of pushing through that element. I think in talking through a little bit around the model, right, in terms of understanding, hey, what is that customer journey? Where can we play throughout that? How do we balance growth and design initiatives that are also focused on the short term, but also some of those longer term objectives? Really insightful stuff.
Dan Juckniess: Yeah. Well, hey, I love it. I appreciate the time and know I feel fortunate to be part of this company. And like everything else, partnerships are key. You’ve been a good partner and just, you know, good, solid honesty, transparency makes good things happen, that’s for sure.
Mitch Edwards: Yeah, absolutely. Thank you, Dan, appreciate the time today.
Dan Juckniess: Yeah. Appreciate it. Good to see you, Mitch.
