How Salesforce Cut Customer Attrition From 20% to 8% ft. Michael Marguglio

Mike is the Executive Vice President of Global Renewals.

Michael Marguglio:
Everybody in this organization plays a role in customer health and customer retention. So what we have now is we have a renewals agent that does the forensics. So it takes what might have been hours of work and compiles that into a nice executive view that It’s them that visibility. The team starts to pull back from that a little bit, that they don’t trust what the output is.

Josh Schachter [Host]:
Has AI ever caught anything that maybe the humans have missed?

Michael Marguglio:
So there’s a couple things.

Josh Schachter [Host]:
You’re listening to Unchurned, brought to you by the Gainsight Podcast Network. Subscribe to our Substack at unchurned.gainsight.com, where we go deep on every episode, like how one post-sales team at Cloudbeds built over 150 AI agents. That story and more at unchurned.gainsight.com.

Josh Schachter [Host]:
Hey everybody, welcome to this episode of Unchurned. I’m your host, Josh Schachter, Senior Vice President of Strategy and Go-to-Market Development at Gainsight. And I’m thrilled to be here in person at Salesforce Tower with Mike Margulio. Mike is the Executive Vice President of Global Renewals. Mike, thank you so much for being on the program.

Michael Marguglio:
Josh, it’s great to be with you. Thanks for having me.

Josh Schachter [Host]:
So, uh, you’ve got a big role. You’ve got quite a big remit. You guys manage close to 400,000 renewals, I believe?

Michael Marguglio:
That’s correct.

Josh Schachter [Host]:
You’ve got 900 people, 700 renewal managers underneath you. Tell us a little bit more about, you know, what you do at Salesforce.

Michael Marguglio:
Sure, happy to. So what my team’s responsible for is our global renewals business. So this is every line of our business. This is ensuring that every one of our customers, as they come up for renewal, has a successful renewal. So it’s important that we make sure that we have on-time renewals, customers are able to kind of extend with us. But we also have a whole operations and kind of data insights team around that that supports that. There’s a lot of insights that folks want out of this business. And there’s also a lot of complexity when you think about the operations of this business, given what you said, almost 400,000 transactions.

Michael Marguglio:
So that requires a lot of work with our, you know, various organizations that we interact with, our sales organizations. So it’s a big number that we carry every year.

Josh Schachter [Host]:
Do you even know how many product lines, how many SKUs you’re renewing? I mean, it’s gotta be massive. Sure, it’s a lot.

Michael Marguglio:
It’s a lot. And we try every year really to, as best we can, to kind of consolidate those. And there’s a lot of enablement we have to do with the team around those. But over the years, Salesforce has made a lot of acquisitions. I mean, I think it’s over 80 acquisitions that we’ve made. So part of what we do is also integrate a lot of those into our process.

Josh Schachter [Host]:
Yeah. So how might, ’cause if I’m sitting, listening, watching this at home, I’m thinking to myself, wow, that guy manages, you know, 900 people, 400,000 renewals a year. That’s just gotta be a massive undertaking. It just sounds very intimidating to me, a layman, right? That doesn’t know all that much. Is it like, in what ways is it more complex than maybe your typical person that owns renewals in SaaS?

Michael Marguglio:
Yeah. What’s interesting, it’s, it’s, there’s some things that aren’t nearly as complex as they used to. And then there’s certainly a lot of complexity just given the size of the book and all the different pricing and packaging offers that we have. You said a number of years ago, if you go back to when we first started this team, we really, we loaded the renewal opportunities in 3 to 6 months in advance. So we had very limited visibility into what a customer had when they renewed, what they were consuming, what risk there might be on the accounts.

Josh Schachter [Host]:
By the way, like Salesforce is a big ticket item, you know, the foundational product. So 3 to 6 months in advance is when you’re starting that renewal process, even for such a large—

Michael Marguglio:
Well, this is, this is going back a number of years. Okay. So that was, that was when we created those opportunities. So one of the first things we said we needed to do was we really needed to make sure we visibility into everything a customer had regardless of when that renewal date was. So that was kind of the foundation for us is to say every customer that has a contract with Salesforce, we have visibility into that renewal. So we understand what the terms are, the pricing. So we don’t spend a lot of time compiling all of that. We can come into a renewal cycle, whether it’s 3 months from now, 12 months from now, we can get engaged in an early renewal situation, a customer that’s not renewing for another 3 years.

Michael Marguglio:
So it’s really given us that visibility into every customer and every contract.

Josh Schachter [Host]:
Yeah, and it’s a very cross-functional function here, I would imagine. Tell me more about the different, the other groups and people that your team interfaces with.

Michael Marguglio:
Sure, sure. So we ultimately, we’re the owners of the renewal, so we’re on the hook for ensuring that our customers renew and they renew on time and that we’re forecasting, you know, the potential attrition on the business accurately. But we’re an integral part of the account team. You know, I often say that renewals, it really is, it’s a function that has to align well with our sales organization because they, They’re the account executives. They ultimately own the account, our customer success organization. We also align very closely with our legal organization, our finance organization, our product organization. So there’s a number of teams that are really critical to the overall kind of successful renewal outcome.

Josh Schachter [Host]:
Who are your closest conspirators, co-conspirators at the leadership level, you know, with sales and product and customer success? Who are you in the most meetings with, you know, strategizing this stuff together?

Michael Marguglio:
Well, we’ve made a big shift as an organization. So customer success is always been one of the values of Salesforce. But more over the last few years, we’ve really pushed to align our incentives as an organization for our sales organization, our success organization, and even our renewals organization is that we’re really ultimately measured on customer retention, customer growth. So there was a lot of work to kind of bring those together. The other thing that we’ve done is attrition is really a cross-company effort. And so we’ve created an attrition council within this organization that we said, look, our priority—

Josh Schachter [Host]:
You say attrition, I say churn, right? Sure. Exactly. It’s a motto, whatever.

Michael Marguglio:
Okay. Right, right.

Josh Schachter [Host]:
Yeah, and it works like that, but yes.

Michael Marguglio:
Yeah. Often people think when I talk about attrition, we might be talking about employee attrition. We’re talking about dollars leaving the business. So as customers come up for renewal, how much, how much? Ideally, they’d be renewing in full or growing with us. But we do have, we do have some levels of attrition. So we, as an example, we’ve created this attrition council where really what we’ve done is we’ve gone out to all the cross-functional teams and said, everybody in this organization plays a role in customer So that was a, that was a good way to get our product teams and get our legal teams and our finance teams and everybody across the organization, senior leaders aligned on that vision and say, okay, how do we all impact that? And how do we make sure we’re taking steps to—

Josh Schachter [Host]:
When did you guys create this council?

Michael Marguglio:
We created this a couple years ago. Okay. So we’ve been on this really, you know, attrition certainly, or, or, you know, renewals has certainly been top of mind for us as a company for a lot of years, just given that we have a subscription business and that amount that we’re renewing every year is just continues to grow. But we’ve really in the last couple years, couple years that let’s start to think differently about how we align the incentives. And then we also start to have other teams really start to think differently around attrition. So for instance, our product organization, our product leaders would be very interested to know what features are customers not consuming?

Josh Schachter [Host]:
Yeah.

Michael Marguglio:
Or where are we starting to see attrition start to uptick? And then how do we get ahead of that risk? That’s the other thing we often talk about. Okay, what’s the ultimate outcome of those renewals? Where are we starting to see that leaky bucket, dollars leaving the business? But ideally we’d be identifying that risk much Earlier on in that cycle.

Josh Schachter [Host]:
I love that idea of that attrition council. And I mean, I want to teach— teaching moment here for other companies that are listening. Tell me more about the way it operates. How often do you meet? Who exactly at the leadership level is involved? What’s the MO of that council?

Michael Marguglio:
Yeah, well, one thing we did was we said we need to have some dedicated folks that are really going to help coordinate that effort. So on a monthly basis, we’re going to meet. And what we’re going to do is we’re going to go and we’re going to get the senior leaders from various functions across the company. And we’re gonna align on who that council is, what the cadence of that is, and then the topics that we’re gonna discuss. So the topics range every month. Topics could be specific to maybe just trends that we’re seeing across the business. It could be specific to maybe new investments or new motions that we’re having across our customer success organization. It could be in this next month’s council, what we’re gonna do is talk about how do we get better visibility in predicting attrition, and then how do we start to leverage that more for some of the different segmentation of our business? So we bring various topics to that, And we also look for other folks from other teams to provide us some input and some of the things they want to start to bring forward as well.

Josh Schachter [Host]:
And I assume you’ve seen an impact from that process, that practice.

Michael Marguglio:
A lot more visibility, a lot, much better understanding of the business, a lot better understanding of where there’s at-risk accounts and how each vote, each individual can engage differently and start to help across those. And yeah, and the participation, I think the awareness is continuing to improve.

Josh Schachter [Host]:
Everybody, it’s, it then becomes incumbent on everybody attrition to prevent attrition.

Michael Marguglio:
Yeah. Well, it’s that—

Josh Schachter [Host]:
CS team. So we’re all in it together.

Michael Marguglio:
It’s that joint ownership. So I’m ultimately responsible for forecasting every dollar that leaves the business. And for a long time it was just viewed as that’s, that’s a renewals function, that’s a renewals motion. But again, it’s really changing that culture to get everybody across the organization to understand how important— I mean, a dollar’s a dollar. A dollar of, a dollar of existing business is just as important as a dollar of new business. So, so that’s why it’s really critical that we think about not only what are we doing to continue to grow and expand new product offerings, but also what are we doing to make sure that we’re limiting the dollars that are leaving the business.

Josh Schachter [Host]:
At a company the size and scope of Salesforce, owning that number is a pretty big thing to own. Does that like make its way up into the street? Does that make its way into earnings reports? Does that make its way into investor updates? I mean, That’s a very, again, to use the word impactful number to own.

Michael Marguglio:
It is. It is. And the way we represent it is really as a percentage. And this is something we disclose externally in our earnings call every quarter. But we talk about the percentage, the attrition rate. So the percentage that are leaving the business. Now that number’s come down significantly. You know, we externally disclose that our attrition rate’s approximately 8%.

Michael Marguglio:
So approximately 8% of the dollars are leaving the business. But at one point, not too many years ago, A number of years ago, it was up— number was over 20%. So we’ve taken a lot of steps along the way to really improve the visibility, getting ahead of these, and doing more things upfront so really can try to make that renewal not an event.

Josh Schachter [Host]:
Yeah. So we’re here at Dreamforce. My first Dreamforce. Dreamforce 2026. Yes. It’s an incredible experience. It’s a zoo, just to be clear. It’s complete— getting my lunch downstairs, it’s like zigzagging through, but it’s like the most amazing energy of technologists that I’ve seen in one place.

Josh Schachter [Host]:
And everywhere you go, there’s a different booth for Agentforce and Cloudforce and all of the cool things that you guys are doing with AI, which everybody’s well aware of. What specifically is the Renewals team doing right now? Are you building AI workflows to use in your team? What are you guys up to?

Michael Marguglio:
Sure, happy to share that. So yes, but by the way, welcome to Dreamforce. It’s my 16th Dreamforce.

Josh Schachter [Host]:
Does it ever get old?

Michael Marguglio:
Never gets old. I continue to be just really amazed at just the energy in the city and just the customers, customer participation, and just every year it feels a bit different.

Josh Schachter [Host]:
As you’ve grown in your career at Salesforce and you’ve become the executive, have the after-hours gotten more exciting or less exciting for you?

Michael Marguglio:
I’ve learned to pace myself a lot better. Okay. Yeah.

Josh Schachter [Host]:
There’s more like you have handlers that take you from one to the other to the other, so you have to get that pacing correct.

Michael Marguglio:
There’s often a lot of different events throughout the day. So it’s no shortage of things going on. But, but to your question on how are we leveraging AI, how are we doing things with agents? I’ll give you a few examples. When we look at a renewal, when a renewal manager picks up a renewal and says, okay, this customer’s coming up for renewal, they often would go through a pretty extensive process to say, okay, what contracts do they have? What are the terms? What is the pricing? And then start to look even further to say, what other open new business opportunities might there be? What open cases are there? What, what past due invoices? What, what has this customer had any sort of outages or or issues or anything like that that’s come up. So they used to spend, depending on the customer and the number of contracts, I mean, that could have taken hours, maybe half a day to compile all of that. So what we have now is we have a renewals agent that does the forensics. So renewals agent can take a renewal opportunity, a renewal manager can go into this renewal agent, take a renewal opportunity and say, give me the forensics on this renewal or this account. And it pulls a complete summary, but it even gives insights into what happened at the last renewal.

Michael Marguglio:
That we did with that customer. So it takes what might have been hours of work and compiles that into a nice executive view that gives them that visibility. The other thing that we’ve done is we get a lot of questions. So as you said, we have about 900 people, we have about 700 renewal managers, but that’s supporting a lot more account executives and also a lot of other folks across the organization that might have questions on a specific account contract renewal that’s coming up. So we’ve created something called—

Josh Schachter [Host]:
What is it, like 15,000 AEs or something?

Michael Marguglio:
15,000 AEs, yeah. And so we’ve created something called Ask Renewals. So that is, that is an agent that is somebody can go into Slack and they can go to Ask Renewals and they can type in a question. They might want to know what’s the end of, end of life date of this product, or when is this customer’s contract coming up for renewal, or what are the, what are the terms, what are the price caps that they might have? It could be any number of questions, and it’s a way for they automatically get self-served against those questions. So we get questions all the time within our own team, our people on our team might have questions or that people might be onboarding or just we get questions coming in from outside our organization. It’s a great way to funnel all those into kind of a real self-service site. Now, the third thing is that we’ve been doing, because we’ve done a lot of automation in our renewals about the auto-generation of the opportunities that I just said, the auto-generation of quotes that we generate, the auto-generation of the notifications that go out to customers to get to initiate that renewal discussion. And now we’re starting to also create some automation around putting an agent in that experience.

Michael Marguglio:
And that in our low end of our business, we think about that scale segment, that long tail of our business. That’s where you’re starting to see much more of that low touch or no touch motion with an agent that’s going to be sitting there.

Josh Schachter [Host]:
And I want to put a pin in that and come back to that later because the big bet that we as a company at Gainsetter make with Atlas and all the things. And so there’s synergies, uh, there it sounds like, and shared priorities. Okay. So it’s give me the dossier of the customer, give me the 360 review, and I don’t want to take my 5 hours to do it. I want it in 5 minutes, let’s say, maybe less. Then there is knowledge sharing, knowledge transition and transfer and collaboration, a little bit of internal ticket deflection almost, right, of helping me get the information to my peer. And then we’ve got the long-tail renewals and helping to automate that. In the first 2, at least, well, in all 3, there’s a lot of time savings.

Josh Schachter [Host]:
What are your renewal managers doing, or what do you want them to do, maybe a better question, with some of that time savings? Yeah.

Michael Marguglio:
Well, you know, it started when we started to look at these different ways to automate. For instance, as I said, starting with the auto-generation of the, not only the opportunity, but the quotes, we were doing a lot of time studies with the renewal managers and we were finding that a disproportionate amount of time was spent compiling, getting understanding of the renewal, generating those quotes, starting to send out those notifications. So what’s happened now that we’ve been able to automate a lot of those functions is it’s allowed our team to scale. It’s allowed our team to spend more time And on that internal kind of alignment dialogue and building strategy around that renewal, it allows them to handle more renewals in a given month. So it’s been able to help us as, as our book of business is continuing.

Josh Schachter [Host]:
What do you, what, what’s your metric that you call that internally? Is there a— The ratios.

Michael Marguglio:
Yeah. So we look at ratios and every year we reevaluate those. So you might find in the very low end of our business where a lot of those customers might just auto-renew on an annual basis, um, a renewal manager can cover a lot of accounts. Because we’ve automated a lot of those pieces that I just said, and those customers traditionally kind of roll over and auto-renew. Now, if they want to engage with the renewal manager, absolutely, we’re here and we engage around that. But as you go up to our enterprise customers, that number’s obviously much smaller. Those deals are bigger, they’re more complex, take longer. The cycles can be, can be much longer in the low end.

Michael Marguglio:
So we look at those ratios and we’ve been able to increase those over time. Hmm. So we’ve, we’ve really, one metric we look at is how do we continue to drive down our cost to renew? So how do we create the same level or better engagement? How do we make sure we’re taking the right steps to get ahead of those renewals so we have the right collaboration and strategy? We’re strategizing around that renewal, but also we’re driving down our cost to renew. So that’s an important measure for us is not only attrition rates I said, but how are we scaling that cycle?

Josh Schachter [Host]:
Cost to renew, on-time renewals, renewal rate, expansion, upsell, cross-sell.

Michael Marguglio:
Expansion, upsell. We also want to drive pricing, price increases where we can. We, in contract term length, we want to try to get customers committed and onto longer commitments, you know, term commitments with us. We look at things like bill frequency. We also make sure the customers are in compliance. There might be certain, they might have certain limits that they’re running against on certain things. We want to make sure we’re providing those as well.

Josh Schachter [Host]:
Get those overages.

Michael Marguglio:
Get those overages, right.

Josh Schachter [Host]:
Get those receivables in. What’s your stack rank? Do you have a stack rank? Like what’s the golden metric for you that you’re really trying to optimize above everything else? Above

Michael Marguglio:
everything else is we want to minimize the dollars leaving the business. Yes.

Josh Schachter [Host]:
Which is a renewal rate.

Michael Marguglio:
It’s a renewal rate, and actually we’ve evolved a little past renewal rate because we often talk about, I keep saying attrition is because we’re concerned about every dollar that leaves the business. The renewal rate is a great measure as a customer’s contract comes up for renewal, but there is sometimes there could be leakage or there could be attrition that’s happening mid-contract. And often folks say, well, what’s happening mid-contract? Why, you could have customers where maybe they’re going to be written off. It’s a bad debt situation. You could have some products that customers commit to, but not for the full length of the contract. So we wanna make sure we got visibility. There might be something where it’s only a year commitment, but the rest of the contract is 3 years. And if there’s a restructure of that contract, if there’s something that, that warrants kind of a restructure of that, we wanna be able to have the right engagement around that as well.

Michael Marguglio:
Yeah.

Josh Schachter [Host]:
AI is smart, and I wanna know, has AI ever caught anything that maybe the humans have missed or would have missed?

Michael Marguglio:
So there’s a couple things. So the way I think about that is if we want to go back and get a kind of a long-term view of the account, an example might be if we said, what are all the concessions maybe that we’ve made across an account? And it’s lifetime. We had an example the other day where somebody brought that up and we took a customer that’s been a customer of ours since 2009. And I went back and I looked at all of the concessions that were made around some courtesy licenses that were given. maybe a contract modification that was done, different payment terms. So that there was this long list of things that dated back to 2009. And I was kind of reflecting on that thinking how incredible that is to be able to go back and find, pull all that together in a very consumable way in these different categories, but very unlikely that somebody on our team would’ve been able to go construct that.

Josh Schachter [Host]:
Yeah.

Michael Marguglio:
So when you want to get that full holistic view of—

Josh Schachter [Host]:
It’s forensics. It’s like the— Right, right. It’s a renewal detective. Actually, there you go. That should be the name of your AI agent.

Michael Marguglio:
Right, right.

Josh Schachter [Host]:
Exactly. Renewal detective.

Michael Marguglio:
Yeah. So it’s adding to that, right? So there’s the general understanding of what a customer has. And then the next level was how are they using that? But really understand the history of that. So I mentioned before about even just getting a summary of what happened at the last renewal, knowing that the last renewal might have been fairly contentious. So there was a lot of— there was some pricing discussion.

Josh Schachter [Host]:
And the last renewal might have been for years.

Michael Marguglio:
It might have been 3 years ago, 5 years

Josh Schachter [Host]:
ago. Right. And it could have probably then in that case, if it’s 5 years ago, is a coin toss of it was a different

Michael Marguglio:
Right,

Josh Schachter [Host]:
right.

Michael Marguglio:
Yeah. So it’s, it’s, so it’s being able to kind of really surface that. So as your renewal manager now, you have some insight of that. You might actually be able to uncover that, look, this renewal took a long time before. There were a lot of cycles that the customer had to go through and we actually pushed up right against that contract end date. Yeah. The other thing I’d say—

Josh Schachter [Host]:
By the way, I want to know which customer this was that has, has had their way with you guys since 2009.

Michael Marguglio:
I can’t disclose them.

Josh Schachter [Host]:
That is a customer. Strategic, a brand One by one, kudos to them. Was it the same buyer, the same sponsor, or is it just like—

Michael Marguglio:
I didn’t get to that level of detail. Okay. This was more just how we could pull some of this stuff.

Josh Schachter [Host]:
Because you could profile like, you know, oh, this person over here, we got to keep an eye out on them. Right. Make sure they don’t try to pull one over us in the next renewal.

Michael Marguglio:
Right. Right. The second thing though, I’d say is, as we look at, is the other thing that we want to be able to really get a better insight into is how is the customer using it? Like, what is that kind of attrition risk insight that we can develop? So as we go into renewal rates, what are all the different indicators? What are all the indicators on not only what a customer has, but what they’re consuming? And simple things like you purchased 100 licenses, how many of those are assigned? But then you get into start getting into feature adoption and you can start to look at various levels of consumption. And that for us, that’s been a, that’s been an ongoing process. So, you know, we’ve continued to evolve essentially what we originally called an early warning system. And now vault that. Certainly as our products have changed and our pricing models have changed, we want to, we want to continue to modify that. So that’s been an area I think that we’d look at, say, I don’t know if this has given us the right insights or it’s telling us that this account is unhealthy or higher risk of churn, but it’s really not.

Michael Marguglio:
So those, those have been areas that we continue to modify.

Josh Schachter [Host]:
Let’s go to— I was going to talk a little bit more about AI, but we can come back to it. Pricing is changing. Sure. SaaS becoming outcome-driven, consumption-driven, and all these things. How is that changing? You alluded to it. How is that changing your playbooks and how you’ve run renewals with your team?

Michael Marguglio:
Yeah, what we moved, we moved from what was traditionally very much of just a license-based model, subscription model, to now we have various forms of that, right? I mean, we’ve moved up and said it’s now, it’s like human and agents working together. So we’re looking at much more of a mix of certainly your traditional license model, but also more consumption-based products. We also, through acquisitions, we have more on-prem. in, you know, traditional perpetual license models. So there’s the maintenance contracts as well. So it’s not uncommon you see a customer that has a mix of all of those. And as we come into renewal, that’s a good opportunity for customers to really reevaluate and reset on that. So customer, they might say, listen, we have less, maybe we need less licenses, but we need more consumption-based products.

Michael Marguglio:
So there’s that, that’s the role of a renewal manager is to really understand how to navigate and help that customer.

Josh Schachter [Host]:
You’re basically looking at like the macro optimization, not the local optimization within each product, but overall, what’s the product portfolio mix that’s going to give them the maximum value, what they need out of Salesforce at large?

Michael Marguglio:
That’s correct. And that’s why, that’s when you think about all the different products and the complexity, all the different pricing models, that’s— we need to have the ability for the team to really be enabled and get answers on those type of things quickly.

Josh Schachter [Host]:
Yeah. Okay. What hasn’t worked with AI? I would say had, but that’s like very loosely said, right? So, What have been some stumbling blocks, right? And some key learnings. What are things that you would like to do that you’re still iterating, maybe redesigning? We’re all figuring this out together, even Salesforce, even Anthropic, even OpenAI. What are some of the things that have been challenging for you guys?

Michael Marguglio:
Well, what hasn’t worked is, is when we originally started to pull those contract summaries and that forensics, is we were finding that oftentimes we weren’t pulling all the pieces together. So when you start to have those situations, the team starts to pull back from that a little bit because they don’t trust that. They don’t trust what the output is. Mm-hmm. So, so when, when a renewal manager goes through and says, give me a summary of this account and they don’t see a full summary of that account, there might be other contracts that wasn’t picking up. There might be some other things around other deals maybe that are in play that it’s really helpful that we know. So when we show up and we don’t have that full holistic view of the account, Then what you see is you see low adoption of it. You see the customers, or you see the employees not really embracing that.

Michael Marguglio:
And to build on that, the other thing that we really try to look at is of all the things we’re rolling out, how much is the team engaging in those? So again, simple example, we’ve created this forensics view. How often are the team leveraging that on every renewal? The Ask Renewals agent that I was just saying, when they have questions, how much are they going there and starting there first? How much are they leveraging Slackbot? Slackbot is a great tool. Whenever I have a question, I always go to Slackbot and type in something. Could be as simple as, when is this certification? Or why do I have to complete this trail? Or like, you know, when is my performance review?

Josh Schachter [Host]:
Slackbot’s great. Right.

Michael Marguglio:
I always start there. I’d say in most cases, I get the answer served up right away. So, we built a view and not really to kind of punish anybody with, but really just get a sense of how is the team really engaging? How are they leveraging AI? And is there an opportunity that we could do further enablement? Or are there things we can do to continue to enhance some of these so that it’s actually providing more value to the team?

Josh Schachter [Host]:
How, as the executive leader of this group, how are you consuming that information on adoption amongst these different AI

Michael Marguglio:
tools? Well, we incorporate this actually into the performance reviews. So for instance, right now we’re going through our mid-year check-ins at Salesforce. And one of the things that we do is we engage that process. So if you and I were doing our mid-year check-in and you’re, let’s say you report to me. I would first go into Slackbot, and we’ve got an agent that helps kind of pull together a full summary. And what it starts to do is it starts to surface a lot of the way years ago, the other things you’re doing to engage around AI, and also how you, how your collaboration is, how your performance is. And it kind of pulls forward this, this full summary. So when we can sit down—

Josh Schachter [Host]:
When you say through Slackbot, this is not just through the Slack conversations that I’m having with peers and in channels. This is through, through other different data sources as well.

Michael Marguglio:
Yeah. It’s, it’s pulling all these different data sources. So it’s giving me, it’s giving us a good framework to sit down and have that conversation. And so I would be looking specifically at things like, how are you leveraging AI? And, and, and then get some feedback.

Josh Schachter [Host]:
And a Slack bot is able to give you that?

Michael Marguglio:
Yes.

Josh Schachter [Host]:
Interesting.

Michael Marguglio:
Yeah.

Josh Schachter [Host]:
I didn’t realize that.

Michael Marguglio:
Yeah. In fact, I started to pull examples for myself because you can do your own self-assessment on this. And it would say, here’s some good examples of like, it would be bringing up examples of some of the collaboration alignment, some of the things that I’ve been doing. What if it— yes.

Josh Schachter [Host]:
We have a Slack bot.

Michael Marguglio:
Yes.

Josh Schachter [Host]:
I use all this stuff actively. What do I prompt to figure out my own performance?

Michael Marguglio:
Well, you should try it. You should go in, you should just start with some simple prompts about some things that maybe within Slack or that you’ve been engaging in and just ask it various questions. But then it comes into the data. I mean, how is it able to kind of pull in and leverage all of that data? How are you, you know, whether it’s looking across your opportunities, it’s looking across your, you know, the learning that you’re doing or the trails you’re taking or whatever it might be, right? To see what that employee engagement is.

Josh Schachter [Host]:
I will say that one thing that I’ve done as a party trick recently is, uh, I, you know, at customer and prospect dinners, I’ve had everybody take out their phones, go into their Slack app, and ask Slackbot to do a personality profile on them. And then we go around and we read our personality profile to the group. And it’s always, it’s always, uh, very clever. And honestly, it’s, it’s pretty, pretty spot on for the description. I’m always very impressed and a little scared. Oh yeah. Yeah. Absolutely.

Josh Schachter [Host]:
Yeah. So you feel good about AI adoption overall within your team?

Michael Marguglio:
We continue to push on it. So I, with every day, there’s new enhancements, there’s new tools that we’re rolling out to the team. So we continue to push on that.

Josh Schachter [Host]:
How is AI— well, we know it’s changing the game for your team now. Do you have any prognostications, any— the forecast guy, what’s your forecast for how AI is going to change the day-to-day of your team a year from now?

Michael Marguglio:
Yeah. Well, I think another big piece that we haven’t talked about is my ability to really leverage AI to say, give me a, give me a forecast as I look out 12, 24 months in my business.

Josh Schachter [Host]:
Yeah.

Michael Marguglio:
And then what are the areas, whether it’s specific customers, whether it’s specific products, maybe it’s specific price pricing or terms, whatever those things might be, they’re, they’re risk in the business that we should be flagging. Because the earlier we identify those, the more that we can get, we can get ahead of those. So you think about the customer lifecycle from the time they sign a contract with Salesforce. We want to make sure that they’re onboarded properly, they have a successful implementation. We’re taking steps to help them realize value, drive better, drive adoption. So again, back to the point of when we get to the renewal, it should be really kind of a non-event. I know my team probably hates when I say that, but ultimately, if we’ve, we’ve done everything well and we’re helping our customers realize value, oftentimes customers won’t even get to renew. Because we’ll be working through an early kind of restructure, maybe an upgrade of some sort, or they’re expanding their usage with us.

Michael Marguglio:
So that predictability, my ability to kind of look out and say, not only do I have confidence as I look at the risk in the business, 3 months, 6 months, 12 months, but I can start to even look beyond. So we’re in FY27 right now. So I want to be able to look and say, okay, where’s all the risk in our business in FY28? And then what are some of the engagements that happen around that? What are some of the motions within our success organization where we can start to engage with some of these customers differently and try to get ahead of that and try to do some things to move the needle on that ultimate customer success score.

Josh Schachter [Host]:
So if I asked you how it’s going to change your role within the next year, let’s say, it sounds like better visibility into forecasting and being— making these decisions, having this information earlier is a big piece of it.

Michael Marguglio:
It helps me with the forecasting. It also helps me as I look at capacity planning and how I think I’m going to segment and plan for the organization around what are our needs and our staffing needs that we have across the team. It also helps when we show up with our counterparts within sales and customer success and we’d say, okay, here’s some of the areas, here’s some of the hotspots, or here’s some of the areas of opportunity. These are good candidates. These are, these are good profile candidates. So we should be, we should be speaking about maybe some of our new additions and looking at potential upgrades.

Josh Schachter [Host]:
Going back to long-tail renewals, because that is something again that interests us very much. I hear it a lot from industry leaders that everybody, it feels like there’s this new access that’s been unlocked to long-tail renewals that we as a community may not have had before in SaaS. Because we couldn’t afford to put people fully on the long tail, so they were unmanaged, you know, and then we just kind of assumed that they would, they would, they would renew, but having these other headwinds and, but now we also have AI, so it kind of goes both ways. Tell us more about how you’re treating the long tail, maybe in ways that, that is different than a couple years ago. You started to talk about it a little bit.

Michael Marguglio:
Yeah, well, our long tail, why talk about long tail? I mean, it’s, for us, it could be if you look at customers that are below a certain spend, So let’s just say in this example, customers that pay below $25,000 a year, a lot of those customers are set up to auto-renew. So that for us was one of the first things we implemented a number of years ago to say, okay, well, a lot of these contracts should just default to an auto-renew motion. That doesn’t mean that customers don’t have the ability to engage around the renewal and add or reduce, make some other bridge like that, less friction. So we put that in place. And the second thing we did is we took our Marketing Cloud offering So once we acquired ExactTarget and that became our marketing cloud, we said, look, there’s this renewals journey we could build. And what we wanted to start doing was getting away from just those customers auto-invoicing. As you’d imagine, if you’re a customer that auto-renews, you might not know your renewal date. So you get this renewal notification that comes through, you intended to ask, make changes, or you had questions on it.

Michael Marguglio:
So what we did is we started to automate the notifications at 90, 60, 45 days in advance. But it also ties back into Salesforce. So, if you were to give—

Josh Schachter [Host]:
Isn’t that scary?

Michael Marguglio:
It was scary a little bit because what you’re doing is you’re automating, you’re pulling out of Salesforce the contact information, you’re pulling out the renewal dates, the amounts. You want to make sure it’s going out on the right cadence to the right individuals. And then, what is your follow-up?

Josh Schachter [Host]:
So, you’re also having faith that they’re going to renew. Otherwise, you’re giving them a heads up, hey, you know, just so you know, your renewal’s coming up in case you want to change your mind.

Michael Marguglio:
Well, it is funny. I mean, there’s often over the years I’ve heard customers say, well, I don’t know how much notice I want to give. Right. But yes, we want to be very transparent that the renewals—

Josh Schachter [Host]:
You have confidence in the value that you’re delivering to the product.

Michael Marguglio:
Yeah. Well, and it’s— yes, you’re right. And so you have this automated motion. And what it allows us to do in that phase is a customer could come back and let’s say they confirm. They just click, say, we’re confirmed, we’re going to renew. That goes, flows through to Salesforce, changes the stage of the opportunity, and flows through my forecast. Now, if they wanted to engage with somebody, if they had questions, then what that would do is log a task and that gets assigned a renewal manager. So that was, that was a big wave.

Michael Marguglio:
That was a big change for us that allowed us to scale that business even more. Then we started to build more functionality on that. So now give you exposed, give you visibility into what you have, give you visibility into your contracts, your quote, the terms of your, your contract. And when you have questions, we start to create more and more of those self-service capabilities. The last phase we’re getting into here, and we’re gonna be launching this this year, is when you get to a point where you feel like I haven’t been able to get the questions I I see my contract, I’ve got my quote, I, but I, I’ve still got some more questions. I’m gonna engage with the renewal manager. You’re gonna start to engage with an agent. And I think that’s a critical piece when you look at—

Josh Schachter [Host]:
That’s long tail.

Michael Marguglio:
That’s long tail. Yeah. And when, when we, when we look at this for Salesforce, this is over 200,000 transactions that, that we have going through on an annual basis. And so, so it’s, it’s really critical as we think every step of the way that a customer’s able to get the engagement, you get a tailored response on that. Because in the past, when you’d have a question, that would log a task, and then you might get a call from a renewal manager in a day or two. But now you’re engaging with an agent around that experience. So our hope is that that continues to resolve a higher and higher percentage of those renewals. But we still will have renewal managers that are there to engage, and all that history is captured, right? Is that— that’s brought into that renewal manager.

Josh Schachter [Host]:
And is there human in the loop within that system?

Michael Marguglio:
Human in the— yeah, human in the loop. And again, goes back to what I was saying about the ratio. So you might look at that and say, as we build more of that, instead of somebody handling 200 renewal events in a month, they might be able to handle 300 or 400, or that number just continues to scale.

Josh Schachter [Host]:
I mean, we buy into this like full-heartedly, wholeheartedly. Again, there’s so much value that you unlock at the long tail of renewals, like I said. So I think that’s great you guys are doing that.

Michael Marguglio:
Yeah. And, you know, and so it goes back to one of your original questions is, what does that give you? Well, it gives us hopefully a better experience for the customers. And then it also gives us the ability to take those resources that we have and put them on accounts where we think there might be more risks that we need to engage around, or there might be more upsell opportunity. So it allows us to scale this business and drive down that cost of renewal.

Josh Schachter [Host]:
What are your biggest rocks for the end of the year? We’re basically heading into Q4 now. What’s left? You got this renewal stuff done. That’s a top priority, it sounds like. What else do you want to accomplish as you climb the mountain towards Anbeer?

Michael Marguglio:
Well, we are in this unique period where we are about, probably about 4 and a half months from our year end. And there’s certainly a big push to close out Q3, Q4. Q4 is our biggest quarter, but we also want to make sure we’re getting ahead for next year. So this is something, it’s finding the right balance for the team so that it’s not just staying focused on the successful this quarter, next quarter, but also really starting to get ahead for next year because we’re already into next year’s planning.

Josh Schachter [Host]:
And so— You’ll be 2 moms for next year?

Michael Marguglio:
Well, we’re not quite there yet. Yeah, but we’re getting close. We’re getting close. But one thing we are talking about is as we start to look at the book of business next year, what is our planning? What is, what do we see within the business? And what are some of the, those kind of prelim numbers we start to put around that? And what gives us confidence in that is certainly we have 27 years of historical So we can certainly look and we can get a pretty good idea how the customers kind of move and what we’ve been seeing, specific products, segments, industries. But we also have confidence as we look out and we know that we’ve done a bit of a mix of that kind of attrition predictability or that modeling we’ve done, but also our renewal managers have come in and they’ve done a little bit of validation against that as well. So that gives us that kind of sense of like where we see the risk, And ideally we’d be taking steps now. Ideally we’d be sitting there, we’d be hitting that button saying, let’s create a red account. There’s a problem here.

Michael Marguglio:
This customer renews in June. Adoption’s not where it should be, or adoption’s declining. And let’s make sure we’re bringing the right resources. We often say the full power of Salesforce to that account.

Josh Schachter [Host]:
Yeah. Wow. It’s a lot of power. You’ve been in this space over 25 years. I want to end on this question, okay? For the youngsters there listening in, just heading into SaaS and the future of SaaS, what that will become. Maybe they’re going into a role in renewals. What’s a piece of advice that you’d give them or you’d give yourself at the start of your career?

Michael Marguglio:
Yeah, yeah. Well, look, I find that the role of renewals, the business that we’re in is a, you know, it continues to evolve. It’s very different than it was years ago when I was at PeopleSoft and it was a, you know, on-prem license and we were doing maintenance contracts. But what I like about renewals is we really interact with a lot of folks internally. I mean, as I mentioned before, as rattling off that attrition council and all the different organizations, it really is a unique function because really everything we do as a company flows through to the renewal. So when we announce something this week, we announce these new additions, you know, new portfolio products that ultimately flows through and that comes down to the renewal, right? So you have your existing base and you have your new customers and you’re seeing these different changes in the pricing models and all of that. We also really pushing the team now as we take this transformation away from just having an organization focused on driving new business and an organization focused on retention is really combining those. So I’m seeing the organization more and more focused on overall customer health and growth.

Michael Marguglio:
And so first time I’d seen in a long time, really in my career, that you’re seeing your sales and customer success and renewals organization really have these joint metrics of success. up and, and, and how we’re being compensated. So that, that is a big transformation. And, and I think with AI and just everything that’s coming up, our ability to really scale, get better insights into these customers, and really start to change the conversation, get out of what typically was maybe a more tactical transaction that we were having and really show up with better insights around, you know, that individual customers and what other customers are doing as well, bringing that perspective. So we’ve, we’ve, our renewal managers have never been armed with more data and insights around the business and things served up to them to say, hey, your renewal opportunity needs to be cleaned up because of these things, or you’ve got this opportunity, we should be pursuing these 2 or 3 things. So much better insights around, around, around the customers.

Josh Schachter [Host]:
Thank you. Mike Margulio, Executive Vice President of Global Renewals at Salesforce, still passionate about renewals after these years. I love what you guys are doing with your programs, and thank you so much for joining us on UnChurned.

Michael Marguglio:
Thanks, Josh. Appreciate it.