Arbor Education’s CRO: How Forward-Thinking Leaders Profit from Breakthrough Innovations
In this interview series Richard Richie, Managing Partner of Alcon Maddox, gets some of London’s most forward-thinking tech leaders to spill the beans on what is making their companies so successful and what innovations the future has in store.
This week Phillippa De'Ath, Chief Revenue Officer at Arbor Education, offers valuable insight into the importance of ensuring early adopters of enterprise software are taken on a journey. She also discusses how a softer sell in the run-up to achieving product market fit, with an over-emphasis on customer success, enables you to turn on a more effective sales engine when you reach the tipping point, and understanding that if you're an enterprise, it will be slow before it can be very fast and the need to be realistic about expectations.
RR: Phillippa, firstly tell us a bit about Arbor Education.
PD: Sure. Arbor Education is a company that provides a management information system, or MIS, to schools, which is basically an ERP for a school. In other words, it's the Salesforce engine of a school that allows them to do all their data analysis, client communications, transfer data to the government, academy trust leaders, local authorities, and so on.
In our group, we support one in three schools in England and we’re by far the most popular choice for schools when they switch to a new MIS. We’re passionate about providing a transformational service for English schools. Whilst we only work with state schools, we’re essentially helping one in three children in England to have a smoother journey through their education, and we’re just getting started.
Until COVID, schools weren't especially on board with the movement to cloud. Now, it's almost taken as standard, yet still only 47% of schools in England use cloud-based services of any kind. In that sense, EdTech is way behind commercial sectors, but it also means that the opportunity to transform is much greater. I think the opportunity to transform wider public service is still one to be had. The interplay between data, the school sector, social care, social services, and so on, is really interesting.
RR: Given the fact that you've been on this journey for 10 years, what have been some of your big successes that are worth shouting about?
Well, we've had a minimum of 40%, and typically closer to 80%, year-on-year revenue growth. So we must be doing something right! The year before last, we had an extraordinarily successful year for a few different reasons, which I'll come back to, but we've stuck with the hockey stick curve we would have shown to our earlier impact investors.
A few things that I've changed through that time are, I guess, the scale and breadth of the team. In the beginning - the school education domain is really tricky - we made a point of hiring people who had been school leaders and trained them in sales, so that they could manage the complexity of the domain and work with their peers to bring them a new way of working, and I think we proved that worked very well.
I trained all the early sales team. Prior to that, they'd been classroom teachers, so that was a learning journey for them. But then we've also supplemented that with some really experienced salespeople, from across EdTech and other sectors as we've built our enterprise offerings.
For very large academy trusts or local authorities, it's a different level of systems integration challenge rather than just pure institutional sales. We’ve become very effective at working with an ecosystem of partners that now represents about 40% of our sales volume and customer support, for our customer base.
The partners within our sector are a mixture of commercial and local authority trade services teams and I'm really proud of the work that we've done to bring on board quite traditional organisations that have worked in a very particular way with our main competitor platform, which had a sort of de facto monopoly.
We've allowed them to get more confident with Arbor, to bring more value to schools, and to support our growth at the same time. There's a big education piece here and for schools that work closely with their local authority central team still we've been enabling those teams to support Arbor. They're allowed to keep the same person on the end of the phone. So that local connection without working with a sort of faceless software provider, if you like. But crucially, they also get the benefit of moving to new technology. We're starting to see that transition in the hundreds now, rather than in the fives or tens, and we only really started investing in our partner programme about three years ago.
RR: What's the best advice you've been given on breakthrough innovations and their adoption?
PD: Perhaps in more general terms, on the partner side, I battled for a long time to design a partner programme that I thought would fit our kind of business. Through consultation with lots of different people, including veterans of this particular industry, I realised that for public sector customers - and schools are a particular funny beast - they have tiny budgets, but all the complexity of a government department. That working with the ecosystem they trust, not selling to them, but bringing them on a journey is incredibly important, and we have to work within the confines of public sector procurement.
I think the best advice I was given was to lean into the partners who already understand how schools operate and bring them with us a little bit more slowly. That’s really played out, we have partners now where I've been working with them, very gently, for three or four or five years, and then when it switches, you suddenly start to see that growth and you can have 70-80% of the schools in the local authority moving to our MIS in a three or four month period.
I think the other thing for us is we’re in a kind of replacement business. More so than any of my previous tech sales experience, it's a really, really aggressive space, surprisingly so. Perhaps because the prize is so big. We have a very high barrier to entry. Change in schools happens slowly, but once you're in, and if you do a good job, then you're in for a very long time.
Customer retention is over 99% and customer satisfaction ratings are very high. That's because we don't rush the journey. We don't rush the onboarding journey either, but use our scale to build confidence to save a day, save a week, speed things up a little bit all of the time.
We're very public about how we're learning from the work that we previously did to build confidence in the sector to keep making that change.
RR: If someone was starting down this path towards running a tech business like yours, what would you advise them?
I would say you need to be able to sell something to people who actually want to buy it and to make sure that they're successful using it. You can't do all of those things all at the same time. So be realistic about where you are in your journey. For us, we were very much at the product stage, you know, the product market fit took years, probably five, six years.
When the product was still developing, we had to overemphasise on customer success to make sure that schools could actually operate whilst using it. Sales at that point very much took a backseat, and it was about making sure that the small number of customers that we brought on were up for the journey. We followed the product roadmap in terms of what we would sell, and then we reached a tipping point as we knew we were at product market fit. At that point we were ready to really sell as we were confident we had enough strength in our ambassador base.
We've sorted out our problems. We've got a handle on our customer churn. Now let's go for it. And I think being realistic about what you need to get to, to be comfortable that you can switch on your sales engine and set expectations appropriately. It's fine if you have a, you know, easy consumer product, there's no onboarding cost and all the rest of it, but we're not in that kind of sector. If you're an enterprise, you've got to understand it's slow before it can be very fast and just be realistic about that.
RR: What does the next level of success look like for you and the team at Arbor?
We’ve recently completed a really big acquisition, so we're working on bringing together two competing platforms into a single family and making sure that the customer journey moving between those different platforms is really clear and easy. Secondly, we want to further invest in our software ecosystem.
So now that we can say we are the platform for school data in England, other applications are dependent on us for their growth and vice versa. We want to really focus on that and make sure that our partner network is not just big, but also really effective so that the value is demonstrable from partners, for both customers and for Arbor's own efficiency. Then, potentially, look to international expansion.
We're in a really parochial game, but could we take Arbor to a different country or partner in a different country to share what we've learned? Let’s see.