Scaling Culture with SaaS: How to Turn Frontline Employees into Revenue Drivers

Audio Scaling Culture with SaaS: How to Turn Frontline Employees into Revenue Drivers

Video Scaling Culture with SaaS: Lessons from a CEO

Chapter-by-Chapter Summary

Following are the sections we covered in this conversation with their summaries, along with the time location in the video and audio to follow along. The timestamps in orange correspond to the chapters in the YouTube version of the podcast episode. This video will display to the lower right as you scroll down. 

00:03:11 Origins of Frontline Performance Group

Frontline Performance Group (FPG) has an interesting origin story that reflects both growth and transformation. Originally, the company began as Khoury Consulting, founded by Ziad Khoury. Over time, it became clear that the name needed to evolve to better represent the company’s expanding vision.

Ziad, who remains the chairman of the board, decided to rebrand the company. This change was inspired by his book "Frontline Profit Machine," and thus Frontline Performance Group was born. The new name not only aligned with Ziad's book but also made it clear what the company does. Geoffrey Toffetti, current CEO of FPG, appreciates this clarity because it helps communicate their mission effectively.

Geoffrey's journey to becoming CEO of FPG is equally compelling. After leaving his role in hospitality in 1999, he joined a dot com startup called ZeroChaos.com. This was during a challenging time for tech startups—right before the dot com bubble burst.

Despite this difficult period, Geoffrey thrived at ZeroChaos.com, where he became the first employee outside of its founders. The company grew from a small startup into a thriving business with over 600 employees by the time he left.

Geoffrey's transition to FPG began when he met Ziad Khoury after leaving ZeroChaos.com. He was drawn by FPG’s mission to help companies and employees increase revenue—a more appealing prospect than his previous focus on saving money through supply chain efficiencies.

At FPG, Geoffrey started as a managing partner and Chief Operating Officer (COO). He brought in a corporate mindset that helped reshape some of the company's structures and titles from boutique partnership-style roles into corporate ones like Vice Presidents and Directors.

Geoffrey’s leadership played a crucial role in expanding FPG’s reach into new verticals such as hospitality—an industry he was familiar with from his earlier career days.

"The first hotel that we ever got was the Waldorf Astoria in New York, which at the time was the most prestigious hotel in the world."

This marked a significant milestone for FPG as they entered into prestigious partnerships with top hotel brands globally.

Geoffrey's story is not just about business acumen; it's about finding alignment between personal interests and professional opportunities—a journey that has helped him lead FPG to its current success.

00:09:22 Service-Based Sales Strategies

At Frontline Performance Group (FPG), the concept of service-based sales is more than just a catchphrase—it's a core philosophy. The idea is simple yet profound: sales done right is actually an act of service. This means that selling should be about educating the customer, answering their questions, and aligning them with products that they will truly enjoy. It's not about pushing products for the sake of profit, but about offering something that genuinely benefits the customer.

"Sales is not something you do to your customer, it's something you do for them."

This philosophy is especially important when training frontline employees. Many of these employees may not see themselves as salespeople—they might consider their role as simply taking orders or providing basic service with a smile. FPG works to change this mindset by instilling creeds and values that emphasize service as a foundation for selling.

For instance, when a customer arrives at a hotel, their experience begins from the moment they step into the parking lot. Every interaction—whether with a valet, front desk agent, or server—contributes to their overall perception of the service. FPG focuses on these key touchpoints within hospitality, particularly at front desks and in restaurants and bars, to drive meaningful incremental revenue beyond just booked services.

Training involves teaching employees specific dialogues and techniques that blend the art of human interaction with scientific methods of performance enhancement. Front desk agents, servers, and bartenders are taught how crucial their roles are in impacting revenue and profitability.

The art comes in how these employees interact with guests—using empathy and understanding to create positive experiences. Meanwhile, the science involves utilizing specific techniques to effectively communicate value and benefits to guests.

In essence, FPG’s approach turns frontline employees into revenue drivers by shifting their perspective from order-takers to key contributors in the sales process.

00:12:46 Vision for Frontline Performance Group

Geoffrey Toffetti's vision for Frontline Performance Group (FPG) is rooted in his own experiences in the hospitality industry. Starting as a front desk agent, he quickly realized the potential of this sector. He saw that hospitality had a large market size and was a perfect fit for FPG's strategies.

Initially, Geoffrey noticed that front desk agents weren't given formal training. He had to learn on his own, which led to him doubling his pay through commissions. This experience sparked his idea: to adapt FPG's successful systems used in car rentals and call centers and apply them to the front desk environment.

The vision was clear—provide structure and training so that every employee could make the most of incentive opportunities. This approach took some time to develop, but it proved successful.

A significant milestone was FPG's partnership with the Waldorf Astoria in New York, one of the world's most prestigious hotels. This was a challenging environment, busy and complex, and it seemed like a setup for failure. Yet, FPG not only thrived but tripled revenue there.

Geoffrey attributes this success to FPG's business philosophy—immersing themselves completely in their projects before scaling them. Instead of rushing into scaling without understanding all the details, they took time to master their approach.

This philosophy ensures success and reduces issues like employee churn. It highlights how deep understanding and hands-on experience can transform vision into reality, paving the way for effective scaling.

00:15:37 Evolution of Business Vision

Geoffrey Toffetti's journey with Frontline Performance Group (FPG) has been a story of transformation and innovation. When Geoffrey joined, the company was primarily a service-based business. The focus was on traditional training and consulting, without much digital integration. However, Geoffrey saw the potential for change.

In the early days, terms like SaaS (Software as a Service) were barely known. Yet, FPG was already moving toward a subscription model. About 70% of their business had shifted to this model early on.

"We were kind of marching toward a SaaS mindset, a full virtual digital delivery."

The first step in this transformation was to create technology that could house their intellectual property. This journey began around 2015, with the development of tools that would support both FPG and their clients.

Initially, the focus was on making consultants more efficient by using technology. This approach allowed consultants to spend part of their time remotely, increasing their capacity from managing four clients to eight.

In 2019 and early 2020, they began discussing fully virtual delivery with key clients. Then came March 2020—COVID-19 struck, changing everything in the hospitality industry.

FPG adapted by making their technology more client-facing and shifting to digital delivery. The pandemic's challenges were met head-on by training managers and empowering them to take charge daily.

This shift resulted in more scalable operations. Now FPG's consultants could support up to fifty or sixty hotels instead of just four or five.

The cornerstone of FPG's platform is a suite of tools that includes three key components:

1. Analytics: To visualize performance effectively.
   
   
2. Learning Management: Providing comprehensive training resources for frontline employees.
   
   
3. Motivation Tools: Including incentive plans and recognition programs to inspire employees.

What started as tools meant for post-consulting use have now become central in FPG's approach—leading instead of following traditional consulting methods.

This evolution has allowed FPG to expand globally without the need for constant travel, opening up opportunities in countries like Tanzania where on-site visits would have been impractical.

00:23:49 Acquisitions During Pandemic

During the COVID-19 pandemic, Frontline Performance Group (FPG) made strategic moves that shaped its future. They acquired two companies: Drake Beal and Associates, and TSA Solutions. These acquisitions came with unique challenges and opportunities, especially given the pandemic's impact on the hospitality industry.

Strategic Acquisitions

FPG's first acquisition was Drake Beal and Associates. Previously, FPG faced little competition in the car rental sector. However, as they expanded into hotels, they discovered that Drake Beal was a significant player in that space. This realization came after Hilton rolled out FPG to more hotels following successful results at the Waldorf Astoria. One of these hotels was already using Drake Beal’s services.

Recognizing an opportunity, Geoffrey Toffetti reached out to Drake Beal. His experience with mergers and acquisitions at ZeroChaos.com made him confident this could be a beneficial move for FPG. After years of maintaining contact, the stars aligned in 2015-2016 when Drake Beal's owner decided to retire.

This acquisition allowed FPG to strengthen its position in the hotel industry by inheriting valuable relationships where Drake Beal was a primary vendor.

Navigating Challenges with TSA Solutions

The journey with TSA Solutions began later when FPG noticed their influence in Europe and Asia. In January 2020, Geoffrey initiated formal discussions for acquisition just as COVID-19 began impacting global markets.

Despite the challenges posed by the pandemic, FPG and TSA reached an agreement by early 2021. The situation was extraordinary since most clients were closed due to lockdowns.

"Integrating an acquisition when none of your clients are open is a very interesting scenario."

FPG faced unique challenges as they transitioned from service-based operations to incorporating SaaS products from TSA Solutions into their offerings.

Building Relationships and Value Creation

FPG's strength lies in building relationships—a key factor during these acquisitions. They believed that meeting clients would lead to positive outcomes due to their relationship-driven approach.

To navigate financial uncertainties during this period, FPG structured a creative enterprise value construct based on future value rather than immediate revenue gains. This approach allowed both companies to recover value as markets began stabilizing.

These strategic decisions highlight how thoughtful acquisitions during challenging times can lead to long-term growth and success.

00:28:30 Identifying Your Customer

Understanding your customer is a critical aspect of any business strategy. Geoffrey Toffetti, CEO of Frontline Performance Group (FPG), emphasizes the importance of knowing who your customer is, not just in terms of business needs, but as real people with dreams and challenges. This understanding is central to FPG's approach.

"We actually break it into four different groups."

Four Key Customer Personas

FPG identifies four main customer personas to target effectively:

1. Executive Level: This group includes operational and revenue management executives who are accountable for the profit and loss (P&L) of hotels. They have a broad view and can leverage FPG's services across multiple properties.
   
   
2. General Managers: These individuals manage the P&L and culture of their specific hotel properties. FPG aims to help them enhance frontline culture and achieve key performance indicators (KPIs), especially in areas like restaurants and bars.
   
   
3. Department Heads: Whether it's a front office manager or a restaurant outlet manager, these leaders are crucial for managing teams and driving culture at the ground level.
   
   
4. Frontline Employees: Uniquely, FPG builds its systems from the frontline perspective. This ensures employees have access to their own revenue performance metrics and KPIs, empowering them to excel.

Aligning Strategy with Customer Needs

FPG aligns its company strategy with these personas by structuring their teams accordingly:

• Customer success consultants work closely with department heads and frontline employees.
  
  
• Sales account management teams engage with general managers and higher-level executives.
  
  
• Account executives coordinate with top-level executives at customer organizations.

The organization's chart is designed to put the customer at the top, emphasizing that every role within the company exists to serve them effectively. It's here where "the rubber meets the road"—the point where direct contact with customers transforms into tangible value in terms of revenue and profitability.

00:32:43 Impact on Bottom Line

Understanding how to boost the bottom line is crucial for any business. At Frontline Performance Group (FPG), the focus is on enhancing revenue through strategic service and sales. The process begins with recognizing that while a customer may have already booked a service, there’s potential to increase revenue by offering additional value.

Geoffrey Toffetti, CEO of FPG, explains that enhancing the customer’s experience can increase revenue by 15% to 20%. This additional income is highly profitable since it incurs minimal costs—usually just incentives for frontline staff. This makes it a highly effective strategy for improving profitability.

"The ROI is very strong. We average about twenty to one."

The Role of Incremental Revenue

The idea of incremental revenue revolves around seizing opportunities that would otherwise be lost. For instance, if a hotel room remains unsold, the potential revenue from that room perishes with it. FPG refers to this as "perishable" income, emphasizing the importance of capturing these opportunities when they arise.

Geoffrey elaborates on how these opportunities manifest not just in hotel rooms but also in unsold experiences like golf tee times or spa packages. These services can’t be stored and sold later—they need to be utilized in the moment.

Measuring Performance and ROI

To track success, FPG uses analytics to measure performance improvements and justify returns on investment (ROI). While some areas like restaurant sales may not offer clear pre-booked revenues, trends in individual performance can still be observed and improved over time.

Front desk operations, car rentals, and theme parks offer clear metrics where improvements can be directly measured. Incremental improvements at the front desk alone can boost RevPAR (Revenue per Available Room) significantly.

Growing Awareness in Hospitality Industry

Although industries like car rental have already maximized incremental revenue strategies as part of their core business model, many hoteliers are still catching up. The awareness is growing about how these strategies can make or break a financial year.

Metrics like RevPAR are essential; they measure rooms' revenue against available room nights. Geoffrey notes that increasing this metric by even a small percentage at the front desk equates to success.

In conclusion, embracing incremental revenue not only enhances profitability but also solidifies a business's financial health over time. As awareness spreads through the hospitality industry, more businesses are recognizing its vital role in sustaining their bottom line.

00:37:15 Changing Behavior in Business

Changing behavior in business is a nuanced process that Frontline Performance Group (FPG) takes seriously. Their approach is rooted in a framework known as the Corey Performance Equation. This framework, derived from Ziad Corey’s life work, focuses on three main components: the right environment, the right actions, and the right measurements.

The environment in a business is crucial. It includes the company culture, the tone set by managers, and existing incentive plans. Creating a positive atmosphere encourages employees to embrace new behaviors and mindsets.

Actions refer to what managers do and what they are accountable for. It’s about setting clear expectations and responsibilities for employees.

Measurement is about transparency. Employees need to see how they’re performing relative to their peers. This transparency creates positive pressure, motivating everyone to improve through what is known as the Pygmalion effect.

"What we're teaching is not rocket science. It's pretty basic."

At the frontline level, three key motivators are crucial: recognition, reward, and accountability. Recognition often comes from leaders but can also be peer-to-peer. Reward systems should ensure that top performers earn more than those at the bottom, fostering motivation.

Accountability means setting expectations clearly and using tools like leaderboards to show performance comparisons.

FPG's technology supports these elements by providing digital tools that make these processes seamless and engaging for employees.

The journey from manual practices to digital platforms has allowed FPG to scale effectively while maintaining quality control. By digitizing their expertise, they’ve expanded their reach without diluting their service quality.

The idea that leaders need hands-on involvement in every customer interaction can be limiting. FPG's success shows how empowering systems can free leaders from daily operations while still delivering on cultural promises.

00:45:08 Company Culture Insights

Creating a strong company culture is essential for any business aiming to succeed and thrive. At Frontline Performance Group (FPG), culture isn't just a buzzword—it's a core component of their success.

Building a Safe Haven

FPG has cultivated a culture where employees feel safe and empowered. When sending staff to different countries, often alone and in challenging environments, it’s crucial that they feel supported. This support comes from knowing they belong to a team that values them.

FPG spends significant time nurturing this environment, ensuring that every employee is cherished and empowered. This foundation allows them to be positive influences in their workplaces, even when situations are difficult.

Balancing Care with Accountability

The company draws inspiration from leaders like Simon Sinek, focusing on balancing care for employees with clear expectations and accountability. Geoffrey Toffetti explains their approach: "We are going to give everyone as many chances as humanly possible to perform their job. We don't want to fire people for performance but will only separate if they don't honor our culture."

This means kindness, honesty, and directness are vital traits within FPG’s environment. Employees are encouraged to treat one another with respect and integrity.

"Leaders give trust first and freely."

Trust as the Foundation

Trust is the cornerstone of FPG's culture. Leaders are encouraged to trust their team members from the start rather than expecting them to earn it over time. This approach flips the traditional mindset on its head, fostering an environment of mutual respect.

Geoffrey emphasizes that telling new hires they must earn trust sends the wrong message—it implies distrust from the beginning. Instead, by openly trusting employees from day one, FPG builds strong bonds within their team.

Authentic Engagement Over "Window Dressing"

True employee engagement goes beyond superficial gestures like birthday parties or pizza days. Geoffrey recalls challenging an executive's approach by stating that such efforts were merely "window dressing." Instead, he focused on meaningful engagement rooted in genuine care for employees' well-being.

This leads to an important principle: how leaders treat their team members directly impacts how those team members will treat customers. If leaders wish for guests or clients to feel valued and appreciated, it starts with valuing and appreciating the staff first.

00:50:55 Exploring the Dark Night of the Soul

Navigating the path to success isn't always a walk in the park. It can be challenging, especially when you're a leader in a thriving company. People often see the glitz and glamour of success from the outside, but the reality can be quite different. This journey is something that Geoffrey Toffetti, CEO of Frontline Performance Group, knows all too well.

Geoffrey talks about what he calls "the crucible"—a tough phase that every competent executive must endure. This period can stretch over several years, where you're overworked, underappreciated, and underpaid. It's a time when you might hate your job but find your perseverance galvanized.

"To be a competent executive, you have to go through what I call the crucible."

During this challenging time in his career, Geoffrey had to juggle many responsibilities. He was traveling extensively while his wife was managing a small business and caring for their newborn baby. He recounts living out of a suitcase while integrating acquisitions—some of which were hostile.

Being younger than his peers by about twelve years meant he earned less than them and was tasked with challenges they didn't face. It was tough, and the workplace culture was often contentious and cutthroat.

Despite these challenges, Geoffrey emerged stronger and wiser. He learned valuable lessons about leadership—especially how not to treat people or motivate young managers.

He offers advice to those climbing the corporate ladder: embrace the pain that comes with growth. Expecting success without struggle might lead to failure because you won't be ready for inevitable adversity.

Geoffrey's story is a testament to resilience and determination in overcoming difficult phases in one's career journey.

00:55:30 Seeking the Changeless Beneath Change

Change is a constant in life and business, and navigating it can be challenging. Yet, amid the whirlwind of shifts in culture, environment, and industry, Geoffrey Toffetti, CEO of Frontline Performance Group, finds his grounding through faith and personal experiences.

Growing up, Geoffrey faced many challenges. He lost his father at a young age and dealt with various hardships. These experiences shaped his drive to overachieve despite not having a college education. His journey was marked by perseverance and a strong desire to succeed against the odds.

Faith plays a crucial role in Geoffrey's life. Although he rebelled against his Christian upbringing in his twenties, he eventually returned to it through an intellectual journey. Now, faith is an essential part of his life that provides solace and inspiration.

"I do still have an intrinsic motivation to win," Geoffrey shares, highlighting how the odds were stacked against him from the start.

Geoffrey emphasizes the importance of being good to people and defending those who need help. In leadership positions, he believes that leaders should take responsibility and protect their teams.

Mentorship has also been significant for Geoffrey. He advises finding mentors who can offer guidance and honesty—mentors who will tell you when you’re going off track.

In sum, Geoffrey Toffetti's story is about finding stability amidst change through faith, personal resilience, and guidance from mentors. His journey inspires others to seek something beyond themselves—a dimension that provides energy and inspiration.

01:00:15 Parting Thoughts

As we wrap up this insightful episode of "The Business Philosopher Within You," Geoffrey Toffetti leaves us with some final reflections that resonate deeply with anyone climbing the career ladder. Geoffrey highlights a key lesson learned during his career: the balance between the quality of your work and how others perceive it.

He points out that it's not only about what you achieve but also how it's perceived by others. Many of us have seen charismatic colleagues rise through the ranks, even if they don't seem to accomplish much. Meanwhile, those who work hard might not get the recognition they deserve.

"Do good work and make sure that the right people know you're doing good work."

Geoffrey emphasizes that understanding this dynamic is crucial. Learning to promote yourself without appearing self-promoting is an art form worth mastering. It involves being in the right place at the right time and knowing how to engage in conversations that matter.

His advice is clear: if you feel stuck, it might be because your value isn't recognized by those who matter. Taking time to cultivate your image in your work environment can make a significant difference in career progression.

Geoffrey's insights underscore the importance of visibility and recognition, alongside performance, in achieving career success. As listeners, we are encouraged to apply these lessons and ensure our efforts are acknowledged by those who can impact our professional growth.