The Descartes Systems Group Inc (NASDAQ:DSGX) Q3 2020 Earnings Conference Call - Final Transcript
Dec 04, 2019 • 05:00 pm ET
Edward J. Ryan
and cross-selling has become a huge part of what we do.
Operationally, we've combined the MK Data, the Visual Compliance and now the Customs Info businesses together as one group that goes to market and we think that helps get visibility with the customers that need those types of services. The sales reps are outselling all of them together. And we think in the long run, that's the best way to run this business. And we think we certainly have a tailwind going right now and more and more people are realizing that they need to do this. And I think that's only going to continue.
Can you elaborate a bit more on the cross-sell strategy from a sales perspective. I mean do you put sales incentives in place to drive cross sales. Are you building out like an inside sales force to try to harvest more revenue from them?
Edward J. Ryan
The biggest thing we've done so far is put those sales forces together and make them operate as one and I think that's paid benefits not only for our customers who -- where it makes it easier for them to find and learn about the solutions, but also for the sales reps that they're making more sales as a result, right? Would you rather go try and convince someone who's never heard of us to buy the solution or go convince someone that's already doing business with us? Well, as a guy that grew up in our sales organization, I can tell you, if they already have a contract with us and they're already doing business with us. We have access to their executives. We have a contract and master terms in place with them already. It's a lot easier to sell that way. And we're pushing ourselves to get -- we do have sales incentives. I don't want to get into those on the call, but we definitely have the ability to, from time to time provide sales people increased incentives to sell certain products of ours. It's not the main way we do business. But from time to time, we take advantage of that.
Okay. And then just one for our Allan here. Allan, the performance obligations that are in Note 19, there's some variability quarter-to-quarter but good year-over-year growth. Can you just walk through some of the moving parts that drives the variability there?
Sure. So what that is under the new revenue standard that is the sort of contracted revenue we have that we would receive over time. The number will fluctuate from time to time. A lot of our contracts we sign, they'll be annual or multi-year. And as we go through a year, you'll see -- with -- a lot of times with annual renewal, and so you'll see a fluctuation as you go through different parts of the year, right? They'll tend to be a little bit of a pop-up of those early in a year, they may come off a little bit