You need to know these GTM trends (with Chris Walker)

2025 is around the corner - and we asked Chris Walker about his predictions for the next years. Will we see more efficiency? Growth? How will AI transform teams? And much much more.

• (00:00) - Introduction
• (03:17) - Has anything changed?
• (05:03) - Understanding the Core Problems
• (07:06) - The C suite
• (12:03) - Wrong KPIs
• (14:40) - No, we aren't more efficient
• (19:00) - AI and Market Efficiency
• (22:03) - Building Customer-Centric Software
• (24:12) - The Real Cost of Software and Market Growth
• (24:52) - Predictions for Marketing Teams
• (27:03) - Challenges in AI Adoption
• (29:24) - Data's Role in AI and Marketing
• (30:37) - Future Trends and Predictions
• (34:40) - The Art and Science of Go-to-Market Strategy
• (35:56) - RevOps and Go-to-Market Operations
• (37:48) - Customer Success and Account Management
• (40:51) - Key Ingredients for Success in 2025

This episode is brought to you by by Everstage - the highest rated Sales Commissions Platform on G2, Gartner Peer Insights, Trustradius with over 2,000+ customer reviews. Some of their customers include leading brands like Diligent, Wiley, Trimble, Postman, Chargebee etc.,

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Creators & Guests

Host

Mikkel Plaehn

Marketing leader & b2b saas nerd

Host

Toni Hohlbein

2x exited CRO | 1x Founder | Podcast Host

Guest

Chris Walker

CEO @ Refine Labs - Demand, RevOps and Revenue R&D for High-Growth B2B Companies

What is The Revenue Formula?

This podcast is about scaling tech startups.

Hosted by Toni Hohlbein & Mikkel Plaehn, together they look at the full funnel.

With a combined 20 years of experience in B2B SaaS and 3 exits, they discuss growing pains, challenges and opportunities they’ve faced. Whether you're working in RevOps, sales, operations, finance or marketing - if you care about revenue, you'll care about this podcast.

If there’s one thing they hate, it’s talk. We know, it’s a bit of an oxymoron. But execution and focus is the key - that’s why each episode is designed to give 1-2 very concrete takeaways.

[00:00:00] Toni: How will companies adopt AI next year? Will teams get smaller or larger? And will we see more efficient growth?
[00:00:07] Chris Walker: go to market efficiency continues to get worse.
[00:00:09] We've been tracking that number for more than six quarters, and it continues to get worse. The idea of efficiency is not cost cutting. It is strategically finding your lowest performing investments, and then reallocating to , the highest performing ones. And it's as simple as allocating a stock portfolio
[00:00:25] Toni: that's Chris Walker, founder and CEO of Passetto and previously Refine Labs.
[00:00:30] Based on his experience, advising, consulting tech startups on go to market. He's here to share the biggest challenges and trends you need to know.
[00:00:40] Chris Walker: Another prediction for, uh, 25. Is that we'll have less than 10 person marketing teams
[00:00:45] for, almost any size company. Forget the enterprise, they're like, they're going to do what they want.
[00:00:49] But when you look lower market, especially sub 100, 150 million, That will see a decrease in team size and an increase in productivity and effectiveness. And that what companies actually need is a lot less money tied up in fixed manager or middle manager level headcount
[00:01:06] Toni: Before we jump into the show, today's is to you by EverStage, the top sales commissions platform on G2, Gartner, Peer Insights,
[00:01:16] and Trust Radius with more 2000 reviews from customers like Diligent, Wiley,
[00:01:22] Trimble, and more.
[00:01:24] Visit everstage. com and mention Revenue Formula unlock a personalized sales compensation strategy session with one of EverStage's RevOps experts.
[00:01:35] And now, enjoy the show,
[00:01:36] Did you have like a good introduction, Mikkel?
[00:01:39] Mikkel: No, I didn't. I felt like I had one. But I told you before the show, I can't be the one doing all the introductions. Well, you know,
[00:01:47] let's see about that. Maybe that's a post production thing. But we have Mr. Chris Walker here on the show again. Kind of a returning guest star here.
[00:01:55] Hi, Chris.
[00:01:56] Chris Walker: What's up, what's up y'all? uh, I wasn't sure if you were gonna have me back But then like two months later here we are talking predictions and things like that. So Appreciate you having me back and looking forward to talking through with you
[00:02:07] Mikkel: Definitely. Yeah, I was saying to Toni, so last time we had you on, it was just around the time when some people call it the SaaS crash or the end of the golden era in SaaS.
[00:02:17] Chris Walker: When was that?
[00:02:18] Toni: yeah, I think this was, this was like felt, feels like a year ago or something. Yeah. Yeah. I just, a little bit longer.
[00:02:24] My story
[00:02:24] Mikkel: is just better that way. Because now that he's back, now that you're back, hopefully then it's, you know, a signal that things are improving, right? Things are going to be better.
[00:02:32] Toni: But also you just mix it up with someone and it's like, there are enough like white dudes kind of talking about this, you know?
[00:02:39] Whoa, okay.
[00:02:41] Mikkel: Nice. Good. Thanks for the intro, Toni. There you go, there you go. It
[00:02:43] Toni: was also maybe a little bit
[00:02:44] Mikkel: funny. Let's see about it. So, Chris, I mean, it feels like so much has happened these last, I want to say a year and a half, actually, since we last spoke we can rehash a bunch of it, but let's just say it's difficult to sell out in this environment.
[00:02:58] It's also been difficult to raise for a lot of companies. So we felt like talking about. What's going to happen the next, you know, year or so would be super interesting to get your take on. Obviously you're advising and working with a bunch of companies. So super curious to hear what kind of predictions you have for us today, Chris.
[00:03:14] Yeah.
[00:03:17] Chris Walker: if you think about it from a metrics standpoint overall, there hasn't been that much that has changed in the past 18 months. SaaS companies, the public median SaaS company continues to see slower growth rate, down uh, 50 percent slower growth than uh, two or three years ago. Um, And cost of acquisition or go to market efficiency double what it used to be two or three years ago.
[00:03:40] Which some could venture would have some impact around 5x revenue on overall enterprise value, so you're talking publicly traded company We're talking billions of dollars in shareholder value that has been lost due to this go to market problem And so and and the overall environment change and the lack of adaptation to how the world works now I think that companies, and I want to talk through this because I start to understand the, the, the problem very uniquely.
[00:04:06] I think I have a differentiated perspective on where the actual problem lies, so happy to talk through that. And then, obviously, happy to talk through predictions. Generally, my predictions are, uh, 50 percent right. then the other 50 percent are more what people should be doing in B2B, but just don't for the next three years.
[00:04:24] So my predictions end up being right, but just late for some things.
[00:04:28] Toni: That's, that's an easy out. That's an easy out. So eventually it will come true. That's what we're hearing. That's cool.
[00:04:34] Mikkel: No, but
[00:04:34] I think
[00:04:34] Chris Walker: love to go back by the way and go to my, cause I uh, all these annual predictions from 2019 all the way through. So I'd love to go back and look at some of those and see how they, I'll have my
[00:04:42] team
[00:04:43] Mikkel: There you go. Unfortunately, I've not prepared that either for this episode, but we can always get you back on and do that. But I think actually to your point, what would be really great would be to, for you to maybe set the scene on what are some of the problems you've seen, because I think that also informs what is then your take on what's going to happen and what companies should do.
[00:05:00] So maybe walk us through some of the problems you're seeing
[00:05:03] Chris Walker: So, When you truly isolate the problem, my two cents, my belief is that the six most important executives in a B2B company don't have the data that they need structured in the right way, with the right context and perspective to be able to make what should be easy, smart, aligned, strategic decisions across their first team of executives, which should be CEO, CFO, CMO, CRO, Rev Ops, and then potentially one other talented executive on your team, depending on your structure, that those six people.
[00:05:32] struggle to get alignment uh, do not use a data structure that has any type of, thought around the top level metrics that we want to measure. It's kind of some of the stuff that Growblocks have been working on, believe it or
[00:05:43] not. But the, when you actually look at the root of the issue, it is a unit economics problem.
[00:05:49] And executives do not calculate or have visibility into unit economics specifically at the top of the funnel. They can calculate per rep performance and quota attainment. But they really struggle to look at what is the ROI on the 15 million dollars a year we spend to create pipeline. We spend it on events, and advertising, and SDRs, and marketing headcount, agencies, and all this different stuff.
[00:06:11] And the degrading ROI of that investment then fucks up the rest of the factory downstream. Sales doesn't have as much pipeline, you have lower PRP, quota attainment, you have to lower costs. You send less customers into your 110 percent NRR machine, you slow growth on the other side. And it all starts with lack of visibility, data, and alignment at the executive team on how we create a pipeline at a proper unit economics.
[00:06:34] Toni: I mean, I think you have been preaching the, you know, unblend your funnel or split your funnel. I think, I don't know, was it like five years or something like this, Chris, by now? And obviously, you know, Groblox has been picking some of those pieces up and helping folks with the go to market analytics piece.
[00:06:48] Why do you think people still don't get it done? I mean, this, this isn't, this isn't a well, you know, hidden secret anymore. People, people understand the split funnel. They understand the, I think sometimes you also call it kind of the, the four MQL funnels. People are starting to understand the concept, but it's still not getting done in organizations.
[00:07:05] Why do you, why do you think that is?
[00:07:06] Chris Walker: This is a incredibly complex problem that requires a, a deep understanding of what the actual issue is, along with the understanding of all of the cross functional jobs in the executive team. Sales, marketing, rev ops, finance, and FP& A. And what it's like to be a CFO and a board. I have that perspective, unlike very few people, which allows me to connect the dots between finance and go to market and rev ops in ways that most people are unable to do.
[00:07:37] And so when you think about one individual executive in your company, trying to align these six core executives, the only person that can do it is the CEO. And many times the CEO should have an advisor or somebody from the outside to come and help them do that Just like they bring in challenger for their sales team and they bring in some account million dollar account management training for all their CSMs And meanwhile, they do nothing around their pipeline.
[00:08:03] They pay Forrester 50 grand to put them in a quadrant and give them shitty advice and then the second part of it Is that every not every I would say basically every company I haven't encountered one that doesn't do it this way You That the primary way that they scrutinize investments is around which department spent the money and then they use some type of attribution model to divide the credit between departments.
[00:08:23] And it is the fundamental flaw in go to market. That people have grown up with for more than a decade. The MQL models were built around it. The analyst relations were built around it. The technology vendors, the CRM architecture, everything is built around how do we run this either one funnel MQL model inbound or outbound or up to a four funnel MQL model that has an overly simplistic finance calculation on top of it.
[00:08:47] That leaves the six executives that deploy millions, tens of millions, potentially hundreds of millions of dollars in go to market investments, and they have no proper data on how to make decisions. No, no data. It's all about which SDR booked the meeting. How many meetings did SDRs book? What's our cost per qualified opportunity through our website?
[00:09:08] None of the data connects together, and it doesn't match up with the financial model. So how are we going to make decisions around it? And then lastly, I'll say that the, the, the technology ecosystem that is built around this is built for a specific department, always. So you build an attribution tool for marketing, you build a sales development tool for SDRs, you build an ABM platform that up, tries to get a lot of people to use it, but you integrate these tactical point solutions into your shitty CRM data.
[00:09:34] They pull out bad CRM data and they give you tactical level reports that then your managers and directors use that have no financial data. Then they build bottoms up manual reports to give executive insights and the insights are useless.
[00:09:47] Toni: Yeah.
[00:09:47] Chris Walker: That's the
[00:09:48] problem.
[00:09:49] Toni: and I, and I think the, the problems exasperated by, you know, kind of the tools that he has mentioned, they're being sold to, you know, the VP market, VP sales, and it makes sense for them to buy these tools. Right. But I think the responsibility for the overall piece. It's quite murky, right? I mean, I think you're kind of pointing out it should be the CEO and it's, it's so cool to see you putting the CFO into this team also to kind of, you know, manage oversee the go to market.
[00:10:13] Taking this back to predictions, do you think that's going to get solved in 25 or is this one of the Chris Walker? Maybe by 2030, we will have a solution here.
[00:10:23] Chris Walker: Solve how, you know what I mean? What does solved mean? I think that you'll have first movers that start to do things differently and see some success by it. But even the advice that I've been talking about for marketing for five years that a lot of people see as common knowledge now is probably only at 2 percent market penetration.
[00:10:41] And so like the, the, While there's AI and product and all this stuff, B2B moves incredibly slow. Incredibly, incredibly slow. When you think about actual transformation, sure, they can duct tape a new tool into their shitty, like, the bad CRM setup. They can, like, Put AI as a bell and a whistle into their product, but when it comes to go to market, it's, it's not innovative.
[00:11:04] And so when you think about who is the person that can see into the future, three years, and see what the company looks like, and deploy strategic investments across the go to market, To accelerate enterprise value, to maximize growth, and to co coordinate the entire factory. It is literally the on only the CEO has the authorization to deploy those investments, and then the confidence to de to communicate them back to the board as you execute against them.
[00:11:32] And so, if you ever try to make this change through the marketing department, through a CRO, I talk to a lot of RevOps people that try um, that it needs to be championed and led by the CEO, because it involves the entire first team being aligned on something. Um, If you try to fix it and go to market, you won't fix it.
[00:11:48] RevOps with the CRO, if you do not have finance integrated, and you do not have a process and a methodology to integrate the finance data with your CRM data, you will not get the result that you need. And it's, it's just a uh, a complete lack of accountability at the top of the funnel to unit economics.
[00:12:03] So when you think about, And I, I have some data to show on this, but I'll give you an example, right? So like in Q4 of 22, there's a company, they're at like 40 million ARR. At that point, when we go back and measure their data, we uh, create pipeline efficiency at 46%, which is below the target for a 50%, which means that you spend 2 on marketing, or 1 on marketing SDRs, and you get 2 in revenue.
[00:12:27] Okay, so you have that type of, calculation. Then, over the past six quarters, their primary KPI for marketing was demo requests, and their primary KPI for SDRs was number of meetings booked. And it inflated pipeline creation, so pipeline looked like it was going up. And so this, the data looks like it's going up, and then they're measuring marketing on website demo requests, so website demo requests are going up.
[00:12:50] And so they're like, everything's going well. And in the meantime, this metric on the ROI is actually degrading 'cause win rates have been dropping during that time. So on their dashboards, they're like, this strategy is working. And meanwhile, for the past six quarters, that number has gone from 46% to 146%.
[00:13:07] A three x decline in productivity. That has fucked up their whole revenue factory and very difficult to fix. Um, And, and so when you track the wrong KPI. Which was website demo requests against all the marketing spend, and they have a cost per MQL that they can come up with and things like that. And then marketing is driven to that number, and then slowly over time that number degrades.
[00:13:30] That then all of a sudden you have a third of the pipeline, you spend the same amount of money or more, and you have a third of the pipeline that you used to get for your sales team. Now what do you have to do with sales headcount? if they were tracking the right data, they would have seen the problem in Q1 of 23, that the number went from 46 percent to 56 percent in the next quarter to 62 percent and could have had the ability to stop it in the middle of 23.
[00:13:51] But instead, they hired my company four quarters later when the problem had almost tripled. And so, the wrong KPI can, especially at that stage, 20 to 50 million, because at 20 million your metrics look good and you just raised a big round and you're going to pour gasoline on it, and you don't have the visibility, your CAC doubles, then all of a sudden, instead of being profitable or breakeven, you're burning 6 million a year and you're in big trouble.
[00:14:13] And so that, that's an example of, like, how the wrong North Star metric that doesn't account for unit economics can really mess up your go to market.
[00:14:23] Mikkel: So, just maybe to hop into a couple of things you mentioned here basically it's the CEO, CFO now, now deciding a bunch of things. And we've also seen CFOs reign in spend, you know, cut costs, basically efficiency has been the, the, the switch we now flicked on after growth at all costs. Do you think?
[00:14:40] Chris Walker: sorry to interrupt you, but efficiency has gotten worse.
[00:14:43] Mikkel: So that was actually going to be my question. Do you, do you think we've gotten more efficient now or do we just still have the broken engine and just smaller?
[00:14:52] Chris Walker: look at it. When you look at both private, the private companies that we assess with a standardized data model, along with 80 public SaaS companies, that they have been cutting costs and they have been improving EBITDA, but go to market efficiency continues to get worse. Which means that they are not cutting costs at the same rate that they are, that net new ARR is declining. And so, like, and what that tells you is that the cost cutting isn't strategic. It's that they're cutting, like, cutting random stuff. Because if you were cutting the right, lowest ROI things and leaving or amplifying and reallocating to the highest ROI things, You would see improvement in that number.
[00:15:30] We've been tracking that number for more than six quarters, and it continues to get worse. Um, And so, the, the, the, the idea of efficiency is not cost cutting. It is strategically finding your lowest performing investments, and then reallocating to high, high, the highest performing ones. And it's as simple as allocating a stock portfolio of 50 million bucks.
[00:15:51] You need to be able to have the visibility into every single individual investment. You need to be able to estimate the ROI of each individual investment, identify the lowest performers and reallocate them to highest performers as quickly as possible and get a better blended return on investment across your whole portfolio.
[00:16:05] It's really as simple as that. I don't go to market. It's become so overcomplicated. The marketing reports are ridiculously overcomplicated. have no connection to the actual financial data that comes out of the system. They, it does not input the right costs. It does not pull out the right actual revenue data.
[00:16:24] And when you only rely on the CRM and then manager level insights, you're going to get bad stuff, bad insights. And so I think one of the predictions, and this is something that people should just move to, I think in five years, is that historically go to market has been about distributed decentralized control.
[00:16:43] Which you take the CEO, then you distribute it down, and then the rep, the leaders of the go to market, however many you have that lead those different functions, then distribute it down to sub functions, distribute it down, and then it's just like in the military. These field reports come back up from the lowest level people and come all the way back to the executives, which is an insight that you want.
[00:17:01] You do want that to happen, but it can't be the way that you decide on your fucking strategy. And so the move to central, centralized standardized uh, sort of, analytics and decision making for strategy, I think is what companies will move to, which is that the executive team has a stream of data, finance and CRM data that's properly processed and properly visualized for their level, and then contextualized through AI and other things to actually help them make decisions or at least see the view.
[00:17:29] at the level that they deserve to compare against the field reports they get from their managers and agencies, and be able to blend that together and make a true strategic decision that, that, you need both of those views. If you think about, like, the command center for the Pentagon or something like that, they're not only relying on what they hear from the person that's on the battle zone.
[00:17:48] They have intelligence and a lot of other things that help them make true decisions. They have advisors. And when we're talking about some of these companies, these are high stakes decisions. A 200 million ARR company, the difference between growing at 20 percent and 30 percent is a massive difference for investors.
[00:18:04] It's a huge difference. It's a massive difference in enterprise value multiple. It lowers cost of acquisition. Like we are, we are over, we, we, we grow SaaS businesses because of the enterprise value that it just can't be replicated in almost any other business model. Um, And so, why don't we start, start aligning our go to market to the number, the most important thing, which is create value for shareholders.
[00:18:26] Obviously, we need to make an impact for customers, deliver a differentiated product, have a great culture. I don't want to diminish any of those really important, important things. But when it comes down to it, if you simplify it, we need to drive enterprise value growth. And so the, the, the lowering of costs is just a response to the fact that performance is declining and we've increased costs.
[00:18:47] So now all of a sudden we just have to adjust to the reality of the situation so that we don't keep losing a ton of money.
[00:18:52] Toni: What a lot of, so, and I think there's, there's a couple of points in here that, you know, I, you know, try and try and tap on now.
[00:19:00] So you mentioned AI a couple of times you mentioned efficiency and cost cutting, a lot of people in the market right now hope that, you know, one is the solution to the other, right.
[00:19:11] Especially on, we've seen those AI SDRs, we see marketing teams being like, Hey, you know, someone can just write this copy. Kind of, and, and from your, from your reaction already, I think, you know, the, the audience can, can judge what you think about this, but you know, not, not from a insights driven use case, which, which you referred to with AI previously, but, but from a, Hey, you know, now we have this new technology, this new magic wand, and we have this CAC problem over there.
[00:19:37] Let's just mash those two together and kind of dream our way out of this. What, what do you, what do you think prediction wise is actually going to happen with this, with this AI trend that we're seeing right now?
[00:19:46] Chris Walker: Large, large companies are having AI be a bell and a whistle in their product. And it is. It is fundamentally different to build your company AI native. And that when you do that, you truly understand that bad inputs equals bad outputs. And that all we, all we have in GoToMarket is a ton of bad inputs. It's not collected properly, the data's not tracked, sales doesn't attach right, the right contacts to the opportunities, we have all these campaign members that, Some have UTMs, some don't. We don't track any of our third party tools. SDRs are randomly doing shit. You could have a hundred humans look at your CRM data and nobody would be able to tell you the right answer.
[00:20:28] There's not a, there's not a clear right answer. And so how do we expect a robot to go through that and, and make sense of it? It's not going to happen. And so AI native companies will understand that the actual architecture of the data is required so that AI can know what to do with it. That's a, that people under, that a robot and people could equally understand.
[00:20:48] And so I think that generally, especially when it comes down to operational tools like the AISDR, just have a, have a robot do more volume of the bullshit outbound that you're doing with a human right now, that's automated with software. It's just moving the spam cannon from a human that costs 80 grand a year to an AI that costs a dollar an email or something like that.
[00:21:10] Um, And so, it's the uh, especially when there are major, major technology shifts, companies apply the old world and the old thinking to the new situation. Um, and when you have this type of shift, it, it fundamentally requires an entirely new way of thinking. Um, And it's interesting, the combination between AI, And the economic shifts in the market, the decreased revenue multiples, harder to raise money.
[00:21:40] IPOs are generally way down. A lot of VCs paid a ton of money for overvalued companies in 2021, have unrealized losses on the balance sheet and can't raise another fund and are probably going to be underwater. There's just so many things that are happening at the same time um, that I think people should, that really need to rethink the overall strategy around how do I build a software company.
[00:22:02] Mikkel: Yeah.
[00:22:02] Chris Walker: Um,
[00:22:03] and, and, uh, I think that the trends, I think the number one competitive mode is having a deep connection with your customer, direct connection with your customer. And that will feed you the product insights that you need. It'll feed you the market insights that you need. It'll be able to allow you to communicate with the customer properly.
[00:22:22] Because at this point, it's not about who can build software the fastest. It's about who can build the right software the fastest, who can build the stuff that actually solves the problem. Anyone can go into Versal or VO today, hook it up with Bolt, use Claude. Even I can, I'm not a dev and I can make a, make an app in 30 minutes.
[00:22:41] Mikkel: Yes.
[00:22:41] Chris Walker: It's not to say that that, that app is going to solve a business problem and deliver a business outcome. So you have closest to your customer. Next you have your product delivers a repeatable, consistent business outcome to customers that you can measure and report on. And the idea of just buying a quarter million dollar ABM tool and seeing growth go down, ROI go, go, or growth stagnate, ROI go down and not getting any type of business result that those people promise, it is now the software vendor's responsibility to make the customer successful.
[00:23:14] That requires a different level. Most software companies don't want to have a professional services arm. Because that's been the common wisdom all over the past years. We don't want professional services, it's going to lower gross margin, it's hard to scale. We'll just build a product company and outsource it to agencies.
[00:23:28] And then all of a sudden, five years later, none of your customers can operationalize your product, and your NRR is, you know, 88%. You're fucked. Like, and, and, and so I'll, I'll, There's a lot of software tools that are getting purchased right now that are shelfware, that do not get used properly, that are very, it's, it's an insignificant cost relative to the whole company, right?
[00:23:50] So if you actually look at the tech budget inside of the new logo or the overall go to market budget, we're talking 2 3%. It's a small, it's not like the cost of technology are ruining go to market. But the promise, the undelivered promise of software where companies buy it, think that they're going to get a different result and then they don't, is a very, very expensive problem that costs a lot more than the software.
[00:24:12] You spend 250 grand on the software, But then you spend 30 million on go to market, and you don't grow faster. And so you have all these people, resources, programs, things like that, that is the actual cost. That cost, and the time delay. And so I think that, Yeah, and then lastly, I think the company, the, the successful companies moving forward will be AI native.
[00:24:33] And truly understand what that means in their business, not only around product and features, but how they run go to market, how they scale sales and marketing, how they Uh, collect invoices, how they uh, how many headcount they have, what their headcount scaling model is. I think many companies will be a million dollars per employee these days.
[00:24:49] And like, only Google is like that right now.
[00:24:52] Another prediction for, uh, 25. I, I, it probably won't happen in 25, but we'll see. Winners paving the way um, is that we'll have less than 10 person marketing teams
[00:25:04] for, for, for, almost any size company. Maybe at the, and the big, forget the enterprise, they're like, they're going to do what they want.
[00:25:11] But when you look lower market, especially sub 100, 150 million, That will see a decrease in team size and an increase in productivity and effectiveness. Um, And that what companies actually need is a lot less money tied up in fixed manager or middle manager level headcount to lower all those barriers in marketing to have true expert strategists that own a function, understand how to use AI, and understand how to use external consultants that are far fucking better at whatever they're trying to do and have a process to do it.
[00:25:42] And that will be the new way that companies scale, not only marketing,
[00:25:45] SDRs, you could, you could handle the exact same way.
[00:25:48] Toni: so we were actually talking with Kyle Coleman about this. I mean, he's also at Copy AI. I was kind of, that
[00:25:52] Chris Walker: he's leading and paving the way on this. Uh, But I'm now finding other CMOs aligned to this thinking and coming into a new job. And it's like, you know, a CMO back in the day would say, I'm expecting a 50 person team. And now they're getting a 12 person team. And they're like, this is amazing.
[00:26:07] I might actually bring it down to eight.
[00:26:09] And I'm just seeing a very different approach when it comes to marketing for a small subset of marketing leadership.
[00:26:16] Toni: but it seems like this is one of the use cases. So the thing is, right. AI is just some fricking new technology, whatever. Right. I mean, it's like SQL was new 20 years ago and now AI is new and, and everyone obviously tries it to apply it to everything to kind of buying muesli and kind of whatever, doing ABM and so forth.
[00:26:33] Right. But But I also do believe there are a couple of legitimate use cases for generative AI right now. Right. And, and I actually think some of the, some of the points you're making in terms of, Hey, you know, the marketing team might actually be smaller and we might have like a couple of outsourced experts and, you know, a couple of things are going to take over.
[00:26:51] Do you, you know, do you, do you believe that this will be something that more and more people will actually be able to achieve, or will it, will it stay with the you know, crazy outliers of a Kyle Coleman and so forth?
[00:27:03] Chris Walker: When, as you move down in the organization and you move down through to the department, into sub functioning department, into the breakdown of the managers and things like that to do the tactical work inside of that department, you are, you force and you, you incentivize micro optimization and micro application of AI. So, how do we use AI to, like, report on our Google Ads 30 minutes faster than we did before? How do we, like, buy this tool that claims that they can, like, optimize our performance marketing that doesn't work, but we can now use AI to optimize our performance marketing so our cost per lead is 5 less, but the full fucking model still doesn't work?
[00:27:44] And so you're gonna, you get that breakdown when you think about it, and so The strategy around AI, if you want it to run, be the brain of your go to market long term, you need to think about it at the top, and then bring it down. Not at the bottom, and then try to build it up. And so that's the, the fundamental difference right now, is that I think that the executive team, while excited about AI is not taking seriously the business transformation that is required to be ready for it, to actually use it.
[00:28:15] To actually take the full capability of it. I know companies that are running the AISDR experiment, but they don't even track their outbound. So they don't even, they, they have data to know which emails get opened and things like that. They're never going to know how to scale it, they're never going to know whether they should actually get rid of the humans or not, they're never going to know, they just don't have the data.
[00:28:35] And so they don't know why the bot is reaching out, they don't track that, they don't track why the humans reach out, they don't track what message gets sent when it converts into medians, and so there's just a, there's a lot of missing data that you need for a robot to do something that you want it to do.
[00:28:49] The, the, there's been so much, quote unquote, like, black magic, particularly in prospecting, black magic where Jimmy just happens to get nine meetings that month, and Jimmy's the best SDR. And then we give him a gold star, and we, we pump it up, and we have a little party in the office for Jimmy. And it's like, but why did he get nine meetings, and the other people got four?
[00:29:12] What is, what is this person doing that is different than all the other people? Oh shit, we don't know, we just know Jimmy, Jimmy's great. We need to get more people like Jimmy. Let's change our hiring profile. And that's like the fundamental, it's just the fundamental gap when it comes to data.
[00:29:24] Whether you want to use AI as a, as an insights engine, or as an operational, as the brain for operational automation through AI, either way, the data ends up being the thing that is the reason that you can't implement it. Um, and you all know this very well, right? You all were trying to solve this problem, at least in the CRM. So, and maybe you hadn't positioned it for that, but it's like a secondary use case, right? That like, The way that, and you've seen this many times, whether you're at 5 million ARR or 100 million ARR, 95 percent of companies have this very messy, incomplete, overwritten fields, fields that aren't used anymore but are still used in the software.
[00:30:08] Marketing stuff is tracked 50 percent of the time, and outbound stuff is almost 0 percent of the time, maybe 5%. And basically the only thing they have real visibility on is opportunity creation to closed one, which is why they can run that part clearly. And they can manage a sales team because they have all the data that they need to manage that.
[00:30:24] But then when you look pre opportunity created all the way up to, we want to sell to this account, we've decided they're a target and look at that part of the pipeline process, they got nothing. They got nothing.
[00:30:37] Mikkel: So, I mean, you've covered a bit I think the setup with the problem and we've had a few predictions don't have more. If you have more, you want
[00:30:43] to kind
[00:30:43] Chris Walker: Let's go. Yeah,
[00:30:44] Mikkel: because otherwise my, oh, you have, okay, great. Because I think you After your predictions let's talk a bit about what opportunities lie ahead.
[00:30:51] What are the archetypes of those who will succeed and those who won't? But I'll just let you throw in, if you have a few more trends you want to drop before we progress to that stage.
[00:31:01] Chris Walker: so what have we talked to through so far? The move from decentralized distributed reporting and decision making to a centralized command center. So there's like change happening there to deliver strategic insights. There is the, uh, lowering of marketing team sizes, I think across the board, up to hundreds of millions in ARR that like, The org complexity, many jobs could be done 80 percent by AI, and the fact that we have so much fixed cost tied up in this function, and we don't even have enough, we don't have a lot of money for programs, we don't have money to hire any experts, just doesn't, it feels like a, the poor allocation of resources for that big amount of money.
[00:31:42] Obviously, I think many companies are going to try AI as an operational tool and realize that it hurts their brand. It diminishes customer experience. That there are, that there are negative drawbacks to what they're trying to do, particularly around the idea that they do not have the data to, to, um, Programatically have AI do things that are relevant to the customer and helpful to the customer.
[00:32:05] And so you just have a robot going around doing random outbounds. That's what it's gonna be. And so I think that people will try it and then rea sort of walk back on that. I think we'll have a trend, oh, like, we we're gonna get rid of all our SDRs and move to AI. And then I imagine that And I, which I think is for most companies, like a really terrible decision to just stop doing one thing and move it all over to something else, I think is a very risky, unnecessary decision that just, just need, that shouldn't need to be discussed unless you're literally not gonna make payroll in a month, which is almost nobody like that hard shift of like, forget this thing, we're gonna move to this thing completely.
[00:32:42] It's super risky to the business. You, you are, you are decimating 20 people that collect all the meetings that you use to get revenue and you're going to move that to a robot and hope that it gets similar performance. So I think people will, there'll be mistakes made there. I think that, uh, generally uh, 2025 will be slightly stronger than 24, but if you just read the tea leaves and look at what companies are doing, Many companies are still lowering budgets this quarter for next year.
[00:33:12] We are not, we are not at the end of this. We aren't. Like, going, people, companies decreasing their budget by another, another 30 percent going into next year. And we're talking 100 million dollar companies here. So this is 20, you know, 10, 20 million dollars less than go to market investment. It's a big, big chunk of money to change in one year because CAC needs to go down.
[00:33:35] And EBITDA needs to go up for investors, and we need, it just needs to, it needs to change. And so I think that, companies will continue to struggle with unit economics. That will see potentially some tailwinds in the market that all in all market tailwinds do is hide the real problem from you That's what 2021 and 2022 did don't don't you remember?
[00:33:56] And so if you do start getting market tailwinds Maybe use last time as a little bit of a learning because last time what happened is that the market was pushing buyers to buy your solution And then you are wasting a million dollars a month on Google ads and bullshit advertising, and you were attributing the advertising to the success, which the advertising had nothing to do with it, and then all of a sudden the market demand slows, and your million dollar a month Google ad strategy is exposed.
[00:34:21] And so this time, maybe we should put together a better model that accounts for those things, so that if we are growing fast, and our marketing investments aren't moving the needle, we're That we know just to be smart and like fiduciary, have a fiduciary responsibility to our company and our shareholders.
[00:34:38] Mikkel: I can't help, but I'm sorry.
[00:34:40] I almost can't help but ask because there's always also this debate on how much of it is then art versus science. We, we really want to assign it
[00:34:48] Toni: versus operations. Yeah. But it's like, what, you know, it's,
[00:34:51] Chris Walker: yeah. So I made this distinction literally, I made this distinction today. I think it's, and I think it's really important for people to consider. So, you have go to market strategy which is almost purely art, right? You use some data to understand TAM and things like that. But the strategy is. The product strategy, understanding the competitive landscape, picking your market or markets, picking your personas, understanding what motions you're going to run, how you're going to price, like, there's a huge strategy component there, which is almost purely art.
[00:35:23] You need FP& A to do some validation, but it's almost purely art. Then you have go to market optimization, which is investment allocation and optimization, measuring the right data overall, building the right data architecture. Basically, improving the efficiency, growth rate, and enterprise value of your company.
[00:35:42] Sometimes that gets offloaded to a chief of staff or something like that. That's the place where I want to play. And then you have go to market operations, which runs the entire data set across the whole factory, which was what Growblox was trying to do.
[00:35:56] And then inside of that, you can have marketing operations and sales operations and CS operations that operate and optimize specific processes within the department.
[00:36:06] And so the, the one thing that I think has been a mistake is the all or nothing of RevOps that people have been pursuing where, oh, it can't, we can't have marketing ops and marketing if we want to have a centralized RevOps team. We can't do that. Well, actually, yeah, you can. And they have totally different mandates.
[00:36:22] And like, it's go to market operations that wraps around the whole thing. Installs the architecture and manages the data set that executives use to make full strategic decisions. And then inside of that, you have somebody that's in marketing ops that is tagging campaigns under the architecture that's been set by go to market operations and sending emails in the right way.
[00:36:41] And building different plans for marketing, and then we should just call RevOps, SalesOps. This is what it belongs, and we make comp plans, and do geoterritories, and we build ad hoc reports for the CRO, and we measure conversion, and we do all this random, the, it's not random, it's strategic and important sales operation stuff, but let's stop kidding ourselves that it's RevOps, it's not.
[00:37:01] And then you have a CS function, CSAM operations, that's gonna, and maybe we should talk about CSAM too, maybe that'll be one of my predictions. But that's running that actual, like, ongoing process that happens. And so if you look at how a factory runs, factories have larger data sets that then get broken down into a big system that then subsystems, and those subsystems have people processed technology.
[00:37:23] And operations resources need to run those subprocesses. And the sub processes are not Marketing, Sales, and CSAM, it's Create Pipeline, Close New Logos, Expand, Renew Customers, and Expand Accounts. Yeah.
[00:37:37] Toni: so you already, so, I mean, everyone listening is like, Oh, what does Chris have to say about CS and AM? So I don't want to, I don't want to stop you there. You know, I can, I can see a lot of people kind of thinking about this right now.
[00:37:48] Chris Walker: So, if you buy into the concept that the, the core measure of overall efficiency is the total cost of go to market, including post sale, um, Um, compared to the net new ARR that has been added across all that stuff, new logo and expansion combined there becomes a lot of pressure in not only the economics around the customer success function, but also the effectiveness and that when you think about what that function needs to do today, which is not babysit the customer, or help them.
[00:38:25] Make an integration and make sure they checked five boxes and then come back for the renewal in a year. That customer success is in no man's land. It's a thing that we build in for free to the customer. We try to build it into our SaaS subscription fee. It's a man, typically a manager level person, and we're selling, selling a transformational solution to a C level executive.
[00:38:46] They are not equipped and we don't run the operation for that person to help the customer truly be successful. And so I think you have on one side you have professional services which are built to help customers be successful, drive up NRR, and also make profit and you can make a significant gross margin on professional services when they deliver a result.
[00:39:06] And so you have professional services that then would hit uh, gross margin. They would hit COGS and it would impact gross margin. And then the other side you have account management. Which is a sales and marketing thing that is accountable and has a revenue, a renewal and expansion target. And those are sales people that help the customer see the business result and close them on the vision and the next stuff.
[00:39:27] And customer success sits in the middle of that and doesn't do either of them well. Um, And so I think we'll see, I just frankly think we'll see a compression where companies realize, Hey, we need to help our customers be successful. Our GRR is 88%. Our, it's not, our CSA, it's a combination CSAM, product strategy, there's a lot of different things happening.
[00:39:47] For some reason, a ton of like, companies that were so ahead in their category and market feels like they did no product development for like three years. Like all the product, like a lot of those products that 100 million ARR companies, brands that you know about, just like haven't changed in three years.
[00:40:03] And so people are like asleep at the wheel on product. The customer success team isn't helping people be successful. They don't provide the appropriate document, documentation to operationalize their product across the company. I think that, we will see a different structure for how companies run their post sale function that is more aligned to customer results.
[00:40:22] Mikkel: So we don't have many minutes of tape left. I kind of wanted to maybe just ask the last question for you to take us home with this episode. Obviously we have a lot of go to market leaders listening. You happen to talk with a lot of go to market leaders as well. The best ones, the ones who are really nailing it right now, heading into this next year and seizing the opportunities on, on these trends and predictions, what are they doing?
[00:40:44] What can you tell us about those leaders and those teams right now? Maybe to, to wrap it up and give some guidance to the listeners.
[00:40:51] Chris Walker: Um,
[00:40:51] I uh, key ingredients for success that I'm seeing people use, people have used these for a while, I think in many ways they're tried and true. Number one is that go to market on its own is not going to fix this problem. So if you're the CRO and think, oh, I just need to build my comp plan better, or I just need to hire that agency to fix my pipeline problem or something like that, you will be sadly disappointed.
[00:41:12] If finance is not deeply ingrained in this process, you will not be successful because you don't have the visibility. And so the combination, the integration between finance and go to market and that connection point is something that all successful people will need to do moving forward. Because go to market now, like, the number one thing that holds companies back is actually unit economics.
[00:41:31] Slow growth and high CAC are a function of poor unit economics. So you have that component. I think uh, successful successful sales leaders are going to be looking, like I, I, I watch how people plan, right? They're like, we had a 500k per rep productivity last year, we're gonna scale reps by 6 heads and it's gonna be 520 next year, right?
[00:41:58] So they like, increase head count, increase productivity incrementally, like 2 percent or whatever. Strong CROs are gonna try and figure out how they get that PRP from 500k to a million. And do, and have every rep being so much more productive, making more money, staying for a long time, and having half as many reps that are twice as productive.
[00:42:16] That is the secret weapon to retention, cohesion, lack of sales out of territory, and things like that. The way that we've scaled sales I think is not good for the company or the customer. I think that marketing leaders and executive teams that are not using external people to contextualize their performance and help them make good decisions, I think, is just foolish.
[00:42:38] I was talking to somebody, a couple of weeks ago, a RevOps leader, right, and she, she comes in, there's 60 million ARR, and she comes and says, we're trying to get to 100 million ARR in two years right now, we're only growing 20%, like, we need to, this needs to change. Um, And I was like, okay, how, like, what's your new logo CAC?
[00:42:55] And then she said it was like 3. 6 years or something like that. And then I was like, so I'm doing the math in my head and things like that, and I'm like, okay, so you wanna, is it revenue to grow, 40 million in two years. Um, And you want efficiency at that level to that improve from three year, 3. 6 year CAC Payback to less than two years.
[00:43:12] That's probably going to add like 600 million in value for this company. And then she goes, so how much is it going to cost? I was like, it's 20, it's 20 K a month to get started. She was like, whoa, that is way too expensive. We don't have the budget for that. We don't have the budget for that. And I was like, The, if you look at the 30 million that you already spend on go to market, the current return you get on the 30 million is 12 or like 10 or eight.
[00:43:39] It's somewhere down in that range. Like, right. So the return on the existing investment is so low. And so, I just feel like some people, like, the, the lack of financial acumen from some people, not just RevOps, I think that some CMOs struggle with this too, and frankly, CROs too. uh, it's different to build a model for PRP than understand your financial model in unit economics.
[00:43:58] It's a different
[00:43:59] Mikkel: Yeah.
[00:44:00] Chris Walker: But understanding that level is super important. And I think that, great leaders will understand having the right data to make calculated and oftentimes automated decisions is the, is one of the core features of their go to market and will figure out how to fix it.
[00:44:16] I think that we will see a decrease in overall tech stack. I think that we'll continue to see companies lowering the techs. Like I analyze companies, they have 13 data providers.
[00:44:28] Mikkel: Yeah.
[00:44:29] Chris Walker: If you look at the data provider industry, it all comes from the, the data all comes from the same place. All of those platforms have the, almost the exact same data.
[00:44:37] They all buy it from the same company. Why are you paying 13 of them? Cause they have different workflows at a different SaaS UI. Oh my.
[00:44:45] Mikkel: But it's also like
[00:44:46] Chris Walker: see continuous consolidation.
[00:44:48] Mikkel: but it's also like marketing has one project management tool. Product has another project management tool. You know, it's just, you can keep going. You can keep going on that route.
[00:44:57] Toni: Chris, this was fantastic. I think you spilled a lot of really interesting, you know, gold nuggets for people to pick up.
[00:45:04] I think there was, we kind of went really broad we could have also kind of gone super deep in some of those different areas, but really kind of your insights in like 2025 really insightful. And also you know, what you think. Like a winning recipe might look like a winning kind of setup of, of, of the go to marketing going forward.
[00:45:21] Chris, thank you so much.
[00:45:24] Chris Walker: Thanks y'all for having me, always a pleasure to talk to you. You all have been doing awesome things for the industry and sharing a great, a lot of great knowledge. So I appreciate having me on and having such a detailed discussion. Thank you.
[00:45:34] Toni: Wonderful. Have a good one. And thanks everyone for listening. Have a good one. Bye bye.