Outbound is 3x harder

Outbound is 3x harder than it used to be.

We dig into what's happened, and what you can do to make it work.

• (00:00) - Introduction
• (01:30) - Challenges with outbound right now
• (04:39) - The most prevalent channel
• (11:08) - What it means now
• (15:29) - Get the message right
• (19:06) - Let's cut it
• (25:46) - Are you still a fit?

Sources
Pipeline from sales development (Ray Rike)
1000-1400 touchers per opp (Jeremy Donovan)

Creators and Guests

Host

Mikkel Plaehn

Marketing leader & b2b saas nerd

Host

Toni Hohlbein

2x exited CRO | 1x Founder | Podcast Host

What is The Revenue Formula?

This podcast is about scaling tech startups.

Hosted by Toni Hohlbein & Raul Porojan, 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: Hey everyone, this is Toni Holbein.
[00:00:01] You are listening to the Revenue Formula. In today's episode, we're going to discuss how outbound is three times harder than it used to be and realistically what you can do about it. Enjoy.
[00:00:15] Hey, yo!
[00:00:21] Mikkel: not even Monday,
[00:00:22] Toni: It's a Tuesday today. Tuesday. Oh, it's a, it's a, it's an, it's an off week.
[00:00:26] Mikkel: it was so funny, I had, uh, so Dave Gerhardt, he's a big marketing guy. He posted about podcasting yesterday on his LinkedIn. Uh, he was close to, you know, quitting several times, burnout, did four to five episodes in one week. I was like, whew, yeah, that's a lot.
[00:00:41] Toni: I do four episodes a week.
[00:00:43] Mikkel: I said, I said to him, what, what I'm really happy about is we've gotten into this ritual of recording Mondays, head into the studio, first thing, record an episode or two. You're super productive. You already started the week, like, sprinting.
[00:00:58] That's, that's really epic. So, doing this on a Tuesday just feels wrong.
[00:01:02] Toni: Is that, is that why you have a soda here now?
[00:01:04] Mikkel: Yeah, it's some brand placement, marketing Danish soda. I don't know if we're gonna get dinged by Apple now.
[00:01:10] Toni: planet knows what Faxe Kondi is,
[00:01:12] Mikkel: you can't get it nowhere else
[00:01:13] on the planet, probably.
[00:01:15] Toni: it's
[00:01:15] Mikkel: like Mountain Dew.
[00:01:16] Toni: No, everywhere else it's called Sprite.
[00:01:17] Mikkel: Yeah. Yeah, true. No, Dew is probably more apt. Probably more apt. How
[00:01:23] Toni: So what's, what's on the menu today,
[00:01:25] Mikkel: just gonna say how I'm gonna stitch this segway together. Well, we're gonna
[00:01:28] Toni: Um, well, we're going to
[00:01:30] Mikkel: talk a bit about outbound actually. And we've been noticing as of late quite a bit of chatter on LinkedIn specifically that Outbound is not really working for a lot of folks.
[00:01:42] Toni: I mean, so this whole outbound is dead, that's, it's been around, I don't know, since the dark ages, I feel right.
[00:01:50] Um, I think, I think outbound is dead. That's, that's a boring message. Um, I think there's, there's a more sophisticated conversation happening right now, um, which is drilling a little bit into why it's not working anymore. And, you know, what some of the symptoms are
[00:02:04] actually. So I think that is a more interesting conversation to have.
[00:02:07] Mikkel: Oh, yeah, for sure. And I think, um, you know, some of the things people are Noticing out there response rates dropping. This is not data backed, by the way. So just, you know, we didn't, uh, fact check it or write it on wiki or anything. Um, but response rates are down, but we didn't change the approach. And then there's cases where the outbound leader or the team gets, you know, sacked and then they restart, they try more personalization.
[00:02:33] And probably what they mean is we added more. Unique identifiers like FNA
[00:02:37] and
[00:02:38] title and and, and ai, uh, you know, stuff like that. Um, so just I guess making it more relatable and not,
[00:02:45] Toni: know, I think, I think there's a whole, um, war of attrition going on. Um, really leveraging tech to a large degree.
[00:02:54] This is also, this is also Jockos and Sam's talk track. They're really talking about like, while. Uh, you're going to use all of that AI. You're going to use all of those email tools. Guess what? Uh, every single email is so cheap to produce. Everyone is going to produce a bunch of emails and they're going to bombard, you know, the few buyers that remain.
[00:03:12] And obviously what are they going to do? They're going to ramp up their spam detection and they're going to just try and every single name that they don't recognize in their email inbox, trying to get rid of
[00:03:22] Mikkel: yeah. And I mean, I also have a made up stat here that 99 percent of outbound is really subpar and over reliant on vanilla email sequences as well. So that's a thing, I guess. At least I'm seeing more and more emails go like, subject line, time for a 30 minute discovery call.
[00:03:38] Like, that's not quick. Or
[00:03:39] Toni: Mikkel, comma, and then.
[00:03:40] Mikkel: Yeah, yeah, yeah. The good old
[00:03:42] Toni: But the, I think it's, um, uh, it's not only that 99 percent of that is, uh, you know, subpar, it's
[00:03:48] Mikkel: also just...
[00:03:50] Toni: It's also just more volume. It's, and that's, that's why it's leading, you know, maybe a year or two ago, it was maybe only 90 percent was sub power, maybe 80 percent was only sub par.
[00:04:00] Uh, but now the volume has just been ramped up so much that, you know, the, the whole, you know, signal to noise ratio. It's just leaning all noise. There's, there's, it's very, it's very difficult for anyone with an email inbox to read anything anymore.
[00:04:14] Mikkel: and when they can't even spell my name right, then it's like, ah, pass. I would have booked a meeting with you, but now,
[00:04:20] Toni: Yeah. I mean, my, my name is usually spelled with a Y, but what's, what's, your
[00:04:24] Mikkel: what's your problem?
[00:04:25] I got one today and it was totally messed up. I've never seen anything like it, actually.
[00:04:28] Toni: and it like it Mike or
[00:04:29] Mikkel: No, it's like M I E H K E Y. E l I was
[00:04:33] Toni: No, I think they just send it to the wrong email address.
[00:04:36] Mikkel: No, it was ai. The AI messed up. That's, that's what happened.
[00:04:39] Um, so the, the thing is, we've talked in the past about you need to find a channel that works. Yeah. Right. We've talked about that stuff.
[00:04:48] Outbound is one of the most prevalent channels out there for a reason. It's not that you and I were, you know, we're super passionate. We, you know, sit at night just thinking about, Oh, outbound is so wonderful.
[00:05:01] I mean, you and I, we also sit on the
[00:05:03] Toni: end. I just now had, you know, myself was an outbound opportunity I was working on, and it was fantastic.
[00:05:10] It was fantastic, kind of really kind of leaning into this, like having this conversation, learning a lot from, you know, all the resistance come back. I think when you kind of lean into this outbound motion, you hear people...
[00:05:20] Uh, zone out, you need to, so, I mean, that happens a lot, right? You need to take a note. It's like, okay, that talk track, I'm going to scratch that out forever because everyone falls asleep
[00:05:31] to it. And everyone else is like, Oh, you know, I want to really inbound on Growblocks. And then that, you know, it's, it actually doesn't help you that much.
[00:05:39] Anyway. Sorry. This was like a personal
[00:05:40] Mikkel: so, so, um, Ray Rike, he obviously loves stats. And he has a ton of them and I picked up some here and, you know, they, they serve a ton of companies and half of the companies, they generate 30 percent of their pipeline from
[00:05:55] sales
[00:05:55] development. Just putting it out there into the world that it's actually a thing and 25 percent of the survey companies generate more than
[00:06:03] half
[00:06:04] from sales development.
[00:06:05] So you should pay attention to this. I mean, it, it, it works for a reason, right? And I, so I went and asked, uh, we have a gentleman on our team called Anton. So he's like the good old SDR leader, really, you know, dialed in with sales and obviously also worked with a couple of our customers, I believe, on this area and I said, hey, what, you know, you are connected in this area, what's going on right now?
[00:06:27] He's like, well, you know, more folks are struggling, outbound requires more work, but it still works if you do it right. That
[00:06:34] was
[00:06:34] Toni: it right. Yeah, I think this other stats here is, I think it's really interesting, not a single player north of 40 million in ARR. Achieved that level without over 50 percent of pipeline coming from outbound.
[00:06:47] Isn't it fucking nuts?
[00:06:48] Yeah, crazy. Right? Yeah. And, and I mean,
[00:06:52] Mikkel: Isn't it fucking nuts? Yeah, PLG companies, you
[00:06:54] Toni: PLG
[00:06:54] Mikkel: an outbound motion
[00:06:55] Toni: you Yeah, of course.
[00:06:55] Mikkel: in many them. So, um, so that is really why we're going to talk about outbound today. Maybe you are struggling right now. The team is struggling. You're thinking about building it up. We need to talk about this subject today. Yes, I think there's another stat that we
[00:07:09] Toni: uh, maybe we've kind of forgot to mix in. So, um, Jeremy something, something from,
[00:07:15] Mikkel: guy,
[00:07:16] Toni: Insight Partners.
[00:07:17] Mikkel: Inside Partners,
[00:07:17] Jeremy. Okay, yeah.
[00:07:19] Toni: you don't
[00:07:19] know
[00:07:19] him.
[00:07:20] Mikkel: No, I had beer with him. No, I don't know.
[00:07:22] Toni: Okay, you know what, Pablo's buddy,
[00:07:24] Mikkel: Yeah.
[00:07:26] Toni: um, he published a stat and I've now seen this exact same stat being picked up in like five or 10 different LinkedIn polls afterwards. Today, apparently you need 1000 to 1200 touches across obviously multiple accounts in order to book one opportunity versus three to 400 touches.
[00:07:47] Just a couple of
[00:07:47] years ago, uh, so I would treat that stat with a bit of care, like I'm not, I'm not a thousand percent kind of sure, because if you really break it down to mid market European activity standards, when you kind of break it down like that, and let's just say you do 50, uh, let's just say a hundred touches a day.
[00:08:08] Mikkel: right?
[00:08:09] Toni: That means you basically need two weeks to book one opportunity, right? You have 10 working days in two weeks and you know, 10 times 100 is 1000 touches and that gives you one opportunity. And I don't think that's true. What I do believe though, it's true is the ratio between those two, like three to 400.
[00:08:27] Now it's 1000 to 1200. Um, did it get 3x more difficult? I think so. Yeah. I actually think so. especially kind of using those email guns, you know, sales loft and outreach, super simple there. They automatically do the, you know, LinkedIn view and the LinkedIn connect. All of these things are part of this, right?
[00:08:47] Kind of that, that makes that number more achievable, I would say. but, but generally speaking, I think where we are, the, the problem is it has gotten a lot more difficult to achieve the, the same outcome like you used to before. I
[00:09:00] Mikkel: I think it's also like, there's a ton of the works work that needs to happen that you don't see.
[00:09:05] So, you know, we, we were kind of joking a bit around the personalization. I think the reason outbound can be a wonderful tool is it's a human being that can sit down and research who you are, what the business is. They can talk with you, listen, and actually respond to what you're saying. If you're doing cold email, even just email marketing, and you call it personalization.
[00:09:26] It's usually a matter of using what attributes you have on the record and then ingesting them, right? But that's not really personal as in, hey, a critical event happened in the industry. Let's talk about it, right? And I think that is the superpower of some of this stuff where we get lost in in the tactics.
[00:09:41] Toni: the tactics. Yes. And I think the, you know, I think it was KD recently.
[00:09:44] Mikkel: um,
[00:09:46] Toni: He said, um,
[00:09:47] Mikkel: sales ruin sales.
[00:09:50] Oh, yeah. Yeah.
[00:09:51] Toni: And he said, I said it two years ago and now we're here.
[00:09:54] Sales finally ruined sales because I think it is a superpower. I think it's super great to have outbound conversation. Yeah, sure. It's a bit more awkward. I get it. I personally, you know, I'm not, I'm not a, I personally am not a phone fan, but I know phone works by the way. Um, and it's also one of those channels that only.
[00:10:13] Humans right now can use, right? So let's not forget, let's also kind of have, there's a channel here and it's a, it's a high throughput channel also, right? Kind of having a conversation. If you were to measure that in bits and bytes, that's a lot of information versus
[00:10:27] an email not
[00:10:28] being read.
[00:10:29] Mikkel: But there's also boundaries to it and probably I should have used this in the intro now that I think about it. But the other day we, we got a cold outbound on insurance, super
[00:10:40] common.
[00:10:42] And, uh, we're like, yeah, sure. Let's, let's try and get an offer and see if we can cut the costs. Right. They were like, Um, so when can I come
[00:10:49] Toni: by
[00:10:50] Mikkel: your,
[00:10:50] home and
[00:10:51] visit you?
[00:10:52] And I, and I just was like, no, you're not
[00:10:55] going
[00:10:55] Toni: to
[00:10:55] come
[00:10:55] Mikkel: by,
[00:10:55] said, just send an offer on email and then, you know, be gone anyway. Um, so what
[00:11:00] Toni: are
[00:11:01] folks
[00:11:01] to
[00:11:01] Mikkel: do?
[00:11:02] Right. Wait, let's get, let's get practical now we've spent, you know, 10 minutes beating around the bush
[00:11:07] here.
[00:11:08] Toni: Yeah. So I think there's
[00:11:11] a lot
[00:11:12] that
[00:11:13] needs to be improved and has more focus on, on the playbook itself, right?
[00:11:18] So what are the emails you're sending to whom you need to put more effort in this stuff, right? And then I think
[00:11:25] Mikkel: to
[00:11:25] a
[00:11:26] Toni: degree it's... Whom are you really targeting and focusing? Almost think about it like ABM, right? So at scale ABM, and this is more so a US player than it is a European player, but ABM doesn't mean one to one or one to many.
[00:11:38] It means one to one thousand. That's, that's how the, the bigger players in the US are currently running ABM. So account based marketing. Targeted emails, campaigns, all of that stuff, whatever they can find that is outbounding. Yeah. Uh, which isn't that much for marketing, so that's also a problem there.
[00:11:54] But they're basically tailoring towards segments of an area. Right. And they're putting a lot of effort into selecting
[00:12:00] those 1000 accounts. Yeah. Right. A lot of work goes into account election, um, that I think a lot of people are skipping over. And then, you know, in this, in this churn and burn world of, you know, s scs, just firing emails off to everyone.
[00:12:14] Uh, you basically almost don't have the luxury to go into an account selection and really be thoughtful about
[00:12:19] Mikkel: And even just the creation, they're going to go, Hey, we pulled it from zoominfo, we're good. And then Mikkel's name comes out wrong.
[00:12:24] Toni: Yes. And I think there's a, there's a ton more work that probably should be spent on this. I haven't tried it yet, but people should almost be thinking more and more about, you know, books of businesses for SDRs.
[00:12:36] Versus, I can just, you know, throw this back into the pool and get more. There is a balance here, depending on how many people you can even talk to in an account. But if you're a company that has maybe five or 10 potential, persons you could speak
[00:12:49] to in
[00:12:50] an account,
[00:12:51] that's a lot of work that needs to go into this.
[00:12:53] Right. and then being thoughtful about this, not sending the typical. you know, random email, but really understanding what resonates with each of the different personas. and then, you know, crafting something around. And I think, sure, there is somewhere here where AI can help. I'm sure. I don't know.
[00:13:09] I've, you know, haven't seen those tools, but at the end of the day, kind of, you know, finding messaging that cuts through, through the inbox, through your LinkedIn, through whatever, I think that's really important. Right. And ideally. You want to do that with a bit of, you know, my, my old boss said it like that.
[00:13:27] you know, either background radiation or like carpet bombing from marketing around it. Right. So if you have seen that logo pop up a couple of times, if you've seen like Toni in your stream before and suddenly Toni's on your inbox, you know, there, there's a little bit of. You know, brand equity, if you will, that, that, you know, entices you to, Oh, you know, what is, what are these guys talking about?
[00:13:47] Right. Um, and I think people forget that, right? I think you need to be, the playbook needs to be a little bit more integrated, maybe a lot more integrated. And I think the thoughtfulness in the account selection needs to go way up. Right. And then once you invest so much time into the account selection, Uh, you then need to have very clean messaging and you need to add, you know, you need to educate your SDRs on this.
[00:14:09] Like what is the messaging that works for, you know, marketing manager versus director of, versus VP of, versus whatever. and you know, have that differentiation there. Now the next thing on top then is almost like, well, can you expect that kind of work from. Folks just out of college.
[00:14:25] I
[00:14:26] don't
[00:14:26] know,
[00:14:26] actually.
[00:14:27] I'm not sure. I'm not sure if that part of the equation still fully works out like this. Um, but generally speaking, right? Be more, uh, be more purposeful about what you select instead of just random throwing
[00:14:37] stuff
[00:14:37] Mikkel: you almost
[00:14:41] Toni: you
[00:14:41] Mikkel: have these two separate entities that have not really been working together, right, outbound and then marketing.
[00:14:50] But if you have a really solid pitch, And I'm pitching you here in this scenario and they're like, okay, let me just check it out if I even want to bother continue the conversation. And I said to you, we're a whatever SaaS company, and you go to the website and it's entirely different. That's not going to be very helpful, is it?
[00:15:06] And so there's, you know, while marketing needs to support, you also need to make sure that you don't have that kind of misalignment that actually
[00:15:12] Toni: comes
[00:15:12] and bites you.
[00:15:13] I mean, I would almost say, so maybe there's, maybe there's some, you know, argument evolving here where SDRs maybe should
[00:15:20] be
[00:15:20] sitting more in the marketing.
[00:15:21] Mikkel: Yes.
[00:15:22] Give them
[00:15:22] Toni: to me
[00:15:24] Mikkel: You
[00:15:24] Toni: You know what actually changed my mind. It should be marketing sitting on the VP of
[00:15:26] Mikkel: damn it.
[00:15:29] So I think
[00:15:30] Toni: I think there's, there's some stuff that, you know, needs to happen on the integration side and, um, and you need to find ways to cut through.
[00:15:36] Right.
[00:15:36] And
[00:15:36] I think
[00:15:37] one way is to have a really well orchestrated, executed playbook. I
[00:15:42] Mikkel: think
[00:15:42] Toni: one is you need to be better at figuring out what is the pain at the person that you, you know, that you're sending the information. Sorry, that you're sending the information to, and
[00:15:52] this is,
[00:15:54] you know, you can either slice it into like, is it a need to have, is it a nice to have kind of thing?
[00:15:58] Uh, but
[00:15:59] it's also
[00:16:00] what is, what is their day to day pain? You know, what is it that you can tap into? And And if you are super high up, it's like, Oh, it's about, you know, hitting revenue targets. I think everyone is zoning out because everyone has that problem. Everyone doesn't have that problem. It's kind of, it's too far away.
[00:16:19] You need to be like, Oh no, it's because, um, you can't see this connected to that, which leads to this problem. You know, you need to be extremely targeted and relevant, basically. and,
[00:16:29] Mikkel: uh,
[00:16:29] and
[00:16:30] Toni: ideally,
[00:16:31] and I think this is, this is also kind of a thing to consider. I don't think in the first email, you need to create a case for why someone needs to spend 50, 000 on something.
[00:16:40] The first email is the purpose to get to the first call. And the first call is the purpose to get to the next call. It's like, it's like Dave Gerhardt's, um, copywriting advice or wherever you got this from. It's like, The, the first line that you write has the purpose of getting people to the next line
[00:16:55] Mikkel: Yeah, it's so true.
[00:16:56] Toni: And, and then when you add the next line, you might, you know, the purpose might be to get them to the next paragraph. Yeah. And that's how I need to think about those emails as well. Right? Those emails don't need to build the case for 50 K a c v. They need to be like, oh fuck, this is, this is a problem. I have actually kind of, let me, let me read into this.
[00:17:11] Right? And, and I think that, um, you know, that can be, that obviously needs to be connected to what you do as an organization. Don't get me wrong. But it does need to be a front and center messaging. Now that might create some kind of a. Uh, conflict when person then clicks on this link and land somewhere, and maybe you want to have a different landing page.
[00:17:30] I don't know. I don't want to get so tactical at this, but really the idea is, you know, how do you, how
[00:17:35] Mikkel: do you
[00:17:35] get people
[00:17:35] to
[00:17:36] Toni: open
[00:17:36] the email?
[00:17:37] I mean, and this is, this is basic stuff, right? Everyone sees this as an outreach, but it's the open rate and so forth. and then how do you get from there, you know, once, once you had those seven seconds that they give you, So I saw this recently, and this is like an old thing, people scan the first line of your email, and then they scan the start of every paragraph, and then they close,
[00:17:59] right? Yeah. Uh, and uh, if, if, if you don't hit them there and kind of, you're not interesting, not on the first line and not in the first side of the paragraphs.
[00:18:08] You've lost them
[00:18:09] basically. Right. And then there are like thousands of pundits out there on like, Oh, you know, it should be like a, uh, you know, messaging kind of thing. It should be like this formula. It should be like that formula. It's like, I don't know what it is, but, uh, that's almost kind
[00:18:21] Mikkel: of
[00:18:22] how
[00:18:22] I need
[00:18:22] to
[00:18:22] approach it.
[00:18:24] Yeah, and by the way, so we had an episode with Chris Orlob
[00:18:27] and there was a ton of very tactical advice, not just on, let's say SDR outbound to book meetings, but one of the areas was on the whole pain.
[00:18:35] What you think is the pain is actually not the pain, right? So this whole coaching piece, coaching is not a pain. So go back and listen to that. If you want to get some more tactical stuff for your playbook, that was a pretty solid one.
[00:18:45] Toni: technical stuff for your playbook, that was basically kind of, uh, selling Gong.
[00:18:48] I mean, not, not, not on this call, but kind of he was referring to that, right? And obviously Gong is coaching software to a large degree, now does way more. Udi, I hope I didn't upset you. Um, but, um, basically kind of one of the main points was coaching, but coaching is never the issue. The, the issue is behind that.
[00:19:03] It's like not hitting sales targets, not hitting whatever. Right.
[00:19:06] Anyway. then the next thing is obviously, well,
[00:19:09] let's
[00:19:10] cut it.
[00:19:11] Let's just cut it out. It's not working. Um, so I think, I think people, are. Uh, rightly so careful with it. I do see teams, uh, sizing down, but in proportion to other areas of the, uh, the team as well.
[00:19:26] So it's not just, just outbound being slashed.
[00:19:29] I think
[00:19:30] you need to do, basically a little bit of a revenue impact analysis on that stuff. I think it's. Always super simple, super easy to just cut out the SDR team because hey, they're, you know, young, they're inexperienced, they're running around, they're kind of screwing up, so there's the first ones to go basically.
[00:19:44] but you need to kind of have a better understanding of what is it that they supply versus what is what you get from other sources. And, you know, what I see in the custom base and talking to a bunch of people, um, people are more confident with the marketing side because, oh, you know, it's just a credit card and a bunch of intelligent people with glasses and the help of that stuff, um, that only care about fonts and colors though, um, but, um, but you might end up paying four times as much for the opportunity than you pay for outbound.
[00:20:13] And, and, and I think a lot of people don't actually see that, don't realize that, um. And that's actually where some of the issues are sometimes coming from. Right. And, and then ultimately I think, and I've, we've, we've, I've done this recently actually with someone, you basically take the, the revenue formula, the revenue formula of the SDR team, you write it all down, kind of how many calls they're going to make, how many opportunities they're going to book, how those opportunities convert for how much, for how long and blah, blah, blah.
[00:20:41] and then,
[00:20:41] then you need to get to a specific output number at the end. But they're like five different levers you can pull in order to get there, right? And, um, and that specific customer, there was like, um, Hey, our ACV isn't high enough to support
[00:20:53] outbound,
[00:20:54] but they had really great conversion rates, right?
[00:20:57] Really great conversion rates. So I was saying, yes, you know, Mikkel and I, we talk a lot about, well, in order for outbound to work, you need to be 9k, ideally 10k ACV. I think the, the thinking now on the market is going to 30k ACV, by the way, just saying, um, but. If you get to, you know, uh, let's say 7k ACV or 3k ACV, but you have amazing conversion rates for whatever reason.
[00:21:23] That can still work out, right? So it's not actually only about the ACV, it's about the full formula. and, uh, sometimes you might not be able to get the ACV up, which is a typical, uh, Jason Lemkin quote, right? Like everyone needs to do outbound. If you can't do outbound because of ACV. Get your
[00:21:40] Mikkel: yeah, yeah,
[00:21:40] yeah.
[00:21:41] Toni: ACV up, then do outbound.
[00:21:42] Um, if, if, if you can't get the ACV up, there might be some other areas that you can actually improve in order to get to the output, right? So really think about it like this and, and then definitely put it into contrast with, you know, where else you're getting money from. And then the last thing on this one is the reason why everyone is using outbounds.
[00:22:00] is,
[00:22:01] um,
[00:22:02] it's almost impossible to tap out on outbound. But it's very possible to tap out on most of the marketing channels. It's very possible. Outbound is very difficult, actually, right?
[00:22:13] Mikkel: I think
[00:22:13] the other, the other pieces here also here, like how early are you on the journey and how much have you scaled? RAM times in that scenario will matter, right? There is a RAM time of, you know, three months before you start seeing consistent output and then there's the sales cycle length where those opportunities need to progress.
[00:22:29] So you, you kind of need to factor in a couple of things when you do that analysis.
[00:22:33] Toni: And I think my position on this has changed just a wee bit. Talked about this with Raul.
[00:22:42] Um, and, uh, one piece is here. Well, you can listen to those calls. You can, you know, sit on some of those opportunities and you know, if your team is booking good stuff or not, you know, you can hear this the first month, the second month, the third month, you don't need to wait full ramp up plus sales cycles in order to see deals coming in.
[00:22:59] You can just listen there and it's like, Hey, is this good stuff or is it not? That gives you an indication already there. Right. But then the complete opposite, uh, today talk to someone that has nine to 12 month sales cycles. Uh, they have massive ACVs, so that totally works out. but they also have an SDR motion.
[00:23:17] Um, and they're currently like, you know, is it the right thing? Is it not? and, and the thing
[00:23:22] is
[00:23:23] sometimes, and I've seen this now a few times, sometimes the SDR motion kind of kicks in almost the second
[00:23:30] or
[00:23:30] third
[00:23:30] cycle. Right? You have those opportunities, you book like a year ago and suddenly see there they're closing, they're closing, maybe now they came inbound or maybe, you know, some AE reached out and rebooked the old opportunity or something like that.
[00:23:43] And suddenly they're closing. Yes, that SDR is not going to get commissioned. Yes, in your CAC Payback, that's not going to show up as, you know, attribute to, to outbound and so forth. But would you have gotten that conversation with anywhere else than, than outbound? Probably not, right?
[00:23:58] So you
[00:23:58] sometimes, And I, I'm not saying this to keep people running, you know, behind like a fool's errand or something like this, but sometimes it's like the second or third cycle where this really kicks into gear.
[00:24:10] And it makes sense because when you call someone up and they're kind of interested, they, it might just not be the right time for them right now to react to the problem. So it might just take a little bit for that to mature and then come up, right? Also,
[00:24:23] Mikkel: then come out, right?
[00:24:24] Toni: if you're considering
[00:24:25] Mikkel: cutting it, you need to realize that there's going to be some knock on effects.
[00:24:28] You're going to have some hungry AEs all of
[00:24:30] a sudden,
[00:24:30] right? So maybe that also needs to kind of be trimmed a bit, but you need to understand what is going to happen downstream.
[00:24:37] Toni: be No exactly And I think then almost when you go to the next point here. How do you increase individual productivity. I mean it's pretty difficult.
[00:24:44] How do you increase individual productivity? I mean, that's,
[00:24:47] To happen downstream.
[00:24:50] Mikkel: answer. Just work harder.
[00:24:51] Toni: Just, so I mean, I heard this, um, heard this the other day, uh, someone was basically kind of just yelling at the team, you just need to work harder, I don't give a shit, just work harder. But you know, hey, those people left, I don't care.
[00:25:04] You just, you just need to work harder. Um, and that's, that's
[00:25:08] not going to work out.
[00:25:10] I
[00:25:10] think what you can do, um, and this is a very CRO thing, kind of, Olafur and I were joking, it's like CROs really just fire people.
[00:25:18] That's
[00:25:19] a solution. Um, I mean, it is, if you take out the, uh, the, the, the low performance, then yeah, the productivity team is going to go up, you know, guess, I mean, surprise.
[00:25:29] Um, so you, you can, you can trim your way in that direction. uh, and then there's like, you know, probably all kinds of productivity tips that, that I'm not great at giving, firing.
[00:25:44] Mikkel: of productivity tips that I'm not great at. Firing. Yeah. Jesus.
[00:25:46] Okay. Yeah. the
[00:25:47] Toni: thing,
[00:25:49] which I think is, is, is kind of an interesting one is, um, I
[00:25:53] Mikkel: think
[00:25:54] this
[00:25:54] notion
[00:25:55] Toni: of.
[00:25:56] Product market fit is not a binary thing. You don't have it or don't have it. It's evolving. I think that reality is clear for people. It's like, ah, you know, there's a new competitor or something else happened or.
[00:26:09] You know, what we, what we thought was a 10x feature a year ago is table stakes today, right? That stuff evolves. So you need to be on top of pro market fit indefinitely, basically, right? The same is also true for go to market fit. Um, and especially if some of the underlying, uh, inputs change, for example, it's now three times as hard to book the same opportunity as two or three years ago.
[00:26:32] That's basically like, oh, your 10x feature two, three years ago pulled in a lot of deals. It's not doing this anymore because everyone has it. It's the same thing that changed. We're just not so accustomed to things changing on that scale. It's like, no, no, no, go to my, no, we can trust that. You know, that's the same thing.
[00:26:49] But, but here's something that's kind of moving the goalpost. And suddenly your calculators all need to reset and it's like, well, does it still work for us? Right. Let's just say you can't do any of these things. Well, is, is this
[00:27:00] Mikkel: still
[00:27:01] the
[00:27:01] right
[00:27:01] Toni: for you?
[00:27:03] And
[00:27:03] it could be that it is yes, but only if you get ACVs up or yes, only for the bigger ACV tickets, you know, the, the smaller, the, the SMB mid market team, maybe to let go off, et cetera, et cetera, et cetera.
[00:27:16] Kind of. These inputs, they need to be basically reconsidered now that the chessboard has been readjusted, right? and you can try and fight against the tide of like those 1, 200 activities per opp, which I don't think is fully true. and you will get it down. I promise you will get it down because most of those 1, 200 opportunities are like...
[00:27:35] Mikkel: activities are like,
[00:27:37] Toni: Uh, 100 AutoSend emails in one second anyway, uh, so, you know, there, there's something like that. but, but ultimately, you need to figure out, well, if I have this formula in front of me, I can't get any of the conversion rates up, I can't get any of the productivity up, and my ACV is the only thing that's a variable here.
[00:27:54] And you can't move that either, then yeah, you, you probably need to think pretty hard about
[00:27:58] Mikkel: Yeah,
[00:27:59] I think it's also just, you have to realize that the market cycle we are in now all of a sudden is not as easy. Like money is not lush. Uh, software licenses are being put under more scrutiny and because an organization just went through cost cutting that naturally makes people more conservative to buying.
[00:28:17] And so, you know, what happens if, if it used to be that you just hire someone out of college and the onboarding was. Here's your laptop, here's your phone, here's your password. Dial. Then sure, that might have worked then. But today it's, it's almost like an anti pattern to watch out for. If, if that is your approach and there is no coaching, training, enablement happening of new people you bring in or even the existing
[00:28:39] team,
[00:28:40] you're bound to fail eventually.
[00:28:41] Toni: No, and I actually also think so. I mean, people are still selling software. Don't get me wrong. Right. So growth rates are down. Yes. But you know, basically the, the market as a whole is still buying software like crazy. It's still double digit growth, similar to the last 10 years, basically. So it's still all going in the right direction.
[00:28:58] I think what just happened is the, um, the barrier to entry just went up to a degree,
[00:29:03] right?
[00:29:03] It's
[00:29:03] like.
[00:29:04] Yes, the, the person, the director of sales that you made the pitch to a year ago, two years ago, and who was like, yep, I like it, I want to buy it, you sold
[00:29:14] it to
[00:29:14] her, everything is great. Now it's like, no, I need to talk to the CFO, like in all cases.
[00:29:20] And, and that's basically kind of your, your typical sales process that has been your sales process for the last five years. And, you know, from picking up the phone to sending the contract
[00:29:31] to
[00:29:31] the director
[00:29:31] of
[00:29:31] sales. It's not your sales process anymore. It's the CFO now behind it and you're kind of still playing the same playbook as, as when that didn't happen actually and that is what's moving your go to market fit around and that's what's impacting all of those
[00:29:44] Mikkel: that's what's it's like now you have, it's changed to the point where now you have six to eight people on average involved in a deal on the other side.
[00:29:52] Toni: So yeah, I
[00:29:52] mean,
[00:29:53] things have
[00:29:53] changed. Yeah,
[00:29:54] and you know what? It's good decision making. Do I like it by the way?
[00:29:57] No, No, I don't like it, but it's good decision making and it's good scrutiny and that's how we actually should be buying B2B software.
[00:30:05] I mean, what we've seen the other last two years, I mean, it was literally, you know, when you're at this, uh, in a supermarket and in the checkout aisle, and then there's like all kinds of candy.
[00:30:16] It's called an
[00:30:17] impulse buy. Why did you just grab it, throw it on the thing? You bought it. Uh, did you want to buy it?
[00:30:21] No. But I think there was a lot of impulse buying going on in the last two years. And let, you know, not so much thinking about, does it really help us? You know, do we really need this? Can we really not do this any different way? And I think that has been going back a lot. I think
[00:30:35] Mikkel: I think
[00:30:36] it's
[00:30:36] also because you had this, Growth at all cost mentality, and then with every vendor promising you growth, then it's like, okay, maybe that's the new pattern we need to take. It's like, ABM software, go! Right?
[00:30:46] And then you go and buy it, implement it, it's like, ah, work like, ish, we got one deal. Let's just, I mean, when does it expire, this tool? Two years? Okay, yeah, yeah, yeah, let's just let it run. Um, so it's, it's, it's fundamentally different. But, I guess what we're saying, this can totally work.
[00:31:02] It's
[00:31:02] not dead. There's just a lot of hard work in front of you, depending on which
[00:31:08] Toni: of
[00:31:08] the cases you're
[00:31:08] potentially facing.
[00:31:09] I
[00:31:09] think so too. It's a lot of hard work, it's You need to figure out how to stand out and buying Apollo and applying the latest AI, whatever, and then self click, I don't think this is how you're going to stand out.
[00:31:21] I think everyone is going to do it like this. I think you need to find other ways and it's get your ACV up, you know, improve your playbook, make it more integrated, make it more targeted. and, and, you know, try and figure out is, does the motion still theoretically work? And if it, if you write
[00:31:39] out
[00:31:39] the formula
[00:31:40] and it, and it doesn't,
[00:31:41] Mikkel: then
[00:31:41] yeah,
[00:31:42] you should
[00:31:42] probably
[00:31:42] reconsider
[00:31:43] Toni: this.
[00:31:45] Mikkel: this. Mikkel.
[00:31:47] I just wanted to outdraw music so we could, you know, enjoy. Thank
[00:31:51] Toni: Thank you very much.
[00:31:52] Mikkel: Thank you, Toni.
[00:31:52] Thanks for listening.
[00:31:53] Toni: Bye bye.