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Welcome to the Revenue Rebels podcast, hosted by Alan Zhao, Co-Founder of Warmly.ai.
We feature B2B SaaS revenue leaders who have challenged traditional methods to achieve remarkable results.
In each episode we cut through the fluff and dive deep into modern tactics used to achieve success: intent-based outreach, social selling, B2B Netflix, video marketing, warm calling, customer led sales, influencer marketing and more.
On the show you can expect episodes with those who create demand - marketing experts, partnerships gurus and social media superstars and those who capture demand - outbound and inbound sales experts, leaders, and practitioners.
Our goal is to shine a light on modern, effective and unique revenue generating methods and equip you with the insights you need to unlock your next strategic advantage.
We're huge proponents of signal-based selling and signal-based, data-driven B2B go-to-market as a whole. Ask us what "Autonomous Revenue Orchestration" means and we'll be more than happy to shine a light on our vision of what the field of B2B revenue will become.
For more content, check out our YouTube page and LinkedIn newsletter!
Chris Walker: [00:00:00] Signal based analytics will tell you both two core things. Where are the place? Where are the times when our sales team reaches out, where we barely win any deals and it's super low productivity, let's figure out whether it's a process problem, we should optimize it or more, more than likely. Let's cut it out.
Chris Walker: And at the same time, it'll say, where are the signals where our sales team reaches out, where we have high sales velocity and high sales productivity, which are very clear in the data and also very obvious based on common sense. And then how do we figure out, how do we optimize and structure our go to market to get more of those signals without artificially creating them.
Chris Walker: B2B data has a massive survivorship bias where they only look at the times that they win and they don't look at all of the hundreds of thousands or millions of times a year where their sales team reaches out and loses. And being able to identify all the places where you lose and looking at those trends and then eliminating that from your go to market is the fastest way to optimize your investments and lower or reduce your cost of acquisition significantly.
Chris Walker: And so we do that through a process that we call signal based analytics, [00:01:00] where we analyze, uh, signals, which are a true, an intense signal. That's get sent from a person or account that trigger sales to reach out. Welcome to the revenue rebels podcast
Alan Zhao: brought to you by warmly. On this show, we cut straight through the fluff and dive deep into the specific tactics that B2B revenue leaders across sales and marketing are using to find success in today's environment.
Alan Zhao: I'm your host, Alan Zhao. I'm curious, what's this new transformation that people can go down the path of? Have you seen companies who are executing this successful motion? Is it like signal based selling, which I hear you talking about? Is it orchestration that I hear some other companies talking
Chris Walker: about as well?
Chris Walker: The top level objective in a business is profitable efficient growth measured by rule 40 or some companies are trying to get to rule of 50 at this point, a combination of growth rate and EBITDA percentage. So if that becomes the top level objective inside of the business, then it starts to break down.
Chris Walker: You say, okay, where are the, where's the number one factor that impacts both our growth and our EBITDA? [00:02:00] Go to market, go to market is typically 50 percent of revenue, 50 percent of revenue. As the, is the expenditure that goes to there, which means that half the company's revenue is spent every year on sales and marketing to grow and create new customers.
Chris Walker: And when you, if you're a hundred million ARR company and you spend 50 million a year on sales and marketing and you get 10 million in net new ARR back, it means that you're growing at 10%. And you're spending 50 million to get there, which means it costs you five years to pay back just the cost of acquiring a customer before you even have a shot at profiting.
Chris Walker: And in reality, we need to be spending 15 or 20 million to do that, not 50. And so you either need to make your go to market engine significantly more effective at the same cost, or we need to figure out how do we make this significantly more efficient, therefore delivering the same impact at a significantly lower spend.
Chris Walker: Either way you get there, it's much more realistic and much more effective to do it in the short term. By reducing costs and getting the same amount of impact back. And then over time figuring out how to scale that [00:03:00] back up to achieve a stronger growth rate.
Alan Zhao: And is there a way that you've come across or maybe something that's trending?
Alan Zhao: To, uh, become more efficient or become more effective in how you grow.
Chris Walker: At my company, Posetto and many companies are focused somewhere around this, the signal based go to market category. I see this breaking into multiple subcategories that people haven't defined yet. Specifically at Posetto, we're focused on signal based analytics as the main means to optimize your go to market.
Chris Walker: Because what happens inside of a B2B company and inside of their data is that there's two things that happen. One. All of the budget holders and individual contributors are biased to prove that their budget line items are working and they're not incentivized to prove that they're not working. And so every single report that you get is to try to show how every event is working so good and how every advertising dollar is working so good.
Chris Walker: So one, there's a bias to try and prove things are working rather than to disprove that they're not working. And then number two is that B2B data has a massive survivorship bias where they only look at the [00:04:00] times that they win and they don't look at all of the hundreds of thousands or millions of times a year where their sales team reaches out and loses and being able to identify all the places where you lose and looking at those trends and then eliminating that from your go to market is the fastest way to optimize your investments and lower or reduce your cost of acquisition significantly.
Chris Walker: And so we do that through a process that we call signal based analytics where we analyze signals which are. An intense signal that gets sent from a person or account that triggers sales to reach out and then analyzing the outcome of every single signal that gets sent and in a mature go to market engine, you're going to have millions of times where that happens and therefore millions of data points and a disposition around that and can clearly see here all the things that we do that don't work at scale.
Chris Walker: It doesn't matter whether Jimmy's the SDR or Susie's the SDR, it's not about how good our SDR is. It doesn't matter whether our top rep is working them or our shittiest rep is working them. We lose no matter what. And it's because of the signal that is driven through the account, which can in our data, in every [00:05:00] single company, based on the signal, you can have hundred X differences in sales productivity and sales quota attainment based on what signal is being sent that then leads you all the way downstream to conversion of meeting pipeline and revenue.
Chris Walker: And most B2B companies do not see this data because they don't track signals specifically. And so just to get a little bit more into the signal category, I see this break, we broke it into three subcategories at the moment, which will continue to be further defined. But you have signal providers, think G2, TrustRadius, Bambora, UserGems, somebody that's looking for a specific signal and then providing it to you.
Chris Walker: Next, you'll have signal aggregators. Signal aggregators collect a bunch of different signals from a bunch of different sources, and then provide that to you in a package. Think Sixth Sense, think Common Room, think some multi touch attribution vendors might play into this space a little bit. Then think Signal Analytics, which is the place where my company is playing Paseto.
Chris Walker: We don't see a lot of companies playing there at the moment. And believe that, that at some point as a company, when [00:06:00] you have seven different technology platforms that are providing you signals and you spend millions or tens of millions of dollars on marketing to create first party signals, that at some point you need to have an analytics engine to understand what are the signals that actually matter and where are we getting the best productivity and ROI around them.
Chris Walker: And that's what I said I was focused on today.
Alan Zhao: I really like this and it definitely helps us solve some of the marketing attribution problem as well. Because I think if I understand this correctly, you're also, you're reading everything in from the CRM as the source of truth. And then you're deciding, you're seeing like, how are all these signals being acted upon and what are the results of them?
Alan Zhao: We can back into which ones are working, which ones are approved for future use, which ones we can disregard, and then which ones can we experiment down the road. So you're really like making it a portfolio of bets that you go to market team can execute on. Dude.
Chris Walker: To be clear, this is not an attribution solution.
Chris Walker: This is a process optimization solution. So if you think about a manufacturing facility that has to manufacture a billion bottles of Coca Cola every single [00:07:00] year, and they have to do it on time, they have to do it within their supply chain, they have to deliver on time to customers, they have all these different complexities in the engine.
Chris Walker: That they have software to understand all these different parts of the process and optimize them and find holes and do that. That's what this software is built for, is to optimize the process around how do we get a customer, which I find to be fundamentally different than an attribution solution, specifically because most attribution solutions are biased to try to prove things are working.
Chris Walker: And in our solution, it's really to look at the data, identify holes in the process, and fundamentally our go to market strategy consulting that we layer on top of the data is most focused on actually proving that things are not working. And I think when you change the way that you look at the data and why you're looking at it, you come to much different conclusions around what data you look at, how you look at it, and what you're looking for.
Chris Walker: And so I, just to be clear, I do not see this as an attribution solution or a competitor to attribution software. I see it as a fundamentally different category around how do we look at our go to market holistically, and how do we optimize the process of acquiring and also expanding and renewing [00:08:00] customers.
Alan Zhao: Process optimization. Can we talk a little bit about how go to market teams can start taking on more of the signal based approach? It seems like a lot of them are still left in the past. Here are all the jobs, here are all the companies. Go ahead and welcome the phones.
Chris Walker: Yeah, I think there are, I think there are layers to this.
Chris Walker: I think that some companies are just waiting for first party signals, which are signals nonetheless, but they just wait for whether it's marketing to create, to spend some money, to create a signal. And that's the only place where they deploy, uh, more mature companies will then layer in third party types of signals or like what I would call like non hand raiser or non active signals.
Chris Walker: That could be someone visited a third party blog that comes from Bambora, or we got some black box information from Sixth Sense that says we should go and reach out to this account, but we don't know why, some technology that would do website de anonymization that will say this company was on your website, or even more, this person at this company was on your website, and so I think the reality, especially in tech and SaaS, is [00:09:00] that every B2B company is using signals to deploy sales and SDR time and resources.
Chris Walker: And at the same time, most companies are not tracking the outcomes of that stuff. So they're using signals, but they're not tracking the outcomes of the signals and therefore can't optimize around what are the best providers of signals inside of those providers? What are the best details of those signals?
Chris Walker: I get that this account was on our website, but does it matter whether the account was on our pricing page versus our blog? Probably, but we don't track that. We don't know. And so I think that the core thing is recognizing one, that you use signals today, whether they're first party, third party, or some combination of both.
Chris Walker: That signals have a massive predictor in terms of sales, velocity and sales productivity. So optimizing your go to market around them is fundamentally smart and to recognize that you don't measure the outcomes of them right now. Therefore, you have a black hole around what are the best signals to use. I think those are the core recognitions about where we are today at most companies.[00:10:00]
Alan Zhao: How about the, the rollout of some of these signal based selling programs and companies? A lot of people, it's like you said, they use website de anonymization pretty soon. They have all these signals in place, and then you have a rev ops person that needs to orchestrate it all together for the sales reps to consume.
Alan Zhao: Just curious, your perspective based off your experience, what's the, the tools to use, the rollout plan, the step one, phase two, phase three, the people involved?
Chris Walker: I think it's pretty janky right now, to be honest. I think that when you look at how companies operate it today, you have marketing over here trying to create first party signals and deliver MQLs, which is a signal nonetheless.
Chris Walker: And then you have the sales and SDR team that buy their own technology and try to find their own third party signals so they can do independent prospecting. And there's very little crossover between the two, or there's no consistent analytics to look at all of them together. And then what you have on the sales side is the sales team will go and Uh, an SDR will have a specific tool and they'll say, okay, there was a job change through sales navigator and they'll reach out.
Chris Walker: None of the data is logged around why they reached out. And [00:11:00] then in the analytics, it'll just say the SDR got a meeting and you don't actually see what was the reason that they got that meeting? Was it the, and so there's a, there's what I call a black hole in terms of where companies get revenue and pipeline through independent sales prospecting that is not currently measured or tracked.
Chris Walker: Sales professionals have been doing this for a long time, whether there's a tool and technology around it, or they're doing their own manual research to try and find signals, there's just a lot faster packaging around it now. I think that, uh, in terms of the rollout plan, a lot of companies will buy an ABM platform as a first step and hope that is gonna be able to help their go to market team act more integrated and they fail to get adoption across the SDR team around following up against signals.
Chris Walker: And they fail to get sales team adoption to follow up with them. So it just becomes a marketing pet project to run display ads. I think a lot of account based marketing platforms fall down in that way, because, and it's not because the platform isn't capable. It's because companies cannot deliver cross [00:12:00] functional alignment across the go to market teams to make this type of change.
Chris Walker: I think in terms of, if you wanted to set this up for success in a mature company, it would be to set up an experiment with a smaller group of people and to run that smaller group of people as a, Quasi test against your current state and understand it if it's performing better in order to understand whether it's performing better You're probably gonna need some level of analytics that you do don't have right now, but I think setting these up as pilots Proving out that it works demonstrating to the company based on data that it works and the other people in the sales and SDR team would dramatically increase the Probability of success and adoption across the team
Alan Zhao: understood You mentioned a little bit, a couple of things about how account based marketing kind of falls down because cross functional alignment.
Alan Zhao: Is there any way that you think that you can solve that? Are there pieces that are missing? Is it like a process problem? Is it a tooling problem? Is it just the overall strategy problem? Cause it seems like account based marketing is very much focused on the
Chris Walker: experience of the user. In [00:13:00] 2017, when I worked at a, at a B2B company, it was clear in the, as we started to run, like before it was basically 100 percent outbound prospecting field sales would go out and try and get meetings.
Chris Walker: And then we, through our sales opportunity flow inside of Salesforce, we'll be able to see the outcomes of those meetings all the way to revenue. And so there's a very clear picture of like, how well is this working? And then we started over years to start to build our in traditionally inbound engine.
Chris Walker: And we'd be able to look at when somebody comes in and asks to buy, what is the outcome of that meeting that the sales team gets? And then how does that flow downstream? And at the beginning, sales reps were like, fuck this. I don't want any leads for marketing. I've been delivered ebook and webinar and trade show leads for five years.
Chris Walker: I know these things are garbage. I want to keep doing my own prospecting. I'm going to have more productivity that way. And then through the data, what we're able to show is okay, if you go and source your own meeting, on average, you're going to win those meetings at 4%. And if you take this person and ask to want to buy that works at one of these accounts, you're going to win those at 38%.
Chris Walker: If you [00:14:00] want to hit your quota, you're much more likely to be able to hit your quota through the ones that you're going to win opportunities and meetings at 38 percent versus 4%. And we use data to show the whole sales team around why they should be changing their behavior around the way they think they should be optimizing and working that helps them achieve their goals.
Chris Walker: And I don't think that B2B companies do that when they roll out an ABM platform. So you get stuck with the sales team that says all the things that I do are the best opportunity to win. They don't give the new stuff a chance and you need to, whether it's through a pilot or a smaller group of people or through large scale data and tracking and be able to show the company that this is a far more effective way to run, go to market and help fundamentally help those people achieve their goals in a more predictable and faster way.
Alan Zhao: If you're a fan of the Revenue Rebels podcast, please leave us a review on Spotify and Apple podcast. Your support goes a long way to helping us bring on more amazing guests. Thank you. Got it. So it's, this is an aiming problem and you want to increase the surface area of how many attempts of different techniques or ways to cut accounts that you can try.[00:15:00]
Chris Walker: It's an adoption problem. That's the, it's really like when it comes to why account based marketing platforms don't get adopted across the entire go to market, it's cause SDRs don't adopt the usage of the intent data that gets pushed out of that and neither do sales teams. Marketers love it. They love to run their display ads and be able to have sixth sense create bullshit metrics around how their things are working so good.
Chris Walker: Like. Marketers love ABM platforms, but when it comes to adoption across the entire go to market, a lot of sales and SDR teams are not adopting that, therefore, like, it doesn't become an entire go to market solution. Ironically, whether it's an account based marketing platform or a signal aggregator or a signal provider, I think that those provide, uh, data that could help SDRs and sales people be a lot more effective in their prospecting if they use them properly.
Alan Zhao: I'm very curious about this. Why do you think it's an adoption problem? I've always heard that salespeople take the path of least resistance and they fill it with water. So if one signal is going to generate 4X of return, why would they not adopt it?
Chris Walker: Because there's [00:16:00] no data showing they're going to get a 4X return.
Alan Zhao: Gotcha. That's where you guys come in, help out. Nice. So given all this new versioning space of signal based selling, and then also demand creation, how do these all fit together in this new world of go to market? There's dark social, there's brand, there's performance marketing. How is it going to change in your point of view?
Chris Walker: So I see basically you have two major steps to acquire a net new account or a customer. You need to get that account to want to fundamentally want to buy, to prioritize solving the problem that you solve, to decide that you are one of the three or five potential people that can help them solve it, for them to enter your pipeline in some way.
Chris Walker: So you have, I need to get my target accounts to fundamentally want to buy. Okay. And then when an account has decided to solve that problem, how do we most efficiently and cost effectively convert that in market account into a paying customer? And so you have two major parts to [00:17:00] simplify. You have two major parts of the process.
Chris Walker: A majority of the B2B go to market investments get spent on the second part. When we have an in market account, how do we convert that account into a customer? And my estimate somewhere around 90 percent of the total B2B go to market investments to acquire net new customers is spent there between marketing dollars to create the signals, SDRs to follow up, and salespeople to close them.
Chris Walker: And so when you think about optimizing your go to market, you should look at where is the process that we spend the most amount of money, which also happens to be a ridiculously inefficient process, And how do we use data to optimize that, which is what signal based analytics is all about. And then, Maybe in the future, it would make sense to figure out how we optimize the other 10 percent of the investments that we spend in order to get target accounts in market, but it cannot be the number one priority today, just based on the spend and the inefficiencies in terms of executive level prioritization, look at the places where you spend the most amount of money, which is the process of converting an in market account into a customer, [00:18:00] which my belief is that companies spend somewhere between two and three X more than they should.
Chris Walker: They should be looking to achieve somewhere between an 24 month CAC payback period. And right now, most com most private companies are somewhere between 48 or 60 to more or more months in terms of CAC payback period. And a majority of the money is spent inofficially in that part of the process, so that's the first place that we need to start.
Chris Walker: Not buy marketing mixed modeling software, not install another multi touch attribution tool, not try to start our podcast and build our brand. All those things matter and all those things are really important, but not when you waste so much money. on sales and marketing and SDRs to try and convert in market accounts so inefficiently.
Chris Walker: So I think we just need to, everything in the revenue process matters, but I think we need to be strategic around how we prioritize both our analytics and where we optimize.
Alan Zhao: That's like eating a very unhealthy meal and then adding a small plate of salad and said, I'm still doing good.
Chris Walker: Yeah. And for some reason, a lot of companies that I interact with, that when they think [00:19:00] about trying to improve their go to market, it's always about adding something new, not taking a bunch of stuff out.
Chris Walker: And when we think about optimization, the first part of the process should be here, all the things that we do that clearly based on data or what our customers tell us, or ideally both don't work, let's strip those things out. Now, all of a sudden we achieve appropriate ROI. Now let's think about building back up and adding new stuff.
Chris Walker: But most people do not think about the process that way. I think because they were trained about how to do marketing and go to market and the growth at all costs era where you just add a bunch of new stuff on top of stuff. But adding new stuff on top of a big investment that doesn't work is not going to solve the problem today.
Alan Zhao: And then the next question of what, once you've removed the stuff that doesn't work, where do you put it into? Signal based analytics also helps you figure out where you double down on. This is a really great point because I think this era, a lot of people are starting podcasts. A lot of people are trying to do dark social or they're investing on email and ads and they have no idea.
Alan Zhao: Double down on next. [00:20:00]
Chris Walker: Yeah. Signal based analytics will tell you both two core things. Where are the place, where are the times when our sales team reaches out where we barely win any deals and it's super low productivity, let's figure out whether it's a process problem, we should optimize it or more, more than likely, let's cut it out and at the same time, it'll say, where are the signals where our sales team reaches out, where we have high sales velocity and high sales productivity, which are very clear in the data and also very obvious based on common sense.
Chris Walker: And then how do we figure out, how do we optimize and structure our go to market to get more of those signals? without artificially creating them. And so how do we get more of the signals? And so you basically cut out the things that aren't working, double down on the things that are already working, and then think about building a strategy to layer on new things, which could be more focused on getting net new target accounts in market, but it also could just be accelerating or improving things that we do around our signal based go to market motions.
Alan Zhao: So this is very forward looking to take the analytical approach because it's the base layer that all these decisions need to be made out of. And like you were [00:21:00] saying, we're probably investing two to three to four X more than we should be into things that aren't working. What's your prediction for what the future go to market landscape looks like once we start to evolve more into the space?
Chris Walker: Just to be clear on this, the reason that I got here and why I started my company is cause I've consulted with more than 300 B2B companies. And my core conclusion is that. The core reason for go to market bloat and why executives don't aren't able to make what should be fast and easy decisions is that they do not have the right data to make those decisions.
Chris Walker: But the biggest issue in go to market is actually the data around the performance that allows us to make decisions on how we invest and how we develop our strategy. And so I see those things through the consulting that I've done and the work that I did with my agency Refine Labs at scale. Most vendors do not see that, they would just want to package and sell data at 99 percent margins.
Chris Walker: And because I've been able to see the problem in a different way, I think that I'm approaching it in a different way, which is around the analytics while everyone else [00:22:00] is going to providing the signals. I'm looking at measuring the signals because I've seen the problem in real life. When we think about the future of go to market, I think that the future is going to be And it's, it's, it should be getting there pretty soon.
Chris Walker: Obviously, it's account based in B2B, especially in sales led motions. We sell to, and even in product led motions that eventually grow to a level, you figure out that you need to settle accounts to keep growing your business. So it's going to be account based. Many of it already is. It's going to be signal driven, which then drives the efficiency around it.
Chris Walker: And it has to be deeply integrated, not based on siloed departments. And then what drives from there is that we have to be able to drive profitable, efficient growth. Like that is the top level narrative in the business. And so I think that companies will start to basically have to eliminate specialized roles.
Chris Walker: I think that certain functions that do not deliver appropriate ROI or certain large line item expenses like Google ROI will be cut because if you [00:23:00] can't grow at 50 percent and you need to hit rule of 40, what's the only way to get there? It's to improve EBITDA. And what's the fastest way to improve EBITDA?
Chris Walker: Stop spending so much fucking money on sales and marketing. And so I think that, I think we'll have to go back to reality around how go to market runs and how a true business operates in terms of profitability and shareholder value, which got lost for quite some time in the late 2010s and early 2020s.
Chris Walker: I think that there's promise around AI and the use of AI technology and tools in order to do a lot of robotic manual work that. Currently happens by humans, which is slower, less effective, less consistent, things like that. There's a lot of promise around AI specifically and outbound and content creation and hopefully data analytics in the future and insights.
Chris Walker: I think that will, a lot of companies will go back to basics around how we both prospect closed and expand and take care of customers and have less specialized roles, which creates more. [00:24:00] Accountability and hopefully longer tenures for the people that do take care of those accounts. I remember back in the day, sales reps at the companies that I worked for, a lot of them had been there for five to ten years.
Chris Walker: And the reason is because over time, as you build a book of business, because you're not just responsible for closing accounts, but as you build a book of business, that you can deliver grow, consistently growing income streams based on all the accounts that you've closed. And then you take care of them, like how insurance brokers and other ones make money, which then drives retention and tenure.
Chris Walker: Where right now, because NAE is only focused on closing that new business, basically their income resets every year, um, and a lot of companies through the cutting of territories and the irresponsible scaling of sales headcount and the low quota attainments that a lot of sales rep income goes down every year rather than going up in the way it should be, and then it creates a difficult or challenging things in terms of customer success because the person that's taking care of them is then a revolving door every one to two years.
Chris Walker: I think that we [00:25:00] just, a lot of things we need to get back to basics around how you run a profitable, efficient business.
Alan Zhao: So it seems like these days, tenure is going down. Inefficient spend is going up. Do you see like a reversal in the future where tenure will start to increase the number of people that you need will start to go down and then you'll have more efficient outcomes for less resources put in.
Alan Zhao: So fewer people, maybe better tooling, better
Chris Walker: processing. I think that's where companies will eventually get to the question is how fast can you get there? And so, yeah, I see that as the potential, but the process in order to get there can be very challenging. To try and figure out how you get 20 million in revenue by spending 20 million dollars instead of 100 million dollars is not a very, not a very easy question to answer.
Chris Walker: And so I think that it'll take a lot of time to get there. I think that the financial markets will continue to put pressure on it. I do predict that a lot of seemingly very successful companies will have a lot of challenges this year [00:26:00] related to their financial metrics, the combination of EBITDA and growth rate.
Chris Walker: So we'll see how that all plays out.
Alan Zhao: Chris, this is a fascinating conversation. You have a perspective that very few people do. And I've learned a lot from this, especially in terms of what decisions need to be made as far as improving your EBITDA margins. And one of the most important ones is where you're supposed to cut the fat.
Alan Zhao: And so for those of you who are watching or listening, tuning in, please do check out Bussetto, it's Chris Walker. Thank you so much. How can people find out more about you?
Chris Walker: Alan, thanks for having me on the show. Great discussion. For those of you that want to learn more, feel free to follow me on LinkedIn or any other social network at ChrisWalker171.
Chris Walker: You can also follow my podcast, the B2B Revenue Vitals Podcast on Apple Spotify or any other content platform.
Alan Zhao: Awesome. Thanks so much.
Chris Walker: Thanks for having me, [00:27:00] Alan.