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Demand-Geniuses is the podcast for revenue-focused B2B Marketers. We bring you the latest insights and expert tips, interviewing geniuses of the B2B Marketing world to bring you actionable advice that you can implement to accelerate growth and progress you career. The role of Marketing in B2B go-to-market strategy has changed drastically. It's more important to revenue generation than ever as buyer engagement becomes more digital. We equip you with the information you need to thrive in this new, revenue-critical role.
Tom Rudnai (00:00)
I still hear a lot of people talk in terms of the
traditional funnel. Like, how do you think about the funnel? Is it a useful framework still? Is it completely defunct and irrelevant? And why is the bow tie a more useful framework for thinking?
Dave Boyce (00:16)
Yeah. So I think the funnel is useful as far as it goes. gets right. It gets you right up to, closed one in kind of sales terms, right? Like awareness, education, selection, closed one boom done. And many, many of us who are of kind of my generation have been to many, many board meetings or quarterly business reviews or pipeline reviews where the goal was to call and hit a number. And what number was that? The bookings number, like.
And I even had a sales VP one time say, hey, never, never confuse sales with implementation. He was like, don't worry about the rest of that stuff. We just got to land the number and the number is the bookings number. Well, you and I know that that's not where the story ends. Like it actually begins there. Like for customers, it begins there. Like as soon as I become a customer, that's the beginning of my journey. And now I have now whether or not I achieve kind of impact with the solution is going to
drive whether or not I renew and expand with you, whether or not and so when we have the bow tie, that's where that's where the bow tie opens back up. And actually, if we're doing it right, and we have a north of 100 % net retention, that means our customers are actually growing with us not shrinking, not a trading, but growing with us. And if you and if you look at so let's think about this for a second. Take a one I know
There are marketers from all sizes of companies on, but I'm going to take a round number that's just easy to do the math with. So you have a $100 million recurring revenue business, $100 million of ARR. OK, cool. How many of those million dollars entered your system from brand new customers during the last 12 months? Probably about 10 million of that 100 million. How many of those millions of dollars were expansions based on customers you already had?
Probably about 20 million. Okay, so 10 million brand new customers, 20 million expansion from existing customers. How many, how much was renewal? 70 million. Okay, so 70 million was just renewing existing contracts. 20 million was expanding existing contracts. That's all my existing customer base right there. Only 10 million was brand new customers who walked in the front door and were just starting for the first time. And yet we put all of our time and attention.
on acquisition. if I were, you you said modern CROs are being charged with thinking about the whole ARR stack. Of course they are like that's like we care about the hundred million dollars. And just from a marketing standpoint, then you start to think, well, wait a second, how much of my marketing intention am I spending on acquisition versus my existing base? And then you start to rethink. You're like, oh my goodness, like we have, we got to take care of our 70%. We've got to expand into our other
20 % and yes, of course we still want to acquire. That's a much bigger aperture in terms of where I'm going to focus marketing efforts.
Tom Rudnai (03:17)
Yeah, think that's really interesting. There's one thing you said, which just seems so obvious, which is like, we have that mindset internally of the sale is the end of a journey, but for the customer is the start. And there's just bound that's going to cause friction that the customer is going to experience when you have one company feeling that way about it and one feeling in the other, right? It's such an interesting mindset flip for how we need to operate to avoid customers. It's just going to piss people off.
Dave Boyce (03:42)
I how you said that, yeah, because I I'm just going to say it like it is, Tom, like exit stage left all of the well-paid salespeople enter the people that get no respect and get paid half as much as the salespeople to start taking care of our customers, like those customers that are eventually 90 % of our revenue stack. Like, no, that ain't right. Like we need to care a lot about the whole thing. That whole machine is what's generating.
are $100 million of ARR.
Tom Rudnai (04:15)
Yeah, well, if incentive drives behavior, then the fact that as soon as someone at the start of your customer's journey, you kind of cut the incentives off dramatically, then suddenly there's this juxtaposition in the experience that people get from really fucking incentivized to not incentivized. that that's going to create this horrible initial experience of your company as a customer.
Dave Boyce (04:30)
Totally. Totally.
And then we pull back marketing attention too. Like I ran marketing at Oracle and this is one thing I realized is why does our marketing shut off as soon as they become a customer? It's almost like you would think you would shower them with attention once they are a customer because that's the seeds for kind of the rest of their kind of revenue life with you. But you're right, we often don't do that.
Tom Rudnai (05:02)
Yeah, that was where I wanted to go next, with what the role of marketers should be in this kind of machine. But I guess there's going to be a lot of marketers feeling like they don't have agency in this, right? Because to an extent, are a slave or what you do is going to be dictated by what the people above you think you should do and therefore the KPIs that you're given and stuff like that.
Yeah, how would you what would your advice be to a marketer who is hearing all of this but being like, what do I need to do about it?
Dave Boyce (05:33)
Yeah, well, you one thing.
This is a long play, Tom, but we're well into it. You mentioned the term revenue architecture. That's term that's taken hold within Pavilion. There are 4,000 certified revenue architects now on the planet. You can take that course. You can take that course. can get your peers to take that course. can get your bosses to take that course. And it will just be a first principles kind of understanding of what you and I have talked about. So that'll soften the beaches a little bit for you as you're trying to...
you know, get common language and common understanding about what matters. Okay, fine. But that doesn't necessarily mean that you're gonna get the mandate to go, you know, spend a lot of time and energy on the right side of the bow tie. There is one thing that's getting a lot of attention though. That right side of the bow tie can and should be the source of opportunities on the left hand side of the bow tie.
And PLG companies have been doing this forever. I mentioned the Dropbox tactic of referring new customers. Okay, that was kind of the yesteryear version of it. But what's today's like Canva invites people to to evaluate and collaborate and contribute to designs. People who don't already have Canva accounts. Zoom requires, you know, invites somebody else to the call who may or may not have a Zoom account.
Tom Rudnai (06:58)
Yeah.
Dave Boyce (07:07)
Figma invites kind of inspection and kind of trials and, you know, basically feedback on application design. These are all kind of collaborative, multi-person experiences that pull people into the ecosystem of the product, and eventually some of those people become prospects for actually their own account. So we can use the right-hand side of the bow tie as a source of opportunity on the left-hand side of the bow tie.
That's something that all revenue leaders understand. If I don't have to go buy a brand new MQL, but I can actually generate it from my existing customer base, that takes 10 % of the burden away or 15 % of the burden away for what I have to do as a marketer. And it actually, if you model that out on a recursive basis, it takes a lot of pressure off of the system to get your customers working for you on the acquisition front.
Tom Rudnai (08:06)
That's really interesting what it's kind of building in virality, right? Which is again, it's nothing new, but I think it's probably overlooked in a B2B world and particularly in a B2B sales led world, which is good. Like, because every company that you've just described there is like the poster child for a great product led business. Are there sales led organisations that you have seen do a fantastic job of this and what are they doing that works so well?
Dave Boyce (08:32)
I would say not a fantastic job, but we're starting to understand it. We call these things growth loops, and we're starting to understand how important it is. So I have been involved. I'll use winning by design as an example, but I did the same thing at Oracle. you see this. Actually, I'm doing this next week. Here's a good example. Next week, I'll be keynoting an event that Amazon is hosting.
for its customers. Okay, so and it's PLG customers are bringing in PLG expertise to speak to its customers of the AWS marketplace. So these people are coming in with all different backgrounds and all different experience with AWS. And they're going to sit next to their peers in San Francisco, I actually have to dial in because I'm going to be in London, but they're all going to be in person in in San Francisco next to their peers, hearing from me hearing from the
the head of growth at MongoDB, hearing from each other what's working, what's not working in our business. So if I'm sitting there and I hear what she's doing and how it's working, then I'm getting ideas and then I'm doubling down and expanding my use of AWS and the services on Marketplace. That is a natural reaction that, or a natural interaction that I can create that spurs demand.
customers talking to other customers, customers talking to prospects, sharing what's working, creating kind of that opportunity for those synapses to fire. I love those. I love diving into customers, helping them tell their own story, helping them communicate with their peers, and helping their peers get ideas from the success that's already happening. That generates real opportunity. I guarantee that they will track a lot of opportunity coming from out of that event.
Tom Rudnai (10:23)
That's really interesting because that's one thing that I do hear a lot of marketers talk about increasingly is kind of like the pillars of their strategy being content and community. And I what you just described as community and it's a kind of new, slightly more interesting approach to events. But I think that the framework of how they think about it is still very much left side of the bow tie.
they're not thinking about it in terms of how can we create a growth loop just always dependent on but that feeds into offline right it's it's a different way of thinking it but I bet there's so much you can unlock when you start viewing it in that way instead of just as a good channel
Dave Boyce (10:46)
Yes.
I mean, you think about when you're making a purchase, you're going to spend some money or you're going to adopt some sort of a solution to help you solve a problem in your business. I am pretty sure you probably just don't take the marketer's word for it that this is an awesome product. I bet that you reach out to peers. I bet you look on the forums. I bet you kind of figure out who else is using it and you use your kind of informal influence network to see if would this be a good idea or not.
That's what I do. I don't want to take the marketer's word for it. So now all this is doing is just paving those paths, just make it easier for a prospect to talk to an existing customer and get that existing customer's success to influence the prospect's decision.