Subscribe
Share
Share
Embed
Is RevOps broken? And how do we fix it?
Together with Jeff, we get into a bunch of the challenging areas of Revenue Operations and some of the steps you can take to improve it.
***
Together with Jeff, we get into a bunch of the challenging areas of Revenue Operations and some of the steps you can take to improve it.
- (00:00) - Introduction
- (01:40) - Meet Jeff
- (03:45) - Glorified GTM IT
- (11:57) - Overinvesting
- (18:13) - The go to market plan
- (30:57) - Under- & overinvestment
- (34:25) - Getting RevOps headcounts
***
This episode is brought to you by Growblocks. Finding and fixing problems in your GTM shouldn't take weeks. It should happen instantly.
That's why Growblocks built the first RevOps platform that shows you your entire funnel, split by motions, segments and more - so you can find problems, the root-cause and identify solutions fast, all in the same platform.
***
Connect with us
✉️ Newsletter: revenueletter.substack.com
Creators & Guests
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: Hi everyone. This is Toni Hohlbein from Growblocks. You are listening to the Revenue Formula with Mikkel and Toni. Is RevOps broken? From being seen as a glorified system admin to underinvestment, it kind of feels like it. Today, we're joined by Jeff Ignacio to figure out how we can fix it.
[00:00:19] Enjoy. So also, you know, so maybe this is, like, crying on a very high level. So we, uh, we have an au pair.
[00:00:30] Yeah. Like, my wife and I have an au pair. Right? Because, hey, you know, why not?
[00:00:34] But guess what? She just quit right now. Like, this is I just got a text message. Au pair quit.
[00:00:40] Who who whom does Au pair quit on? I mean, it's like, is it is it because it's so bad. Yeah.
[00:00:46] Jeff: hope she gave you a a 4 week resignation or 2 weeks.
[00:00:50] Toni: Yeah. It is 4 weeks,
[00:00:51] Mikkel: but it's still, like Have you not done any capacity planning at home?
[00:00:54] Like, making sure you had the next
[00:00:55] Toni: No. My attrition model was on track, but it's, like, you know, sometimes with an n of 1, it's, like, you're on on 0.7789.
[00:01:04] Jeff: Well, they always say it's about the working environment, so I don't know what your house looks like.
[00:01:10] Toni: Yeah. Well, yeah. That's right.
[00:01:11] I could show you a picture. There's, like, 20 no. Not 20, but, like, 5 construction site workers right now building in a, like, a staircase.
[00:01:17] Mikkel: So, basically, everything in your household is a mess
[00:01:19] is what you're telling
[00:01:20] Jeff: It sounds like a
[00:01:21] Mikkel: hey, work is good, but work is good.
[00:01:23] Work is good.
[00:01:24] Toni: Um, my colleagues are great.
[00:01:27] Mikkel: I feel like this is all the intro now. We should have recorded. We have a recording.
[00:01:31] We're right ahead of you. This is just gonna get like sliced in and then jump cut. Yeah. So that's perfect. Yes.
[00:01:37] Toni: Okay. So the voice So Mikkel, whom do we have
[00:01:39] Mikkel: here today? Yeah.
[00:01:40] The voice in the other end you probably heard is, uh, our friend, Jeff Ignacio. Uh, welcome, Jeff. Thanks so much for joining. Hi,
[00:01:47] Jeff: Hey, guys.
[00:01:47] Thank you for having me.
[00:01:50] Mikkel: So you're head of GTM and ops and growth at Regrow, and you run, the subset called RevOps Impact.
[00:01:57] go check that out definitely. And your adviser to a bunch of companies, among others, Scratchpad and Sona. So suffice it to say, you talk with a lot of RevOps as yourself.
[00:02:08] Jeff: I think I do spend a lot of time with a lot of folks in rev ops, and I would say everyone has a different title. Some folks have sales analytics, sales planning, marketing operations, CS operations. But I think if you can put on everyone under a big tent, we just call it rev ops.
[00:02:23] Mikkel: I mean, when, uh, Toni started this is the running joke.
[00:02:26] Uh, there were 2 options on the table. It was either revenue operations or commercial operations.
[00:02:32] Toni: And it took role in this company still is commercial operations to this day. And it also became kind of popular in Copenhagen that it was commercial operations. And, yeah, let's just say I was wrong.
[00:02:45] For that. I'm not the right 1 to name anything. Full
[00:02:47] Mikkel: of Denmark. Yeah. But anyway, so what you know, the reason to get you on the show was really, uh, we shared this common interest on revenue operations, and there's a lot of things happening at the moment in revenue operations.
[00:03:01] last year, I believe, it was the fastest growing job title. Forrester is citing that, you know, this function is pivotal to influence revenue growth and retention, and a lot of companies see the benefits they can gain from such a function. Mhmm. I think what we've noticed is a lot of the rail ops as they become CRM admins, do a lot of Python validation rules. And what we wanted to talk with you about is what are some of the signs that is fundamentally broken, and how do we go about, you know, making rev ops have an impact?
[00:03:30] So you kinda promised to do some homework and bring some points on, hey. Here's here's where it's really dire. No pressure. No pressure. No pressure.
[00:03:39] Here's where it's really dire. So why don't we just hop straight into it?
[00:03:43] What's the first thing you've seen?
[00:03:45] Jeff: Well, I think the very first thing that I've seen is that a company, uh, uh, treats their revenue operations function as this order taker or a bit of a ticketing office.
[00:03:56] So I have this field I need inputted. Hey. Just 1 more thing. Send a ticket down the queue. Hey.
[00:04:01] I need this report. I need this dashboard. I saw your commercial actually with the the the report and dashboard. That is so on point because you can't you can't imagine how many shoulder taps you get, uh, in a week around a Slack message or an email. Okay.
[00:04:15] I needed this report. I need you to tell me double click into this. I know this cohort. What's the retention rate of this cohort from, you know, 22 years ago? I'm like, wait.
[00:04:24] Hold on a second. Our data doesn't even go back that far. Uh, and if we do, we're gonna have to go caveat and asterisk that the data has to be clean. So that's the first thing I see is that we treat the revenue operations function as this administrative back office, uh, when it can be elevated because it has a pulse on what's happening across the entire org, and you can get some greater insights if you empower your revenue operations organization.
[00:04:47] Toni: I I think to to degree, right, I think where to degree, it's actually understandable.
[00:04:53] Right? I'm also trying to kinda see it from the other side, um, because, you know, some of the reasons why, you know, I was hired. I had a job and it's probably the same thing for you, Jeff, was, yes, you were running the CRM. Right? I think that's it it started there.
[00:05:06] and I think for a lot of folks on the ground that, um, maybe aren't that super, educated in all strategic revenue operations, what can you do? If you ask them in the middle of the night, you know, what does rev ops do? And then there's a they wake up and it's like, CRM. And, you know, kind of that is still ingrained. So I think many, many times when people have some issue and to a degree, I think we in RevOps also enjoy it, we become the go to person for all kinds of different things.
[00:05:32] Right? and then it's so easy to not say no and just say yes and hey, let me kind of fix this for you and let me jump on this and let me do this. think it's also coming from the history of, uh, you know, how this road even came to be. The question really becomes kind of how do you break out of this. Right?
[00:05:47] How do you how do you move beyond and and and also, potentially, in some case, even change the image that you have internally.
[00:05:55] Jeff: I think there's a couple things.
[00:05:56] Uh, first of all, you know, in the middle of my sleep, the first word will blurt out of CRM. So people are gonna wonder like, uh, it must be on his mind all day every day. He talks about it in his sleep. But I think the 1 thing you can do is, you know, the operators who are in seat, they have to take some responsibility as well and an ability to learn and develop in the role. I think many folks who are in the operations function can have a bit of an engineering mindset because they're so good at process improvement thinking through, you know, step a to step b to step c.
[00:06:27] But I think what we can do as a profession is start to figure out, you know, what is in it for our stakeholders and how do our stakeholders want to be communicated to. So there's a there's a little bit of art and science, and not a lot of folks talk about this all the time. It's let's talk about how we can, you know, improve this flow or improve this Apex code. That's not what the stakeholders wanna hear. They wanna hear, well, what do I take away from this?
[00:06:51] What am I driving improvement from? And then how do you communicate is important as well. So do you communicate in a sprint or a newsletter that goes out detailing every little thing that you tackle throughout the week? Almost nobody cares. What you wanna do is, you know, succinctly tell folks, here are the improvements that we're making.
[00:07:10] Now if you care for the details, here's all the detail. And if you wanna set some time with me, I'm happy to walk you through it. But you're going to get fewer clicks to get to where you wanna go. You're gonna have a better layout of information to see what you need to see. And we're in the spirit of taking requests and and to find out how we can further improve the organization.
[00:07:30] So those are the ways that I think revenue operations can elevate is to really start thinking through how can I communicate better and more effectively? And then on the reporting side, figuring out the takeaways and then imagining and predicting, you know, what your stakeholders are going to ask ahead of time. So they might ask the forecast. Well, okay. Last week, we asked these 3 or 4 fundamental questions throughout the forecast repeatedly through all the AEs.
[00:07:52] Well, I'm just gonna, you know, head my CRO or my head of sales off at the pass. I'm gonna start answering those questions ahead of time with the insights that I can see from the reports.
[00:08:01] Toni: And I think kind of a very common, you know, you could say explanation or good reason or maybe also excuse why RevOps is sometimes, you know, stuck in this is, oh I need someone else to come in and manage the CRM for me so I can be more strategic and do more other stuff. Right?
[00:08:19] So this it's also a, where does the flow of the money go in the organization. Right? So, while while the money doesn't, you know, go into to revenue operations, maybe that's 1 of the problems. But where do you see this money being, uh, sent to in in in other cases, which maybe is kind of the the root cause maybe for this issue here?
[00:08:37] Jeff: Well, I don't have to be the CRO's job either. Right? They they have a role that is just as busy and their plate is immensely full.
[00:08:44] And so 1 of the first reasons for why you wanna make a hire is to take something off your plate. Ensure CRM is 1 of the easiest things to take off your plate. The next is going to be, okay. Well, I need I need someone to do the math to start looking at the TAM and really start thinking through all the little details around how many of our customers do expand and when do they expand? Are there particular segments that have shown tremendous awareness and interest that we're not looking at?
[00:09:10] Are there in some ancillary use cases coming through the win channel that tell us maybe there's some repositioning of messaging and narrating, uh, narrative? So, you know, these type of insights, you know, 1 person can handle alone, especially for early stage CROs. Early stage CROs are not just, you know, leaders. They're also jumping into deals. They're not jumping into deals late either.
[00:09:29] They're probably there in the middle of the deal pre proposal especially if it's a strategic account with a strong, you know, appreciation for an executive stakeholder. And so these CROs, you know, we can make a joke that RevOps is glorified go to market IT. Well, in some ways, we can also joke that the CRO is a glorified sales leader as well because they're jumping in and becoming super sales rep. So I totally get the idea of taking something off the CRO's plate, and that's where the budget comes from to fund a new headcount.
[00:09:57] Toni: And and maybe kind of, you know, to kind of go 1 more step in that direction. So I mean, there's this whole talk about growth at all costs is over, go to market fit is broken for all these SaaS companies and so forth. So what's your, you know, hindsight 20 20 perspective here on well, if RevOps would have had a stronger role in those organization, do you think that some of that crazy investment in sales and marketing, for example, because the this is where the money went, right, kind of wouldn't have happened like that or would have happened in a smarter way or kind of what's your what's your perspective on that?
[00:10:33] Jeff: I thought that's taking a lot of credit for RevOps, um, I would say no.
[00:10:37] If you had RevOps sprinkled in magically this company would have you know superior unit economics. No, I think I think it's a shared responsibility across leadership. Um, also the incentives were different back then. Uh, just 2 years ago, companies were incentivized to to grow top line, and the fastest way to achieve top line was, you know, to go surge headcount and surge programmatic spend. Uh, and so to pump the brakes because we're in a paradigm shift is a tremendous change in mindset and also in experience.
[00:11:05] How many operators today, you you know, in their twenties and thirties have seen a down market? Almost nobody. And so now we have to adapt pretty quickly. So everyone who has been operating in the environment of the last 10 years have had to fundamentally shift, uh, to finding paths, you know, quote unquote productive growth. And not a lot of every not a lot of people have that playbook in their experience.
[00:11:26] And so that's where critical thinking, taking risk, and really assessing, you know, what are, you know, what are some of the best practices that we think we can enable that we haven't seen that are gonna help enable us to get that productive growth. So having rev ops, I think, could have helped for sure. But I think it's a shared responsibility across multiple functions, the CRO themselves, the CMO, the CFO, the CEO. And, you know, we were playing a different game the last couple of years, and I think, fundamentally, those the the request for growth at all cost is no longer here.
[00:11:57] Mikkel: I mean, it kinda plays into 1 of the other so when we connected previous to hitting record, 1 of the points was really on this overinvesting in sales and marketing as some of the of the problems that can happen. Can you maybe tell us a bit more about that?
[00:12:11] Jeff: Well, I think there's a couple of symptoms that you hear today.
[00:12:13] So I think David Spitz at bench Benchsights has been touting this metric called, uh, net new uh, it's I forgot what he calls it. But, essentially, total sales and marketing expense divided by net new ARR. So it's essentially a symptom quarter over quarter of, you know, what is the incremental cost of the new quarters net revenue. And what you're finding is that metric has moved up into the right and not in a good way. It's moved from 150 percent about 6 quarters ago to close to 240 percent today, which means that for every dollar of net new ARR coming in, you're spelling you're spending 2 dollars and 40 cents.
[00:12:48] And so what that pretends is that either we've we just got worse at acquiring new customers, which I think a lot of sellers I don't think they're getting worse. I don't think we've discovered amnesia in selling, but I think that the demand for buying products has dried up. It slowed down, and that's why you see that customer acquisition costs increase dramatically. Now, does that mean that's probably artificially capped because of CFO mandates, cost mandate to cut the discretionary 20 percent. I think there's a little bit of that going on.
[00:13:19] The demand to buy is probably still there, but it's being suppressed, uh, by these buyer caps. Now, who knows when that buyer cap is gonna get lifted? Perhaps companies will say, you know, we've the problems, the underlying problems of why we needed these tools still exist. When the wallets open up, we are still going to spend. And that's what I'm betting on.
[00:13:41] I think the demand is still there. Now I think companies can get ahead of it by finding dancing part partners. You're seeing it now with SalesLoft and Drift starting to create these super apps. And all these super app companies are now offering, you know, value with a bundle. So it passes some savings hopefully on, theoretically, to their customers like myself.
[00:14:02] And then we, as operators, can get a bunch of stuff in the warehouse, a bunch of stuff in the in the product belt that would then say, I can pay, you know, instead of a dollar for a dollar, I'm spending maybe 85 cents on a dollar. And getting a 15 percent savings. So I think there's some, uh, hopefully, some bundling or value that's gonna come out of these these m and a's that's happening today.
[00:14:24] Toni: what would be a so let's just say there's a, know, there's a rev ops are listening. He or she doing a lot of work in the CRM maybe here. Um, and let's just talk specifically this over investment in sales and marketing, and and the issues that are coming out of this and, you know, the whole environment, and it's super complex for people to fully grasp. Right? And I think you obviously kind of have have your head wrapped around this.
[00:14:45] is there like a a simple advice you can give those folks? Like, hey. This is how you maybe can help your CRO or help your VP of sales. You know, how maybe even your CEO, you know, to navigate this thing or provide a perspective on from a from a RevOps perspective? Do do you have, like, 1 or 2 things that you that you can share?
[00:15:03] Jeff: I try to let unit economics guide me. So every time I run the CAC analysis, you will inevitably find that even if you cut 10 percent of tech spend, you're not really gonna put a dent in the CAC.
[00:15:16] Right? Because, you know, the the biggest expense is going to be on the headcount. And so the easiest way to make your unit economics work for you is to make that headcount productive. And so you can make that headcount productive in a couple of ways. 1, if you need a smaller footprint of a sales organization, that may be the case.
[00:15:33] But I all I would also say you wouldn't wanna start the enablement function because you need that team to ensure that they're utilizing the best skills every day to hopefully bring in those win rates back up in line. The second thing is taking a look at your existing customer base. So if you have enough to cross sell and upsell or just to even retain your customers, that's gonna take a lot of pressure off the new sales number. So if you can find a path to generating revenue from your existing customer base, I think it's a common answer that we're hearing these days is, you know, renew is the new new and expansion is something more favorable. So cost of expansion, at least for 2024, 2025, is also gonna be another unit economic metric to take a look at.
[00:16:18] So there's cost of acquisition for new customers, then there's the cost of cost of expansion. How much does it cost you to go get an incremental dollar? Now if you can grow the expansion, that's just gonna take the pressure off, like I said earlier, uh, off a new business number. And we've seen what it takes to get new business in. It takes 2 dollars and 40 cents on average.
[00:16:37] And so if you can cut into that number, that's gonna help the org tremendously. The second thing is, you know, probably improve your ICP and your targeting. So in the old days, when you had a ton of headcount, you probably were selling to almost everybody. And so what what you wanna do is narrow down your TAM to the to the addressable set of folks that would benefit from your product today. And the easiest way to look at that is going to be momentum and win rates in your pipeline, segmenting by, uh, certain cuts of the data, industry, region, uh, technographics.
[00:17:13] That That type of information is gonna help you lead the way to being more specific.
[00:17:18] Toni: And especially something like this. Right?
[00:17:20] ICP targeting. I mean, this is who are you RevOps talking about this stuff. Right? I mean, it's, you know, it's a that is that is way more strategic than than yes. Sure.
[00:17:32] You will probably be the person being leaned on, you know, pulling the data, doing the analysis, and so forth. But triggering something like this because you sit on that, uh, dataset, I think that, know, and then coming with suggestions, you know, that that stem from the data, I think that can, uh, be hugely impactful for not only the business, but also how the rest of the organization potentially looks at you. Right? Another thing that I think, uh, you and I kind of see a lot, uh, Jeff, is the way these go to market engines are kind of planned. The way this this thing is being laid out, new year, new Excel spreadsheet, and let's go kind of what what are the what are the pitfalls that they're seeing there most of the time?
[00:18:13] Jeff: So, hopefully, folks have finished their annual plan. I I I know a lot of folks can have, uh, dozens of versions of their plan before it's finalized. I joke often the first time I ever finished an annual plan when I worked in finance was that we had a v 22. And then that wasn't the final file.
[00:18:30] The final file was v 22 final in all caps, uh, but there was a v 2 22 with lower cap final just to show you the evolution. They're like, nothing's really, really final final until until someone puts it in all caps. But that final addition of the plan had a couple of things. It showed us what the potential plan was gonna be by quarter, by month, by what channels, and it gave the different teams across the company their targets. So marketing had their MQL targets, uh, or their opportunity targets, influence their source, however you wanna track it for the sales organization, how much headcount they're gonna have, how much quota each person is going to carry, and then what accounts or territories they're gonna sell into.
[00:19:13] So 1 of the pitfalls of the annual plan is not rolling it out fast enough, not communicating, you know, the goal for the year and then rallying the team to achieve that goal, and then quite simply, hiring too late. Some folks can hire the team too late, and everyone knows this. If you have a sales led model, the reps ramp, and you're gonna if you hire too late, you're gonna eat into some significant time of, um, of achieving your number. The second thing is, uh, the marketing plays. You wanna make sure that your marketing campaigns run effectively, uh, according to plan and are targeting the right personas to be able to generate the the right type of leads at the top of the funnel.
[00:19:55] Mikkel: Yeah.
[00:19:56] I mean, um, it was so funny. At some point, we we were looking into all the capacity planning stuff in particular. It was like, if you account for ramp and attrition, you are super sophisticated, but it's so critical for this motion to account for what's gonna happen in the future. And And I know we've also talked about the fact that if you are hiring too late, then, actually, by default, the hiring plan no longer fits. I mean, maybe you had planned, you know, 2 SDRs and 1 AE, but those numbers now, they're not gonna get you home.
[00:20:24] Right? So so I think that's that's the other side of the coin. And I think what what I have experienced as a pain being on the receiving end as a CMO VP marketing is you get very little say in how those numbers change in the spreadsheet. And all of a sudden, there's some kind of a conversion rate that's moved from, let's just say, 8 to 10 percent. And it's only 2 percentage point.
[00:20:46] Right? But it's a massive leap all of a sudden to have such an efficiency gain, and you only find out about it, you know, maybe q 1 in during the QBR when you're behind. Right? So what how should rev ops actually facilitate connecting finance and the go to market teams to ensure that for everyone's sake, that this plan, it's actually it is likely to happen if we do a really great job.
[00:21:10] Jeff: I always love the assumption uplifts that are in the model. Right? So, for example, the 8 percent to 10 percent, that's not a 2 percent improvement. That's a 25 percent improvement. Right?
[00:21:19] So you're talking about, uh, a paradigm shift, a lift on all of your channels. So is LinkedIn? Is Facebook? I mean, all all yours is your social or or is that gonna lift 25 points? Okay.
[00:21:32] Well, I might be able to lift it if I have narrower targeting. Um, but then you also, you know, you also have to squeeze a little bit of, um, the bid cost. Right? What's the bid ask for the keywords that you normally bid on? So on the demand gen side, you might see a ballooning of cost as well.
[00:21:48] It's not just a 2 percent improvement, but I don't know if your model sells, uh, what's our cost per opportunity improvement? Cost per improvement also goes down 10 percent. So you're telling me that we're gonna not only have higher conversion, but we're also gonna have a compression of cost for our, uh, you know, opportunities generated from marketing. Um, I think 1 of the challenging thing is things is, you know, spreadsheet spreadsheet magic. Right?
[00:22:10] And the way magic comes in the not just marketing, but in sales. In sales, it'll be something like, well, last year, we ramped reps on a 9 month schedule, and this year, we're gonna do it on a 4 month schedule. Why? Because we brought in Jeff, and we brought in the enablement person, and, magically, they're gonna ramp 4 time twice as fast. We're also gonna shrink our sales cycle from a hundred and 90 days to a hundred and 30 days.
[00:22:32] Why? Because we have this deal matrix pricing sheet now. People aren't gonna have to negotiate with each other internally to get something improved. We're gonna cut 60 days off the sales cycle. Okay.
[00:22:40] Well, is that believable? Is that not? And so that's where the work begins. We have a plan with the numbers. The numbers belie process improvements across the org or initiatives.
[00:22:51] And will those initiatives pay off in the way you think they will? If they don't pay off, well, you're not gonna capture the upside or even the the model number in your plan. You actually might fall to the low side, and maybe you didn't even account for the low side in your model. So 1 thing to be careful of is, you know, don't be too aggressive in your assumptions. If you believe you can be aggressive, have a good justification why.
[00:23:15] But, otherwise, I think 1 of the things is you wanna think through, you know, how could you achieve those improvements in the first place? Sales cycle, win rate, deal size, channel cost, uh, cost per opportunity, channel optimization conversion rates. Those things are those things we can put in the spreadsheet, and they can be quite reckless if you're not in touch with the sales and marketing team. The sales and marketing team can fundamentally tell you, here are the boundaries and the limits of what I think we can achieve based on these initiatives that we roll out next year. And 1 thing as a revenue operator, if you tell me that we're gonna change your qualification criteria, it's not a 1 week project.
[00:23:49] That's like a 1 month, 2 month project because you have to, you know, not only document it, you'll have to roll it out and then change the behavior of the organization. That takes that takes a couple of weeks at the minimum.
[00:24:01] Mikkel: Yeah. Yeah. I think we also had, uh, Dave Kellogg on the show at one point talking about, well, they had multi year plans to move some of these efficiency metrics because that's how you needed to look at it.
[00:24:12] It's not gonna be, like, whip a magic wand. You do 1 project, then it succeeds. Like, that's it's rarely how it works out.
[00:24:19] Toni: So But I gotta say, I mean, so the I'm also understanding the finance side, honestly. I I I get it.
[00:24:25] The, you know, the the the job to be done for them is do a budget. Do it. Right? I need I need this budget. Um, and they're really trying hard, uh, to figure this out and match it and so forth, and they're getting those sometimes, impossible to achieve new numbers.
[00:24:42] Uh, first of all, growth needs to look like this, but you only have so much in the bank and you need to have so much left in the bank. Kind of those are the those are the, uh, guardrails they have been given, basically. And I can totally see because they're they're not the 1 you need to deliver the plan. Right? We know this and this is, again, you know, not their job, not their fault.
[00:24:59] But then, basically, kind of it's so easy to spend time in the model to tweak things in between in order to make this thing work out. Right? So so I also understand that, uh, and I also understand, um, the right way to do it is really the full on bottom up. Those are the niches we're gonna run. That's what we're expecting to come out of this.
[00:25:18] But also, kind of imposs I would say impossible to pull off for one reason. Uh, you might know what you wanna do in the next 2, 3 months. I think you might wanna, you know, you might know that. and let's just live in a world where you say, like, hey, we're gonna roll out this, uh, pricing matrix or this discounting hierarchy, and we can actually accurately predict how the ACV lift is gonna end up or the sales cycle lift is gonna end up, whatever it's gonna be. The problems then also well, what about the second half of the year?
[00:25:47] Right? No one has any clue about the initiatives. I mean, no one is maybe kind of too extreme, but it's really difficult to have a clue about the initiatives in the second half of the even in q 2. Right? Do you have, like, any tip there?
[00:26:01] Do you have, like, an a magic wand, Jeff, kind of that he can, like, oh, yeah. No. Toni, this is this is actually kind of how you do it. Is there anything like this where you can, like, hey. This is how I've solved this problem or solved this problem in the past?
[00:26:13] Jeff: would say, first, I have empathy for the finance organization. Yeah. The finance organization is strategic.
[00:26:19] They're gonna have they're just like go to market operations. They're gonna be embedded talking to sales and marketing. They're gonna hopefully have a good sense. But at the same time, they're in a rock and a hard place. They have to protect and grow enterprise value.
[00:26:32] If enterprise value growth isn't on the table, then survival of the business as a going concern is important as well. Um, I think the cohorts of 20 21, 20 22, a lot of those VC funded companies were told to, you know, make sure cash runway gets to 20 25. And guess what? We're getting closer and closer to 20 25. And if they haven't been able to achieve that inflection point, these companies probably will not have a a funding opportunity to at the valuations they're looking for.
[00:27:01] So either you're looking at a down round or you're looking to operate with the cash flow from operations as is. So totally get it. But at the same time, if you you you go into a business and the number is a number that seems unrealistic, you might you might try to do a replan, but you also committed to the organization. So go and achieve it no matter no matter what it takes. And so that's the job of leadership to try to achieve impossible things.
[00:27:28] Um, but so when I'm thinking about working in the second half of the year, the initiatives, there's 2 types of things that I think a RevOps leader can have at their disposal. 1 is, uh, a couple of things. So there's the company OKRs, the targets, and you work backwards from there. And these are annual targets, annual goals. So you have your objectives, your key results, and then I like to use another letter for, uh, initiatives after that to start detailing all the hypotheses of what we think we can unveil within the org.
[00:27:58] Now what ends up happening is those initiatives, you generally try to t shirt size them and put them in the right place on the road map. So they might fall into q 1 or q 2. No one wants to see their initiative hit q 3, q 4. So you're you're probably gonna see that first half of the year pre pretty condensed. And what ends up happening is if if you don't plan properly, you'll take on too many strategic projects that are over the capacity of the enablement and the operations organization.
[00:28:24] And some of those projects are either going to become delayed, deprecated, descoped, or rolled over. And that's why some some of the projects that you have in h 1 are actually h 2 projects, but you're trying to squeeze everything in h 1, h 2.
[00:28:38] Mikkel: I mean, it would be so much easier for all, like, it could just get done q 1.
[00:28:43] Jeff: I needed this
[00:28:43] Mikkel: I really I really yeah.
[00:28:45] But I
[00:28:46] Jeff: Where's that lead score
[00:28:47] Toni: to a degree. Right? So one hot take I hate the word hot take or the phrase, by the way. But, you know, 1 unpopular, uh, you know, opinion here could also be scrap this annual planning thing, actually.
[00:28:58] Just do rolling. So, I mean, to a degree, I think for the budget, you will need to have an annual budget. I I don't think it makes I mean, this is this is just how the world works. Right? Um, But I think for and and I think in the budget, you can have assumptions, um, that at least should get a recognition by the go to market leadership team.
[00:29:17] It's like, yep. Okay. I understand. You know, for this to work out, I need this number to move up. I think there needs to be a bit of a handshake on both sides.
[00:29:24] Neither find is no go to market leadership can be completely safe. Both of them need to be a little bit, you know, on the risk side, basically. Right? And and, you know, finding that balance, I think, is difficult. But then on the flip side also, uh, figuring out what do you wanna do in h 2, that will probably happen in May or June.
[00:29:42] Right? It will it will not happen in December. Kind of that's that's I think kind of the reality that many people are kind of running into. And then you get into this duality of, hey. Here's a plan, but here's also a forecast or Yeah.
[00:29:54] Projection or whatever you wanna call that thing. Right? Kinda, I think those those you almost need to, you know, the the bottom up will keep evolving while the top down will stay as as as is almost. Right? I mean, to a degree, I think this can be a way to navigate this.
[00:30:08] But I think it also
[00:30:08] Mikkel: changes as as you grow. Like, the closer you get to some kind of, hey, this smells like IPO, you need to get way more predictable versus if you're early stage Yeah. Everyone is
[00:30:17] Toni: having that problem right now. Yeah. That's Like, we're about to IPO.
[00:30:20] All the IPO. So we are busy with the s 1. Sorry. Can't can't talk to you. So we
[00:30:24] Mikkel: had Klaviyo and then I think that's
[00:30:26] it.
[00:30:26] Now it's
[00:30:27] Jeff: Yeah.
[00:30:27] Well, show me where these IPOs are. Where are
[00:30:29] they hiding?
[00:30:29] Mikkel: yeah.
[00:30:30] Jeff: the IPO market has been shut down, I think.
[00:30:33] Mikkel: Yeah. So, um, you had another. Let's move to the next. Yes.
[00:30:37] Let's move to the next. Right? Enough of the planning. 1 of the things you also wrote, uh, kind of conversely to, overinvestment was underinvestment.
[00:30:47] Jeff: Oh, well, show me where you're getting this headcount for revenue operations teams, and, uh, I'll tell you that you're not under investing in rev ops.
[00:30:57] Mikkel: So what is the problem here?
[00:30:59] Right? So I think, you know, it's it you you kind of said, well, it's either that it happens too late or just it doesn't happen. And, um, then there are even things just on general capacity. But let's talk a bit about the ramifications of underinvesting as a go to market team. What are some of the things you see there where revenue operations actually should be able to go in and help out?
[00:31:18] Jeff: A couple of things that I've seen. I generally operate in the series b, series c space. So these companies generally have brought in, you know, very technical revenue operations teams before they brought me on board. Um, and I I find my skill set to be someone in between, someone that works on the strategy side, and someone that works on the technical side. And so, generally, when I've come in, I've seen a couple of types of mistakes.
[00:31:42] 1, you've overhired, and you've brought in the wrong type of individual, which is complete opposite what we were talking about. What that means is you brought in someone from a big company, and you bring them into series b, series c, where quite frankly, a lot of the processes are not documented. They're not well put in place. And the CR the tools have not been well optimized, nor do you really understand, you know, the TAM, the strategy side of the business. So you're bringing that heavy hitting resource from your company, and they're gonna find that they're gonna have to roll up their sleeves.
[00:32:14] They may not have been in that position for a very long time. So that's 1 mistake that I see. Second mistake is believing that you you hire a superhero, someone that can pretty much do it all, and you're putting that person in a position where they're quite frankly working 60 to 80 hour weeks, and they're doing that for months on end. And that person's at significant risk of burnout. Uh, and, you know, they're not gonna tell you that.
[00:32:37] But behind the scenes, I can tell you that the folks that I talk to who are in those roles, they're a lot of them are burned out, uh, and they can only do it for so long. And so when they're asking for help, they're asking for headcount or bringing in a team, and they're not able to get it. Well, that's just 1 of a belief from the company that they're not willing to further invest in the function or further invest in that individual, uh, even though they put all their hopes and dreams on that one individual because, quite frankly, they're doing a great job. So there's a a bit of a dichotomy there where the more the better you do as a solo person or a team of 2 or team of 3, they could do it all. Well, that team has got it really well covered.
[00:33:13] We don't need to further invest. That's one area. Uh, the third mistake that I've seen is hiring too late. Right? So you see I've seen a couple of instances where you log in, and the admins of the tool are the heads of sales, the CEO.
[00:33:29] And number 1, you see, okay. Well, we've got a lot of hands in the cookie jar, and those folks should be working on other things across the business. There's a higher and better value use of their time than, you know, putzing around in the CRM or the marketing automation platform. And so those are a couple of mistakes that I've seen in terms of underinvestment in operations.
[00:33:48] Toni: So the the second 1 totally rings true. I mean, this this is basically where the RevOps person, you know, where the the organization has all of those expectations for this RevOps person, but then they step in and they actually, you know, for a year deep into janitor mode, just kind of cleaning up basically before they can do anything on top. Right? And this is really the, the the the problem of this is you hire this person around, I don't know, maybe 5 or 6 million to get get ready for, you know, moving to 20. Uh, but really that person won't be able to contribute much, just fix things behind the scene until you, I don't know, way into this journey already, and then they're not really helpful. Right?
[00:34:25] But in the other example, what's your what's your approach to get more headcount approved? Right? And and I don't wanna say, uh, CEOs or CROs or kind of whoever owns that kind of budget inhumane and just like, I don't care about your, you know, burnout. I don't care.
[00:34:41] I think I think they obviously do care, but what are, you know, solid business reasons that rev ops can bring up to, um, to actually approach their boss to get more
[00:34:51] Jeff: Yeah. So when I talk about headcount, it's not just about a person that's full time. I'm talking about just capacity overall. Right? You wanna increase the capacity and the capability of the org. You can do it in a couple of ways.
[00:35:02] 1, you can make sure that you only prioritize and focus on the critical path, things that matter. But if you do need to expand the capacity, you can do it in a couple of ways. Uh, you can build the team internally. And to me, that's about a value use case. You often see ratios stated as a reason for why you need to increase headcount.
[00:35:22] So 25 or 30 to 1 is kind of the top end ratio that I've seen. I think Max Mater from found HQ has been looking at some lower ratios for some publicly traded companies, 15 or 17 o 1, like, companies like Datadog. Uh, so somewhere in between. So if you're scaling up the sales
[00:35:39] Toni: if if I'm just interjecting, so for so basically, it's sales headcount or was it go to market headcount to rev ops headcount. Right? You said 30 ish or, you know, 15 17
[00:35:50] Jeff: Yeah. That's a sales operations metric.
[00:35:52] So for sales operations, you're looking at 20 25 to 1. Uh, for marketing ops, I don't know a really good ratio, but it have to be based off of, uh, campaign execution. So the diversity of campaigns, the number of campaigns, I think that's probably the the better metric, uh, to think through. Marketing ops can be a bottleneck to campaign execution. And if you're thinking of ambitious campaigns for the year, uh, marketing operations will have to follow.
[00:36:18] Um, so that's 1 1 way of doing this full time headcount. The third way is bringing in contractors. So folks on contingency, maybe you don't need a full 40 hours from 1 headcount. You just need 10 to 15, and you need highly concentrated, highly skilled, uh, set of hours from an individual. And so you might consider bringing in the agency.
[00:36:37] Uh, the fourth, and I think this is less popular, but I think 1 thing you can consider is bringing in a tool. There are tools out there that can radically reduce the amount of time from an individual. So if you have someone in rev ops do, uh, calculating commissions for 20 hours, you know, every single quarter, Well, I don't know what their billable rate is. But if you brought it in in, you know, incentive compensation management tool, an ICM, you could probably, you know, crunch down that time, uh, significantly. So there's a number of ways to increase the capacity.
[00:37:08] It's not just bringing in headcount. But how do you make that investment case? 1 is, okay. Well, how do we, uh, increase the frontier of operations? So what capabilities are we not bringing in today that are now taxed across other team members in the org?
[00:37:22] Finances taking on planning or quotas when you can carve that into sales operations. Maybe the sales leader is going into the CRM. Maybe you can carve that time back. So there's a couple of ways you can think about consolidating those functions into an additional incremental headcount. Doesn't mean that the work doesn't get done.
[00:37:38] We just wanna move it to the right individuals. The second way of doing it is, um, you know, a compliance or a risk argument. Um, bringing in an operations resource helps baseline the org and prepare themselves to be ready to be compliant for any sort of, um, any sort of audit that's gonna come through. So, there's, like, 2 arguments. 1 is a labor savings and a ROI, uh, ROI impact, and the second is to use the compliance line.
[00:38:06] Mikkel: Interesting. I think there's also another piece here.
[00:38:09] Like, now we've run through some of couple some of the things that will be broken in the go to market, basically, if if this is if this has not been run the right way, basically. And if there's a marketing leader or sales leader or whatever that sees some of these constraints or problems appearing, whether it's the planning that's broken or something else, that's probably also a point to say, well, it's probably not because Bob, who's doing RevOps, is doing a terrible job. It could very well be that the resources just aren't there yet, um, and kind of help make that case as well. Because I mean so I mean, the listeners aren't aren't all gonna be RevOps. So they I I actually
[00:38:45] Toni: think so so, uh, listening to this and I think you're totally right.
[00:38:48] I mean this, the the parallels to a product manager are just so overwhelming me there. Right? Um, so and the the thing is, right, when when I talk to our, you know, it's a small team, 1 product manager, It's like a, um, it's kind of a matter of fact kind of conversation. It's like, yeah. I know, mister CEO, you want all of these things, but you know what?
[00:39:08] Guess what? What? You can't have them. We don't have the resources. We can't do these things.
[00:39:11] and I think this is where RevOps is kind of junior, honestly. It's like, uh, actually, it should be like, hey, you want all of those wonderful things? Yep. Uh, me too. But he can't have them.
[00:39:21] It doesn't it doesn't work. If you want more, cool. Yes. Hire more. This is how we do it.
[00:39:26] Blah blah blah. But actually, no. You know, forget about it. These things will not happen because x, y, and z reason. Right?
[00:39:33] And I think there's sometimes, I'm not it's not it's not like I was great at this when I was RevOps, but it's like, um, uh, you know, uh, our own ability to know what we can get done. I think that's kind of lacking a little bit. I think product management and so forth are getting way more scientific around this. And, uh, and then maybe it's also the environment. Kind of sales marketing and CS, kind of they did, you know, those product development timelines, they keep pushing out for whatever reason.
[00:40:00] I don't know why. But the quarter never does. Right? And I think the the pressure then, therefore, then on all kinds of different even project oriented roles like revenue operations in in in the GTM, they then therefore is like, well, you know, I need to hit this crazy number and that, you know, timeline is moving, so therefore, you need to do as well. Right?
[00:40:20] I think I think there are some of those things that are just, um, set up in the wrong way where I also believe we can't just push it on the on the leader and say, like, oh, you need to be better educated. It's also us on the revenue operations side to kind of push back in a better way. also, to a degree, also mark our territory. It's like, you know what? Sorry.
[00:40:39] No. Can't do that. Uh, you know, you can fire me now if you want to, but that's just what it is. Right? And I think kind of that if you do that right, if you're really good at this, I think it also changes almost how people look and it's like, damn.
[00:40:52] You know, he's he's a boss. You know? I don't
[00:40:56] Mikkel: know. You know? Play that card so many times.
[00:40:59] If it's always like, it's either this or fire me. I know which route it's gonna go. I know exactly where it's gonna go.
[00:41:06] Toni: Nuclear option all the time. I know. I know.
[00:41:09] I
[00:41:09] Jeff: So I'm at capacity. Read the sign.
[00:41:12] Mikkel: Yeah. So I think this was, um, honestly, I think this was an important conversation to have because I I think it's been very hyped up revenue operations, and I think it's an important function, by the way. I think you need this kind of overseer across the go to market.
[00:41:29] Uh, I wish I had that function last time I worked together. Um, so I think, uh, I I hope we kind of were able to pinpoint some very real pains out there. And
[00:41:40] Toni: I think so I mean, maybe maybe wrapping or or opening. I'm not quite sure what I'm doing right now. But the, um, I think if you as CRO listening or CEO or founder or something, listening to this like that, yes, you don't need um, masterful, artful people, you know, building your CRM into tooling infrastructure.
[00:42:02] so this is a very specific skill, but over investing in this, you feel like, you know, do we need to be the company with the best CRM setup? It's like, is that going to change things for us? And the answer is probably no. But what I think Jeff and Mikkel and I are talking about is is not the best CRM setup. It's actually the best go to market setup.
[00:42:22] Up. Right? Yeah. And that is a different profile. It's not the same thing.
[00:42:25] Um, I think, you know, someone like Jeff, for example, kind of, you know, pulls that obviously off. but having a brain like this in your organization, yes, that looks at the whole thing through a data lens, obviously. I think that is the real reason why people wanna have revenue operations. That's what's really, you know, you know, moving the needle and driving the business forward, not the other piece. Right?
[00:42:45] And I think this is, don't wanna get into this whole strategic RevOps thing, but, uh, this is where where, you know, we as rev ops, uh, group kind of need to move towards. Right? And kind of have clarity. Hey. This is my strategic stuff where I'm impacting the business, and here's the the hygiene things that have to be ticked off for me even to be in that position. Jeff, thank you so much for spending a bit of time here and enlightening our our listeners on, uh, how RevOps is
[00:43:11] broken and how you can move
[00:43:13] Jeff: Yeah. I appreciate you guys. Thank you for having me on.
[00:43:15] Mikkel: Thank
[00:43:15] you.
[00:43:15] Don't worry about it. Thanks, Jeff.
[00:43:17] Toni: Bye. Bye..