5 efficiency plays you haven't thought of

Don't let efficiencies be another buzzword this year. We lay out 5 real efficiency plays for 2023 that you can start tomorrow.

Show Notes

It's 2023, and if you've been listening to everyone on social media, you'll know that you have to focus on efficiency this year. 

But what does that actually mean? What can you actually do?

Don't let efficiencies be another buzzword this year. In this episode, we cut through the BS and give you 5 real ways you can drive efficiencies this year. 

Creators and Guests

Host

Bart Padjasek

Copywriter at Growblocks

Host

Toni Hohlbein

2x exited CRO | 1x Founder | Podcast Host

What is The Revenue Formula?

This podcast is about scaling tech startups.

Hosted by Toni Hohlbein & Raul Porojan, together they look at the full funnel.

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

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

Toni: [00:00:00] Hi everyone. This is Tony Holbein. You are listening to the Revenue Formula. In today's episode, we are not only going to talk about why you need to drive efficiencies in 2023, but also how to actually achieve that. Enjoy.

Bart: Always make sure you hit the record button. Oh, Mikkel,

Toni: yes. How much hair you have grown. . I'm so jealous. Mickel.

Bart: What are you jealous? Michael just actually has some time off now instead.

Toni: And also you finally got rid of your, you finally got rid of uh uh, your Danish accent. I got

Bart: rid of Danish. You wouldn't believe what I had to do to get all this hair

Toni: right now as well.

you need to tell me which product

Bart: you use because did you know that they actually have shampoo and conditioners separate? . ,

Toni: yeah. That was one of our conversations. By the way, Nicola and I didn't know this, and it's like, well, Why don't have any left? Yeah,

Bart: there's was a good jazz. Yeah. . Which is ironic cuz like out [00:01:00] of everyone in the office, I think I wear the like hats and caps.

I guess some of the more often things, I mean mean maybe Sandy in the office as

Toni: well, but yeah. I just can't pull it off . It just doesn't, it doesn't go well also with like a shirt. No it

Bart: doesn't. That's true. I got a little bit more casual usually on this, but we're doing another good casual episode here, uh, when we're talking about.

I guess going into this, going into this new year and a good casual topic about going into 2023 is that 2023 is gonna suck. Yeah. 2023 is gonna be just like 20, 22 practically, if not worse. I think we're, we're seeing data everywhere. We're seeing, you know, evaluations dropping, we're seeing less funding from everything.

But like, other than, you know, all that stuff, what else should we kind of expect for this?

Toni: So the, the funding environment is kind of the, almost the starting point. So, you know, just a little bit of, you know, macroeconomic theory quickly. Like, um, [00:02:00] uh, the, you know, money was pulled out out of the public markets for stocks because, uh, interest rate went up and um, um, and because obviously there's lots of uncertainty, right?

And if those, um, uh, public companies are faltering in in stock price, what that means is they can't buy you. They can't mm-hmm. , they can't acquire your company. Or it doesn't make sense for a company that was about to go public, to go public with those current valuations. Uh, which then basically means that, um, you know, all of these VCs, they're all just business.

We never really talk about this venture capital companies company. Um, and basically they're giving you money to get more money back. And currently, you know, the exit markets for those venture capital companies, it's either m and a. Someone is buying you well, they can't buy you because they're stock faulted and they can't, you know, usually it's a 50 50 deal cash on stock, and suddenly they.

their stock is worth less. So that doesn't work out. [00:03:00] And at the same time, the other, uh, you know, event for, for VCs to make money is, uh, when you go public, but the public markets don't pay as much. Now even they pay, you know, potentially less than the VC put in money. So that, that is a big, big problem. And basically what then happens is this goes down the value chain of, you know, public markets then about to.

Then Series C, series B, series A, C, right? And it, you know, usually takes a bit longer. Um, and we are now seeing it across the board. VCs don't want to give you money if they do want to give you money for, you know, very different valuations that you had last time. , we can argue whether or not now this is the right or wrong valuations, but basically less for what you had last time.

So people don't wanna do that. So what the next thing is that, um, people don't wanna go out, get funding. Um, so they're cut cost in order to extend runway. Um, and uh, the, the pressure for them to grow is still there. So basically now efficiency is becoming the new, uh, the new buzzword, [00:04:00] right? Yeah. We see that telling companies, Hey, you need to be efficient.

You need to grow further and farther. Uh, the money that you have already. Uh, they, the VCs tell them that, Hey, I probably can't give you more money for my staff because, you know, that doesn't make sense for me either, . Um, and suddenly, you know, efficiency replaces growth at all costs. Right? Yeah. Um, and then how does that, how does that, you know, find itself where it's like suddenly everyone is talking about how important, you know, customer retention is?

It's not like this was not important before. No. Um, some people. Call it already. The, um, the biggest churn event of all time in sars. Wow. Yeah. So that's, that's, that's encouraging I guess. Mm-hmm. , um, not scared at all. Yeah. Yeah. And um, and I think, you know, this is obviously kind of a net retention rate thing.

Why is net retention rate important? Because it's the cheapest way to grow. You don't need to spend more sales and marketing dollars, comparatively speaking. Um, [00:05:00] and then the other side is suddenly, and we are seeing this here from the grow block side, sudden. When we talked a year ago about CAC, Payback and then, and those efficiency metrics because you know, that's our trait.

That's revenue. New operations. This is, you know, what, what we kind of thinking about all the time, everyone was like, who cares about efficiency metrics? I just need to grow, grow, grow. Well that, that has changed. Um, a lot of people are now focused on CAC, Payback on, I don't know, burn multiple on, you know, again, net retention rate.

Right. Um, and, um, I think that that is, that is what changed and that is also why it changed. And I think the truth is some, some companies will be able to adapt and figure it out or have enough runway and or take a step down in valuation, get through this. and some other companies will probably just run out of cash and fizzle out.

Yeah. Um, and I think, um, we've seen it already. There's was already kind of a small wave of these, uh, happening. Obviously this is, you know, not shouted and touted and not [00:06:00] everyone knows about it, but it's happening. Um, and I think it will intensify over the next six to nine months. Actually.

Bart: Definitely in, in talking about a, a lot of these efficiency metrics and the idea how we need to be more efficient, like this is also isn't a new trend either.

Uh, we, we've been seeing articles and blogs about this all the way back from 2019 and when before, and yeah, we understand we need to be more efficient, but. What does that actually entail? What is, is it just about keeping up these metrics or is it

Toni: just more Yeah, so, and that's, that's I think where the, where the finance and rev ops just stand on two different, um, aisles, I guess.

Mm-hmm. , I'm gonna show this the right. I'm sure. Can I do that? Yeah. It's so good. A native speaker. He is now sudden

Um, so I think finance is great at calculating those metrics. . Um, but I think Rev Ops is great at actually improving them. Right? And, and, um, you know, when you, when you think about those different metrics, obviously number one [00:07:00] thing is to understand what they mean. And then number two thing is to understand what is it that needs to change to improve them.

So let's kind of go to through, you know, the two main examples right now. Obviously CAC, Payback. Mm-hmm. . I think a lot of people listening to this show probably start understanding what that is, but CAC stands for customer acquisition cost, which is roughly equivalent to your sales and marketing expenditures.

Um, and basically means, uh, you know, and CAC, Payback is usually measured in time, so either month or years. It basically measures how long it takes. , um, to get the, you know, money back for the investment you put in to acquire that customer. And I'm gonna say that again, it's kind of a fancy roi. So let's just say you spent, um, a million dollars to, um, acquire a, I don't know, cohort of, uh, customer.

So let's just say, uh, in, you know, q1 you spend $1 million, right? And you were able to [00:08:00] sign $100,000 of. with that 1 million, then it takes you 10 month in order to, you know, recoup this 1 million that you spent. Right? That's what CAC Payback means. And at the end of the day, it basically tells you how efficient is your, uh, revenue engine.

That's what it does. Mm-hmm. . And, uh, what's pretty cool about it? It's. In my, my perspective, it's very operational. Uh, you can augment the CAC Payback by, you know, uh, customer lifetime. You can augment it by, uh, gross margin. You can adjust into all of those different things and basically kind of pile more and more things on top of it and then say, what is good, what is bad?

VCs really like that approach because then they can say, okay, this company has this number, this company has that number, and now I know that company A is better than company B for US operators. Um, you know, taking that view of just, you know, describing the whole company in one number. Sometimes just very, you know, very not [00:09:00] operational, right?

You can't really, you know, there are too many levers to pull, so breaking it down a little bit is better. And that's why I think CAC, Payback is actually good because it, you know, nicely summarizes your sales and marketing efficiency. Right? And then the other one is burn multiple, which is a little bit of a, of a newer thing.

I feel at least it was for. And it basically is asking, so for, um, not only for your revenue generating part, but for everything mm-hmm. . So really how much money you burn. Um, so for, for the money that you burn, how many, uh, how much AI you're able to acquire, like in total, right? And that includes your, uh, product development cost includes your general admin cost includes everything.

And basically the idea is that a good ratio is. , right? So what does it mean? So if you have gotten 10 million of, uh, uh, venture capital, uh, then a burn, multiple of two would mean that you have acquired 5 million of a r with those 10 million [00:10:00] of venture capital, right? That would be a burn, multiple of two.

Um, and obviously if you're less efficient, Your, your sales engine is less efficient if your product team is outsized. If some of these things don't fully work, then means that from the 10 million, you're only able to buy 3 million. Right? Suddenly you have a 3.3, you know, burn multiple and or less, right?

And that basically talks not only about your, um, uh, you know, sales, marketing efficiency, it actually talks about the whole company efficiency, right? So that's why this is a. , um, that is now being brought up more and more, and I think we could go deeper and deeper into all of those efficiency metrics.

They're like 20,000 other ones we could kind of talk about. But I think those are the, uh, predominant ones to, to focus on in my, you know, from my

Bart: perspective. Definitely. And I think those are two very good superstar metrics, especially for a lot of revenue operators. But revenue operators listening to this, are watching the, this podcast.

If they're listening to this and they think, well, okay, yes, well we [00:11:00] are, we do have cat Payback. We, we, we are tracking or burn multiple. What else can we do to actually drive that efficiency? Like, what's, what practically can we do?

Toni: So I think this is, this is where, you know, everyone else stops in the LinkedIn post and in the podcast

Yeah. It's like, hey, you need to be more efficient. Um, and, you know, use all of those fancy metrics and explain to you how they calculated. Um, but, but, you know, screw all of that. Uh, I wanna know how I can actually get more efficient. Exactly. What, what is it that we need to do to tweak those numbers? Um, and luckily for everyone listening, that's what we're gonna talk about today.

Beautiful. Um, and um, and obviously, so I heard it now a lot, uh, from a lot of kind of different people from different, you know, circles. Apparently we are seen as a non Bs, uh, podcast. I've seen that. Yeah. Uh, so we, we were gonna, we're gonna, uh, continue on that vein and, uh, gonna talk non BS about some of the things that, um, you can [00:12:00] do and can think about in order to improve your, your efficiency and your metrics around.

Right. Um, and by the way, if there are things that you think where we are, uh, BS. Write us a message. Yeah, let us know. You know, I, I would like to know the things because sometimes we do, and we

Bart: know someone needs to call us every once in a while.

Toni: Someone, someone needs to call us up. Um, okay, let's go. Right?

So let's go into a couple of, um, you know, tangible examples. Uh, some of them might be a little bit more obvious than others, but, uh, number one, um, and this is, uh, this is a, you know, it may be a difficult one to kind of start out with, but, um, Generally speaking, when you are operating your engine, uh, you are always trying to kind of keep it simple, uh, because that, that just everyone understands that you can communicate it better and so forth.

Um, I think there is a good reason to think about [00:13:00] adding more granularity. Into how you interpret and analyze your engine. Mm-hmm. , um, obviously that adds complexity and so forth, and that needs to be mitigated and maybe you buy grow blocks and that's how you fix it. But, uh, generally speaking, the, the, the, the way you need to think about it is, um, the more granular you can see in inside or into your engine, uh, the better you will be able to find things to tweak, right?

Mm-hmm. , and, and that basically comes from. Perspective of there is no one silver bullet that, you know, changes your efficiency. Um, they're probably. Uh, lots of lead bullets that . Yeah. You have to stack all these, these bullets. You know, that's, that's, that's, that's how you kind of get there. And, um, if your granularity level is too, um, too low, basically mm-hmm.

what that means is you will, uh, you will have a hard and harder time as you grow, uh, to find [00:14:00] those little tweaks. Right? And let's go through some, uh, some potential, uh, some potential examples. So one is, and this is obviously a little bit my favorite here. Um, so think about, uh, for example, process, you know, only processing hand raises, meaning people that requested them or a trial manually.

So through an inbound SDR, however you want to do it, instead of pushing, you know, webinars and or white papers to the sales team as well, right? Mm-hmm. . So, and you know, in order, you know, now why is granularity, why does it matter? Many, many times people just look at the MQL number, uh, and then on the MQL to opportunity conversion rate.

And then they say like, why is it dropping? Or, you know, why we can't, we can't find anything to optimize here. We need to maybe try and figure out the conversion rate, how to get that better. But we can't find anything to optimize here. If you split it into hand raise mql, non hand raise m qls, um, or if he even tweaked the definition of an kernel to only include hand raises, what you will be able to [00:15:00] see is.

Uh, number one, uh, the hand MQs are the ones that are actually progressing and, um, adding people resources to the hand, MQs only will be extremely efficient. Right. Will be extremely efficient. Adding it to the others, uh, will for that cohort will be very inefficient. And I've even had conversations with, um, people in like companies of like a hundred million plus and.

They did. Um, so revenue, uh, and they did, um, they, they were able to do an analysis actually, uh, on how passing, uh, uh, you know, white, white paper, uh, uh, webinar and webinar leads to the sales team actually decreased even the conversion rate of the hand raiser mql. because basically they were swamped. I mean, it's, you know, once you say it out loud, it's like, ugh of duh uh, they were swamped with going through all the other useless leads and [00:16:00] couldn't attend to the really important leads quickly enough.

And as we know, if you don't reach out to them quickly enough, then the converger rate drops and so forth, right? Yeah. So it's not only that. Comparatively speaking, um, you shouldn't have extended those costs and resources to that side, but because you did, you even decreased the efficiency of, of your hand raises.

And again, if you don't have, and this is just one example, and there might be a thousand others in your engine, if you don't have the right granularity level, you will just not, you will just not see this. Right. Um, and then, you know, one, one other piece on, uh, on the granularity side is, um, Root cause analysis.

I'm more and more trying to, uh, uh, realizing, um, how key this is. Um, previously to me it was kind of a second nature kind of thing. Something was off in my own revenue engine and I was like, mm, what could it be? Those five things. Let's ask that person. If it was that, let's ask that person [00:17:00] if it's that. Um, but for, uh, many other organizations enter different roles in United RAVs background.

It's, it's not so simple to just think through it and realize, okay, those are the, the problems, right? Mm-hmm. . Um, but the key here is if you don't do proper root cause analysis and understand what is specifically what is wrong in your engine, you're basically incapable of fixing. AI and, uh, and, uh, the, the root cause analysis in doing this in the right way and doing it correctly is the precursor of finding the right solution.

And again, if you don't have it set up in the right granularity, you might simply not understand why something is, uh, is actually going off right. And obviously this whole thing could start with. Hey, we are not hitting enough opportunities maybe from marketing. Mm-hmm. You know, let's just, let's just go down that route.

So why is that actually right? Um, and the, the answer might be the M two UP conversion [00:18:00] rate dropped. The answer might be that, um, More, uh, you know, white papers and webinars were pushed, uh, but their conversion rate dropped, but everything else stayed stable. It might be that, um, uh, maybe marketing was hiring too late in order to push out that marketing campaign.

It might be that the marketing campaign was pushed out on time, but basically failed to deliver. And the thing is, and you know, there might be 10 other reasons here, and the thing is, if you, if you aren't able to pinpoint what it is exactly, How do you know what you're gonna change? I mean, basically what that would result in otherwise is you yelling at the VP of marketing to get his or her shit together.

Yeah. Um, but that's not fixing anything. Right. And, and basically kind of having the right granularity depth in order to do root cause analysis to kind of pinpoint exactly what's wrong and then address that. that is, um, that is a way you kind of, you know, can drive efficiencies in, in, you know, across your organization.

Bart: Yeah. And, and, and [00:19:00] because I think we talk a lot how there's this inherent logic to your revenue engine, and if you're not going into that, that the, those, those granular details, you're gonna miss a lot of details.

Toni: Yes. Okay. Moving on to something that is a little bit more, um, obvious, I would say. Um, and we are calling it hiring at the right time equals efficiency.

Um, so, so what does, what does that mean? So I think number one, check if your ease can realistically take more opportunities. That's an easy one. Yeah. Yes. Uh, and, and you know, what does it have to do with hiring? Well delay your next hire, you know, basically, uh, you should only hire another account executive If, um, and this was a previous like, uh, VP sales of.

Um, only do it once your existing ease are laying flat on the floor, panting, , you know, catch, trying to catch their breath. Yeah. Um, that's, that's when you should have [00:20:00] another E starting. Mm-hmm. not before. Right. And I think a lot of people still think about this, um, bottlenecking and choking the excess of, you know, for to, to opportunities.

Make sure they work them really hard. Um, I think you should, you know, there's obviously an equilibrium here, but I think you should, um, think about figuring out how many could they take and then give them those and only afterwards, you know, hire someone else, right? Mm-hmm. , um, that might even lead to a quota increase in the force.

So that then would be a real, uh, bottom up, uh, in our measure that you take. And then because of that you could increase quota if you wanted to. Right? Definitely. Um, and, um, That goes hand in hand also with, um, you know, the way you're thinking about staggering your hiring plan. Uh, because you can't, you know, obviously when, when the ISA laying on the floor, you know, catching their breath, It's too late to come to a conclusion of now hiring another E because it's gonna take another two to three months before that.

AE is like in the [00:21:00] c your wrap up time and all that. You obviously need to, you know, you obviously need to do it a little bit before, um, but basically thinking about it, well, uh, maybe instead of thinking like, part wise of hiring an s e e at the same time, maybe should hire, uh, uh, the SDRs necessary for that part to sustain two months.

Have them start early, you know, have them ramp up, have them produce opportunities, and then once the E hits, the E actually sits there from week two of his tenure. With, uh, 10 meetings lined up for the first week. You know, by the way, also the best way to basically cut down your ramp up time. A lot of people are, I think a lot of people are thinking about and so ramp up.

It's not even on the list here. I'm coming up with this ramp up , but a lot of people thinking about ramp ups, like as an inevit, uh, inevitability to kind of, Hey, this is just gonna take time, I think. Ramp up looks like it does because you basically create an excuse for your sales manager to not give that person enough [00:22:00] opportunities because hey, they only, you know, the first month they shouldn't, you know, close anything.

Yeah. Or maybe just a little bit. No, give them, give them the full blast opportunities from the second week after ramp up. By the way, this is how they're gonna learn the fastest. That's how they're gonna close the most revenue. And it might even be that the ramp up is only six months because your sales cycles are three.

From the second week, you know, you're basically being treated like a fully ramped AE. Uh, and you, you're gonna, you're gonna have your second quarter, you're gonna probably hit the full ramp target. Um, sure there's some ah, you know, but that person doesn't really fully know. But how can you cut down the time for that person to get there?

Right. And, and really the, the one and only way to get them there faster is by, you know, sitting, you know, putting them in front of more potential customers and, you know, coaching them on that instead. Showing them another slide deck or something . Anyway, and obviously that goes hand in hand also with, uh, you know, your marketing folks, you see us folks and so forth.

Can you CSM team take on more people and so forth? I mean, there's, uh, more customers. So there's a couple of things around hiring that [00:23:00] you just, you know, be aware of and need to, kind of, need to think through. And if you're more correct with your hiring, you're basically saving. . Um, and that drives efficiency in the end.

Moving on to something that we've been talking about actually, you know, here and there already, uh, CAC, Payback, relocation, yeah. Mm-hmm. . Um, I think there's a whole episode on, uh, on, on CAC Payback and to, you know, move some of those things around. Um, but basically the basic idea here is not just calculate your overall CAC Payback for your revenue engine.

You know, that's gonna give you a number. You will figure out if that number is high or low. Sure. Um, but it's very non-actionable. Uh, what you need to do is you need to, um, you know, break your CAC, Payback down into the different markets, into the different, uh, uh, channels, maybe into some of the different products and so forth.

And basically kind of, you know, navigate through that in that [00:24:00] sense. Right. And, you know, once you have figured out where something is expensive versus where something. , you should think about relocating some of those resources from the expensive to the cheaper one, which then basically in turn will bring down your CAC Payback in that sense, right?

Um, and again, it, it's gonna bring down your CAC Payback, not because you saved on on sales and marketing cost. It will bring it down because you still have the same expenses on sales and marketing, but you will have more revenue coming out of it, right? Investors love that story. It works out all the time, by the way.

But it's, it's, it's a thing. And again, right, in terms of granularity, you can, number one say okay, you know, different regions, different channels, that's already gonna be a little bit difficult. But if you can even go further than that, um, you know, that will just enable you to do those tweakings, uh, in a much more granular level.

I don't wanna blast through this. Yeah. But so the next one is, um, [00:25:00] benchmarking. Yeah. So I generally actually, like who the hell really needs benchmarking? How, how is this really actually helping me? Um, and, and the, the real thing here for me is benchmarking isn't really helping you to get more efficient.

Um, it's, you know, as an operator it's probably going. Against you by the cfo, the CFO's gonna come. Well, uh, the benchmark for this number is actually like, you know, much higher or much lower and, you know, why aren't you getting there? Um, so I, I used to despise benchmarking, um, and not use it very much. Um, but the way I'm actually starting to see it is don't see benchmarking as a, um, , um, you know, as a, oh, here's a gap.

See it as a way to motivate yourself, um, yeah. And, and, uh, and, and motivate yourself with, with a very specific direction behind it. Right? So basically [00:26:00] you look at your revenue engine, you look at benchmarking, uh, you know, against your own revenue engine, and you will see some areas that are green, and you will see some areas that.

right now, you know, okay, I should be paying attention over here. Um, I don't have a clue how to improve it, but this, this should be an intention area. And then what I would suggest to do is, um, find experts that maybe are better here. And it should apparently be easy, uh, to find those because, . If the benchmark is X and you're below it, that means you're below average.

That means a lot of people are above average or on average. Yeah. And you should be able to find them. Right. And where would you find those people? Well, you will find them in all of those rev ops and sales communities. Go there, say, Hey, I have a problem with my opportunity MQL conversion rate. Um, you know, is you, Can, can someone help me with this?

Definitely. Right? And then basically you're gonna come up with like a number of plays and how can [00:27:00] we improve this and are we doing this already? We're doing this already. Oh, interesting. We're not doing this. We thought this is not so impactful, but maybe you should try and actually do that. Um, and that's then how you find, you know, proper ideas for plays to execute to then, you know, Um, improve your, uh, improve your, uh, efficiency, basically.

Bart: Definitely. It, it, we can all agree that, you know, no benchmark is potentially perfect, but I, I think the ability to have something to compare yourself to, to, that's not just a target, but it's something that, you know, like. Other people are able to do this or, or I, I maybe I'm doing great in this one area, but then Benchmark says that in another area that I'm, we're falling behind.

I, I think in any department you can potentially have something like

Toni: that. No, of course. And but my point is it's just not actionable. Yeah. It's just, you know, someone says somehow that you're not good over there. Uh, but there's no way of asking a follow up question. Why am I. Why are other people good? And, and my [00:28:00] point is use benchmarking to, you know, get an understanding where you're good way, you're not good.

And then seek out, um, expertise in order to fix that specific area. And you can go, you know, to, I don't know, winning by design and pay them $200,000 to help you fix it. You can, you can go to, uh, kind of a rev ops community and ask, you can send me a message and, you know, we can have a conversation. But generally speaking, that's, that's how you would actually kind of make it much more actionable, right?

Mm-hmm. , instead of coming to any of those options and say like, Hey, my Payback is, uh, 24, I need to get to, you know, 12, what should I be doing? It's very different to have. Hey, my am quel. So opportunities is like that. What should I be doing about this? Right? It's a very different set of examples and help you can get, again, it goes also back to the granularity piece that we just, you know, talked about earlier.

Mm-hmm. . So the last one, um, the last one, bit of a mind twister. Mm-hmm. . And, and we are now going in Tony Marketing Land and, uh, let's [00:29:00] see how many people are, you know, really willing to follow here. But generally speaking, um, Generally speaking, and this is like, some of this is like a little bit boring, so hey, focus on your icp, on your ideal customer profile.

And the idea is you are probably, um, already in, you know, whatever channel you are in, you're targeting your icp and that's great. And then the idea is, oh, let's put more money into that channel because the channel works out. But the problem is, actually, the channel works out because you connect to your icp and those are usually, you are, you are already connecting to them.

Mm-hmm. and the channel still looks like it's working out, um, because, you know, you, you add more people and the existing ICP that you're connecting to is still paying for the additional money, but the additional money actually didn't bring you more leads. Right. So the marginal, additional dollar that you put into Google paid.

is not gonna get you more leads, but it's still is gonna look like it's efficient because the original 10 [00:30:00] 20% in the first place are paying for the rest. Right? So let's just say everyone understood that, right? Uh, and then that is a, that is a big if right there. Yeah. Uh, the, the idea is basically instead of adding more dollars to, you know, one channel.

Um, the idea is actually to turn around and say like, Hey, let's only add dollars to a channel where we think we have hit the ICP that we are after, not all the other crap that comes afterwards. Um, and then take this additional cash, go to another channel and try and target that ICP again. Go to another channel.

Target this ICP again, because the idea is that the way you convince someone to engage with. You need to, you know, have a certain amount of impressions you need to, you know, pop onto their radar for them to be like, oh, I should probably check them out. Um, and in, you know, if you are distributing your cash across multiple channels where you know the, the sweet [00:31:00] spot ICP of your sits, you are basically able to create that impression or the critical mass of impressions with them faster, right?

These ICP guys will be, think. Jesus, these guys are everywhere. They're like dominating the space. Why do I not know about them? I need to check them out. Um, and that's basically kind of how you can make sure that you, you know, penetrating that ICP in a much better way, much more efficiently and so forth, right?

So really this is a, you know, instead of, uh, you know, going to the end of one channel and then building up a new one because basically as, as deeper you go into one channel, the, you know, the payoff will be low on the marginal. ROI will be lower and lower and lower. Cut that stuff, bring into another channel to try and, you know, surface again for the same ICP and create those seven to eight impressions or that overall like wow, they're everywhere kind of feeling.

And then have them convert. Right? Yeah. And

Bart: that makes a lot of sense. Considering customers today, we're not just [00:32:00] all living on one platform, right? Yes.

Toni: Where they're everywhere and you, you are also not going on this one platform all the time. You also maybe don't see it, you know, the same way. You know, seeing, you know, basically follow your I a.

Mm-hmm. . Um, and, you know, okay, why is that an efficiency thing? Well, you're gonna spend the same amount of ad dollars or marketing spend, um, for, uh, much more valuable impressions, which then, you know, in theory will lead to more conversions from that core icp. Uh, that core ICP will go through your funnel much quicker and happier because they're core icp, they're not fringe.

Um, basically all of that driving efficiency across your whole funnel. , definitely. And,

Bart: and like you said, it, it, it makes the impression that all of a sudden, well this company's all over a place. Yeah. So like, if I'm not interested in them, I'm, I have to see what are they at least about. Yes. So I think those are some really good, practical elements of efficiency.

[00:33:00] And like we said, there's. Hundreds of things you could potentially do to drive more efficiency. And I think, I think that if you, the one thing that you should walk away from this episode is the fact that efficiency should not just be a buzzword anymore. Yeah. You can't just be throwing around, uh, CAC, Payback or burn multiples anymore.

It, you need to have an actual plan of how to actually achieve that efficiency.

Toni: Yeah. And you need to do it from the bottom up. Right. What are, what are the things we're actually gonna do? That then will result in a better kick Payback by the end of the year or something like that. And, and sometimes I'm also saying to all my RevUps friends out there, um, you need to stop the fluff.

Talk about, you know, efficiency and alignment. You start actually doing it, you need to execute it. You need to show people that it can drive those efficiencies instead of just talking about it. Um, and here's a little bit of a laundry list of things you maybe, uh, want to execute.

Bart: Yeah, and maybe if you follow some of the steps, uh, 2023 bait might not be as bad as maybe we teed it up at the very beginning.

There you go. Let's hope. Thank you [00:34:00] bar. Thanks the ones again. It was fun. We'll see you guys again, uh, in a week from now. Good one

Toni: guys. Bye-Bye. Bye.