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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 (00:00.142)
Welcome to another episode of Demand Geniuses. I'm gonna get straight into it today and just introduce my guest which is Louis Fernandez. Rather than do a bad job of giving your background, Louis, do wanna just give us all a quick introduction into you?
Louis Fernandes (00:18.748)
Yeah, firstly, thanks very much for me on the show Tom. Really appreciate being here. So yeah I'm Louis Fernandes. I've been in SAS as an industry now for over 20 years and been in industry itself for over 36, which is either really good or a little bit depressing. I started life off actually as a client-side marketer in B2C and then went from
marketing, ultimately via agency to sales in technology. that's kind of been my journey over that 36 odd years with little stints doing bits and pieces of skiing and sailing in between. But that's a story for another day. yeah, spent the last decade, I guess, in revenue leadership roles, running effectively SaaS scale ups and their revenue functions.
Tom Rudnai (01:17.706)
and I saw there was a stop at Mark Warner along the way which sounds quite fun. There was a little bit of time in banking I think which I'll forgive you for that sounds less fun.
Louis Fernandes (01:17.99)
So yeah, that's me in a nutshell.
Louis Fernandes (01:30.492)
It's where I funnily enough cut my teeth on marketing. you know, it was probably to see, you know, retail banking marketing kind of thing. And it was very good in terms of this was in the days when banks still ran apprenticeships. So I was in fact on a banking apprenticeship. And we went around learning all sorts of things about finance, about law, about sales, about marketing. So it was was quite good education from that perspective.
Tom Rudnai (01:58.958)
I think the art of like the early career rotation has been lost a little bit, right? Because everything is about like feeling a very specific role or specialization. It's quite difficult. We're going off on a tangent already, but let's go down it briefly. I always think it's really hard at the start of your career because you're meant to know what to do and what you want to do. And I'm like, I remember when I was 22, I didn't have a clue what I wanted to do. And there isn't the same like testing ground to go and work that out anymore, is there?
Louis Fernandes (01:59.984)
But yeah, all good.
Louis Fernandes (02:06.821)
Yeah.
Louis Fernandes (02:15.575)
Thank
Louis Fernandes (02:28.54)
Yeah, I think that that's partly true. And I think that that's one of the reasons that I think some of the stuff we're going to be talking about today around, you know, sales and marketing alignment and those kinds of things and how you operate in a whole GTM function, actually, from a very formative kind of point of view, the stuff that I did in banking is actually quite related because I went around, as you say, different departments and learned about how business functions.
Tom Rudnai (02:50.126)
Mm.
Louis Fernandes (02:57.476)
as opposed to just how sales functions or just how marketing functions. And I think as a consequence of which you learn to see things from other people's points of view as well, which is particularly helpful when you then move into leadership roles. know, it's not just about what's right for your function. You have to look much broader and think about it in the context of what are the objectives of the business and also for the people within it.
and how you bring people together to collaborate. So that changes the dynamics a lot.
Tom Rudnai (03:30.594)
Yeah, well, think everything's so vertically specialised now, right, that it's difficult to get the broad perspective across the organisation and as your role moves a little bit away from being head of director level cheerleader for your function and towards C-level cheerleader for the business and advocate for what is best in the aggregate, it's probably quite a harder jump to make if you don't have the early career exposure that traditionally you would have gotten to everything else.
Louis Fernandes (03:52.721)
Yeah.
Tom Rudnai (03:59.918)
Anyway, we digress. I guess coming back to 30 something in your career, is there a step in that that you would say, I always like to ask this, that you would say was particularly formative for you? And I guess you might think in terms of progression, but also just your thinking and your mindset.
Louis Fernandes (04:01.796)
Right, yeah, agree.
Louis Fernandes (04:20.156)
Yes, actually it was towards the end of my tenure at NatWest where I mean this was being 93, 94 and I'd been at the bank for probably five, six years at the time getting on for seven years and we were in the middle of the last what I want to think of as the last big recession. This is the time when people were literally posting the keys for their houses back through letterboxes.
because they were effectively in negative equity. Anyway, at that time, the bank offered everybody voluntary redundancies and I took one. And so it was first time suddenly at the age of about 25 that I was out of work. And that's when I decided to head over to the Alps and become a ski bum. And I have to say that that changed my life. Quite literally, it's...
It's amazing. You suddenly find yourself in an unfamiliar country, working in an industry you know nothing about. And you're in at the deep end and kind of making it up as you go along. again, those formative things that we spoke about a minute ago really translated through. And suddenly you're running a P &L, you're running a business, you're the sales and the marketing, the whole bloody lot. And actually, it gave me a real appreciation.
for go to market, but just not in a SaaS context. What was really interesting was a few years after I made that move, I was still working in sort of the ski industry and I set up my own company. Because clearly at the age of then about 28, 29, I knew everything that there was to know about the ski industry and, well at least I thought it, and set this thing up.
and I then went bust within 12 months. That, in terms of the lessons you learn, better than any education I've ever had, has stood me in really good stead throughout. And now, when I'm approaching things like go-to-market, I'm always thinking of it in terms of, it's like having your own money. What are you gonna do with it? How are you gonna de-risk what you're doing, but still get to the result that you need to get to?
Louis Fernandes (06:44.004)
And I think that that's been particularly useful through the age of free money when everybody sort of was spending willy-nilly on all sorts of go-to-market initiatives in inverted commas that were, in a lot of instances, a pile of shit and just didn't really go anywhere. And then suddenly, fast forward to, you know, the
Tom Rudnai (06:57.262)
Mm.
Louis Fernandes (07:12.826)
post COVID era where you've got interest rates really high, money is no longer free. Pretty much every single SaaS business that I know out there has got some sort of path to profitability project on the run. Because guess what, they didn't understand the unit economics. They were frivolous with money to start off with, scaled people without having the scale of business to support it. And Kelsa Pree's look where we are now.
Tom Rudnai (07:40.888)
Yeah, well, I guess a lot of those companies must have found themselves with people who are very ill equipped to deal with that, right? Because a lot of it is the people who were stars of a company during the kind of zero interest rate period where it's just about throwing cash at problems, right? And so I know you've recently kind of set yourself up as a revenue advisor with magnitude 10, right? But I guess it must be that experience from earlier in your career where the fundamentals of business.
are a lot more in the kind of crosshairs, must have stood you in pretty good stead.
Louis Fernandes (08:19.302)
Yeah, I mean, I remember one of very first bosses turning around to me and basically reciting an old adage back at me, revenue for vanity, profit for sanity. Who knew that was the thing, right? Yeah, I look at today's paradigm and everybody's scrambling for how do we hit EBIT numbers? How do we make sure that we're actually getting some return on capital employed?
How are we actually creating free cash flow? Now again, go back to banking, at least to understand what these terms are, right? Because it was stuff that was important then. But a lot of people use the terminology without really understanding how these things operate or the unit economics that sit behind them. And that again is a huge advantage when you're then talking about how do you really set up a go-to-market function for success.
Tom Rudnai (09:11.512)
Yeah, okay. And then help me, so let's get into that a little bit then. So what would you say the biggest differences are and let's focus on companies where you're setting up a go-to-market motion maybe rather than trying to claw it back a little bit, which I think is a whole different question and probably a much harder task. Like in terms of, let's say I've just raised a series A, I'm looking to build an efficient go-to-market motion.
What are like the fundamentals that you focus on on day one now and how does that maybe differ to 10 years ago or five years ago?
Louis Fernandes (09:47.485)
This is the thing I think that certainly my thinking hasn't changed that much over that time But how thinking per se has changed I think is quite a lot. I mean, let's start with the fundamentals The fundamentals don't change and anybody who's ever studied Kotler will think of the four P's of marketing product price place promotion And you sit there and you go. Well, how do I apply that to GTM? Well, first thing is what's what's my product? What is the product actually?
you know, solving a problem for. It can have all the bells and whistles in the world, but if it's not actually solving a real world problem and has a real world use case and I don't have a proper vision of what my MVP is, then you know, what the hell am I doing? If I don't understand what it is I'm solving for.
or I think it might be this or I think it might be that, or I could be all things to all people, well then I'm screwed before I even start. So being able to really understand what my proposition is, really understand which markets it serves, and then understanding really in detail those intricacies of my ICP, my ideal customer profile, that match that, that's absolutely fundamental.
So I think that that's where I would always start.
Tom Rudnai (11:16.952)
Do you think that's something?
question.
Tom Rudnai (11:24.718)
Cause I think that was something that was also in focus, has always been in focus. The difference has been potentially the way that you then allocate resources to go after that particular ICP. So I'm one of these people, I've kind of been trained as such over the last eight years or so. And ICP has always been a very front of mind thing that you're educated on very early coming into any commercial role. So it wasn't that that was ignored. Like where do you think the...
problem came in how we used to operate before because we still did look at these fundamentals we just seemed to make bad decisions off the back of it.
Louis Fernandes (12:05.712)
Right, okay, quite straightforward. You might think about your ICP, how many people actually really enforce it? And this is where the problem lies, because what we do is we then build compensation structures that reward people for closing deals, regardless of who the deal is with, whether it's the right deal or the wrong deal for the company, which is paying on revenue. So immediately you start going down that kind of a route, and it becomes, well, so long as I can line my pockets, what do I care whether it...
actually fits an ICP or not. It doesn't matter to me, I still get paid. And that's where bad behaviors then start creeping in. And because people aren't paying attention to that, you then end up effectively selling things to people that were never a good ICP fit for you in the first place. And certainly probably not right for the proposition. At which point you implement something, it doesn't go well, because it was never gonna be a fit in the first place. They churn.
your cost of acquisition goes through the roof and your lifetime value is in the toilet.
Tom Rudnai (13:11.074)
Yeah, well, it's interesting. It comes back to me. What I hear there is it comes back to a similar problem to what we spoke about before right at the start, which is specialisation. And I think one of the things we did very smartly in SAS is we realised that it makes sense in a commercial function to specialise and have different people own different chunks of the bio journey and things like that. But what we probably did that I don't think was that smart is we built KPIs around those specialisms and that kind of distracted everyone from the broader goal. So
Louis Fernandes (13:12.378)
There's your problem.
Tom Rudnai (13:39.148)
As a content marketer, you got your KPIs around top of funnel metrics. You then move down funnel in marketing and then into sales and everyone owns just their piece. We got very fancy with how we try and attribute that to the whole, but it leads to people going after the wrong things.
How, guess, so how would you approach it differently in terms of structuring something now? Like if you were gonna go into a new organization, how would you approach aligning, like creating incentives for different teams in a way that gives people ownership, which I think is what that system does very well, but still keeps everyone's eye on the broader price?
Louis Fernandes (14:00.199)
There's only one thing.
Louis Fernandes (14:15.676)
Mm-hmm.
So it starts with the overarching objective. What is the job to be done? What are we trying to achieve? And then you have to be really specific about how you define it. We are looking to achieve XYZ revenue growth in these markets, selling to this ICP with this proposition. Right? So everybody then needs to align around that. So we start building out comp plans.
Personally, it's not about things like getting really tactical around, well, actually what I need is I need, I'm gonna pay somebody on a number of leads. Who cares? Do those leads convert? Do those conversions lead to revenue? And do they lead to revenue in the ICP accounts we've defined? If the answer is no, why am gonna pay for that?
So you've got to get aligned around making sure you understand what is it that we're paying for that drives the behaviors and compensation drives behavior, who knew? So you get to the result that you want. If you're not aligning around that result, and this is across all departments, then any surprise that you don't get there.
Tom Rudnai (15:37.144)
think the challenge is, I guess, because I'm completely with you, guess to play devil's advocate a little bit, the flip side is everyone focuses on the single north star, which is always my approach, right, of revenue, but you then lose ownership of your goal a little bit, right? Which I think is another challenge.
Louis Fernandes (15:55.727)
Is it just revenue though? But I challenge you on that Tom, is it just revenue or is it profitable, sustainable, predictable revenue?
This is where the definitions become important. Because if you just say, actually, all I'm interested in revenue growth, okay, I can get some short term revenue growth and I might sacrifice next year to achieve this year's targets. But then it becomes about sustainable, predictable, repeatable, you know, all those good things into the right ICP with the right value proposition. And there are some solid lessons there from other people. You only have to look as far as
Things like a book I'm sure you're familiar with, Crossing the Chasm. mean, Geoffrey Moore talks very, very eloquently about don't start picking off too much too early because you end up blumonging and getting distracted. And the same is true with multiple different sales motions. You're too early in your revenue journey to suddenly have three, four, five different sales motions targeting different segments.
because you don't have the scale structure or resources to be able to do it. And then guess what? Your economies of scale don't work out. So your unit economics collapse, your unit economics collapse, suddenly your profitability is down the toilet. It all becomes a vicious cycle. So you've got to really think about these things and be very intentional about which markets you're entering, when you're entering those markets, which customers you're serving.
What is it you're serving them with? What are the problems you're trying to solve for? And can you do it in a sustainable way? And then you align the teams around those, you know, North Star goals.
Tom Rudnai (17:41.838)
Yeah, and that's where when in organizations I've been in, I've seen all of this break down. And if we're talking about sales and marketing alignment, that's when it breaks down, right? It's when you don't have that intentionality and so people are going after volume in their isolated kind of arena, right? And then I was always on the, think we've both got a foot in both the sales and marketing side, but I was on the enterprise sales side and you get that classic thing where you're getting leads through, the leads get ignored because they're not good leads and things like that.
Louis Fernandes (17:59.207)
Yeah.
Tom Rudnai (18:12.458)
Do you think it's something, I think what always makes that difficult in practice is the way that we're funded and the kind of short term cycles that we operate on, right? So typically as a startup, you raise and you give yourself 18 to 24 months of runway and everything becomes about hitting the next milestone within that. Like, do you think it's almost just an inevitable consequence of the VC model that we typically rely on though, that...
you have that element of short-termism and trying to cram as much into that next window as you can.
Louis Fernandes (18:47.622)
think it's as much about expectation management, right? You so I'm desperate for funding, I go to a VC, I've got this deck that has all these KPIs that we're going to hit in the next 12 to 24 months, none of which I've actually bothered really calculating, but it just sounds good on a pitch deck to get my money. Now I've got my money. Hurrah. Now guess what? I'm now tied back to those metrics that I plucked out of thin air and didn't really think about.
And you know, the VCs haven't got a clue anyway, because they're like, yeah, great. Fantastic. This is is a punt we're prepared to take one of many. Or at that's how it was. I think it's a little bit harder now. And people are educating themselves a bit better now about what the risks are involved in a particular proposition, and certainly in the market they're entering into because let's face it, the majority of software categories today are Red Oceans. Right, there were very few categories.
Tom Rudnai (19:23.821)
Hmm.
Tom Rudnai (19:39.534)
Mm-hmm.
Louis Fernandes (19:45.533)
the Blue Oceans, the big opportunity that everybody's now grasping onto is AI. You know, because everybody's got funding for an AI project, right? Whether I know what I'm going to do with it or not is a completely different conversation. But that's not the point. What I care about is the fact that there is the AI piece there and suddenly I'm going to, you know, pour my eggs in that basket and off I go.
The right question to be asking is to say, actually, if we want to create blue oceans, it's about how do we apply the AI to particular use cases and then show people what the art of the possible is, and then goes back to education. And it's sort of a slightly different model to the one that we've been used to for probably the last 10 years.
Tom Rudnai (20:33.368)
Yeah, it's something that gives me hope, I think one of the challenges, and if I put myself in the shoes of a marketer here, right? Is that a lot of these expectations are put on you. And so you may know the way that you ought to operate and what kind of good marketing or the right thing looks like, but it's very difficult to do that in the face of all this pressure. I think as traditional software companies are no longer like the shiny, sexy thing for funding.
it hopefully means that better practices or better, more realistic expectations cascade down and it makes it actually easier for the person at the end of the chain. guess from your experience and it's quite interesting. I'm trying to kind of translate this down to folks who are working a little bit more on the ground. From your experience in the kind of C suite of these organizations, what advice would you give to a marketer who maybe is feeling pressure to make
what you would say are bad decisions in terms of how they can kind of push back against that. Does that make sense?
Louis Fernandes (21:40.249)
Know your numbers, know your numbers, be commercial about it. You know, it's one of these things. This is where the intersect between what we think of as B2B marketing and, you know, we've got ourselves to blame sometimes on this front where we say, actually B2B marketing, it's more about, you know, demand creation and getting leads. It's not, we need to think about marketing in terms of the full marketing mix. It's a strategic function.
that determines which markets we enter into, how we position our proposition, how we even do things like pricing and packaging of those products and services, and think about it in terms of what is the impact that it makes them to top line. So if I was a CMO, I'd be saying, I want to have ownership of the revenue number because we have to be contributing towards it in a meaningful way. Likewise, if I'm a CRO,
Again, absolutely I have accountability for the revenue number, but I'd also be sitting there thinking about what do I need to do to create that sustainable sort of cycle of incoming pipeline. Tactically, if I'm just thinking about demand generation and creating a volume of leads, that's a zero sum game. It doesn't lead anywhere. I need to be thinking longer term. What am I doing from a brand perspective?
And actually one of the go-to bits of work that I think I would encourage any B2B marketer or any B2B revenue leader, CRO, VP sales to look at is some of the work that Les Bonet and Peter Field did, the long and the short of it. know, having a look at how does brand activation really interact with sales activation?
understanding those paradigms. So that would be my sort of guidance on that.
Tom Rudnai (23:44.588)
And give us a little bit more context, because I'm not actually familiar with that work. Give us a little bit more context on what that was.
Louis Fernandes (23:52.828)
Okay, so the long and the short of it talks to long term and short term implementation of marketing strategies. The majority of B2B marketers, will look at again, I'm running a campaign to create demand so that we drive pipeline for this quarter, next quarter. Very few people think about brand. Yet, if you look at the biggest brands that there are in software,
They're like the sales forces of the world, the oracles, the SAPs. We sort of look at those and the Microsofts, we sort of look at them and we go, hang on a minute, we're startups, we're cool, we're hip. Why are you in business in the first place? Because you want to become one of those mega vendors. That's your ultimate goal. You want to make the money, you want to drive the revenues. Look at what they've done. They have brand presence. They're front of mind for every Tom, Dick and Harriet out there.
in a buying cycle. And the ones that are category leaders in any particular software category, they're the ones that funnily enough invest in brand.
That's what I mean. So long-term bit and long-term brand activation. Actually brand activation is just long-term sales activation. That's what it is. You're front of mind. People know who you are. They know what you stand for. So when I enter into a buying cycle at that top of funnel, I'm thinking about your brand ahead of anybody else's. And we hear so much about the dark funnel these days. 70 % or 80 % or whatever number it happens to be this week.
of the buyer journey is completed without ever involving anybody from sales. Well, if that's the case, you need to be present in that dark funnel so that actually when people are making purchase decisions, you're part of the consideration set.
Tom Rudnai (25:45.336)
Yeah, well I think a lot of what we've described is just- No, it absolutely is, it's really interesting. A lot of we've described, what we've talked about here I think is that historically there's been a bit of a tipping of the scales overly towards short term and what we're starting to see is people accept there needs to be a little bit of a recalibration at the very least somewhere back into the middle. I think it's interesting hearing you talk about brand as well because it's something that someone who's from, I would often expect someone who's from more of a CRO type background.
Louis Fernandes (25:49.147)
Is that making sense?
Tom Rudnai (26:13.71)
to kind of roll their eyes a little bit at brand, right? Because I think historically brand has some quite unhelpful connotations of unmeasurable kind of wishy washy marketing. we're working on brand is kind of proxy for we're not doing anything tangible and we can't show that we're having an impact. Do you view it differently?
Louis Fernandes (26:35.141)
Don't tell that to a marketing executive at Unilever.
Tom Rudnai (26:38.242)
Say that again,
Louis Fernandes (26:43.739)
Tell that to any marketing executive at Unilever.
Tom Rudnai (26:43.788)
Hmm.
Tom Rudnai (26:49.272)
Say a bit more about what you mean by that. Yeah.
Louis Fernandes (26:53.755)
drive sales. It's like, you know what, the way that we the problem that you have is that a lot of the B2B marketers that are out there haven't understood what brand is, because they haven't come up through a traditional, you know, marketing route. You go to any FMCG marketer, they understand the power of brand. Not only that, but a brand director and FMCG, they are responsible for revenue. They they own the P &L, they own the revenue number, and they own
Tom Rudnai (27:14.958)
Hmm.
Louis Fernandes (27:23.001)
market share and woe betide you if you make that disappear in any way shape or form. Can you imagine if you own something like Pampers as a brand or Kleenex or Gillette? This is about sales kid yourself not and the amount of money they invest in brand is it has a direct relationship to the revenue that it drives for those businesses in the same way that
If you look at Salesforce as a great example in a B2B context, the value of the brand at Salesforce, they reckon, if you wanted to achieve the same output, you would have to spend $3 billion a year recurring to get the same impact that Salesforce has achieved because of its brand.
Tom Rudnai (28:15.394)
Hmm.
Louis Fernandes (28:18.615)
And whether you think it's a great product or whether you think it's actually it's had its A day and it's a bit of a me too, you know, it doesn't matter. It's still got a share of mind.
Tom Rudnai (28:27.854)
Yeah, absolutely. Well, I know that there's a lot of talk about where you can find a bit of a moat these days, And generally speaking, technology is not the moat it was. And one of the last ways a lot of people would say that you can establish a moat is by building a brand. The other thing I think is useful is I think just changing the perception of what exactly constitutes brand. in my definition, brand.
is less about like the flashy activation that you've done and a lot more about the fundamentals of who are we, as you said, who are we, who do we serve and how do we build a narrative that stems from that and goes through every element of the business, right? Every touch point that we have with customers and build kind of an element of story into that from a content marketer's perspective that comes down to understanding, okay, what's our content IP?
Like what's our unique perspective on the world and how can we make that flow consistently through campaigns? Whereas I think what brand has often become associated with is particular channels that are long-term and hard to track.
Louis Fernandes (29:38.64)
Yeah, but again, I think this is one of the big confusions of tracking and attribution. So in so many organizations, we have this deceit or conceit, but it's all about attribution because why am I actually looking to measure attribution so that I can get credit for achieving X or Y or Z because that's how I get paid.
rather than the right way to look at it is to say, the reason I want to track attribution is so that can understand what I need to tweak to get the best possible result and optimize our revenue engine. Very few organizations use it for the latter. Everybody's looking at it for the former. Not only that, but actually I have a bit of a bug bearer around attribution, because most people do it in either first touch, last touch, or a W kind of attribution model.
Actually, if you want to do proper attribution, you need to go to econometric modeling, which is expensive and complicated, and nobody really does it.
Tom Rudnai (30:33.23)
Well, and I think the challenge that you get has a really damaging effect in an organization because people start just optimizing for the model. People work out how to game a model very quickly and they start building for that. How would you say, if you're like, where does that leave you in terms of attribution? Is it something that if you were to go in and see our own organization tomorrow, would you prioritize getting attribution set up but do it right? Or are you more of the belief that it's just awesome?
Louis Fernandes (31:03.131)
No, I wouldn't prioritize attribution at all. I'd prioritize selling stuff. You know, it's about, let's make sure we are selling to our ICP. Just bear with me one second. Can we cut for a sec? Because I've got somebody at the door and my dog's going mad. Give me two seconds.
Tom Rudnai (31:16.856)
Sure, I can hear your dog. Sure, yeah.
Tom Rudnai (31:59.374)
That's right, the dog has very strong views on attribution.
Louis Fernandes (32:00.838)
Sorry about that.
Tom Rudnai (32:04.078)
Cool. Are you struggling by the way, just while we're paused, are you struggling with the connection at all?
Louis Fernandes (32:08.741)
Yeah. So where are we?
Louis Fernandes (32:14.031)
Yeah.
Louis Fernandes (32:18.659)
It's saying it's trying to reconnect make sure you have a stable internet connection and I do but so I don't know what's going on there
Tom Rudnai (32:23.69)
Okay, I think it's okay. I just find you pause a little bit. sometimes it just makes it a little bit difficult. But we can we may as well well plow on.
Louis Fernandes (32:32.26)
Yeah.
So let's start on, because you asked me if as a CRO going into a new, how would you set up? I wouldn't say let's start with that.
Tom Rudnai (32:37.389)
Yeah.
Tom Rudnai (32:43.82)
Yeah, so yeah, so like, where does that leave you in terms of the way that you approach attribution? Is it something that you will focus on when you come into an organisation but do it right? Or is it something that you just think not doable and therefore let's not try?
Louis Fernandes (33:01.293)
It's not that it's not doable. It's just not a high priority. The real priority is making sure that we are selling into our ICP and selling consistently. So let's make sure that we understand how our revenue model works, first of all. So number one, what are we doing in terms of net new names? Number two, and this is again something that I think a lot of CROs get wrong because most CROs come from a net new name background. Let's be honest.
But what they're not then paying enough attention to is what's happening in terms of retention and what are we doing in terms of expansion into existing accounts? Because again, the way that an ARR business works is that it's maintaining the annually recurring revenues and then building on those with either expanding into those existing accounts or winning new ones. When you get to a certain scale, so we talked about some of the mega vendors.
The mega vendors aren't really selling any new names. What they're doing is they're churning the existing accounts they have with new propositions, new capabilities, expanding the footprint. That's how they're making their money because very few people are not working with those guys, right? If you think about, say, Office 365, people are moving from one instance to the next to the next, and then they bolt on Teams, and they bolt on something else. But very few...
are actually saying, well actually I'm buying this for the first time. So it depends where you as a business are on your revenue journey. And it is very different from nought to one, one to five, five to 10, 10 to 20, 20 to 50. That's where you're starting to really scale. And it really becomes about that retention piece. 50 to 100, we're looking at not just retention, we're really getting into expansion.
Tom Rudnai (34:42.168)
Hmm.
Louis Fernandes (34:54.873)
and they quickly outstrip net new names, quickly. And that's where you need to then start focusing your attention on what elements within my revenue model are the ones where I need to be focused on. So I start thinking about, again, what are the important metrics that matter in my business? Net retention rates, gross retention rates. You know, we focus on ARR. I always think about ARI.
And it's not a financial measure. It's annually recurring impact. If I continue to have impact with my customer, guess what? They'll spend more money with me. Rather than, I don't focus on the customer and I'm more focused on winning new business. And we end up in the classic Kotler world of the leaky bucket.
Tom Rudnai (35:24.248)
See later, bye.
Tom Rudnai (35:45.358)
What role do you think marketing has to play in delivering impact? Because I often think that that's one thing that's actually quite often overlooked.
Louis Fernandes (35:47.931)
It's still the same thing.
Louis Fernandes (35:59.258)
I think it's really important to be able to then articulate the impact that you're having for existing customers and turn that into not just case studies, but reasons why people would buy. It's interesting, I was having this conversation just the other day and we talking about sales methodologies, so things like spin selling, challenger, those kind of things. Let's take spin selling, really, really simple. So the acronym, for those that don't know it.
S situation P problem I implication and needs payoff If I break that down the situation the pain and the Implication are all things that as marketers we can talk about So what I could be saying is something on lines of this is a customer. We've worked with that looks like you This is the paradigm they were in facing these kind of
challenges that everybody in that operating model faces. Macro-environmental, know, competition amongst rivals, whatever it happens to be. These are the specific problems they had within that context. This is how they went about approaching it.
changing some of the methods of operating, transforming X or Y or Z, whatever it happens to be. Oh, by the way, this is how we help them do that. A piece of technology may have been a part of that solution. Let's talk about that briefly, very briefly. Then we turn around and we say, and these were the outcomes. This is the change of paradigm, before and after. And we're using classic storytelling.
Tom Rudnai (37:32.622)
Hmm.
Louis Fernandes (37:46.554)
And in fact, there's a sales methodology that talks exactly to this command of the message. You know, it's about having that consistency of message, ultimately, throughout every interaction that we have, from marketing to sales to CS, it's a consistent story. And we take people on the journey with us. And it reminds me a little bit of something classic that
you know, what was it, 2009 when Simon Sinek first burst onto the scene with, start with why, and he said, people don't buy what you do, they buy why you do it. Classic storytelling.
Tom Rudnai (38:18.798)
Well, I I think, guess where was getting at with my question is often that I think marketing and that storytelling element often ends at signing a customer, right? We think a lot about go-to-market efficiency increasingly, but what we don't necessarily think about is like the efficiency with which we're able to deliver value. And there's still a lot of emphasis then on that always being either a product or a customer success problem to solve post purchase.
rather than something where actually marketing can add a lot, awful lot of value to adoption, to educating on new use cases, but it's often not a priority. Have you seen anyone do that well and is it something that you've seen become more of a focus or?
Louis Fernandes (39:02.029)
Yeah, and it's interesting actually, I don't know how familiar you are with the folks at Winning by Design. So Winning by Design, yeah, West Coast, Jaco Van de Cooge, if you've never had any interaction with him, he's worth talking to. Brilliant guy, know, super motivational and gets it. But what he's talking about with things like the bow tie model is that it doesn't stop at clothes. In fact, he doesn't even recognise clothes.
Tom Rudnai (39:04.119)
loosely,
Louis Fernandes (39:31.78)
He talks about mutual commitment. He talks about first impact. And then he talks about that recurring impact over time. And this is where, you know, traditional sales models always stop at, we've closed a deal, hurrah. It's not, that's the start of your engagement really. That's the start of which I've made a commitment to you and I've promised you an outcome and a result. Now I've got to deliver that and prove.
I can do what I said I would do. That's where the recurring impact happens. That's where we build trust. That's the point at which I open the door to you being able to say to me, Louis, I trust you because you delivered on your earlier commitment. What else can you do for me?
Tom Rudnai (40:20.174)
And then I guess, so last question on this and then I'm conscious of time, we can get into some quick fires. I think there'll be a lot of CMOs and heads of marketing who listen to this and like, this all sounds great. That's exactly how I want to operate. They feel held back by the fact that they probably sit under either a CEO who doesn't quite get the kind of things that you're talking about or one of those CROs that used to be the best sales rep in the organisation and has gone up to CRO that way. Like.
What would you like any practical advice for them to start trying to create this change internally when maybe they're not completely empowered to do so and they are held back by their current isolated goals?
Louis Fernandes (41:02.363)
again, it's all about the numbers. Follow the money. As I think it was famously said during Watergate, know, understand the economic model, understand it as well as your peers in revenue and be part of that conversation. Be commercial. Don't just be marketing. Be able to talk finance. Be able to talk
these other languages. So this is the whole point. The reason I think a lot of organizations fail is because the people at that sort of C-suite level don't speak each other's languages. Yet one of the things that we learned from Challenger, if nothing else, that, you know, was teach, tailor, take control. So maybe educate people about how things could be done differently. Tailor your message, depending on the audience you have, and then that...
Tom Rudnai (41:59.288)
Yeah, it's funny, it's one of my kind of bugger bears at the moment is I think, I think marketers often suffer with the fact that they're kind of put in a box within their organisation and they find it very hard to break out of that. But it's ironic because the core skill set typically of a marketer and a content marketer is storytelling and building a narrative. What I think typically they do a very bad job of is directing that energy internally. It's all directed out kind of externally. And I think that's where there's a big opportunity to kind of evangelise what you could do.
Louis Fernandes (41:59.58)
you to take control.
Louis Fernandes (42:30.742)
Thank you.
And when I made the transition from marketing to sales, guess what I did? I did exactly that. I just started storytelling internally to win effectively support for some of the initiatives I wanted to do. And within sales organizations, particularly at SAS, S-A-S that is, and HPE, I have license to do some really innovative stuff in what might be considered
Tom Rudnai (42:38.552)
Mm.
Louis Fernandes (43:03.045)
quite monolithic organisations, mainly because, what drilling going on now in the background, I'm so sorry.
Tom Rudnai (43:04.632)
Hmm.
Tom Rudnai (43:09.934)
That's fine we'll go through it we'll work through it.
Tom Rudnai (43:17.262)
It's
Louis Fernandes (43:18.811)
Two seconds.
Louis Fernandes (43:23.173)
Fuck me. Cut that bit out. anyway, yeah, so because in these monolithic organizations, I had license to go and do these things because I was talking about commercial outcomes that had impact.
Tom Rudnai (43:46.158)
you
Louis Fernandes (43:49.735)
up. Shall we do some quick fire quickly and we can edit this and splice it later?
Tom Rudnai (43:52.78)
Yeah, let's do some quick fire questions. Cool, right, let's get into that now. So first question for you, Louis, an AI, an AI use case or an AI tool that you love that just blew your mind.
Louis Fernandes (44:10.491)
I just use ChatGPT lots and I use it as a sparring partner.
Tom Rudnai (44:14.018)
Nice, think that's one of the biggest ways that it's changed my life is just like the immediate feedback on something. I don't expect it to give me anything massively new, but it can kind of help me unlock new ways of my own thinking.
Louis Fernandes (44:32.419)
Yeah, and I think that's the right way of viewing it because a lot of people use it as a substitute for critical thinking. I use it as way of augmenting my own critical thinking.
Tom Rudnai (44:38.892)
Yeah, and I do that as well sometimes, but it's something I have to catch myself on. I think it's very easy to forget how to think these days. Second question, so for you personally in your career, what's like a skill or a trait that would you say has been the biggest needle mover for you?
Louis Fernandes (44:59.436)
being able to span both sales and marketing. That's my superpower.
Tom Rudnai (44:59.438)
Hmm.
Tom Rudnai (45:04.14)
Nice. Is there a way that you can advise someone coming up who maybe hasn't done both and have the benefit of a long career, what's a tip to someone in marketing who wants to better understand sales for the best way that they can go about gaining your superpower? Short.
Louis Fernandes (45:25.307)
Become a salesperson for 12 months. Carry a bag, do the job.
Tom Rudnai (45:31.118)
Nice, simple. Another question for you. This is a bit more fun. What's the biggest fuck up in your career?
Louis Fernandes (45:43.836)
Oh, definitely losing the company when I was 28 because I thought I knew it all. That was was that's an easy one. I absolutely fucked that up. And it was basically my own arrogance that got in the way of it. But like I say, out of out of bad comes good and every cloud has a silver lining. The silver lining is I learned so much from that experience. But I'll tell you what, I'm gonna fuck it up like that again.
Tom Rudnai (46:08.298)
If you could go back in time to, I think you said it was 28 year old Louis who's just starting that business, what would you say to him?
Louis Fernandes (46:19.429)
Don't change anything.
Louis Fernandes (46:24.891)
I mean it. It's like the lessons that I learned, I wouldn't have learned those lessons. I wouldn't be sitting here now. I don't regret anything. It's all been part of a learning experience. And again, I was reading something by an ex boss of mine this morning, a chap called Tice Van Santen, and it really resonated with me. It's not the destination, it's the journey you take to get there. And it's very true. The journey is what makes us.
Tom Rudnai (46:28.45)
Yeah, fair enough.
Louis Fernandes (46:50.435)
If you don't do the hard yards and you don't have the hard knocks, will never learn anything. Be resilient about it in the future.
Tom Rudnai (46:56.504)
think the challenge is when you're in there and you kind of feel it, like it's something I struggle with massively, trying to found a business, right? You're doing something that you don't really know how to do. Yes, you can look back at it. You can either look at other people or look back at things when you've done that before with that very sensible perspective. It's so hard to tell yourself in the moment.
Louis Fernandes (47:22.151)
And this is where IBM used to talk about the DIKW pyramid. D data, I insight, K knowledge, and at the top of that W wisdom. And it comes with lines here and gray hair here.
Tom Rudnai (47:36.652)
Nice, I need some of that then. Okay, and then final question before I let you go, Louis. Recommendation for everyone in terms of a book to read, a podcast to listen to, a thought leader to follow.
Louis Fernandes (47:52.332)
Well, the podcast is easy one. The What's Broken in GTM and How to Fix It podcast with myself and Simon Daniels. That was easy. And then, in all seriousness, the one that I'm really, really into at the moment is Diary of a CEO by Stephen Bartlett. It's absolutely fascinating. He's got some amazing guests. So that's definitely a podcast to listen to.
The other one, and I'm gonna do two podcasts, because I can't help myself, is Trip and Trip US. So the rest is politics and the rest is Politics US. If you like car crash television, that's it. Then the books, again, I've pointed to it already, but it's not that it's a great read.
It isn't, but it's got some nuggets in there that are fantastic. But I would point towards the Long and the Short of it by Binett and Field. It's worth reading as a marketer. It's worth reading as a revenue leader because you get a perspective on a couple of different things. But the other thing that I would read right now or certainly get a hold of a copy of and go through it is Revenue Architecture by Jaco van de Koetsch.
Really, really good. Yeah, so hopefully that's a few tips.
Tom Rudnai (49:10.104)
Yeah, and for people at home who don't like books, Jacko has done some really good podcasts as well, which is where I learnt about the whole kind of revenue architecture methodology. So if you'd like to have it spoken to you, he's great at that.
Louis Fernandes (49:19.056)
Hey.
Louis Fernandes (49:24.823)
or watching on YouTube, the energy is insane.
Tom Rudnai (49:26.048)
Nice. Okay, I'll look forward to that then. Cool. Louis, thank you so much for joining us. It's been really interesting to pick a brain. Normally at this point, I ask if there's anything that you would like to plug, but you've cheated and you've done that already. So I'm not going to give you that opportunity again. That's payback. Been a pleasure. Thank you for joining us and everyone listening. Thank you for listening.
Louis Fernandes (49:42.713)
Aha!
Louis Fernandes (49:52.005)
No, thank you for having me on board, Tom. I really appreciate the opportunity.
Tom Rudnai (49:52.994)
Awesome. See you soon.