Is your GTM broken? What do you even look for? Why does it matter?
That's just some of the points we cover in this episode. Besides giving you four clear things to look out for - we also share some solutions. The outcome? You should see improved performance & efficiency.
Mentions
David Sacks & Jason Lemkin at SaaStr
GTM consortium
***
That's just some of the points we cover in this episode. Besides giving you four clear things to look out for - we also share some solutions. The outcome? You should see improved performance & efficiency.
- (00:00) - Introduction
- (03:09) - The stakes
- (08:35) - Disconnected operations
- (10:20) - Reporting isn't aligned
- (15:08) - No shared language
- (22:03) - Disconnected execution
- (33:28) - Wrapup
Mentions
David Sacks & Jason Lemkin at SaaStr
GTM consortium
***
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.
***
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✉️ Email: podcast@growblocks.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: Hey everyone. This is Toni Holbein from Growblocks. You are listening to the revenue formula with Toni and Mikkel. In today's episode, we're talking about the 4 signs that your go to market is probably broken, and we're gonna talk about solutions to each. Enjoy
[00:00:18] Mikkel: so I was thinking, you've been away, lazy fucker.
[00:00:24] That's right. Just snowboarding. And I'm so disappointed by the way that you had just have 1 board not 2, but let's leave that aside. But I was like, surely, there's gonna be an intro, a story that you kind of, you know, you sat on the flight home or you drove, I don't know, and you're like, I'm gonna go back. It's gonna be Monday.
[00:00:42] What I'm gonna do, I'm gonna get in the studio and record with Mickle, And, of course, I'm gonna have this amazing story to tell.
[00:00:50] Toni: So, I mean, I don't actually, but I gotta say,
[00:00:55] um,
[00:00:55] then I haven't been snowboarding for 4 years. Because, you know, kids, and, um, you know, you do this once or twice so you do this the first day, the second day.
[00:01:06] Yeah. By the by the third day, basically, couldn't move anymore. It's like
[00:01:10] Mikkel: Yeah. Your
[00:01:11] legs hurt. Your feet hurt. Your
[00:01:13] Toni: But the thing is the the second you're then on the slopes, everything is fine again.
[00:01:17] Your body works again because, you know, the fear of falling is, like, too much. Um, but, uh, but otherwise, the second I came home was, like, I can't move anymore. but luckily, there was nothing broken.
[00:01:31] Mikkel: That's good, because we're gonna talk something else that might be broken. So thank you for that beautiful segue.
[00:01:37] Toni: you go.
[00:01:38] Mikkel: Someone's done their homework, I think. Uh, we're gonna talk about the go to market. and The signs that it might be broken.
[00:01:44] Actually, And some of them hopefully are not there. Let's hope. um, but this
[00:01:49] Toni: everyone is there. I think everyone is
[00:01:50] Mikkel: Let's see.
[00:01:51] Then at least you can start fixing it. And this is actually pretty important. It's pretty important because a lot of stuff has happened over the last couple of years. Right? So there's a lot of conversation around what how does SaaS actually work?
[00:02:03] Well, How does that business model hang together? And we've gotten really smart around it. We've developed all these amazing tools and functions and stuff. And it goes from, you know, awareness, to acquisition, to a customer, to retention, to expansion. It all hangs together.
[00:02:19] And right now, we have the challenge that This growth at all cost. The GAC. GAC? It's kind of over. It's done.
[00:02:28] It's efficient durable growth. And you kind of wrote a, uh, rev letter and also LinkedIn post post about how that's actually shifted a lot of businesses at the moment and, you know, explaining a lot of the pain we're seeing. So layoffs,
[00:02:43] VCs
[00:02:43] stuck with deals that they can't get rid of. and All that, you know, all that mayhem, basically.
[00:02:48] Toni: The whole the whole not the industry. The whole ecosystem is kind of effed right
[00:02:52] Mikkel: now. Yeah. It's kind of unwinding and And resetting and I think it's kinda normal when you have that kind of massive shift that the holy crap moment. Basically, um, you realize that, hey, this is This unprofitable, untenable path we've been on, is not gonna work no more.
[00:03:09] Toni: I think what's really important for everyone, you know, listening to understand Is I think there's a lot of dramatization going on right now. You and I are playing
[00:03:18] Mikkel: Yeah. Yeah. Just a
[00:03:18] Toni: a little bit.
[00:03:20] Mikkel: We're selling the episode.
[00:03:21] Toni: you
[00:03:22] Doomsday has come and passed, and you're basically dead
[00:03:25] Mikkel: already. Repent.
[00:03:26] Toni: Yeah. Exactly. Pay us a thousand dollars, maybe your souls will get, you know,
[00:03:31] Mikkel: Hey. Hey. At least we're not selling courses online. Yeah. Yeah.
[00:03:35] Toni: Um, so the, um, the thing is though, uh, so SaaS is now what? Like, uh, 25 years old,
[00:03:41] Mikkel: 25 Yeah. I mean, we had Dave Boyce on the show. and Yeah. It's 20 years.
[00:03:44] So
[00:03:44] Toni: Yeah. Um, and, um, so this works. Right? Kind of the the idea of that delivery system works. Then you don't pay a million bucks 1 off, and then come 5 years later and do a million bucks again.
[00:03:58] Um, but instead, do like smaller, Um, small entry barriers, maybe pay only 50000 bucks and, you know, and so forth. Right? So that works. Uh, that's great. Um, then we had this whole, Um, you know, normal growth actually up until the 2019, uh, 2020, something like that.
[00:04:16] And really, this is, Um, this was sign you know, signified by the public markets actually by a median multiple on ARR of around 6. So what does that mean? So you have a a annual recurring, uh, revenue, and, uh, you are being publicly valued. So they looked at public companies, And they saw that their market capitalization basically with the the valuation. Yeah.
[00:04:39] That's public talk for valuations. It's the same thing. Their market cap, Um, was 6 times the AR, which makes sense because it's re recurring and you're growing and and therefore, it's like, okay, you know, it's not 1 off. It's not 1 x because, hey, this stuff will continue to come in. Right?
[00:04:56] So that makes sense. what then happened, and this is what basically broke the system, Is, 0 interest rates. Mhmm. Basically, COVID happened. Yeah.
[00:05:06] Uh, digital just went through the fucking roof. Everyone was e commerce, SaaS, digital. You know, that's basically who we
[00:05:15] Mikkel: Yeah.
[00:05:15] It's how we're gonna live forever. Yes. Yeah.
[00:05:17] Toni: Um, And what in reality happened is that it spiked because of COVID. Um, but, you know, if you look at across a couple of different charts, what you're seeing is All of this is actually returned to where it should have been by now of growth, you know, in that direction would have
[00:05:32] Mikkel: continued. Yeah.
[00:05:33] Toni: you you've seen these ecomm charts that, you know, Spiked in our back to where they, you know, expected to be Yeah. 5 years ago, actually. So all of this is all of this is, you know, basically kind of happened. And and with that Spike, what happened also is that, wow, these SaaS business, these digital business are growing like crazy. let's value them
[00:05:52] Mikkel: higher.
[00:05:52] Yeah.
[00:05:54] No. But it's also, like, you know, when money. I saw I saw David Sacks talk with Jason Lemkin, uh, on YouTube. So it was a SaaStr recording.
[00:06:02] You can find it there. I'll drop in a link. But he basically said, well, so it was a bubble, and It was fueled by the Fed just air dropping money. And by the way, that also happened in Europe. Just wanna say that.
[00:06:12] And what are you gonna do, you have, like all of a sudden, you have money in your bank account.
[00:06:16] Toni: That's so all of that is true, but also, let's not forget. SaaS is a tiny, tiny, tiny little niche Yeah. Of the whole economy, and, you know, Why why didn't all of this stuff happen with the
[00:06:28] Mikkel: rest by the way? No.
[00:06:28] It's So funny. I was literally thinking, think about all the gyms. Yeah. Did were they multiple? They're multiple at no. No. So Let's get it back to the go to market.
[00:06:36] because
[00:06:36] Toni: no. No. But, basically, kind of where we kind of then heading to is, okay, infinite money. Yeah. We can do whatever the whatever we want now.
[00:06:45] Um, what then happened is like, okay. Since money is so cheap, and since valuation therefore then are suddenly so high, we can actually afford to spend 2, 3, 4, 5 years of customer acquisition cost in order to, you know, acquire 1 customer. Because that was okay, actually. Kind of it made sense if you have a 20 x multiple on your revenue, every additional dollar that you
[00:07:08] Mikkel: Yeah. You
[00:07:08] Toni: kind of have, like, an incentive to buy it for 20 20 the amount. Right?
[00:07:13] And if if you only buy it for 5 x, Well, that's that's a bargain. Wow. Let's let's go. Right? So, um, then everything blew up because that logic totally makes sense.
[00:07:23] It makes financial sense. Yeah. Um, And, um, and what then happened is that, um, everyone built, like, shitty machines Yeah. Pretty much. and now Everything behind the scenes is resetting.
[00:07:35] So suddenly, it's like, oh, wait a minute. These SaaS companies actually aren't growing that much. Oh, wait a minute. Um, you know, COVID is over. People go to a restaurant again.
[00:07:44] You know, they do the stuff that they did before. Zoom is I mean, all of that stuff. Right? and suddenly, what everyone is waking up to to a degree, like, annoyed. Yeah.
[00:07:54] And right? Yeah. Is he, like, Uh, you know, this is so unfair. You know, the crazy times from 5 years ago, they're over now. Uh, that, you know, this is this business is so hard.
[00:08:03] Um, so that's why I'm not saying the golden age of SaaS is over. I think just the super easy convenient
[00:08:10] Mikkel: time Yeah. Yeah.
[00:08:11] Toni: back to like, you know, we we're building a normal business time,
[00:08:13] Mikkel: actually. Yeah. Yeah.
[00:08:14] Toni: that has a couple of ripple effects on how you build the business and, actually, how you build the go to market. And now that, you know, some of that is basically dropping away, that has a massive impact on how you need to re rejiggle your go to market,
[00:08:26] Mikkel: Exactly. And we have 3 departments that's pretty key just when we're talking go to market. So marketing, sales, CS. But That's really the key focus.
[00:08:35] And the first first sign that is disconnected. And you it's broken is you have disconnected operations.
[00:08:43] Toni: Yeah. I mean, this is this feels like a broken record kind of
[00:08:46] Mikkel: coming Yeah.
[00:08:47] Toni: so it's really this. If if you look into your own go to market organization and if and, you know, they might be called rev ops. Don't get me wrong. But If they are reporting lines from marketing operations or someone doing kind of marketing operation stuff but rolling to the VP of marketing, Someone doing sales ops stuff, maybe being called revenue operations, rolling to the VP of sales and the same for CS. That might be a really really good sign That something is amiss.
[00:09:15] Yeah. It's a really good sign, uh, meaning it's a strong sign, not a not a positive sign, that something is amiss here. Because what what basically will happen is, um, you know, Dave Kellogg calls it the, uh, the the the fencing, uh, the analyst fencing,
[00:09:31] Mikkel: Yeah.
[00:09:31] Yeah. Yeah. Okay.
[00:09:32] Toni: Um, uh, I think I started calling it the weaponization of operations.
[00:09:36] Yeah. Um, and the the typical scenario is VP of this and VP of that walk into room, bring their bring their, um, their plus ones, which is operations. And then, uh, while the big boys talk, then there's a number problem, then suddenly the 2 plus ones go like, but this report and
[00:09:54] Mikkel: Yeah. Yeah. Yeah. They got it out.
[00:09:57] Toni: Um, and, uh, and the smarter, more eloquent, more prepared operations person wins that conversation.
[00:10:03] And guess what? That's not how it should be.
[00:10:05] Mikkel: No. It's Like who will be my champion and fight for
[00:10:07] Toni: Yes. Um, so exactly. And and the so that that's the problem.
[00:10:11] Right? Kind of you you can't have You can't have, uh, operations folks kind of, uh, gunning it out, um, because at the end of the day, it's not about that.
[00:10:20] It's it's it's basically a symptom of, think another thing, which is really your reporting not being aligned. Basically, kind of the numbers are not not aligned.
[00:10:30] Everyone has their own little reports. everyone is creating their own reports, which I think is kind of okay, but you need to do it based on a shared basis Of data, I would say. Right? Um, and and everyone is is super focusing on their own little island, um, which I think has been also the case previous 2019.
[00:10:53] Mhmm. and also was there kind of an issue already. Uh, it's now exasperated by this shift that we're going through and everyone looking for go to market fit again. you know, while you're looking at your own Uh, island all the time. People are starting to realize and need to realize it more that actually they need to they have to look at the whole thing.
[00:11:12] Yeah. You have to look at the whole thing. Right? There's a couple of other items we're gonna go into. but looking at, I don't know, some people call it the bow tie model or the Data model or revenue model or whatever.
[00:11:23] Kind of you need to look at the whole thing front to front to end and, um, try and understand, you know, what is What is causing an issue in there? And then, you know, collectively fixing it. But but if you don't, you're only gonna see, hey. My area is green. Yeah.
[00:11:37] So f the others. Right?
[00:11:39] Mikkel: Yeah. Yeah. Now
[00:11:39] I remember being in those sales and marketing meetings where we would look at the funnel. We wouldn't think about how long are they gonna stay with us.
[00:11:47] Is this the right profile? And it it was purely just the are we booking meetings, period. End of story. And then you went back to marketing, and you were looking traffic leads and opportunities. That that was it.
[00:11:57] You didn't care about anything else. I also felt like, you know what? It wasn't super productive. Actually, you didn't get a whole lot out of it. Not saying those meetings are unimportant, by the way.
[00:12:06] It's still important to track those stages of the funnel. But I always felt like we lacked that full view, um, and that kind of framework in place to say, hey, this is how the business needs to run.
[00:12:15] Toni: you have like an example of okay. You sit in a marketing session and you see some issue further down the funnel. How how would you react to that?
[00:12:22] Do you have, like, an example there?
[00:12:24] Mikkel: Well, to be honest, most of the time, it it was not that proactive. It's like a, No. We have a problem now kind of thing. And then you have, like, a limited number of plays you can choose to run.
[00:12:36] It's like, well, There's not any conferences coming up we can go to. That's a sure thing. Can I spend more on this channel that works and has a, you know, fast, uh, cycles? Like, No. Uh, I then I can do some some enablement. So to be honest, I think quite often, it's it's more so that, you know, there's a problem happening now downstream in the funnel. Not as much upstream. Like, sure, I've we've had cases where, you know, a channel blew up and we obviously had to do everything to fix it because we knew, you know, if so the specific case was the cost per lead just went through the roof because a competitor had raised prices.
[00:13:12] So they could just go and buy, You know, at higher prices and we couldn't, know, basically maneuver that very well. So we had to kinda throw everything and just to salvage that channel. Yeah. Um, so I think it's more kind of that piece making sure that the, like, the what's gonna deliver the 80 percent doesn't blow up.
[00:13:29] Toni: No. But it's so I also sometimes think, especially for marketing teams, there's a I mean, you mentioned this. There's a bit of a time delay
[00:13:37] Mikkel: Oh, yeah.
[00:13:38] Toni: Because really, you need to see that there's an issue next quarter, not not this quarter. Right?
[00:13:42] And I think kind of in the example that you mentioned was kind of an SMB motion more. Right? So you could do something intra quarter, basically. Uh, but for anything that's bit more mid market, kind of, some of that is kind of, you know, messed up.
[00:13:53] Mikkel: It's really difficult. Like, Um, I think some of the best you can do is try to activate the audience you currently have and just assist sales to the best of your ability to kind of progress the deals. But then it's building for the next quarter. and try and see if you can compensate there.
[00:14:08] Which is which is often hard, to be honest.
[00:14:10] Toni: And, I mean, I think another example is basically, Um, let's just say supply and demand, not within the sales side, but sales side to the CS
[00:14:18] So you you won't you won't not sign a customer because, Oh, you know, sorry. Don't have any any capacity for you anymore. So you will always say yes.
[00:14:28] Mikkel: Yeah. Yeah.
[00:14:28] Toni: Um, and, um, And and what then, though, needs to happen is you need to kind of give the CS team a bit of a better heads up.
[00:14:35] And sometimes you can see this A couple of months ahead, so CS actually has time to hire. Yeah. Right? Because otherwise, they just they just won't be able to. So there there
[00:14:44] Mikkel: I think all kinds
[00:14:45] Toni: of practical Shifts basically in
[00:14:47] Mikkel: I think, actually, That's 1 of the fundamental challenges you're gonna have. If you have disconnected ops let's say you have an ops person in marketing. Are you gonna have that person and sit and run the numbers all the way downstream?
[00:14:59] Toni: No. Of course.
[00:14:59] Well, you can't.
[00:15:01] Mikkel: No.
[00:15:01] You you're not gonna You're not gonna do that.
[00:15:03] Right? So you're gonna be focused on your thing and say, hey, I delivered the leads, And that's a problem. Right?
[00:15:08] So, um, so let's move to the next 1.
[00:15:10] Toni: Yes. So I think and this is this is maybe a thing that's more for executives, uh, listening in, um, which really is about Language. And it always sounds like, uh, Toni language. Sure.
[00:15:25] Language is
[00:15:26] Mikkel: Stopping the episode
[00:15:27] Toni: Yeah. The the the problem is really, you know, either it's disconnected or misaligned language, kind of what do you call different things. And, um, it starts with It starts with silly things like an MQL definition.
[00:15:42] Which I hate. Um, but it starts with something like that. Right? Kind of what what does it mean?
[00:15:47] What is it really? Um, and, uh, and the the marketing folks being clear on that, but also the sales folks actually understanding that piece. Right? Um, and where then kind of goes all to 2 is, um, really understanding the processes that lead to some of these pieces behind it. Right?
[00:16:04] So again, uh, in many organizations that we have seen, an MQL can be created by way of a demo request, Which is what every salesperson thinks how an MQL works.
[00:16:16] Mikkel: works. Yeah. That's a problem.
[00:16:19] Toni: And and that is, You know, in many, many parts of the owners, it's kind of okay, um, you know, to have that level of understanding. But, you know, once you realize, okay.
[00:16:28] Wait a minute. Um, there are also other sources of how an MQL can be created. Then suddenly, you need to understand that that is potentially impacting What you can do with those MQLs going forward. And my, uh, sales folks realize that extremely quickly once they, you know, pop the hood and see what what marketing kind of did there. and marketing, on the other hand, needs to understand that their, We know white paper downloads aren't converting as well as the demo requests.
[00:16:55] Mikkel: Yeah. Yeah.
[00:16:56] Toni: um, and will create a problem for sales afterwards.
[00:16:58] Right? And the The thing here is, right, everyone is probably rolling their eyes. Oh, you know, to I I know that. I know that. The thing though is When you kind of look into all of those organizations, there is a there's a big issue happening, know, between the handover between marketing and sales.
[00:17:14] People call it sales And marketing alignment and all that b s. and for the longest time, I was like, you know what? The reason is those marketing guys And and girls, they just focus on their own numbers. They don't care about the downstream. They need to hit their numbers and, you know, screw those salespeople and sales just Complaining because that's what they do all the time.
[00:17:35] Really kind of thinking about it as an as an intent. It's like malice.
[00:17:41] Mikkel: Right? Yeah.
[00:17:41] Yeah.
[00:17:42] Toni: People wanting to be bad to
[00:17:43] Mikkel: Um,
[00:17:44] Toni: Um, and maybe this is just my nature.
[00:17:46] but what I've, you know, woken up to lately more and more and more, And I can recommend this for everyone else out there as well. It's like, you know what? Never assign to malice what you can assign also to stupidity. And this is not that people are stupid. It is though that people are busy with other things.
[00:18:05] They don't care about some of those details that much. They don't understand why they should be caring about those details, and then they just end up not really knowing that there's a difference here. Right? And that then leads to, them being messed up at the quarter end, so them being sales, for example. And because they don't understand what happened to them upstream, because they're busy with
[00:18:27] Mikkel: busy. Mhmm. Yeah. Yeah.
[00:18:28] Yeah.
[00:18:28] Toni: they're gonna be looking for reasons, that they are busy with all the time.
[00:18:34] Yeah. Which means they are super knowledgeable about, you know, the deals, the reps, You know, what they're saying, MEDDIC, MEDDPIC, whatever the whatever they're using. Yeah. And they're gonna be focused on because that's the hammer they have. They're gonna be focused on, Well, the the reason why we have this issue is because the reps did x y and z.
[00:18:53] And that might be correct to a degree, but also the other larger gap is probably caused It's by the non knowledge further upstream. Right? and this comes again from, yes, disconnected language you could say, but also disconnected understanding of what those processes mean, what they are, and then how to, um, how they will impact things further on the stream. So for everyone thinking about, Like, oh, you know, it's these guys are just pointing fingers. You know what?
[00:19:19] They might not know better. They're too busy In their own world in order to know better, uh, to kind of fix it themselves.
[00:19:26] Mikkel: I think there's also a couple of other points that maybe to make it more real. It's also simple things like, who are we selling to? Like, I've come from a we've worked at a business where you could sell to multiple very different types of businesses.
[00:19:38] Like, do we actually agree who we're selling to? That's that's 1 area. Right? And then there's the, well, how do we sell them? Like, what are we saying on things like the website and then the pitch and in the onboarding?
[00:19:49] Are we talking the same language there? Because if not, that's gonna be a bit of an issue. Right? And then ultimately, when you come to the, uh, like fundamentals, like, What is an MQL? What is an opportunity?
[00:20:00] What is a negotiation stage mean? Well, if folks don't really know that and they start making reports, you know, with They're disconnected ops.
[00:20:08] Yeah. The conclusion is ultimately gonna be, oh, we're we have bad data. That's that's what's happening here. Right? And so no one Knows what's actually happening in the business can get to the root cause of what, you know, why they're missing. And that's why it's it's so incredibly important to know those fundamentals and know what the metrics mean, uh, and what
[00:20:28] Toni: I think it's a tall order, but someone not everyone, but someone in the business needs to.
[00:20:32] Mikkel: Oh, for sure.
[00:20:33] Toni: know, that's that's the thing. Right? It's sometimes I've so I mean, maybe this is kind of an add on to the Stupidity and malice. This maybe stupidity is too wrong of a to to ignorance, maybe is a better of a word.
[00:20:46] Um, but I had a call with the CRO who's actually spanning the whole Life cycle. Mhmm. Uh, so marketing, sales, and CS. Uh, he has a fantastic RevOps person, I think, that saves his butt all the time. But, uh, I was on the call with him, I was kind of talking him through the bow tie, which he wasn't fully fully familiar with.
[00:21:04] And
[00:21:05] I told him, like, hey, what Growblocks does is, like, hey, we do, you know, the lead stuff, and then this, and then this, and then the RevOps person was, like, well, this is, you know, the the presales thing, and then the post sales thing, Which, you know, that was his language. And then he just looked, he's like, what do you what do you mean what do you mean presales? What what what what what is what is what is that really? Uh, and then it's like, well, the whole marketing thing, you know, the leads and the MQLs and all of that. It's, ah, okay.
[00:21:28] Oh, yeah. Yeah. Okay. That makes sense. And but but 1 more question.
[00:21:31] What Post sales? What is is it that you really mean by and
[00:21:37] Mikkel: It's with a churn. Yeah.
[00:21:40] Toni: And and, again, you know, he's Fantastic leader.
[00:21:42] He kind of knows how to run shit. Kind of he has a long career. Yeah. But that doesn't mean, um, that some of those, I would say architectural or engineering things of revenue are fully present. Right?
[00:21:53] So, again, someone needs to own it. If it's not the CRO, then it needs to be someone else. Yeah. It doesn't matter, Um, but really kind of trying to understand all of these different pieces now that hang together.
[00:22:03] Mikkel: And it kinda speaks into the next 1.
[00:22:06] Toni: Which is,
[00:22:08] Um, uh, which is number 4, you mean? Yes. Yeah. So for me,
[00:22:12] For me, there's sometimes an issue, uh, when we're talking, you know, disconnected execution. Um, in terms of, I think it's it's much rather disconnected goals.
[00:22:25] Mikkel: Mhmm.
[00:22:25] Toni: That's actually what I think about it.
[00:22:27] Mikkel: Yeah.
[00:22:27] Toni: And there's this whole conversation around, again, gonna be very much in the marketing and sales thing because it's just there, like, a gazillion examples for this. But it's really this, All marketing should be incentivized on revenue. Right?
[00:22:40] and this stems from a world where, people are basically saying, like, well, you know, marketing is, You know, celebrating when sales is missing.
[00:22:46] Mikkel: Yeah.
[00:22:46] Toni: That can't be, so we need to align those 2 functions, and we need to make sure that marketing is delivering revenue. So if you ever try to actually execute something like this, what will happen is you will need to talk talk to a marketing
[00:22:59] Mikkel: leader
[00:23:00] Toni: and say your comp plan, Because sometimes they have 1, will be on revenue now instead. What is the number 1 pushback you will get immediately?
[00:23:08] Mikkel: Well, they don't have control over closing the deals.
[00:23:10] Toni: have control over closing deals.
[00:23:12] Um, and they're basically saying, you know what? Um, I really like Jack, My VP of sales a
[00:23:18] Mikkel: But I don't trust him. I
[00:23:19] Toni: I don't trust him.
[00:23:20] I'm sorry. Not, you know, not with my money. Yeah. I'm sorry. I'm not gonna do it.
[00:23:25] and very valid pushback. Yeah. Um, same pushback on a smaller scale you will get if you say, you know what? SDRs. They shouldn't just book shitty meetings.
[00:23:35] They should be booking
[00:23:37] Mikkel: Yeah.
[00:23:37] Toni: That's what they need to be doing. Have you ever had a conversation with an SDR about that? You know what? It's the same thing.
[00:23:43] He will say, you know what, Bob? I love my I love my AE Bob. But you know what? I don't trust him with my money. I'm sorry.
[00:23:50] I'm not. And I think that's totally fair. People need to, you know, be incentivized, uh, on the things that they can control. Yeah. I think that's really important.
[00:23:59] But, You know, what what then kind of everyone but told you then we still have this alignment problem. No. You don't if you just set the goals correctly.
[00:24:06] Mikkel: Yeah. And you've actually defined the language.
[00:24:09] Yes. Meaning those KPIs.
[00:24:10] Toni: you if you it's so 1, again, simple example. Instead of just setting a goal for MQLs, Which will then lead to whatever, you know, meetings booked with all the blended stuff in there, like, you know, webinars and, you know, events leads and demo requests and Regions and in whatever it might be, uh, when you have this blended stuff hanging there, uh, guess what? The chances for that to be also aligned with your revenue goals next quarter fairly low.
[00:24:39] Because what's gonna happen is marketing is gonna change the blend all the time. Right? They're kind of They're kind of figuring out a new cocktail every
[00:24:46] Mikkel: fucking
[00:24:47] Toni: you know. And, um, and if you then if you, you know, that's then the reason For them either hitting or not hitting the MQL number, and that tends to be completely disconnected from, uh, you hitting your revenue number as a sales leader. So what do you have to do?
[00:25:00] You need to align these things by getting a bit more granular, being a bit more clear what leads to what, and therefore converts how. And and if you set those goals in the right way, guess what? Um, people would probably be in a in a in a margin of 3, 4, 5 percent?
[00:25:16] Mikkel: Yeah.
[00:25:16] Toni: And and you know what?
[00:25:17] It's okay that marketing celebrates, uh, you know, a hundred percent when when sales is at 95 percent. I think that's okay, by the way. And, uh, and and then that's that's what you would basically be able to achieve.
[00:25:27] Mikkel: Yeah. I think there's also a couple of other things in in the realm of execution.
[00:25:32] Right? So think back to the case where intra quarter.
[00:25:36] You're behind. Right?
[00:25:37] And you go to the marketing team and say, hey, we need you to do more. don't care how we do it, but we need more now because otherwise we'll miss. You need to have a conversation that is at what cost because you've made a plan. And again, if you made those plans in isolation, if marketing made their own little plan.
[00:25:55] Then it's a terrible situation. Right? If you've made a go to market to plan together and said, hey. Actually, in q 1, marketing is building this thing that's gonna ship in q 2 and have this impact.
[00:26:05] Are you okay with sacrificing the next quarter? then? Right? And I think the other the other nuance to it is, Uh, and we've talked about this before is, let's say that marketing channel blows up. You might not be able to fix that in marketing. So what else can you do in the go to market?
[00:26:21] And I think that's back to the disconnected execution, right, that you as a go to market team need to make the goal together.
[00:26:28] Toni: Yes. And I think this is also this has a a bit of a deeper thing to it. Right? Because really what you just said there Is, if if you turn around and this is really how do you execute this thing, which is someone will just say, forget about it.
[00:26:41] Mikkel: Yeah.
[00:26:43] Toni: Is, you will basically take money away from
[00:26:46] Mikkel: someone. Yeah. Totally.
[00:26:47] Toni: So and that's an issue.
[00:26:49] Right. That's that's that's a really big issue. People don't like that. Oh, you're cutting my budget? Who who the who are you?
[00:26:55] Are you the CFO? No? Oh, well then, you know, there's the door, please.
[00:26:58] Mikkel: yes.
[00:26:59] Toni: Um, so the thing really is people need to, you know, go into it with the mindset of,
[00:27:04] Yes, We as go to market leadership team, we need to hit this target together.
[00:27:10] The way we're gonna get there, we don't actually a thousand percent know right now, Now and things might change in between. Um, and I think that needs to be the mindset going into this. Right? It doesn't mean, that And and that is also just impractical in reality to, you know, slash, uh, roles and reassign people, like, every quarter. It doesn't work like this.
[00:27:29] But you have a 10, 20 percent, uh, flex budget, which mean you know, which could come from, ad spend that's Not hundred percent figured out, maybe some experiments you're running on the marketing side, some backfills, some potential new hires on the sales side and so forth, same with CS. You know, that's roughly 10 to 20 percent every quarter. That money you could actually move around. Yeah. Um, and people should be less, uh, Stuck up on, like, no.
[00:27:55] I need to hire those 10 AEs because, otherwise, my manager over there is only gonna have 8 AEs, and then he's gonna be upset because he's not gonna hit his, you know, whatever. It's like, well, then VP of sales that it seems like a people management thing you should be
[00:28:09] Mikkel: with. Yeah. Yeah.
[00:28:09] Toni: Right? Um, and I think this is, it's really important to keep in mind that, yes, the flexibility and all that is great. Uh, but what you need to have is the mindset that you as a go to market leadership team want to He's axed.
[00:28:21] then there might be some fluctuations how to actually get there.
[00:28:24] Right?
[00:28:25] Mikkel: So that's a bunch of signs with the go-to market is is broken.
[00:28:29] Toni: Yeah.
[00:28:29] And I mixed in a couple of solutions to it
[00:28:31] maybe as
[00:28:32] Mikkel: No. I think that's that's good.
[00:28:33] Toni: but ultimately, So, you know, what what you're gonna do about
[00:28:37] Mikkel: Yeah.
[00:28:38] Toni: so
[00:28:38] I think, uh, and we talked about this a little bit, the, Uh, GoToMarket consortium, kind of these guys, think they're doing a fantastic job. Uh, honestly, kind of it's, uh, it's it's a pavilion. It's, um, it's go to market partners, and it's winning by design.
[00:28:53] They're talking about this a lot. Right? Kind of the go to market in itself. and underlying to that is the bow tie and so forth. Right?
[00:29:00] And I think, you they they're starting to call it the The revenue architect and so forth. kind of, you know, align with that language to a degree. The the thing is Someone in your business needs to be a revenue actor. architect.
[00:29:15] That's, I think, how you need to think about it. And Does that person need to own go to market?
[00:29:21] I don't know. I don't think so. It doesn't have to be, you know the architect isn't owning the building either. Right. So it's they're also not footing the bill.
[00:29:30] They're also not managing all the people. They're just they're just putting this thing together, so it's gonna work out in the end. Right? So I think, really having this understanding end to end, I think this could sit with someone that is also Owning the thing at the same time. Let's just say a CRO.
[00:29:44] Yeah. It could. It could also sit with someone that is, um, that is more like a revenue operations profile. And again, then we are we're clearly and and maybe we just need to have almost a different role, honestly. revenue operations, yes.
[00:29:59] It's a lot of process, a lot of data, lots of, you know, CRM and HubSpot on Apex code and whatever
[00:30:05] That
[00:30:06] needs to be done somehow, but it's That is not the person we're talking about when we're talking revenue architecture.
[00:30:11] Someone that actually gets the whole thing, and data and tools is just 1 part of it. It's just 1 1 layer of the whole thing. Right? And that person, well, you know, yes, disconnected up ops.
[00:30:23] Well, that would be taken care of with that. Right? You have, like, 1 umbrella. That makes sense. Disconnected reporting, Kind of that plays into the rev ops piece.
[00:30:31] Disconnected language, I think this is more of a behavioral thing that the that the executives need to adopt than it It's a definition game that, you know, revenue operations needs to talk. then, you know, the the execution bit and the goal bit, um, this is something where rev ops can support. But ultimately, you will have the CRO and the CFO setting those goals and targets. And they need to understand that the way they've maybe been doing this, Maybe that's not the best thing anymore. Right?
[00:30:56] so this this whole, again, education
[00:31:01] on, hey. Once you're past 10000000 in AR, unless you run it like a crazy enterprise thing,
[00:31:08] You probably can learn a lot by understanding the science behind the revenue piece. Yeah. Not saying that everything is science, But a lot of it is, actually. And someone needs to be trained and understand in how to read those charts.
[00:31:22] You know? And that Sometimes can be a CRO. I've met a couple of really fantastic CROs. 1 of them, I hope we're gonna have soon on the show.
[00:31:29] and then There's a couple of, you know, rev ops folks that also can live up to that point. Yeah. Um, I rarely see other profiles being really good at this. Um, you know, it's maybe VP of sales that's punching up and wants to actually kind of own more, or maybe a COO that, you know, understands this the the the go to market side a little bit better. But it's a very small set of people, and it's by the way, it's not the CEO.
[00:31:52] The know, you would be shocked, And maybe this is more for rev ops listening than CROs listening. You would be shocked if you said in in a c level in a c level meeting in your company, You know, CEO, CFO, CTO, CPO, CMO, c whatever. You know? You would be shocked how little they actually know how the engine itself works. Yeah.
[00:32:15] Uh, they're throwing things around. It's like, wow. Why don't we slash this? You know? Why don't we do this?
[00:32:19] Why don't we go over Um, it's like, well, because of a gazillion reasons, we can't do any of these things
[00:32:24] Mikkel: right
[00:32:25] Toni: And, um, uh, so again, you would be shocked. Right? So kind of really, you know, someone needs To someone needs to tie all of these pieces together. Uh, what's the end result, by the way?
[00:32:35] What's the so what?
[00:32:36] Mikkel: Yeah.
[00:32:37] Toni: Well,
[00:32:38] CAC payback is gonna improve.
[00:32:40] Mikkel: Yeah. Yeah.
[00:32:41] Toni: You have more money to grow. You gonna run a better efficient shop. You probably gonna Funding because of it. Your investors gonna love you, etcetera, etcetera, etcetera. Right?
[00:32:50] Um, so this really, know, fixing this Part of the organization, which I would say in many organizations, what, 50, 60 percent, the go to market organization. That's also 56 percent of the the the cost you have. Streamlining this and making this better by 10 percent, massive massive win. Right? Um, and that's really, uh, that's really what comes out.
[00:33:10] Alright? Ultimately, all of those gaps between those departments, each little gap. And, you know, we've broken it down in a couple of different topics here. Each little gap adds a little bit more sand into the gearbox, and eventually, it's gonna grind to hold. Right?
[00:33:24] If you can start, you know, cleaning this up, everything is gonna be much more smooth.
[00:33:28] Mikkel: That's it. No outro today. So,
[00:33:32] Toni: I mean, We talked about no broken bones Yeah. For me snowboarding.
[00:33:36] Mikkel: Yeah.
[00:33:37] Toni: Neither my family. Yeah. Last time we did that, by the way, yes, there were, like, several broken bones, by the way.
[00:33:42] Mikkel: Yeah.
[00:33:44] Toni: Um, same person though. So Oh, okay. Then it's fine.
[00:33:47] Yeah.
[00:33:48] Um, and then we kind of talked about Why do we have this go to market issue right now? Um, we went a little bit, you know, history lesson. Uncle Toni talked history here, the
[00:33:59] Mikkel: in the ivory tower.
[00:34:00] Toni: back into the ivory tower. And then we talked about, you know, what are the signs of a broken go to market? It's disconnected reporting, disconnected operations, Disconnected language, disconnected execution and goals.
[00:34:12] And ultimately, a solution to this is, yes, bow tie thinking, But revenue architecture, someone someone has to own this thing. Yeah. Someone someone needs to do that part. Yeah. Um, and if you do, the outcome will be Improve CAC payback metrics, improve CAC to lifetime, uh, and so forth.
[00:34:29] Right? So it's like a bunch of things that your investors are interested in. So thanks for listening, everyone.
[00:34:35] Mikkel: Thanks, Toni.
[00:34:37] Bye bye.
[00:34:37] Bye.