Chris (0:00)

Foreign. You're listening to GTN Live, a podcast by Passetto. Hey, everybody. Welcome back to this week's show. No live show this week, actually. I'm at home today recording. I've got my iced coffee next to me. It's a beautiful sunny day for the first time in a while and I've had some time to really reflect on a few different themes I'm seeing or within our customer base and just some conversations on LinkedIn and things like that. And I wanted to take the time today to really talk through one of those in particular because I still feel like it's plaguing go to market and B2B SaaS quite a bit. And that's measuring go to market performance by the department that sourced the deal. We talk about this a lot and it's just because it's still so such a predominant issue in our space. And I think that a lot of go to market leaders, specifically marketing leaders, CMOs and VPs are feeling this problem a lot and many still haven't come out the other side with a better solution. And I think that marketing leaders recognize that department sourced doesn't work. And this is really one of the biggest challenges that Passetto exists to solve. And so I wanted to talk about that a little bit more. I think a lot of companies are still measuring performance this way. We certainly see it with our customers. I think marketing leaders are the ones that recognize that it's not productive because it actually undercredits the impact that they truly have across the entire revenue factory. And they know it, but they don't have sort of like a better way to tell that story and to make data informed decisions. And I think ultimately this is not an easy thing to change for a few reasons. One, I think a lot of more mature legacy companies, 60, 70 million ARR, up to a billion ARR. Are using and relying on an outdated playbook and also just like outdated ways of measuring performance. And in our last episode where I interviewed Megan Bowen, she actually articulates this problem really, really well. She's the CEO of Refine Labs. It's a agency that's now been operating since 2019. And so this is something that she and the company sees all the time, right? Legacy, more mature companies coming in, trying to shift how they go to market. And she sort of articulates why, why that happens in most cases. And she recognizes in that conversation too that the buying process has really significantly changed since 2015 when these, these measurement models or these go to market tactics were sort of first put in place. But the Internet has totally commoditized the buying experience and therefore the way buyers used to buy and the way we still measure performance on is no longer applicable. And I think what she also articulates very well is that it's going to change again with the acceleration of AI before anybody knows it. And so if we can't catch up now, companies are going to be in some serious trouble when the ecosystem changes again and they've got to adapt. So aside from that, I think internal bureaucracy always is a factor and mostly inertia when you're dealing with, you know, some larger companies, not always larger companies, but I think a lot of companies are sort of lost in inertia and it's become sort of like difficult to align other leaders around a new concept. And I think in many cases a lot of go to market teams and executives sort of rest on their laurels, I think out of comfort, out of what they're used to and so forth. And so we see a lot of times leadership teams cling to like department sourced attribution because it's straightforward, it's simple. But simple in my opinion doesn't always mean smart. And in my opinion we're also past the point of oversimplified models because I believe and I've seen in the data that it's actively hurting growth. So today I want to talk through the details of why this is happening. I think it's still on unclear around like if it doesn't work, why are companies still measuring performance on which department source the deal? So we'll talk through that. What needs to happen to change it? And then I think what a lot of leaders really want to know is okay, can you give me some examples of KPIs that provide better data around go to market performance. If you're telling us not to use which department source the deal, what do we use instead? And so I want to be able to leave listeners with clarity on what we actually should be measuring. Specifically in marketing, it's not just MQLs, it's not just last touch attribution, which department sourced the deal, but more so signal volume, right? The volume of interactions or campaign member responses that happen throughout the buyer journey. Hand raiser creation we know that every sort of the gold standard when it comes to marketing is the volume of high intent hand raisers that are produced and passed to sales and move on to become pipeline and closed on revenue engagement stage velocity. The speed at which your prospects move through the awareness and engage stage before your BDR or SDR team starts working them and then ultimately pipeline acceleration over time. How can you leverage marketing to move your buyers throughout the sales cycle faster and more effectively? So we'll get into some of those nuances too. So let's start with the why behind this notion of the department source deal. So despite a lot of the innovation I think that we've seen across go to market, many companies, honestly across all sizes and stages, are still measuring performance on which department source the deal. And I think there's a few things that contribute to the problem. One, I think it really starts at the top around the mindset that's being reinforced from like the CEO CFO investors. Those executives often want to shortcut deeper analysis and simply know which team is performing right. And it's easy to sort of tell that story when you say, okay, well our sales team sourced this amount of deals or this many number of opportunities, our marketing team brought in this, our partner team brought in this, so on and so forth. But I think this oversimplification has some pretty serious downstream consequences. So it really comes down to leadership alignment. You need cross functional agreement that performance is measured as a system, not by a department scorecard. That's not an easy change to influence. So I don't want to mislead listeners into thinking, oh, that's simple. What happens though when you have measurement that looks at department performance in a silo, you end up creating internal competition instead of collaboration. Teams end up fighting for credit instead of working together to guide buyers through the process. And I think it also warps team behavior. So instead of focusing on intentionally like how do we work as a team to move buyers through the journey, the way that buyers are actually buying from us, teams manipulate the data just to claim credit for a single moment in time. I just heard about this last week from one of our customers. The CMO there was saying basically like she, her team spends so much time manually scrubbing opportunity records in Salesforce and then editing the deal source field or whatever it is and changing it. If they look back and they say, oh well, you know, the last thing that this person did was, you know, attend a webinar. So we end up changing it to like, well, marketing source the deal. And so I think to myself about how unproductive that is that you have entire marketing teams focusing instead of marketing and making strategic decisions and coming up with creative campaigns and all of this sort of stuff. And they're spending more time in Salesforce trying to manipulate data just to defend what they're doing. And I would Say that that's highly productive. And I want to be clear, the buyer journey does not belong to one team. The go to market motion should function like a factory. It's an integrated system that moves prospects from being completely unaware of your product or your brand and then moving that through a process to becoming a closed one customer. Right. And so let's talk about what the buyer journey actually looks like. This is not totally proprietary information. I think there's a number of companies that have their own sort of viewpoint on this. Winning by design is obviously an obvious one. But when it comes to Passetto and sort of like our approach here, we think about the revenue factory across three distinct stages. You have awareness and early engagement. That's when the buyer becomes aware of your brand. They visit the website, they maybe download a white paper, register for a webinar, fill out a form, engage with like your chatbot on your website. It could be a number of things, but those are all of the things that occur from the very first known interaction that we can track up into and obviously pass this as well. But up into becoming a qualified prospect or opportunity. We want to understand all of the things that they're doing as they're becoming aware of the brand. The next stage in that would be the prospecting journey. Right. We have a BDR SDR team that are actively working prospects and accounts to ultimately get a meeting or, you know, get them on a demo or what have you. But typically when I said this before, that often looks sort of like this, like black box. It's not tracked. It's the pre sales process. So it's not yet an opportunity. And so you've got, you know, your BDRs that are often needing to have multiple touch points across weeks or months, phone, email, LinkedIn, sales navigator, et cetera, to finally book a meeting. And so we think about that as a definitive, distinct process that should be tracked with like, you know, a high amount of rigor. So we can see how long is that taking, how many touch points is it taking, what's the conversion rate to pipeline and closed one. And so we really want to understand that with a high degree of scrutiny so that we can understand what's effective and ineffective in that. And then of course you have the active sales process. So the prospect is qualified, they enter an active sales cycle and then progress through the sales cycle process. So at every stage, both marketing and sales play a role. It is never and very rarely is it one or the other. It's sort of all of these things happening in tandem. And I think it's different for every business too, around where marketing has the most impact. And so historically or traditionally, if we look at what did marketing source, we are potentially undermining or under crediting the influence that they have throughout the entire journey. Okay, so let's talk a little bit about what happens when we look at, look at the data by the department that sourced the deal to just get a quick measurement to credit a team. I think what happens here is that ultimately we're trying to isolate one thing that happened that may have led to the deal being created versus looking at the cumulative impact of multiple things or signals that happen. And potentially in many cases, I think this has a tendency to like, over or under credit certain things that happened within that process. For example, we might say that a marketing webinar was a deal source because it happened two weeks before the deal was created. But what happens if there was 10 different interactions and what happened if the webinar actually occurred after the BDR started the outreach? I think that there's so many nuances to how a prospect or account ended up in becoming a qualified opportunity that when you look at sort of like one moment in time or one moment in time thing that happened before the deal gets created, you gloss over so many different breadcrumbs that can tell you how that opportunity came to be. So what this approach doesn't tell you, which I think is more important, is the sequence of things that happen to create a deal leading up to it. What sequence of events or things help somebody move faster through that process, and then most importantly, what sequence of events or things take longer to convert to pipeline or revenue? So I think there's, like I said, a lot of nuances and breadcrumbs underneath that that we can track. So what needs to change? I think for companies that are sort of stuck in this middle ground, right. The company measures them based on what their department source, but they recognize they want to change. Well, what needs to happen. So like I said, I think the mindset shift needs to happen at the top and recognize that buyers don't buy a by department. They move through an interconnected journey. But the reality is that most companies aren't equipped to measure performance any other way. And so there's sort of this other thing that almost needs to happen first, which is building a better data architecture. Because without a CRM setup that actually tracks how buyers move across stages and teams, we'll never be able to tell a different story, a different, more accurate story. You can tell a story around when you do this around the impact and journey at every stage and compared to a story around where the deal came from, which is one dimensional. And the most important thing is it doesn't really tell you where to make your next investment, right? It tells you, okay, marketing source, so maybe let's just give marketing a little bit more budget or what have you, but it doesn't really effectively tell you what your high performing programs are or your underperforming programs. I think one of the next sort of like key misunderstandings or misconceptions is also marketing's role in Go to Market. And I took a note of this because I had seen a recent LinkedIn post actually last week that really struck me. It was a longer post, but one line in that read, sales reps are given one to two quarters to ramp and deliver results. Meanwhile, marketing leaders are expected to generate pipeline in just a few weeks. Honestly, this hits pretty hard because I see this all the time in our own customer portfolio. I've personally lived this too. And I think, I think there's a pretty big disconnect here, right? Because if sales is expected to produce results and say like one to two quarters after they ramped and then marketing leaders are expected to generate pipeline results in just a few weeks, we're still measuring teams the same way. Marketing department source this, sales department source this. And I think that that is a pretty big disconnect, right? What truly makes marketing impactful in my, in my own opinion, and this is something I really want to get into deeper on, on another episode. But I think now more than ever with like some of these big shifts that we're seeing in the market, creating compelling, disruptive, value driven messaging and content that captures awareness and moves prospects through the revenue factory faster is one of the biggest value drivers of marketing. We've moved away from capturing names and passing them to sales, hoping that sales can get a meeting booked. I think the, I think with the commoditization of content and the way buyers buy now has totally moved us in the opposite direction of that. And now I think where marketing has the biggest, biggest impact is around building credibility, creating market demand, building awareness. And I think it becomes more difficult to produce overnight results when you approach things that way. So I want to take you through a real quick customer example. And so several customers in our portfolio right now have gone through the process of actually like fixing their underlying data architecture. So when they do that, and if you're curious, that's usually like, I would say a 90 to 120 day process, but they now have the right tracking in place where they can actually measure all of the different marketing signal interactions that happen across every stage of the revenue factory or the buyer journey, which we measure through multi touch attribution. Then we can definitively track prospecting or like BDR SDR team performance across a really clearly defined process that moves basically prospects from ready to work to qualified or disqualified. And then we can clearly track how prospects move through an active sales cycle to close one or closed loss. So when we do this, we uncover a lot of data that we couldn't see before because we just didn't have the ability to do so. And when we do that, the engagement stage or the process of a prospect becoming aware of a brand consuming content and then eventually becoming a hand raiser, that can sometimes take months. And so with one enterprise company that we work with, they're sitting around 100 million ARR. But this is what their journey looked like. On average, four to five meaningful signal interactions that occur before an opportunity is created. Right from first touch to last touch we measure like an average of four to five per opportunity. That's typically in this scenario spread across anywhere from like 90 to 130 days before they're even ready to talk to sales. Okay, this doesn't mean that this is a high performing range and that the process can't be faster. But I think what I'm trying to articulate here is that it's not uncommon for many companies to sit in this, this process which the influence marketing has pre opportunity or pre sales can sometimes take like three, four months. And I think when I'm going back to like what I had said earlier in this call, which is what should be a core objective of marketing, I think it's less of what did marketing source. But how can we actually take this process and accelerate it and do more of the things that help accelerate buyers through that process to become qualified opportunities sooner. And honestly, unless you can't can absolutely measure it, you wouldn't really have the data or intelligence to actually be able to do that. And so for this company, we're helping them identify what are the most impactful signals or you know, campaign interactions that a prospect has before becoming an opportunity. How can we generate more of them and how can we improve the conversion rate to pipeline and ultimately revenue and then how can we make that process faster? Right now the average is 130 days. How can we potentially bring that down to like 60 days, maybe 30 days? So it's iterative and unless you have a baseline, you don't really know, right? You don't get the full story. You're just getting, okay, well, marketing source this, sales source this, you're not really getting the nuance into understanding the journey towards opportunity creation. So again, what actually drives impact? I glossed over this pretty quickly before, but I think what really moves the needle in these sorts of scenarios, I think channel performance matters. And so I think it's obviously really important to bring on skilled, tactical, functional leaders that can help manage these things. But honestly, I think now positioning matters more than anything. I think content quality and coverage matters more than anything. Enablement is huge. And creative storytelling that actually breaks through the noise I think is absolutely critical. And that takes time. If we're just dumping cold names on sales before they're ready, I think we're setting everybody up to fail. And unfortunately that's, I think how many teams are still operating. And we see that in the numbers all the time. The proof is in the actual data. And so like that's why we have a stance on it, because we see it all the time. We see it every day. Before Chris created Passetto, he was seeing this every day and recognized that it was a pretty big problem. And so what we often see in, I would say majority of the companies that we analyze data for is that growth rate is down. And in many cases it's actually sharply declining. Retention does sometimes influence this, but I think typically it comes down to a pipeline problem. And companies are spending anywhere between 3 to $7 to generate $1 in revenue. So their efficiency is in the tank and we should see this number more around like $2 or less. Why? Why is this happening? Because their return on their investments across go to market aren't there because they don't know what channels and what tactics are effective. And then if we look at their current metrics, MQL volume might be on a positive trend. Meanwhile, pipeline is down, new logo revenue is down, and there's really a complete disconnect between marketing and sales. And neither team is working systematically because they don't have the right way of doing that. And so I really want to unpack now the framework that we use at Passetto that helps companies move away from measuring go to market performance by department source and that we know to be actually influential in helping drive growth. So if you want to stop measuring go to market performance through the outdated lens of which department source the deal, the reality is that you may need a better system and one that reflects how buyers actually move through the funnel. So here's how. I mean this is totally like a high level view of what we would do at Passetto. But here's sort of our approach or our perspective. One, measure pipeline and revenue without department source attribution. So we strip away the bias of who sourced what and look at pipeline and revenue generation holistically. We have the perspective that deals aren't won by a single department, they're a result of a coordinated system. So we stop slicing credit by team and start tracking outcomes the way that the buyers experience them. So a series of touch points across the entire go to market engine. So that's number one. Number two, and this is something I actually haven't spoken to much in this show yet, but tracking go to market efficiency across all investments. So it's not just how much pipeline you create, it's about how efficiently you actually do it. So when we ingest companies data, we look at all of their go to market expenses and we analyze how every dollar is spent across marketing, sales, customer success, brand, et cetera and how that translates into pipeline and revenue. And then this gives leaders visibility into ROI across the full system, not just by department. Right. So we can see if X number of those investments is allocated towards pipeline creation. We can say proportionate to what you're spending on pipeline, what are you basically generating in return? And we can sort of see if a company's in what we would consider a healthy range or like totally inefficiently spending their money, which happens in a lot of cases. The next thing, number three would be monitoring core sales process metrics. So we dig into the sales process itself by tracking win rate, average deal size, sales cycle length, and then we pair that with contextual data to uncover why deals are closing or stalling. So not just looking at these as like lagging indicators. Our belief is when we use these right, they reveal whether your sales motion is aligned, how buyers actually buy or not, and help you sort of like isolate where the friction points are. The big one. Number four, measuring the prospecting process as its own stage. So this involves some custom CRM sort of like configuration. But we ultimately treat prospecting as a standalone performance stage rather than just this arbitrary sort of like black box. We analyze how long it takes for BDRs to book meetings. Reach patterns are working where handoff and conversions are breaking down and then ultimately helping diagnose inefficiencies and optimizing the top of funnel engine without guessing because I think that that happens a lot, right? Bdrs sort of just like get this call list they call an email an Outreach to a list of prospects every day. But we're not tracking how they actually like move through that process from like becoming a ready to work prospect to actively working them to becoming disqualified or qualified. Like we want to be able to have that visibility to see that. I'll give you one quick example. In one of the companies that we recently architected this for, they were seeing that about one quarter of everything that the BDR team was working was coming from marketing leads, hitting a lead threshold of a hundred points. Okay, qualified leads. And when we dissected that further, we had realized that only 2% of those prospects were converting to pipeline. And when that was happening, it was taking over a hundred days to do so. And so with this particular company, they're now in the process of refining their contact scoring model and I guess being less generous with how they're scoring leads. And the focus there is increasing the number of hand raisers to pass to BDRs versus just passing them all MQLs. And that involves adjusting the marketing strategy a little bit more. So they're introducing more tailored nurturing programs and things like that. But again, I think that's my, just like my short way of saying that there's a lot of insights that can be learned when you really break down the prospecting process and look at it with more scrutiny. Number five, analyzing pre prospecting signal data. So before a BDR touches a prospect, there's usually a trail of breadcrumbs. Not always, but being able to track that and understand, for example, what content did the buyer consume, what pages on the website did they visit and where did they come from? Was it from some sort of paid ad, for example, or an email? What channels sparked engagement? How many signals occurred before they actually raised their hand or had a response from an outbound motion. So this gives you the truth about what's influencing pipeline, not just the last touch. So you can see here, when you look at it this way, you're looking at marketing signal data and sales data as separate things but interconnected. You're understanding the interplay between the two things to understand the systematic process of a prospect becoming aware to becoming qualified op. And ultimately it's a framework that creates more accurate, complete data in a scalable way to measure go to market because it's grounded in how revenue is actually created. And when companies adopt this, it totally changes the way they plan, invest, and ultimately win. So 30 minutes today, I wanted to keep it a little bit shorter and sweeter versus sort of like the longer episodes that we've historically been doing. I hope you found this valuable if you want to go down this path. You're curious about how to sort of like take action in your own organization. I'll quickly plug Passetto. We have an intro sort of offer to working with us. It's a four week go to market accelerator or Sprint and basically you come out the other end with sort of like a new baseline dataset that you can work on optimizing over time with some recommendations in doing so and then basically a diagnosis of your biggest data gaps and sort of like what would need to be done within your architecture to be able to close those data gaps and collect the data that we'd want to be able to start looking at your go to market performance this way if that's of interest to you you can go to passetto.com and happy to chat at any time. Take care y' all and we'll see you on the next show. Bye Sam.