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- [00:01]
Carolyn Dilkes
Hey, y' all. This episode is for Go to Market leaders who know something's off but can't quite put their finger on it. So if this resonates, this is a must. Listen to episode. Trevor and I break down the nine core go to market dysfunctions that we see inside B2B SaaS organizations every day. That's misaligned data, bloated budgets, lack of financial visibility, and no real system tying it all together. So if this feels like something you're dealing with, tune in. You're not alone. And we're going to unpack what's driving that dysfunction and how to fix it.
- [00:42]
Trevor Gibson
You're listening to GTN Live, a podcast by Petto.
- [00:50]
Carolyn Dilkes
What's up, y' all? Welcome to the show. Welcome to this week. Hope everybody's week is off to a solid start. Thanks for joining us live this week for the show. So listen up. The current Go to Market model is broken and it's making people crazy. And it's not because people are lazy, but the system is fundamentally set up to fail and very few people in the ecosystem are fixing it. And so we talk about this problem with B2B executives, both our customers and go to Market leaders virtually every day. Right? I get LinkedIn DMs all the time. You know, Chris Walker did, too. And we have calls virtually every week with people who want to work with Passetto or just want to talk about the problem and doesn't matter, the company, they all have the same problems and they all trace back to what Trevor and I have deemed nine critical misses or reasons that their go to Market is dysfunctioning. But they can't fix the problem. They don't know what to do to solve for it. And mostly they struggle with getting their peers and internal teams on board. And so as much as we think like this old way should be accepted now as antiquated, unfortunately it's not. And so today, Trevor and I are going to break down. The nine ways Go to Market are missing, essentially missing, and the problems that are causing their dysfunction and poor revenue results. So we'll talk about why they're problematic and importantly for everybody here, what we think should be done differently. So. So without further ado, let's get into it. Reason number one that we feel Go to Market teams are dysfunctioning today. Fragmented data across all different go to Market departments. And this is something we really hammer in. Like every time we get on here, it really comes back to like this theme about siloed departments across Go to Market. But unfortunately, there's no way about telling the story without actually rehashing that same theme. We know that performance measurement and decisions are siloed, right? You've got marketing, sales, customer success and finance all operating on different data sets and different dashboards. And unfortunately everybody is wanting to solve the same problem, right? We recognize growth is stalling or even declining. We know that CAC is going up, so we need to fix the problem. What are we going to do about it, right? And so you've got finance over here working in their spreadsheets trying to solve the problem. You've got marketing over here trying to like cobble together a story. You've got sales doing the same thing. And the reality is everybody's in their own unique ecosystems, dashboards, point solutions, whatever you want to call it, trying to arrive at an answer. Yet everybody's coming up with a different answer and sort of like arguing then over the different calculations. Why is this one right, why is this one wrong? Blah blah, blah, blah blah. And this happens because most organizations were never architected to operate, go to market as an integrated system to begin with. At the end of the day, it all boils down to that. And so each department being built independently with its own tools, KPIs and reporting. And so what do you have when you have each department in its own siloed function? You have no single source of truth. And there's no single team or person now accountable to measuring in optimizing those results. And so marketing reports on leads or engagement in HubSpot or Google Analytics or whatever point solution that they have, sales runs, pipeline forecast, so does sales or their CRM, CS uses gainsight or spreadsheets or whatever tool they're using. And then finance has revenue data in NetSuite or some other BI tool. And everybody has got their own unique version of what should be the same story, but ultimately it's a different story. And so each system collects different signals with different logic and, and overall the infrastructure can't support a joined up view. That is the reality of it. We don't have a single person to be accountable to, a single source of truth. And we also don't have a system or a tool to act as a single source of truth. And so fragmented data ultimately is the symptom of what we would consider a much larger issue in that Go to Market is not designed, owned or operated as a single cohesive unified system, which it should be. And so until companies fix the actual architecture and ownership of that model, the fragmentation will continue along with misaligned decisions, defensive teams Competing for credit and ultimately wasted spend. Right. That is a thing that we want to solve for. We want to know where do we put our next investment and into something that's going to drive roi? How do we measure that and how do we get all teams aligned and sort of operating in lockstep to achieve the same thing? And so when we're talking about, like, what do we actually do about it, there's a few things. This is the reason Passetto exists. And so as much as I don't want to go down that path and sort of like tooting our own horn, there are solutions in the market that solve for this, that bring together your data and ultimately present back to you a single source of truth. But it relies on which we'll get into in a second, having a single core owner to champion all of this. And so that is another common miss that we'll talk about in a sec. But yeah, Trevor, anything you want to add there around just like this concept of fragmented data across the go to market?
- [06:20]
Trevor Gibson
Yeah, I mean, I think this happens naturally just because everyone in each of these teams, these functions go to market functions, is focused on their part of the world. And so it's not surprising that it ends up that way. We're all probably just as guilty in our day to day as focusing on those specific things that make or break what we're working on at that exact moment. So the key here is to bring it up a level and do everything in the context of that bigger thing you're trying to do as a group and get away from the function or role specific kind of things as your primary driver. So it's a mindset shift, really.
- [07:04]
Carolyn Dilkes
Agree. And I think one other symptom of when you have fragmented departments and we talk about this, but when you've all got like different tools that you're reporting in, which are typically like very tactical in nature, what ends up happening is that you've got each department sifting through that to generate a story. And I think there's a lot of irresponsibility with leaders in that too, because what they're trying to do is often like defend, I think what they're out there doing in the market to like cobble together a story of like, hey, look what we're doing, it's working, it's effective. Like, here's the ROI of that, et cetera, et cetera. And so yeah, the story might actually look pretty positive when you're looking at it through like each individual department because their data is defending the things that they are doing in many ways, but yet you're not really solving the problem. Because the top line like business or financial narrative is growth is going down. We don't know why our cost to acquire new logos or to grow is going up. We don't know why all of our individual go to market departments are telling us the stuff we are doing is working. So wherein lies the problem? Until you have a unified single source of truth, you can't really isolate why that is.
- [08:17]
Trevor Gibson
Yeah, and I think you see that in the day to day when you're looking at say presentations for board meetings or QBRs or whatever. Everyone comes in from their own function department saying like hey, this is what we did. Which is shouldn't really be the point. And that's I think the mindset shift sort of from the top down saying like if you come to one of these big meetings where we're trying to build a strategy and see how it's going, everyone should be coming in and trying to answer their piece of the one big question. Rather than these sort of point things, departmental specific things, I think you're requiring that you come in that everyone comes in and tells they're part of the one story and everyone really adheres to that and stays out of the weeds that are important for that department but don't really support the bigger are we achieving the greater goal or not Question. That's what we should all be shooting for is to be able to tell our piece of the one story, not six different stories that don't really meet each other in the middle.
- [09:23]
Carolyn Dilkes
Yeah, exactly. And like skirting around the real answer that people want to hear. Yeah, most investors, I would say don't really care about all of the different campaigns that you're activating and website visits and this, that and the other thing. It just comes down to being able to communicate the true business impact that your go to market is making. So let's talk about the second one. Financial data is top secret information.
- [09:47]
Trevor Gibson
Yeah. Really is just a great segue from what we were just saying. In order for everyone to be able to speak to their piece of the same story, they need to be working with all the same information. And what you see often is that financial data though it comes up in conversations and presentations and so on in those sort of occasional big sort of reviews. The day to day of what is the state of that financial data, the results metrics that are at the financial level don't really get pushed down or made available to each of the functions in a way that's Actually useful. That stuff lives in finance. It's sort of, I think, viewed generally as hey, finance has got that they're worrying about those pieces. That's not relevant to my day to day of how I'm going to execute my function. And of course that's not really the way we think it should be done. You should be making decisions in the context of that quote unquote top secret information. And so the organization has to figure out what is that information that people, that every function needs to be able to access and how do they get it, do they all understand it? And everyone needs to be speaking that same language. So finance has historically been viewed as just a back office function. Not just a back office function, but a back office function that wouldn't really be relevant to go to market. They're there to say how are we doing overall without the context of the what are we doing day to day to actually make those results real. Therefore, whether it's viewed as truly sensitive or just not relevant, it just doesn't make its way into those go to market level conversations and calculations and so on. And so you don't end up with a lot of leaders in go to market that have that financial literacy that would understand even how to interpret what they were saying if they were to get it. And so this is another sort of big, big mindset shift around the entire organization to say no, we all need to be operating against those, those sort of key facts around financial results, which is growth, it's acquisition costs, its payback period, its margin, all those kinds of things that are really important for the business. I mean any, anyone on the finance side or the executive team should definitely know what those things are and what they mean and what to do about it. But you need the next level of sort of function practitioners to be able to also see those things, understand how what they're doing affects those things and how those things affect what they're doing. It's important then that they will actually see that in the metrics that they care about and you know, build, build a whole system around it. Like we said at the in point, number one, it needs to be seen as that whole system where financial metrics are a part of the equation and the teams learn to work together with finance to understand what are we doing that's moving, moving those levers and how are we going to improve those things and how are we going to talk about it as a sort of unified group that is going towards affecting those specific things altogether. It becomes more of a what are we Collectively doing about these things versus what is marketing doing about it, what's sales doing about it, and so on and so on.
- [13:19]
Carolyn Dilkes
You say too that like oftentimes most go to market teams aren't trained in like financial terms or don't have a lot of financial acumen. But I think the same thing can actually be said too for finance leaders, right? Like they're not in the field, they're not salespeople, they're not marketing people. And therefore they also lack, I think in many ways, go to market literacy. And so there's this, I guess this like gap and therefore leading to our next point number three, no feedback loop between go to market and finance. And before we get into that one, one thing that we've really observed at Pesetta with our customers that achieve impact and have positive outcomes in the work that they're doing is that there typically is sort of like this assigned middle person that acts as the glue between finance and go to market and sort of acts as that person that relays the feedback and closes the gap between both of those teams. We'll get into that in a second because that can look, I think, like a few different things in practice. But what about this problem of no feedback or no feedback loop between go to market and finance?
- [14:31]
Trevor Gibson
Trevor? Yeah, I think what you see the dynamic typically being is budgets get pushed from the top down down. Someone at the top is setting a growth goal, which of course is going to continue to happen. And then finance has will tend to take that and run with it and say, okay, given historical trends or all these sort of more like just numbers driven factors, we'll say, okay, here's your budget for this department, here's your budget for this department, and so on. And it's not done in a way that understands how go to market would or should be using those resources. And sort of, it goes the other way around as well, where the GTM teams aren't then able to take that budget they were given and make decisions in the greater context. They sort of take get that budget and say, okay, well here's my piece of the pie. What am I going to do with it in my own world? And I think that's where we would want those decisions to be made in the greater context with everyone in GTM understanding what the overall goal is and how you might coordinate all those different moving parts across marketing, sales and customer success, or post sale to prioritize and allocate that spend in a way that is not looking at this very granular. What is this marketing team or this function within marketing going to do with their piece of the budget that was allocated, that's the wrong place to make that decision. You want to make that up a level to understand like the strategy overall to build a go to market strategy across the whole thing to say it's not about what we have to spend, it's, you know, as a specific function, it is what we collectively spend, have to spend to influence growth as the sort of ultimate goal. And then of course the problem we always have and see across any customer is how do you then say like, well, we spent this money and here's what it did, here's where it ended up, et cetera. And we've talked about this before in previous episodes. You just around the idea of are you using that money efficiently? Are you actually seeing that that spend was worth it and how do you actually think about that in terms of sort of dollars in, dollars out, but being realistic about what that means. And so we have talked about it before, getting everyone on board around this idea of efficiency. We've all got this big bucket of dollars to work with. What are those things across what marketing's doing, what sales is doing, what post sale is doing to efficiently produce that growth, whether that is in top of funnel marketing activities, marketing tactics, the prospecting process in sales, the retention and or onboarding or expansion efforts in the post sale world, we want to know across all of that, which of those things is working efficiently, which is not, and how would we, the entire go to market team then deploy dollars to achieve improvement in that, that thing that maybe is not doing so well, or how do we double down on things that are super efficient. And again, it's that sort of feedback loop across all the go to market departments. It's being sort of in lockstep with how finance is thinking about those things too. And so speaking that same common language about what is the goal we're trying to get to and how is go to market as a whole deploying that investment in the right way?
- [18:13]
Carolyn Dilkes
Yeah, going back to that first point around the architecture too. Like I think it comes back to when you look at the architecture in like the old way versus the new sort of like revenue factory way. I just want to call out that naturally, when you do it the old way, ownership gets super fragmented in that you have marketing owning MQL volume essentially or like basically the top of funnel. You have sales owning pipeline and bookings, you have CS owning retention and then you have finance owning budget and efficiency. The problem there is that Ultimately, growth should be a shared goal across all of those teams and not fragmented responsibilities. And so this leads to the fourth issue that we would see across Go to Market right now is that nobody really owns Go to Market as an integrated system. Some people do own go to Market, but we've definitely seen our share of why that may not have worked. I think it requires a very sort of like, specific set of skills to be able to do that well. And ultimately it's having one champion person be able to quarterback this initiative and act as the glue between all of these different Go to Market teams. Oftentimes you see marketing wants to own go to market or sales wants to own go to market. And that way never works. You need one sort of like main system architecture to anchor accountability across all of the different teams. And then therefore you have leadership that isn't oriented around a specific super nuanced department set of KPIs, which never really works. And so one thing that we have seen is Rev Ops emerged as a band aid, I think, to try and like haphazardly solve this problem and not necessarily like a backbone to an organization. And then I think when that happens, dysfunction starts to compound and the lack of ownership becomes more and more predominant and visible. And so RevOps could be the owner. We've seen RevOps successfully be an owner in an organization, but only if companies, this is the caveat, only if companies actually treat it like a strategic function and not like this ticket desk of here. RevOps. Comb through this list and check off all of these random things that we need you to do. But treating it like a strategic owner of this problem and being the person with the skills equipped to solve it. And like I said, it doesn't necessarily need to be Rev Ops. We've seen FP&A leaders own this, we've seen CEOs of smaller companies own this. But the core thing is having a designated champion or quarterback who understands all of these different issues in the system with a clear path on how to solve it. Not somebody who's just coming in with a very limited or narrow viewpoint. And until then, Go to Market will remain a fragmented, leaky, under optimized machine. And I think companies will continue to perpetuate the same shit over and over again. CAC inflating growth rate is plateauing or declining, teams are competing for credit, and then there's no clear narrative around what is working and what isn't working. Trevor, you have obviously a Rev Ops background, so obviously curious to hear what you have to add to that yeah, absolutely.
- [21:29]
Trevor Gibson
I will admit up front to being a little biased. I do come from the RevOps world and have watched how that function has developed over the past 15, 20 years from being just sort of glorified, sort of a sales ops function, to being sort of just the systems owns, the salesforce admins or whatever, to the successful ones being that liaison between the go to market team as a whole and finance and sort of overall executive leadership being the one central place that is responsible for the sort of overall go to market metrics in the context of finance and so on. Sort of like we were just saying, being that representative that says, like I go across all these different functions, I know what each of them is asking for and know how it all fits together. I think that is a great place for this to live because when defined correctly like that is literally the objective of RevOps is to be able to say like we are thinking as one, we are bringing the departments together and we have this sort of central place where it all gets sort of coalesced into this one main thing. And So I think RevOps makes sense because they are doing that sort of strategic role. But when organized correctly, they are also responsible for the functional operational components that make it real. So that is systems. I think a good strong RevOps team is incredibly technical, but also strategic. They need to understand how all the moving parts of the organization work, both from sort of a technical systems, like actual tools, software perspective. They should be successfully and clearly driving the use of those tools. So that's a sort of a process layer, it's operational. It's not just, hey, can you go get me a new tool to do this thing? It is a more strategic view of here's the problems we're trying to solve, here's the sort of overall view of all those departments working together and, and therefore here are tools we should use, here are the processes to use those tools, here's how those processes and tools drive the data collection and here's what we do with that data. It is the sort of core stack of processes, data systems that makes this thing work. Carolyn said, yes, this could be FP and A that drives sort of bringing everyone together. Sure, I think that's true, but I think you do leave some opportunity on the table there because they are unlikely to own the systems and process layer as much. And so while I don't know that you see a lot of great examples of this working in practice due to organizations not fully committing, I think the theory is that if you really accept that that is what this RevOps function is for. It's by far the best way to get this thing accomplished, in my opinion.
- [24:38]
Carolyn Dilkes
Yeah, I would agree with that. The one thing I think that really stands out, though, bleeding into point number five, is not analyzing go to market performance against unit economics. Let's talk about that for a second. Because I think whoever champions this function in an organization and fills that void, fills that gap, has to have some level of financial acumen to be able to tell that story around you. Unit economics, how do we see that work in the real world? What does that mean? A lot. I get that question all the time. Like, unpack where that alignment comes in between go to market and finance. And why is that important?
- [25:12]
Trevor Gibson
Yeah. Over the last few years, what I personally have seen is finance making an attempt to get closer into caring about go to market and getting more reasonable questions about how go to market is actually performing against the money that finance is allocating and so on. So, like, we're seeing that there's this acknowledgment that it needs to be figured out. But what I've generally seen is that you get the question and nobody really has a good answer to, well, what should that even look like? What does answering that question actually mean? And how would you do it? Unit economics is a big piece of that real answer now. We talk about it, of course, we've talked about it in previous episodes. It's not so much about the holy grail of quote unquote, roi true dollars in, dollars out, because it's just not realistic to tell that story. It's just not really how things work in the real world. And so this unit economics concept is sort of a proxy and a very useful sort of baseline to understand when we spend on this specific piece of the puzzle. Here's the impact that it makes. Unit Economics. Are you thinking about, here's the way the go to market factory, as we call it, works. Here are the pieces that we could invest in moving things down toward from initial engagement, awareness, whatever you want to call it, down to becoming a new customer and then keeping those customers through retention, good onboarding, good retention efforts, and expansion. We want to be able to look at those individual pieces of the puzzle and say, like, here's what we're investing in each of those things. Here is the impact that we're having, which ideally is generally in terms of sort of, here's the dollars that we put into it. Here's the dollars that were impacted by that coming out the other end doesn't always have to Be that way if there are certain cases where it's more of a volume, are we, are we producing enough prospects? Are we producing, what's the sort of efficiency cost of creating prospects and things like that. So there's different ways of thinking about it, but at the end of the day you're asking the same question. When we put these dollars in, what is the sort of ratio of the result that we get out of it? And again, I think some of that work has been done in finance in the past from certain angles. Things that they had access to and understood the moving parts of, they would measure those things. So overall customer acquisition cost and gross margin, all those kinds of things. But we want to take that down a layer and get the go to market teams involved in understanding those sort of same economics measurements, efficiency measurements down in the parts of the factory that they control. So that, that is bridging that gap to where everyone's talking about things in terms of what are we investing and what are we getting out of it, which lets you put those things side by side and say, hey, what things are working, what parts of the journey are working in terms of efficiency, what things are efficient in relative terms compared to everything else and what isn't. But that requires that you solve some of the problems we've talked about in the previous points. You need to make that information available in the right way to the right people for them to be able to think about it in those terms and measure it in those terms. And that needs to be the common language like we've said. And ultimately everyone, and we've sort of said this, everyone needs to be responsible for results in that same context as well.
- [29:07]
Carolyn Dilkes
What I'm gathering from that point is that a lot of companies I think are hyper focused on like volume metrics versus the efficiency metrics, which is what we really care about. Epiceto and that leads us to point number six, which is unpacking why so many companies have such terrible go to market efficiency. We see this all the time, which is over indexing and overspending on top of funnel lead generation. A lot of times when companies are in doubt or when revenue is down, there's like this insurmountable pressure to do something to reverse the trend. And so what do teams do? They end up throwing more money at generating lead volume instead of fixing the real conversion issue that's sort of happening underneath that all. Looking at qualification rates, looking at the sales motion, it's like let's just throw more money to generate more leads. And then I think that's why you often have a lot of companies overspending on paid search or lead gen ads on LinkedIn and things like this because they might generate a quick return in terms of like giving you some names that you can pass over to sales. But I've said this before, oftentimes those are just cold names. They're not really qualified genuine ICP fits for your brand. And so we're sort of like conditioned to believe that more leads equals more growth. But this is the furthest thing from the truth, especially when those leads don't convert, which we see all the time. And so this pressure to hit top of funnel KPIs leads to overinvestment in volume rather than the quality things that are driving efficiency for the business. And why is this? Right. Why do we do this? Right is because a lot of times companies don't actually have the data to tell you how these leads are converting or understand how efficiently they're moving through the revenue factory. Right. We're missing that architecture. Therefore we can't really tell a good story about what is actually happening with those names. And I think it's a lot easier to scale ad spend and continue to like perpetuate driving like top of funnel activity than to really fix the root cause or get deeper into your messaging, your ICP targeting or your sales execution, things like that. And this leads me down a little bit of a different path, right? And so Chris and I talk all the time and we talk generally more philosophical kind of stuff in life and we share the same vision that nothing good comes from manipulating, convincing, pushing. Right. To achieve something. Right. So when you're thinking about that from a sales point of view or from a marketing point of view, that's exactly what you're doing. When you put dollars into top of funnel activity to some extent, right? You're getting a name in, you're getting a name into the CRM, your system, whatever. And then you think we're just going to get that name and then convince them to buy from us, which in my view, you can do it. It's highly inefficient. What is the more efficient thing to do is be out in market, have a really strong and compelling brand narrative that gets people genuinely interested in what you're doing. And then what do you do? You start to attract the people that actually align to what you are doing. And you're not just generating names and hoping and praying that you're going to convert them into customers. And that goes for sales calls too, pushing and trying to Convince people that your solution is what they need. I think ultimately it comes down to doing a really good job of hitting like product market fit first and foremost and having complete clarity around what you do and messaging that out. And that's why we push a lot of times to convince customers, customers to spend more on awareness ads and less on the lead gen. Because while it might take a little bit longer to manifest into pipeline and revenue, that's taking you down that path of getting your brand narrative out there and letting the people come to you when they're ready. And so this all goes back to our core point, not to have gone off on a tangent, but this inability to actually measure unit economics against what you're actually doing, like in market. How much is it costing you to create pipeline? How efficient are you at doing that? And ultimately that's pushing people to increase the amount of money that they're spending on names, cold leads, and then seeing diminishing returns over time. And I think ultimately this masks the system level issues that we see and we continue to see it every day.
- [33:32]
Trevor Gibson
Yeah, I think absolutely right. And sort of tie this back to some of the stuff we've already said. If you were to put the overall architecture together in a way where you can measure each of these pieces, you would see a very clear sort of story coming out in the measurements of efficiency, in the engagement phase of the journey, the prospecting phase, the pipeline phase. You start tweaking these levers, like Carolyn's saying, and you are going to see efficiency change in some of the operational metrics in each of the parts of the factory. We'll start to tell that story. If you're really clearly tracking your plan prospecting effort, you know what happens when you hand these things over. You start to increase that quality by warming them up, doing the brand awareness work ahead of time, not prematurely trying to just dump them on sales. You're going to see things like prospect qualification rates improve and the efficiency of that prospecting layer or stage improve because you're not having to deal with as much volume. Your, your costs to staff, a team to work a bunch of really bad, low quality things. Those costs will change as you're giving them useful things, things that are warm and ready, that understand the brand that you're not having to beat over the head with the ideas that you want them to have. And so just sort of a callback to why it needs to all be looked at as this sort of factory connected ecosystem of different parts and all of those things measured in the same context. Of what are we investing, what are we getting out of it? You're going to see those impacts for doing it right, investing in the right things and not trying to force it.
- [35:20]
Carolyn Dilkes
Yeah. And some of the most common lead generating vehicles are the most expensive. And so when you start thinking differently about. I just had this conversation with somebody the other day, right. Like you go into, you want to be and have a presence at a, at an industry event that all of your ICP goes to. Right. You can have the lead generation play where you spend a billion dollars on swag and a booth and you know, sending your whole team there and like sponsoring a session and yada, yada, yada like that. Those costs add up fast. But then you really get more pointed, which is we don't spend any money to have a booth presence and swag and sponsorship, but instead we go and we handpick like the 10 people that are warmest that we want to meet and we piggyback on the event and do something, some sort of like VIP dinner or something with those people on the side outside of the event while we're there and focus on having meaningful conversations. You leave that with very different results. Right. You might leave that with 10 qualified prospects who are ready to move on to a demo or something like that. Or you could leave with 300 or 500 names of leads that you can, you know, kick over to sales and hope that they'll convert to something. Both cost very different amounts. Right. The lead generating initiatives are much more costly than the other and the results are very different. But what is more likely to be more efficient and more impactful? And so that really changes the way I think go to market leaders prioritize their investments when they are one, measured on their performance differently with different metrics and two, really consider efficiency as well.
- [36:58]
Trevor Gibson
Yeah. And I think we talk here and there about the us versus them problem that you see across go to market. You know, one of the things that undermines the ability to work together towards that common goal. And you see it sort of, if you break things down into the factory view that we do, you've got one team that's responsible for passing things over to the next team and that team is responsible for passing things over to the next team. And when quality suffers in any of those stages, you create some pretty bad will with the next team over. We've all seen the, you know, the sales versus marketing, hey, we need more leads. But all these leads are terrible. And back and forth and back and forth. That just undermines the point we've been making through this entire thing that everyone should be heading towards the same goal and however you get there should be a collaborative thing rather than, well, we did our job, throw things, throw new leads over the fence and not our problem. Yeah, exactly. And then, you know, the prospecting team gets really upset because they're just wasting their time and it just creates this really negative culture which means you're never going to achieve that sort of cross go to market camaraderie and shared goal and whatever and it's just going to spiral into chaos. And of course we've all seen that happen and it's a bad experience for everybody. And clearly you don't hit your goals either, right?
- [38:25]
Carolyn Dilkes
Yeah, I would agree with that. Let's talk about point number seven, teams fixing symptoms and not the actual systems overall. I think there's a reason for that. Like when we're talking about fixing the underlying architecture, like we're talking about a big cross functional cross departmental initiative that impacts a lot of people. Let's talk about what that means.
- [38:47]
Trevor Gibson
Yeah. The easy way out is often just fixing this little point problem that exists. That one function understands the ins and outs of and knows the tactical KPI that they care about in that specific context. And so those things tend to get the attention. They're smaller problems, the people that see the problems, it's sort of within their realm of expertise and you don't really have to work that hard to deal with the little piece. But as we've been saying throughout all this, that's not going to really fix the bigger coordination and system problem across the whole go to market team or the effort overall. So I think being willing to take a step back and not just go for the easy win so that you can say you did something so that a single KPI can start to look better or whatever, you've taken that time and effort to bring everybody into the mix, try to solve the bigger problem and all the moving parts all at once, you're certainly going to get a better outcome. It's a lot harder. It requires other people to be bought in which of course all this is easier. If we sort of solve for, I think point one, where we started here, that it all needs to be thought of as the, the single system with a number of moving parts with different responsibilities across the different pieces. But doing that all in the context of the big thing we're all trying to do, you're going to get a better outcome for sure.
- [40:27]
Carolyn Dilkes
So one thing that we see all the time, people think is going to solve their problems would be blanket people and blanket budget cuts. Right. Our efficiency is so bad, our acquisition costs are so high, our growth is degrading at an alarming rate. What are we going to do about it? It we're going to cut entire departments at a time, cut the budget by 30%, so on and so forth. And instead of fixing the system, we blame the people, which creates more instability. And I think what's overlooked too is often the loss of institutional knowledge instead of fixing the actual problem, which of course takes time. And you know, there's usually executive or investor pressure to react to these sort of scenarios and then lead to these sorts of cuts. But they're not, I believe that these aren't necessarily like data informed or smart decisions because you're not actually getting a clear view into what's actually driving performance versus what's not. Right. So instead of like shaving off 20 or 30% of your overall go to market budget, what we would say to do is to actually get a good sense into what's performing and what's not performing and to cut back on the dollars that in areas that are underperforming, like lead gen, for example. Instead, when you do like a blanket budget cut, you're potentially risking removing the investment in things that are actually working or in people that are doing a great job. And I've always sort of had this stance that it's not a people problem. It could be in some situations, but a lot of times I think teams and people are set up to fail because the systems and process problem, you've got new people, potentially really talented people that come into your company and they're coming into a dumpster fire where you don't have the right architecture of the data, the systems in place to be able to help them do their job. And so I think a lot of times you have really talented people that like I said, are set up to fail from the outset because the right architecture or infrastructure isn't there to begin with. And so ultimately I think slashing people and budgets like sort of like in one fell swoop is not necessarily a good play. Like I said, it's typically reactionary and doesn't really, I would say it's sort of like a band aid fix. It's not really going to solve the overall problem. Most companies want to grow, they want to grow faster, they want to grow more efficiently. And that might just, I think, temporarily stop the bleed and probably prolong the problem versus actually take the time and take the however many months it is to fix the real issue.
- [42:57]
Trevor Gibson
Yeah, I think this is another one of those sort of easy way out kind of things. It's just the easy thing to do between people in budget cuts or sort of the other way around. Bringing in a new CMO or a new sales leader or whatever and expecting that to just magically fix whatever problem that was seen happening before. Probably not that. Right. If they were failing that bad, the previous person in that role was failing that bad. I think the odds that it was really them specifically and just swapping out with another person really not going to solve that problem most of the time. Sure, there are exceptions to that statement, but overall it should be a step back and a question why did they fail? And it's probably a system problem. And by system, obviously we don't mean technology system. In this case, it's the overall moving parts of the greater system of go to market, expecting one person even in an important role at the top or whatever to somehow magically fix it. Probably pretty unrealistic. So that that next person's probably going to fail too, unless you address the, the root cause in the system itself.
- [44:09]
Carolyn Dilkes
Yeah. And I want to be clear that like I'm not against budget cuts. I think there's a lot of situations where we at Pesetto tell companies that they need to reduce their go to market spend by X number of dollars. And usually we'll say, you know, in what particular areas. But I'm thinking back to one experience we had with a customer of a B2B SaaS company and we were working with the CMO and they were measured on MQL volume and what we could see was quarter recorder MQLs were going up and quarter over quarter pipeline and revenue was going down. And so we were trying to help them isolate why and what to do about it. And at the time we had recommended, I think 20% cut to the marketing budget in one particular area which I believe was like content syndication or third party Legion or something like that. And the CMO at the time told us like, like let's just drop this conversation about budget cuts. I'm not doing that. I have fought so hard to like get more budget this year, the previous year, so on and so forth. And I also feel like that is also problematic. It's like resistance to reducing marketing or go to market spend as well. Like I feel like there's two extremes of this issue. One would be like sweeping budget cuts doesn't really solve the problem, but then resistance. Right. Because marketers and marketing leaders tend to have to really push to get more budget. And so we don't really like the idea of also releasing that either. But I think there comes some sort of responsibility in all of that too, to acknowledge like our efficiency and the ROI of what we're doing is just terrible. So we should do something smart about that. Spending more dollars on underperforming areas just to keep the budget is also not a responsible decision to be made either. And so I, I feel pretty strongly about that, that marketers, specifically because they spend a lot of the go to market budget, need to really think and reflect on how they're spending their investments and not just spending the money to spend it because they have it. Right. I think a bold, a bold, responsible leader can acknowledge that and say, I don't need all of this budget because it's inflating our acquisition costs and it's not responsible of me to spend it.
- [46:15]
Trevor Gibson
That's right. And that calls back to what we've been saying earlier around, well, it's, it's not marketing versus sales versus post sale and fighting for budget. It should be, everyone should be looking at it as where can we invest the go to market budget, not the marketing budget, not the sales budget, et cetera. How can we invest in go to market in a way that's going to get to that, that finish line we're trying to get to, which is growth. It's not getting new, more leads, more volume of leads. It is getting growth.
- [46:47]
Carolyn Dilkes
Yeah, for sure. And lastly, we're almost at time. I can't believe we've almost been chatting about this for an hour. But the last point, which I think is one of the strongest issues we see, is internal bureaucracy preventing change from happening. I often see there's usually like one or two really strong change agents in the company that want to do something differently and are advocating for that, but almost like they're getting stuck and they can't really get the momentum or the leverage that they need to influence change. What are your thoughts on that?
- [47:17]
Trevor Gibson
Yeah, some of the problem is driven by the fact that these topics come up when there's already a fire. So it's a knee jerk reaction to hey, we have a problem. We need to find the fastest, easiest way to solve for what's perceived as like a specific point problem, when really the answer is this bigger, more thoughtful, more strategic way of reacting to it. And so rather than going in saying, oh no, you know, something specific is broken, we just need to go throw everything we can at that one thing. Everyone needs to get aligned along you know, around the same bigger picture vision the system overall. And you start from there rather than going from this very specific. Like we think there's this one specific issue and we just need to tackle that. We need to have everyone acknowledge it's more than that. It's. We need to bring everyone together and do this big thing that gets everyone on board, which is selling everyone on the shared vision and getting the executive team, leaders of functions, everyone that has a stake in this thing onto that same page about the overall system and not trying to make it one specific team or department or leader's problem or fault or whatever. It is a team effort and everyone needs to see it that way versus coming in and trying to change things and making it seem like say marketing's the problem or whatever. Right? You end up with a group of people that don't want to work together because it's us versus them, it's someone's doing the wrong thing or whatever. And obviously you're never going to get anything done there. So I think rather than doing that, it's clearly articulating an outcome that everyone benefits from which is, you know, bringing, bringing the system together in a way where we're all going towards the same goal. And yeah, again, staying away from this is we're going to go fix the marketing problem, we're going to go fix the sales problem instead. We're going to create a go to market system that produces good results that are measurable, like that's the goal. Not any more specific thing that could be interpreted as, as an attack on someone's profession. We don't want that.
- [49:42]
Carolyn Dilkes
Yeah, I agree. And thinking back to like, I think as much as you can model the outcome, I think there's also an opportunity to model the risk. I had alluded to this in I think the last show that we did, which is like what happens if we maintain the status quo? And I wanted to share one real life customer example of this. So we often call not to again, go back to what you were just saying, Trevor, which is like don't blame a specific function, but in one organization that we were consulting with $100 million company and the data that we had showed us that their BDR team essentially was driving the lion's share of pipeline and revenue for the organization. But they were lacking a lot of the architectural data to show within that function, like what is working, what's not working, how efficient are they, what is the conversion to opportunity and revenue. And when we looked at specifically the pipeline, we could see in a Four quarter period. At the start of that four quarter period, the pipeline that was being produced by that specific function was like 18 million or something like this. And over time it had dropped down to like 11 or 10 million by the end of that four quarter period. And so what we helped them do was model out the potential revenue loss from that. I think overall when you factor in like the quarterly losses, it netted out to about 30 million in pipeline within a four quarter period. And then when you apply their win rate against that, what we ended up seeing was you're probably losing $3 million in potential revenue because of the fact that you just don't have data to tell you within the BDR function, like what is efficient, what's not. And so I think that was a real eye opener for the executive leadership. When we got on the call and we showed them the chart, we showed how it all worked. And again, this is like a modeled scenario. And so it's not like written in stone or anything like that. But when they had seen over a four quarter period, we're probably missing 3 million revenue. What does that mean year over year, blah, blah, blah. Like, I think the story really changes when you can show not only the positive outcome of what you're going to achieve when you make a change, but also what's the risk to the business if you just maintain what you think is the status quo or like what you think is working for the organization.
- [51:50]
Trevor Gibson
Absolutely. And it all comes back to the system, the architecture, the shared vision of getting everyone on the same page about how things work, why they work that way, what we're going to measure, what does success look like. All these things that we've been saying throughout this hour, they all come into play to create that world where you can actually look at those more detailed tactical pieces and understand them in the context of the bigger result. Therefore you can make those better decisions. And so that's, that's really the big point that we're making here.
- [52:26]
Carolyn Dilkes
Totally. Well, we covered a lot of ground in the last hour, so thanks y' all for showing up. If you have any other questions, reach out to Trevor or myself on LinkedIn, Trevor Gibson or Carolyn Dilkes. And if you want to learn more about Passetto, you can always check out our website or reach out to us directly. But thanks for tuning in live. Thanks for listening and see you all next week.
- [52:43]
Trevor Gibson
All right, cheers everybody. Sam.