Podcast Summary: B2B Revenue Vitals - Episode RV217: "MUST LISTEN: How to Fix Your Pipeline Problem via Marketing ROI | Go To Market Live Episode 34"

Introduction

In Episode RV217 of the B2B Revenue Vitals podcast, hosted by B2B Refine Labs’ CEO, Chris Walker, Sydney delves deep into the critical issue of pipeline problems and how marketing ROI plays a pivotal role in resolving them. Released on October 11, 2024, this episode shifts focus from traditional demand generation strategies to a more data-driven approach centered on Return on Investment (ROI).

1. Marketing ROI vs. Pipeline Targets

Sydney opens the discussion by addressing a common misconception among Chief Marketing Officers (CMOs) who prioritize hitting pipeline targets over understanding and improving marketing ROI. She asserts, "Results equal investment times ROI. So if you want to get more results, one of the two ways that you can do it is by improving the ROI" (07:30).

Impact of Declining ROI on Pipeline

Using a real-world example, Sydney explains how a company’s declining ROI can lead to substantial pipeline losses. She states, "The degradation in pipeline for the next 12 months, that is lost due to the degradation in ROI, which can be a combination of spending more money and getting less results, is $95 million" (10:15). This highlights how crucial it is to monitor ROI continuously, as it directly affects the company's revenue pipeline.

2. The Role of Brand Marketing

Sydney tackles the debate between brand marketing and performance marketing, emphasizing that measuring ROI is essential to prove the effectiveness of brand marketing initiatives. She explains, "Measuring on the ROI of your investments blended against actual results is the number one way to prove that brand marketing is working if it was actually effective" (13:45).

Accountability in Marketing

Further reinforcing the importance of accountability, Sydney argues that marketing teams should be responsible for demonstrating tangible business results. "A marketer and a marketing team must have accountability to 2.5x return. Well, a high performing sales rep will do 6x. We must have accountability to business results" (17:20).

3. Evolution of Go-to-Market Efficiency

Reflecting on her experiences since 2019, Sydney draws parallels to the initial resistance she faced when advocating for the inefficiency of traditional lead generation models. "What's happening right now feels a lot like that in 2019. If you were there in 2019, the amount of people that told me that I was an idiot for talking about how bad lead gen works... All of us know that it doesn't work" (21:00). She notes that the market is gradually recognizing the necessity for a unified approach to go-to-market strategies centered on efficiency and ROI.

4. Critique of Attribution Models vs. Business KPIs

Sydney criticizes the reliance on single attribution models (e.g., last-touch, first-touch) to measure marketing effectiveness. "All you are doing is slicing a model that doesn't work into four parts that also are not going to work" (25:42). Instead, she advocates for a holistic view of business KPIs that evaluate the entire go-to-market engine, allowing for more accurate diagnosis and strategic planning.

Proposed Approach: Unified Metrics

She proposes segregating marketing investments into distinct categories and applying appropriate measurement models to each. "If a top-level business metric is wrong... then you need to use all of the tools in the right purpose to get the answers that we need to deliver plans that address the business KPIs that matter" (29:09).

5. Key Metrics for Go-to-Market Success

Sydney outlines the five critical metrics she prioritizes for evaluating go-to-market efficiency:

1. Growth Rate
2. Total Go-to-Market Expense as a Percentage of Net New Annual Recurring Revenue (ARR)
3. Net Revenue Retention (NRR)
4. New Logo Go-to-Market Efficiency (equivalent to Customer Acquisition Cost (CAC) Payback Period)
5. Create Pipeline ROI

“Growth rate, total go to market expense as a percent of net new ARR, net revenue retention, new logo go to market efficiency... create pipeline ROI.” (33:16).

6. Real-World Applications and Examples

Discussing high-efficient companies, Sydney observes that very few (around 12-15% of public SaaS companies) achieve high efficiency. She emphasizes that true brand strength often stems from product excellence rather than aggressive marketing tactics. "The companies that measure strong on brand, it doesn't necessarily mean that their brand marketing is strong. It means their product is great" (34:18).

7. Listener Questions and Insights

Q1: Revenue Opportunity Creation and Conversion

• Rhiann asks if revenue opportunity creation should fall within marketing and conversion within sales.
• Sydney’s Response: She likens the process to a factory, emphasizing that the inbound inspection (SDRs) should handle lead quality, not the expensive sales reps. "Salespeople close shit if it's good. That's how they're compensated." (20:02).

Q2: Attribution Models and Pipeline Architecture

• David inquires about populating opportunity sources and aligning them with pipeline architecture.
• Sydney’s Response: She advises against using a single attribution model, advocating for tracking multiple signals that prompt sales actions. "It's the sales trigger. It's what prompted our sales team to reach out." (25:42).

Q3: Brand Activities in High-Efficiency Companies

• Casper questions the necessity of brand activities like thought leadership on LinkedIn for high-efficiency companies.
• Sydney’s Response: She clarifies that genuine brand strength comes from product excellence and customer satisfaction, not just marketing efforts. "Building brand is about delivering on promises and making customers happy." (34:18).

Q4: Turning Around Poor Marketing Programs

• Gregory seeks examples of marketing programs that effectively turned around poor performance.
• Sydney’s Response: She emphasizes the importance of cutting ineffective programs rather than adding new ones. "Cutting a bunch of shit that doesn't work is how you turn things around." (42:46).

8. Conclusion and Upcoming Episodes

Sydney wraps up the episode by highlighting the importance of strategic investment based on accurate ROI measurements. She encourages listeners to align marketing strategies with business KPIs and prepare for upcoming live events featuring industry experts like Tom Wentworth, CMO at Recorded Future. “If you want to attend that live, feel free. I think it'll be a great one.” (42:05).

Notable Quotes with Timestamps

• “Results equal investment times ROI.” — Sydney (07:30)
• “The degradation in pipeline... is $95 million.” — Sydney (10:15)
• “A marketer and a marketing team must have accountability to 2.5x return.” — Sydney (17:20)
• “What's happening right now feels a lot like that in 2019.” — Sydney (21:00)
• “All you are doing is slicing a model that doesn't work into four parts that also are not going to work.” — Sydney (25:42)
• “Cutting a bunch of shit that doesn't work is how you turn things around.” — Sydney (42:46)

Key Takeaways

1. Prioritize ROI Over Pipeline Targets: Understanding and improving marketing ROI is crucial for sustainable pipeline growth and overall business health.

2. Accountability in Marketing: Marketing teams must be held accountable for delivering measurable business results, not just generating leads.

3. Holistic Approach to Metrics: Relying on a single attribution model is insufficient. Instead, adopt a comprehensive set of business KPIs to guide marketing strategies.

4. Efficient Allocation of Resources: High-performing companies focus on cutting ineffective marketing programs and reinvesting in strategies that yield higher ROI.

5. Evolving Go-to-Market Strategies: Embrace data-driven and unified approaches to align sales and marketing efforts, ensuring they contribute effectively to business goals.

Final Thoughts

Sydney’s insights provide a compelling argument for rethinking traditional marketing metrics and strategies. By focusing on ROI and aligning marketing efforts with overarching business KPIs, companies can drive more efficient and impactful revenue growth. This episode is a must-listen for marketing leaders seeking to navigate the complex landscape of B2B revenue generation and pipeline management.