Transcript
Chris Walker (0:00)
You're listening to Revenue Vitals with Chris Walker.
Chris Walker (0:17)
What's up, everyone? Love having you all here. I see some new faces, which is amazing. For those of you that are newer here, you should know that we have been on fire recently. Stuff has been rocking out, been really excited, getting really. And overall, I would say like just an incredible response from the framing of the problem that mostly C level executive teams are facing, which then flows down into all the executional teams. So I am excited about that. On a couple of personal notes, my new company, Passetto, so far in the month of October, so we're 29 days, it's not even done. 29 days into the month of October, we have closed more revenue and created more pipeline in 29 days in October than we did the whole nine months of the year before this. And so that has been really cool. And there's a lesson here that I just covered, that our marketing cadence has not changed at all from any of the months before to October. We produced the same amount of podcasts. I post pretty much consistently on LinkedIn every single week. The volume hasn't changed, the style of the video hasn't changed. The only thing that's changed is the message of what I'm saying. And it's actually, it's the same message or the same problem reframed to a different stakeholder, which is now the Chief Revenue Officer and the CEO, who I firmly believe, depending on who owns the go to market, which I'll talk through, are the only people that can truly solve this issue. And it's not because CMOs are not talented and capable. But I'm working with CMOs right now that want to change this, that see the problem. We run our four funnel model. The model's going to break down. It prevents my marketing team from doing things. The business metrics aren't going in the right direction. And the whole issue is how I'm measured as a CMO. So CMOs see that and then hire us to help them fix it. And before we tried to fix it within marketing. And now I've gotten more wise and the real solution is to work with the cmo, to work with the CEO to let the CEO fix the problem so the whole thing works. And so that reframe has been pivotal for me. And I think it can be pivotal for a lot of marketing leaders because I spent five years trying to fix this problem working only inside of the marketing department. And I know for sure that 99 out of a hundred times, or 99.9% out of a thousand times that you can't fix this problem within the marketing department. It needs to be cross functional. It needs to be led by the CEO who feels the pain or sees the opportunity around how valuable fixing this problem actually is. I talked through quantifying the problem on the last episode for people that weren't there. You can feel free to reference the last must listen episode that talks through how an issue like this around how a company invests money in business development resources and revenue focused marketing and strategic levels of marketing and any other stuff that's focused on mostly on creating pipeline and the roi. The impact of all of that set of investments has been going down over time. And if it drops by a certain level for a 50 or $100 million company, it literally cost them 250 million to $500 million per year that they do not fix the problem. And it delays the compounding of a SaaS business, which is the same thing as compound investing in your own personal portfolio that the later you start, the harder it is to get to your target within the time that you have before you retire. It's the same thing here, the compounding impact of SaaS. If you delay that by a quarter or a year, it creates long term financial loss for all shareholders. And so it's a critical thing that we need to be aware of as executives. And I think what I've kind of done at this point is try to like put it on a silver platter for here's exactly how you would fix it. Cmo. I've tried this so many times. The philosophical arguments about we shouldn't look at attribution this way or it shouldn't go this way and you have a philosophical or theoretical debate with other people in the company or the board never works as a marketing leader. And so what I've learned is that the way to instigate, to quantify the problem, instigate this change and start the discussions is to focus on blended return on investment of all the investments to create pipeline which will either expose the problem or help show how well you're already doing. And then you can have a discussion about if we're already doing well, should we do this anyway to put our foot on the gas? That's another thing that I want to talk about. Most of the companies that hire my company come to me when there's a huge burning problem. The investors are involved, the investors are pushing them to fix it. It's delayed on the timeline, they can't figure out what to do. And it's like There's a huge issue in the company and I would much prefer, and it's so much better for companies to hire my company when things are going well so that we help you not do the small critical missteps that in the next 18 months lead you to that problem that we fix. And to think about this type of stuff as not a the place is burning down now, we need to call an expert in to fix it. But this expert gives us something that helps us go faster. If our growth rate's 20 or 40, doing these processes can pick up the pace, can lower the acquisition. So I'm just trying to encourage people to think about this as an offensive move, not only a defensive move, which, oh, we're missed our targets, we're down forecasted. I guess we need to do a marketing analysis with a firm. There's a couple things that I have discovered or sort of realized for myself. A lot of people ask the question who owns go to market? And I think if we asked 100 people, we would get a pretty spread amount of answers. I think that some people would say cmo. I think there'd be a small number of votes for cmo. I think people would say chief Revenue officer, head of sales, slash CEO. There'd be like a mix of those. Then there'd be a small subset that think that revops owns go to market, which is laughable. And so you have this who owns go to market? And to me it's the, on the OR chart, the highest ranking person that oversees everything in go to market. And so if you're a chief revenue officer and you don't own marketing or you don't own post sale and somebody else is the chief customer officer and they own post sale and renewal and expansion. It's impossible for you to own go to market and therefore it defaults to the highest ranking executive who is the CEO. So in many companies, the CEO owns go to market. And some of them probably realize it and some of them don't. Some of them think it's my CMO and CRO's responsibility to run our go to market. They're the people that I hired. They're high powered executives, super talented and capable. They're responsible for it. But in reality, the CEO and the CFO create the system that the sales and the marketing leader and all the other people in the company play in. And the problem is not a talent problem, it's not a technology problem, it's a systems problem. The way that companies plan, drives how they measure and drives the tactical plan and how the investments get allocated. It's a wild insight as well, is that the allocation of your investments across go to market or even within your portfolio within marketing are a function of the attribution model and the KPIs, not the other way around. So depending on if you use a first touch model or a W shaped or a linear shaped, or you use the lead origination source by department aa, the four funnel model, if you pick one of those different things, I can tell you what your investment allocation will look like because it's built to appease the attribution model, not to drive results, not to be accountable to results. And so the CEO is typically the person who will actually fix this problem. Which I believe is a super powerful insight. It's an insight that I didn't have three weeks ago. And I think for a lot of people that are C level executives having that clarity and if you're a CMO or a CRO that doesn't own all those functions to stop having the burden on you to try to fix it and have the person who actually is in the seat to fix it and tell them and explain to them why they they're the probably the majority shareholder, they're the leader of the company. Go to market and product are the main parts of you got people in team. Just so don't get me wrong there, but go to market and product are the two big strategic buckets. The CEO needs to be running both in most cases. So we have that, that should be helpful for people. And then there's one that people have been really resonating with. So I just want to like kind of expand on it further. Where I talked last week about, imagine that you have a factory that manufactures cars, right? And inside of the factory there's tons of different processes and machinery and TE teams and departments and people and KPIs and all this different stuff. And out of the thousand people that work in the factory, you go to one person who works on a team of people that put the wheels on the car. And you go to that person, you say what's the ROI of what you do? And that's exactly what we do to a content marketing manager, an agency, a performance marketer, a bdr, a leader of a team, the director of field. And we go through the factory and we ask the people that work on the lines of the factory, what's the ROI of what you do? Well, if I didn't put the wheels on, there'd be no car. So I guess my ROI is infinite. What's the ROI of your website? You need a website to run your business. There's no sense in calculating the ROI of it. And when you do that, the insight here is that in a factory, the people that put the wheels on are not the people that figure out how the wheels go on better or how we lower cost about putting the wheels on or anything related to process optimization. Their job is to follow the process and put the wheel on. And there are other people called lean engineers and lean manufacturers and people that have studied ways to optimize processes and reduce waste and make everything better. And because they're not the one putting the wheel on, every time they see a different part of the factory and they can see we need to change the glue, and if we change the glue, it'll go faster and it'll be cheaper. Okay, let's have the glue change. And the people keep putting the wheels on. Now there's a different glue and it works better. The people that work in the factory are not the people that are equipped to optimize the factory. And that is what we do throughout go to market. Our BDRs are responsible for making their cadences better. Our paid media managers responsible for making all of their stuff better. Every single micro person that does a process can get better. So don't get me wrong, everything that they do can get incrementally better. But if the factory doesn't work, getting the person to put the wheels on 5 seconds faster is not going to fix anything. So you have people that are focused on micro improvements that don't actually move the needle. And that's basically the whole sales and marketing team, micro optimizing for things that don't really move the needle. And so I think that we should be taking some of the principles. I think a lot of people that are on this show probably buy into the revenue factory concept because it truly is. It's a combination of people and processes and technology that complete different steps in a process to make something and I think can be operated in a very similar way. And so there's learnings that we can have from them that factories get external perspectives quarterly or even more frequently than that to see if there are opportunities for productivity reducing costs, and somebody from the outside can see that differently than them. In the factory, the factories have teams that are built to optimize either processes within the smaller factories or the big factory. I think there's just a lot of learnings that we can have there and that point out sort of why companies feel stuck sometimes. And then let's see here, Sydney, we had long term plan for go to market efficiency but I'm not really feeling it at this very moment. So. So let's close out there and move to questions. And then before I wanted to say something at the beginning. I didn't get it in, but I think I want to say it so I'll do it now is that this morning I go to a coffee shop with my dog and I walk to the coffee shop and then I. I don't drink coffee anymore, but I'll get something small to eat and it's like a 20 minute walk for my dog and then I get back. So I had to finish that walk and then I had to go up, drop my dog off and get to the studio so I could come in here and record. I had an 11am recording and then I have this one and I get back from walking my dog and I've realized that I forgot my keys at the coffee shop and now I'm like, oh, now like my whole morning's throwed off, I'm going to be late, everything's going wrong. But I've gotten wiser and smarter around that. So when things go wrong, I actually have been able to change my mind around it of like, what? What's coming from this? Why did I leave my keys there? Something good is going to happen. And I think about this in advance and that I have to drop my dog off, get a temporary key from my apartment to get in, go and get my car, drive over to the coffee shop because I don't have time, pick up my keys, drive back, give them the temporary key and then get over here in time to make the recording. And when I get back in with my car and my key, I'm waiting for the elevator, the elevators are running slow. This guy Ian comes up to me, who I've been friendly with, he's an entrepreneur too, and we get to talking. He said something to me that I needed to hear, which is that the performance of your team is 100% predicated on their mindset. And as a CEO, one of the core jobs that you have is helping your team have the right mindset around things. And that was something for me that I just needed to hear. So I think this is an interesting life lesson for people. I thought it was cool for me, like, oh, I forget my keys, everything's going wrong. Then there's some things that I'm dealing with in my businesses and this guy tells me the answer to some of the things that I'm dealing with. And I would have never happened if I didn't forget my keys. So not to get overly philosophical on this podcast, I'm thinking about starting a new one where I can go philosophical on things like this. But I thought that was a cool lesson for people because five years ago when that happened, I'd get pissed. It would ruin my day that I forgot my keys and I was late for the podcast and I had to rush and I couldn't do a couple of the things that I wanted to do before I left. And now it's just like, whatever. It's just like. Yeah. So it's a mindset thing. You can look at. Any person can look at the same situation and say, my life sucks. My life is amazing. My business partner sucks. My business partner's amazing. My team sucks. My team is amazing. And for some reason, we get in this, like, polar of looking at it in either a really good or a really bad way, and the only difference is your mindset. So it's powerful. Use that however you wish. Now back to technical sales and marketing talk. Let's go. I want to talk about CAC and CRMs and all the other acronyms. Let's go.