Podcast Summary: B2B Revenue Vitals – Episode RV220: "Who Owns GTM?"

Release Date: November 5, 2024
Host: Chris Walker, CEO of Refine Labs
Episode Title: Who Owns GTM? | Go To Market Live Episode 37

Overview

In Episode RV220 of the B2B Revenue Vitals podcast, Chris Walker delves deep into the ownership of the Go-To-Market (GTM) strategy within organizations. Through insightful discussions, real-world examples, and engagement with listeners' questions, Walker challenges traditional notions of GTM ownership, emphasizing the pivotal role of the CEO over other C-suite executives like CMOs and CROs. This episode is particularly valuable for marketing leaders, sales professionals, and executives aiming to optimize their revenue pipelines and organizational efficiency.

Reframing GTM Ownership

Chris Walker kicks off the episode by sharing a personal success story about his company, Passetto, highlighting a remarkable increase in revenue and pipeline generation within just 29 days. He attributes this success not to increased marketing activities but to a strategic shift in messaging that targeted higher-level stakeholders, specifically Chief Revenue Officers (CROs) and CEOs.

Notable Quote:

"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..." (00:17)

Walker emphasizes that traditional marketing approaches often fail to address systemic issues within the company, suggesting that solutions must be cross-functional and led by top executives like the CEO to be effective.

Challenges with Attribution Models

A significant portion of the discussion centers around the limitations of current attribution models in marketing. Walker argues that models such as first-touch, W-shaped, or linear attribution skew investment allocations based on these frameworks rather than actual business outcomes. This misalignment, he contends, leads to inefficiencies and prevents companies from accurately assessing the return on investment (ROI) of their marketing efforts.

Notable Quote:

"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." (12:30)

Walker advocates for a shift towards measuring blended ROI based on overarching business KPIs rather than departmental metrics. This approach, he suggests, provides a clearer picture of marketing effectiveness and drives more strategic investment decisions.

Organizational Structure and GTM Efficiency

Walker explores the complexities of organizational structures and how they impact GTM strategies. He posits that in many companies, the CEO is ultimately responsible for the GTM strategy, even if CMOs or CROs are tasked with executing specific aspects. Misalignment in ownership and responsibility often leads to fragmented efforts and suboptimal results.

Notable Quote:

"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." (14:40)

Walker underscores the importance of having a unified GTM strategy overseen by a single leader to ensure coherence and efficiency across all market-facing functions.

Customer Success and Product Strategy

The conversation shifts to the role of Customer Success and how it interplays with the GTM strategy. Walker distinguishes between delivering what was sold to customers and the processes required for renewing and expanding those relationships. He argues that these functions should be handled by specialized teams rather than being conflated, as this separation allows for more focused and effective customer management.

Notable Quote:

"In a recurring revenue business, having renewal and expansion on point is one of the most powerful levers that you have to drive growth and therefore must be managed by the person who is going to have this level of accountability." (20:25)

Walker also touches on the financial implications of supporting these functions, suggesting that proper allocation can lead to reduced Customer Acquisition Cost (CAC) and enhanced gross margins.

Managing Efficiency in Scaling Companies

Addressing the inefficiencies that plague scaling organizations, Walker advocates for a leaner organizational model. He highlights how larger companies often become bogged down by bureaucracy, leading to slower decision-making and reduced agility. By contrast, smaller, more strategic teams can drive better results with fewer resources.

Notable Quote:

"Having a smaller amount of really smart people can get you better outcomes than a really big bureaucratic machine." (44:47)

Walker references examples of large corporations successfully trimming their workforce to enhance efficiency and growth, underscoring the long-term benefits of such strategic reductions.

Rethinking Long-Term Metrics: LTV to CAC

Walker critically examines the traditional Long-Term Value (LTV) to Customer Acquisition Cost (CAC) ratio, pointing out its inherent flaws. He argues that LTV is often based on speculative assumptions that can lead to flawed business models, especially when customer lifespans are overestimated.

Notable Quote:

"The core issue is that LTV is made up... and the whole model is fucked... the assumptions that go into LTV need to hold for almost a decade for the model to make sense." (43:23)

Instead, he recommends focusing on more accurate and actionable metrics like net new Annual Recurring Revenue (ARR) and net revenue retention (NRR), which provide clearer insights into business health and growth potential.

Listener Questions and Chris's Insights

Throughout the episode, Walker engages with listeners' questions, providing nuanced responses that reinforce his central thesis about GTM ownership and efficiency. Key takeaways include:

• Educating Stakeholders on Attribution Issues: Walker advises using financial data and KPI-driven narratives rather than philosophical debates to convince executives and stakeholders about the shortcomings of traditional attribution models. This approach makes arguments more compelling and less debatable.

  Notable Quote:

  "Use the business level, KPIs and financial data. In order for this to work, it has to be a financially driven narrative, not a philosophical one..." (31:26)

• Balancing Diverse Customer Segments: He discusses managing different customer segments within a unified GTM strategy, emphasizing the need for tailored approaches that consider varying deal sizes, sales cycles, and customer needs.

  Notable Quote:

  "At a top level you should look at everything blended to look at the entire performance of the factory overall, which then drives why you look at the underlying data." (34:28)

• Organizational Transformation for Efficiency: When addressing inefficiencies in large organizations, Walker reiterates the importance of shifting towards data-driven decisions and removing departmental silos to foster a more cohesive and effective GTM strategy.

  Notable Quote:

  "We're one go to market team trying to figure out how to run our factory better, take the departments out of it." (36:31)

Concluding Insights

Chris Walker wraps up the episode by reinforcing the necessity of top-down ownership of the GTM strategy, primarily vested in the CEO. He highlights that resolving systemic GTM issues requires a strategic overhaul rather than piecemeal departmental fixes. Walker encourages executives to adopt a unified, data-driven approach to drive revenue growth and operational efficiency.

Final Notable Quote:

"When you quantify that, I guess that sort of explains why companies hire my company when there's something wrong. Because the problem threatens the future of the organization when the missed opportunity doesn't." (51:01)

Key Takeaways

1. CEO Ownership of GTM: Effective GTM strategies require oversight and leadership from the highest executive levels, typically the CEO, to ensure cross-functional alignment and accountability.

2. Limitations of Attribution Models: Relying solely on traditional attribution models can lead to misaligned investments. A focus on blended ROI based on business KPIs offers a clearer picture of marketing effectiveness.

3. Organizational Efficiency: Leaner, more strategic teams outperform larger, bureaucratic organizations by reducing inefficiencies and enhancing agility.

4. Rethinking Metrics: Traditional metrics like LTV to CAC may be flawed for long-term strategic planning. Alternative metrics such as net new ARR and NRR provide more reliable insights.

5. Data-Driven Decision Making: Utilizing financial data and unified KPIs can facilitate more objective and effective discussions around GTM strategies, free from departmental biases.

Conclusion

Episode RV220 of B2B Revenue Vitals provides a thought-provoking exploration of GTM ownership, urging organizations to rethink traditional structures and metrics. Chris Walker's insights challenge listeners to adopt a CEO-led, data-driven approach to GTM strategies, promising enhanced efficiency and sustainable revenue growth. Whether you're a CMO, CRO, or executive leader, this episode offers valuable perspectives to refine your company's revenue engine.

For more in-depth discussions and actionable strategies, tune in to the full episode of RV220 – "Who Owns GTM?" on B2B Revenue Vitals.