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- [00:00]
Dave Gerhardt
You're listening to Revenue Vitals with Chris Walker. All right, Chris, something you said, all this stuff is. I don't know if it's LinkedIn. I've been listening to your podcast. I'm trying to stay sharp. You push me to stay sharp. Tell me what you mean by this. You said some people think I'm wrong, but I'm really just early.
- [00:31]
Chris Walker
Great way to start. It feels like I've been that way my, like, almost my whole career, especially as I've gotten more from the outside. I was just telling you before we got on, because I work with so many companies at once, I'm able to see the patterns and the problems and what people are trying and whether it's working or not and what technology they're buying. And all these different patterns across 50 companies or 30 companies at a time now have access to all their data and their finance and their CRM. And so I'm. And seeing perspectives across the executive team. And so I'm able to pinpoint those things years, maybe three, five years before someone inside might actually see it. And a lot of people, yeah, sort of come at me for these ideas. It's been. I don't know. People call me a contrarian. I really don't see it that way. I feel like I'm just reflecting the truth that people don't want to hear. But, yeah, I've been early around my whole career on some of the things, and I'm just communicating the things that I'm seeing. Smart people, like you see the same things, hear the same things in communities, see those patterns, and there's a small percentage of people that are like, yeah, this guy's right. Maybe I don't see it right now, but I believe him. So I think about.
- [01:36]
Dave Gerhardt
I want to ask you something more about, like, the feedback loop. I think you and I are uniquely exposed to this feedback loop, which does create an advantage and allows you to be early, but saving that for later. Just. This is more of a personal thing. And I think what's interesting is, obviously people will know you. There's a lot of overlap. This will be a very popular podcast episode. It's like feeding raw meat to. You know, this is like, just throw this by a cage, right? Like, it's gonna be nuts. But with that, I think part of having a strong point of view comes with a lot of people who don't know you, don't like you, and you get comments on. On social media. And I'm just curious because there's few other folks that are in this situation, I want to ask you this personally. Like, how do you not let that stuff get in your head? I see people trying to dunk on you all the time. Even when you're not trying to dunk on someone, someone sees think trying to dunk on them. What's your evolution with social media been? Every now and then you, you can't help yourself. You do have to say something in the, in the comments. But I'm just curious like what your perspective has been like as someone. Like, hey, I have a strong point of view. I'm going to share my way. With that comes a bunch of people who either interpret the thing, don't like you, don't like what you say, interpret things the wrong way. Like, where does that sit in your mental space? As I'm an entrepreneur, I'm going to build a business, I'm trying to take care of my personal health at the same, my mental health at the same time. There's a lot of dunking that happens. Where does that sit in your head space?
- [02:52]
Chris Walker
To me, it's become more of an understanding and an acceptance. Like I understand why people think that way. They don't have the perspective that I don't have. They haven't seen the data that I have. They haven't had the 50 CMOs tell them the truth under NDA. They haven't seen the finance data of what's happening at the company and how CAC is going up or whatever is happening in the finance data. They don't have the same perspective that I have. And so it's more of just an understanding at this point that other people don't have it. And then for me it's, I've come to the point where I'm not making the stuff up. This is not my opinion. It's literally just like there's enough data to support this as a fact. You could write a clinical trial around some of the things that I say with all the data that's available. So like people are. And then people have their own invested interests in the world being in a different way. Right. Maybe they sell something that I've, you know, have enough data to say doesn't work anymore. Right. And so yeah, I, I can understand that perspective.
- [03:47]
Dave Gerhardt
As I have noticed, there is a common theme that is the people that are often the most antagonistic or don't like the things you say the most, they're often solo consultants for some reason. Have you noticed that trend?
- [03:59]
Chris Walker
Yeah. And it's like why conversely, five years ago, refine labs like There are many people that come up to me on the street. It happened to me in Tulum last week. Some guy was like, five years ago I was a solopreneur. Now I have a 35 person agency and all I did was just follow the same stuff that you were doing. And I'm like, that makes me happy, dude. Like, and so why are these people pushing back? I'm like giving you a clear opportunity to make your business more successful. Some people will do it directly, some people will do it in post and it'll show up in my algorithm. And I have a very, I've developed a very clear policy. I've only done it five times. But there's a difference between having a debate, having a, you know, intellectual or respectful debate, versus being disrespectful. And when people get disrespectful, it's just a, it's an immediate block at this point. I just don't have time for that bullshit anymore.
- [04:39]
Dave Gerhardt
Yeah, I agree. It's not healthy. There's also this weird thing. I was listening to this podcast today, but with this doctor, this woman, she's amazing and she was talking about parenting. I'm dealing with something with one of my kids right now and I'm trying to get better. Like anything, I'm trying to get better, I'm trying to be a better parent. Like, how do I help my daughter through this? We're driving each other nuts right now. And she was like, you know, there's no room for nuance in the world that we live in today. And I think that is what's funny about marketing is like marketing as a craft, as a business discipline. There is so much nuance in marketing. And then like you throw marketing point of view and takes and advice on social media and there's no room for nuance on social media. And so everyone, it just becomes this crazy thing. And I, I think it's also another example of like if you listen to what you say long form. Like, I got back into listening to your podcast recently cause I knew you were going to be on. I kind of just cleansed myself other than doing this podcast. I'm like, I got to just like listen and not marketing stuff. And so I, I learned through, you know, who I interview. And so I listen to your podcast, I'm like, man, this is really good. And I think if a lot of people listen, if you listen to the hour long thing that Chris said about X, that would change your opinion versus if you just read the headline and the sound bite, you Got to hear the tone of voice, you got to hear the nuance, you got to hear the backup. And so it's like, sometimes I think the short, firm stuff actually does a disservice to the actual. Like, if you took the time to listen to the whole thing, you would have a different perspective.
- [05:58]
Chris Walker
Yeah. And then to back what you were saying, like, I'm starting to feel like it's time to, like, rethink the box that of marketing. Like, I think that there's a bunch of stuff thrown in one category that is poorly defined, and there's too many responsibilities. Long term, short term, tactical, strategic product, pipeline, all under one thing. I just think.
- [06:18]
Dave Gerhardt
Okay, that's later in my notes. Producer Dave, Save it. All right, so. So we got to that. Another thing I want to ask you about is the roi. Talk about the ROI of having a podcast and being active on social media right off the bat. And I want to lead you in a little bit because I heard you talk about this recently, and you talked about how it's given you such an advantage, whether it's a podcast or a live event, not to create pipeline or sales. Obviously, that is a nice benefit if you can generate sales from your podcast or social media or content. And this is so key. It is. It's given you the ability to figure out a business's strategy and shorten the feedback loop. Instead of having to, like, spend six weeks coming up with a survey, trying to send out a survey, getting 500 responses. Can you just talk about that as a marketing strategy for people listening to this? Just the value of the feedback loop and how you talk so passionately about, like, the strategic insights you get from this feedback loop.
- [07:14]
Chris Walker
Yeah. I mean, in 2014, I worked with a consultant named Andy Midwin. I was a, like, product manager at a $10 million industrial company. And he came in, he taught me a lot more about marketing than just running ads. There's this whole other thing, which is like, what product are we going to build? How are we going to price it? How are we going to competitive position? And how are we going to understand what people need? How are we going to test that? How are we going to beta alpha launch, revise new features, roadmap, and there's like, all this other underlying stuff. And so I remember going to trade shows and building, like, a survey and, like, spending more time not trying to sell the product, but to understand what do people want, what are we missing? How do we change the messaging? What on the brochure needs to be different at that point. The only time you had to do it was the five times that you went to a trade show. So much has evolved in the way that you're able to access your customer and that you don't need to build a booth and for people to show up now you can host your own event, you can have your own community, you can have your own zoom calls with, with prospects and things like that. And so, and I didn't think about this initially, but the way that I've seen it now is that like, the value of the podcast is, as you mentioned, just not about the pipeline that's created. Like, the benefits that I'm seeing most right now is like all the objections that come up when people ask questions. Like the roadblocks that people say, like, hey, I want to implement this, but this is the roadblock I'm running into. The feedback and the insights you get from your customers help you shape your message, your product, how you help customers implement, how you structure your organization, how you price it. And so there's just so many benefits around those aspects that I find super valuable.
- [08:41]
Dave Gerhardt
I often think about, I use this example a lot. I used to be obsessed with like old school advertising, direct response, like building that type of stuff, like the creative that was it made. There's like ridiculous ads like your, your doctor's favorite cigarette was like the lucky ridiculous. But, but I like understanding some of those principles. And I, when I talk about this topic, I often think about, man, you know what, that generation of marketers, they would kill to have the insights that we can get from like writing a post on social media and getting instant feedback. And I think this is something that can be true at any scale, obviously for both of us. We have lots of followers on LinkedIn, you know, have an email list. I have a community, there's a substantial audience there. But I think you can do this in smaller doses. And what you have. I used to think that social media used to be like an afterthought as a marketing channel on a team.
- [09:28]
Chris Walker
Still now.
- [09:29]
Dave Gerhardt
Yeah, it still is, which is crazy. Look at anything in the world. Social media is how the world communicates. And that is true whether you sell hoodies or, you know, enterprise software politics.
- [09:40]
Chris Walker
Like the most powerful things in the world happen through social media.
- [09:43]
Dave Gerhardt
Yeah, And I think it's not always a direct response thing. It's not like, hey, I posted a link to my thing and you know, people sign up for my product demo. It's like the ability to test messaging. And so we did this in the early days of When I was at Drift, we. We use the CEOs, like LinkedIn. We use social media from the founders. We got a lot of that that way. Doing this in a different way with Exit 5. It's like the same thing we were doing seven, eight years ago. I'll give you an example to. To build on something you said there. We did our first event this year. I wanted to not pay a lot for speakers. I wanted to not hire famous people to speak at the event. I wanted to put on an awesome event. And so literally, I went to our podcast analytics and I sorted by most downloads over the last year, and I went through. I picked the top 10 episodes and I reached out to each of those speakers and I said, hey, Chris, you were one of the most popular speakers on our podcast last year. We're doing an event in Vermont. It's in September. Would you Want to speak? 9 out of 10 said yes because they already know us. They already have the relationship. And the content of the event was amazing because I already felt like I tested it right? And it's like, if you can have these little feedback loops in all of the parts of your business, so that's more context for you maybe to get your idea back there. But I wanted to ask, how would you. Okay, so.
- [10:52]
Chris Walker
So give me that side benefit that I've noticed most recently that I think people really underappreciate is that I've actually found, like, my podcast content to be Most effective for GR&NRR retention and expansion. When your customers are listening to your message and then, like, you know, you got the CMO and they're like, sharing it now with the CRO, and then all of a sudden you have an expansion potential and more people in the organization are bought into the theory and the message, and all of a sudden they're staying for longer and buying more stuff and happier and telling more of their. More of their customers and their friends about it, like, that benefit is just not very trackable. Like, people just tell. My customers are like, hey, I was listening to that episode of the podcast. I shared it with my counterpart. It's been like, amazing. They feel so much more aligned now. It overcame that roadblock. I think that people underappreciate all of these side benefits aside from pipeline creation.
- [11:40]
Dave Gerhardt
There's just something about the format of structured but casual audio, you know, like, I've been listening to Tim Ferriss for 10 years. I feel like I know the guy, Right? I'm sure you have people in your audience the same way they've Been listening to Chris Walker for seven years on his podcast. They feel like they know you and that creates a connection at the same time and you can become a source of information for them. So how can we help other people? Like, I think it's easy for somebody to be like, oh, yeah, well, you know, you guys have huge followings. Like, you can post something on LinkedIn and get a million comments, or you can send your email list. Like, how do we make this possible for other people? Maybe you don't have a huge audience or you're at like an unknown enterprise software company. Is that a false belief that you can't tap into the benefits in the same way? How would you help somebody do that?
- [12:21]
Chris Walker
Everybody starts at zero. We both did.
- [12:24]
Dave Gerhardt
What was your zero? When was that?
- [12:26]
Chris Walker
I had 900 followers that I had collected from 2008. Whenever LinkedIn started to 2019. I had 900 followers. When I started, like actively posting on LinkedIn and giving it a real shot. Our first live event that I did had 17 people there. I did my first in person event. 10 people came. I had like a whole thing set up in Miami. We rented a space, 10 people showed up. Hopefully that's like encouraging to people. The benefits that I felt are relative to the scale that you're at. Like, at that point, I had. Nobody knew me. I had like whatever three or four customers. I had two people on my team. We had no money in the bank. And just going there and getting one more customer, that's 25% growth. You know what I mean? Like, it's all relative to your size.
- [13:07]
Dave Gerhardt
And scale or having to test your. Okay, only 17 people showed up to that live event. But like, they stuck around, they stayed. Having to test your pitch and test what you're talking about with those people, that's 17 more people than you got feedback and data from before.
- [13:21]
Chris Walker
And how do you expect hundreds or thousands of people to follow you and listen to you if 17 people won't? If one person won't? Right?
- [13:27]
Dave Gerhardt
So also, I've seen you do this, but for me, something that's like, awesome about. We've tried to like consciously evolve the Exit 5. You know, once we started building Exit 5 as a real company, they're not like, Dave's hot marketing takes anymore. It's like we're trying to. I think I'm, I'm a good host. I love interviewing. I'm a good party host. So I have CMOs and other people on my, you know, at my party. And then we were like a curation business Instead of a creation business, we share their takes. Right. However, when I'm hosting, I notice if I say something, I made an analogy. Like I use an analogy. I'm sure you do this same time. You use analogy that even if it's only 17 people, the chat lights up because of a joke that you said or something that landed. It's like truly like the a standup comedian going to some like rinky dink venue to test out their things. And you're like, now I'm doing it right now. I make a note and I follow up that with that later. And then that becomes like a fleshed out perspective. And so I think there's also some value in you having to stand up and turn the mic on and just go for an hour.
- [14:23]
Chris Walker
It's a creative outlet to me. It forces you to be there and be creative and try new things. Like that happened on my event like four years ago. The MQL hamster wheel came out there and it was like our leading message. People would say it all the time. It was the number one thing they started sales conversations with. It came from just like a random joke on a live event.
- [14:41]
Dave Gerhardt
Love it. Love it. Okay. If I were to start an agency, it would be a B2B Social media agency because I think people don't know how to do it and don't know how to think about it the right way. And it's still very. This is the value of it. You also get pipeline from it. That is like a nice also benefit is that people are going to buy when they show up in your self reported attribution. But we could talk for hours about this. All right, next topic. All right, so speaking of, some people think I'm wrong, but I'm really just early. Five years is a lot of time, especially in this industry. You've said five years changes a lot. I give different advice now than I did five years ago and that's a good thing. Let's talk about what's different 20, 25, what has changed? How do you summarize the things you're talking about right now as it relates to what's different? And our audience is B2B marketers. They want to be, you know, their current marketing leaders or future marketing leaders. So that's your lens.
- [15:29]
Chris Walker
Yeah, I think the big macro shift is the shift from growth at all costs into, you know, whatever you want to call it. Sustainable. Sustainable growth. I don't really call like calling it profitable, efficient growth because many companies can also burn and be efficient. But that shift right and so the first three years that I was talking about it like you could have silos of marketing and SDRs and sales and partner and divide the credit and simplistic four funnel model and not have any finance data coming in and just dump a couple more million and raise 18 months later. And didn't really matter if we got 30 customers or 20 or if our CAC payback was three years or two years, we just keep going. And then there was a big shift that happened in 2022, 2023, where the revenue multiples of software companies have fundamentally sh, which requires us to be able to be a lot more efficient in how we think about our overall go to market strategy and how we integrate and combine the functions of marketing and SDRs and sales together to make one machine that delivers customers in a very efficient and sustainable and scalable way. So I think that's one big thing that the market still hasn't adjusted to. Finance is demanding that we cut costs, right? So they're cost cutting, but they're not getting more efficient. More efficient means making every dollar work a lot harder. When you spend a dollar instead of getting $1 back, we need to get $4 back, right? And then if we do that, then we spend the same amount of money and we get four times as many customers. I'm like, that's great for everybody, including shareholders, even the people that have 10,000 stock options.
- [16:55]
Dave Gerhardt
Is this related to like post? I guess I'm a brand, I like to tweet and write on LinkedIn. I'm not a, I'm not a CAC metric, you know. Yeah, this is your hair, this is your. But is this like a 20? This is post. So like the bubble, you know, there was kind of 20, 20, 2021. Is it post? Is it 2021 to, to now when this happened, like the flooding VC market growth at all costs, like, is that what changed?
- [17:18]
Chris Walker
What fundamentally changed is how investors, public investors value software companies. That used to be a lot higher and now it's a lot lower. And that compresses down into the private market and it changes how much you can spend to acquire a customer because that means it forces how much you're burning cash and how frequently you need to raise. And then at some point people get to the end and the founders don't even make any money. Right? That happens in a lot of VC funded companies. So I think that's one major shift.
- [17:42]
Dave Gerhardt
Could you imagine, by the way, as someone who started multiple businesses now, could you imagine going through all that blood, sweat and tears and not making a dollar.
- [17:48]
Chris Walker
And you don't take any distributions either. You know what I mean? The VCS don't allow you to take. I mean, maybe you take secondary, but you don't get a distribution every quarter like you do in a company like ours. And then all of a sudden you sell your company for 50 million bucks and you have a hundred million in preferred returns and you literally make nothing. That's one big thing. Another thing that I've been obsessed with recently is just like the evolution and the speed of AI. It's almost like the first version, like, almost when like the Internet happened. People take the physical world and they just try and copy it into this new world with the Internet. So people are doing that with AI right now. Like, how do we take our SDR human and make it an AI sdr? And I think that's the first fundamental layer. But over time, I think, well, people will appreciate all of the additional capabilities that get created through this technology. So I got excited about that.
- [18:33]
Dave Gerhardt
We're going to come back to that. I'm updating my. I'm literally, I'm literally live knowing. I also sent a screenshot of us to Eric at Hatch, and he just had exploded. So, okay, let's talk about. We're going to talk about AI. So the shift in growth at all costs. Okay? So it changed how investors value companies, yada, yada. I heard you talking about how, even how marketing measures the effectiveness of marketing. And so maybe I'm translating. I don't know if I'm translating this right or wrong, but you've talked about basically, like, how it impacts how we calculate things. Like CAC as an example. So like, you spend a hundred thousand dollars on a campaign, you make 300 grand back, and everyone's like, whoa. But you're like kind of raising this flag. You're like, hold on, hold on, hold on. If you actually go and unpack the actual costs inside of the company, what is the marketing headcount? What is the sales headcount? What are all of the expenses? Is there something in there where you're. It's almost like you're saying, like, we want to measure. We need to get back to measuring these things. Like a lemonade stand. Like, truly, like, I bought the lemons, I got the table, I got the jar. Like, is there a thing, a topic.
- [19:35]
Chris Walker
Here that you've been getting at 100%? If you're at the lemonade stand and your lemonade is a dollar and the sugar costs 50 cents and the cup is 30 cents and you stand, it costs this much money and all of a sudden you get the dollar for the lemonade but it costs you $4 to make it. You're sitting at the lemonade stand losing money and free your time. And that's what happens in B2B SaaS companies right now. And there's one best practice and it's an easy example because a lot of people do it where they take the Google Ads manager and the Google Ads manager says, wow, we have a 3x roas on our Google Ads. So we spent a million dollars on ads and we have $3 million from some attribution model to say that we got $3 million in revenue from that. And they're like yay. And then. But you didn't include all the other advertising. So now it's down to a one and a half row ads and then the head count and then the agencies and then the consultants and then the SDRs and the sales team and then all the technology and then the leadership and the sales enablement team and rev ops and it's like what now all of a sudden we have a five year CAC payback and marketing celebrating in the corner.
- [20:34]
Dave Gerhardt
How does it get fixed? It's like everything is measured. It's just not a true statement of like where the money is going across the company. How do, how do we fix that?
- [20:43]
Chris Walker
The guardrails placed on the investments that happen through marketing, like marketing is the one who's responsible right now for saying whether their investments are working or not and for creating what the benchmarks are. Finance should be delivering a lot more strict and stringent guardrails around. We spend this money, this is how we measure it. This is the allowable range that we're in. Which would flag most of the investments as unacceptable at the moment. But because finance doesn't have a true understanding of go to market, they're not able to properly scrutinize them. Another big shift that happened, it's been going on for years and a lot of people are pumped about like marketing mix modeling and multi touch attribution and things like that. Back in the day when it was single touch attribution, every dollar in revenue or every dollar that you spent could only get credited to $1 in revenue. And now with multi touch attribution you can take $7 that you spend and can give all $7 credit for the same dollar in revenue. And so it's very unclear about what is actually working or not. It can see you a little bit confused. Maybe you didn't. Maybe I didn't explain that properly.
- [21:40]
Dave Gerhardt
I'm like a brand marketer. I make the T shirts and the pens. So let's explain the $1 and the.
- [21:46]
Chris Walker
$7 single touch attribution. You get a dollar in revenue and you would have to say that the LinkedIn or that was this thing. Right. Okay. Or the SDR, you had to make a choice. Right. So you had no double counting and now all of a sudden with multitouch you get the $1 in revenue and then each individual person, oh, the event did it. Oh, the Google Ad did it, the LinkedIn ad did it, the SDR did it, this person did it, this technology did it. And all of a sudden you have all these tools with their individual reports all taking credit for the same dollar and all of a sudden it cost seven times as much to get a customer. Right. Yeah.
- [22:15]
Dave Gerhardt
Classic example of like someone you know in B2B has an amazing time at your event, they then go to Google, search for your company, end up, you know, getting the ad or the organic search query gets credit for that. When it's actually a way to, you know, there's, there's some percentage of all those things.
- [22:33]
Chris Walker
Yeah.
- [22:33]
Dave Gerhardt
So everything.
- [22:34]
Chris Walker
Yeah, I feel the need to clarify always. Like I'm not against multi touch attribution. Just the way that it's used in companies is totally flawed.
- [22:40]
Dave Gerhardt
Yeah, it's all right, dude, no one's going to listen to that nuance in detail. They're just going to throw, they're just going to roast you.
- [22:44]
Chris Walker
Yeah, they'll probably just buy it.
- [22:47]
Dave Gerhardt
We got to this point because it was like kind of growth, all costs and it didn't really matter like what the true CAC was or like what the cogs inside of a company are. Like, how did we get here?
- [22:58]
Chris Walker
Specifically, all that mattered was the blended cact. So like finance is up there saying, okay, we have a three year CAC payback or whatever, it's all good. And then they just start dividing. And then we raised another round and it was easy and we did it at 100x revenue and we'll just divide more and we'll just spend more. And so the revenue leadership has never been forced to take a hard look at each dollar and say, what are the things that work hard and what are the things that suck? It was just put more on each thing. And so it's no fault to a CMO or a CRO, they CRO is easier because they have PRP targets and things like that. But for marketing they've never been challenged to look at this in this way.
- [23:31]
Dave Gerhardt
This prp. Is that like per.
- [23:34]
Chris Walker
Yeah, it's like trt per rep productivity. Like how much revenue a rep brings in.
- [23:38]
Dave Gerhardt
Sure.
- [23:38]
Chris Walker
And so people haven't been challenged around, how do we decide if we can't just spend a million on everything and we have to be very strategic around we only have this much money and this many things, we can't do everything. How do we decide which things to do? I think most people struggle with that concept because they've never been forced to. At least CMOs that have been in in SaaS for the past 10 years haven't been asked to by the board or the executive team for the most part.
- [24:01]
Dave Gerhardt
So ideally, finance has strong guardrail. Like finance gives the marketing team strong guardrails and the market team executes within those guardrails.
- [24:10]
Chris Walker
I think it would be really beneficial to manager and director level people just to say, this is my target. And usually they're like four or five times above the target and it's going to force them to be creative and innovative and try new things and do things. And I think that a lot of people would appreciate that. And maybe they do have targets. They're just not measured or thought through in the right way. And so that's sort of what we're trying to do at Passetto, where some people think over here trying to shit on marketing. I'm actually trying to empower marketing because when you do this and you deliver the right ROI on all of your investments, it becomes super easy to say to do the podcast, to do organic social media. Right. Because it costs not a lot of money and it drives a ton of results.
- [24:48]
Dave Gerhardt
I was going to ask you about that actually, but you said something now like, so you can do things that are creative and innovative. And I'm over here on my own podcast and I've gotten reviews of this podcast before. Someone's like, this is, I can't believe this guy was a CMO somewhere. He doesn't know anything. I'm like, well, you know what I'm good at, Chris? I'm good at brand, I'm good at product marketing. I'm going to position. I'm really good at creativity and innovation and getting people's attention. Isn't that what you want out of marketing? Like, we've gone so far in the other way. It's like, wait, no, do you want me being the finance? Like, do you want me spending all? Do you want the cmo? Do you want the head of your marketing organization? To spend all their time figuring out like the blend of spend across, you know, what is the headcount of this and what is this? No, you want me coming up with good ideas to help grow the business and move us forward. And so reality is, if I could have a partner like this in my company or externally, that's going to allow me to fly. You want me to be in that position. It's like you want your engineers to actually write code, not spend all days in meetings talking about justifying the expense. And so I think it's actually like a one plus one equals three type of scenario. Like, let me be creative, let me be this. Let me, let me be the M in the cmo. Instead of like half of my job is spent in finance, which that's not where you want me. You want to put me in a position where I can win.
- [25:59]
Chris Walker
Yeah. And just like the way that it's structured right now, like prevents creativity, prevents doing new things. Like it, it actually forces you to just do these small little things, Google Ads, performance marketing events that you're able to measure that people can't actually justify the roi, but they've accepted in their mind that we should. We're a cyber security company, we should go to 15 events, we should spend 250k on the. That's just what cyber security companies do in marketing.
- [26:24]
Dave Gerhardt
And all this stuff is even more important now than ever because of what you talked about, because of AI commoditizing. Like AI is basically commoditizing, like shitty marketing. Right. And so I actually think of it as an adv manage. It's like all the things that are just table stakes that's just going to get done by AI. And so that allows like the actual creative and strategic marketers to be able to think of how do we win? AI is kind of like leveling the playing field for everybody else. And so how are we going to go and win in this space?
- [26:49]
Chris Walker
And I just think that the, the difference between like looking at analytics and structuring your rev ops and community, like processing the finance data and figuring out what the ROI is, it's just such a different responsibility and skill set than managing the magic quadrant at Gartner and developing the podcast and doing the product marketing and influencing the product roadmap and doing all the customer research and building the copy for your website, it's just incredibly different responsibilities and skill sets that we just put into one thing and say, okay, this is marketing. I think the same problem's happening in revops, to be honest. I Think that there's certain functions that just have too many competing objectives and talents and skill sets that it almost becomes fundamentally impossible for one person to manage.
- [27:31]
Dave Gerhardt
Hmm. I was gonna ask you about this. So talk about the marketing thing because I think this is. We had thought about the team when I was at Drift like this. David the CEO was like there's clearly two pods. I think at the time we had split them up into like brand and demand. You wrote something the other day that I saw which is like there's kind of two movements in marketing and correct me on the. What you actually called it, but it was like there's kind of one bucket that's like product marketing, content, thought leadership, brand building, and then the other one is more of like the traditional demand gen. What would be like the ideal way to split up marketing in that.
- [28:00]
Chris Walker
Yeah, yeah. I really don't think that we should call it and demand. I think it's very confusing for people. The terms are poorly defined and people have their own thoughts. So I've come up my own. There's a part that is strategy. There's a big part of marketing that is strategy, which is analyst relations, PR comms, product positioning, competitive intelligence, customer research. The that if you get it right, can 5x the growth rate right. You're not going to get that from advertising. You're not going to get that for certain things. It's like if we shift the positioning and launch this new feature and like are able to message differently in this competitive situation, like our win rates could double. Like there's massive value in that type of stuff that actually has benefits across the entire customer life cycle. It's not just about pipeline creation. It helps you win more deals and increase win rate. The speed and the velocity, the renewal rates, the expansion rates. And so we can't just measure that part on pipeline creation and the skill set and the timeline in which you think in that is a much longer term timeline. I think thought leadership belongs in there too. I think that using a podcast as a way to get insights can. Can belong in there as well.
- [29:05]
Dave Gerhardt
All right, that's good. I'm down. I'll lose brand and demand. So strategy and what's the other strategy?
- [29:09]
Chris Walker
Right. Yeah, and like a great cmo, that's what they bring huge value to the business in. Like you're 50 million ARR. That's where you really do a lot of stuff and then you have.
- [29:18]
Dave Gerhardt
I mean this is what I've spent 90 of my working relationship with the CEO talking about is those things like all we did was we had a WhatsApp and we talked basically 24 hours a day about positioning this play, that play, showing up at this event and not doing the trade show thing like those things. We never talked about the individual like ad units. So that's strategy. What would you call the other.
- [29:38]
Chris Walker
And then you have pipeline creation, which I've broken into three different stages. You have demand creation. We need to get our target accounts to be interested in wanting to buy our stuff. Then you have supply chain. How do we supply our prospecting engine? With high intent, high quality, qualified people and accounts that were ready for prospecting. And then the prospecting engine, which a lot of times falls into sales, which I think is a poor, poor thing. We want to be able to have all three of those things. Which pipeline ends when our sales team has a qualified meeting, not when our SDR books a meeting before they qualify do band. And so bringing those functions together and then marketing ops needs to extend all the way through. Marketing ops usually ends at they filled out a demo request. It needs to go all the way through to our sales team has a qualified opportunity in pipe that we're going to win greater than 25%. And so like looking at it that way that right now that split responsibilities between marketing and SDRs just allows you to play the blame game. 30% of companies is my estimate that have compressed those functions together, SDRs and marketing and that becomes advertising. It's interesting to think that you have SDRS and prospecting in there. The optimization of your website. A lot of events like events could be driven for pipeline or could be driven for strategy. So like, it's interesting to think whether like events should be spread out across the whole customer life cycle and multiple people can have events. Why do all the event budget go into marketing just because they administer the event? I think we should be challenging that. Ops and data and analytics and process optimization and alignment between the functions, all those things should fit fall into pipeline gen. And that's a lot more math, quant, it's more like science, right? And then the strategy becomes more like art. And I think that breaking those two things into different functions allows you to measure them differently and allows you to say, okay, these things over here, we're going to think about them this way. Like we should be doing AR not just for pipeline creation, but also on retention. When we made that new investment, did our NRR go up and think more strategically across the whole customer life cycle? And then when you have the other side on pipeline gen, it's just very Clear. Like we're running a Google Ad. What is the goal is to get somebody into a meeting with our sales. We spent this much money, did we get the meeting? Did it convert? Did it work? Like the ROI on that side becomes a lot more cut and dry too. And when I think put it into it becomes hard. Yeah, that's a good way.
- [31:52]
Dave Gerhardt
I do like that because I also think you want to have collaboration between those two teams, right? You want to have great product marketing. Clear differentiation, a strong strategy is only going to improve the conversion of those channels anyway. And so you gotta, they gotta be able to work together. Where I've seen it, it just become siloed. And like you have demand gen, which is just like, okay, all of marketing at three companies that I've been at, the demand gen person, the demand gen leader has always been the most stressed out person at the company because we just put everything in that bucket and they gotta do everything and they own the entire revenue number. And then, you know, product marketing and content, we just get to dance around and like, hey, let me know if you need anything.
- [32:29]
Chris Walker
Yeah. I mean, the best time when I was do, I was running Pipeline Jen for a medical device company. It was the most amazing thing ever. Like most of the marketing and quotes team was product marketing, clinical data, customer research. We had new features coming out, new clinical data coming out, new announcements, new positioning and new new PR news releases. And all that stuff was just podcast interviews, was just all the fodder for our advertising. Like, okay, give me that new feature came out. Let me tell our whole customer base about it. Right? Like, so you have the creation and then you have the distribution side of it.
- [33:02]
Dave Gerhardt
It's funny, we've. It's been two years of doing Exit 5 and everything's been organic. And this year we're trying to grow more. We have bigger goals. Imagine this. We started spending on advertising. Guess what's working really well now? Advertising. Because we have an amazing brand and organic base and we know which content is going to work and like those two things work really well together.
- [33:20]
Chris Walker
I know people are so in the either or game and like at the beginning maybe, but when you're at whatever 5 million somewhere in that range, it becomes a both game.
- [33:28]
Dave Gerhardt
Yeah. Okay, so that's good, that's helpful context. I hope people will hear you past that. I don't think if you listen to that, I don't, I don't think anybody would say that you're dunking on CMOs. I don't know a CMO out there. Who wouldn't want to have more alignment from the rest of the company from a finance side, have a clearer team structure to win? Anything else in the, like, what's changed on the, in the GTM side of things that's relevant for this audience or like current beliefs and opinions you have about where GTM is going?
- [33:58]
Chris Walker
I think one that is blindly obvious to me but I think people argue about we need a lot smaller marketing teams at most especially more developed companies.
- [34:05]
Dave Gerhardt
Like oh yeah, listen your predictions. Smaller, smaller internal W2 fixed cost marketing teams.
- [34:10]
Chris Walker
Yeah, yeah. I feel like a lot of my customers have a 50 to 100 person marketing team and then I have some customers that have a four person marketing team and the four person marketing team somehow puts out a hundred times better stuff, a 100 times faster. And it's because they're not sitting in meetings debating like why do we need four teams and five approval levels to send one email? And when you have teams and responsibilities.
- [34:30]
Dave Gerhardt
It'S like that's been the most fun part about having this business. Exit 5. We're a content and media company and we have five people and the level of things that we're able to put out because I think we know what we're doing and there's no nonsense like because there's nobody like arguing with the VP of Sales about like you know, nurture and MQLs and this. Like we can I say it all the time. Like we, we're putting out con, we're putting out work at the level of a 50 to 100 person marketing team because they're smaller. And then this is where the AI piece gets really interesting is like it's not about writing shitty content, it's about like, I think as somebody who's, I've always thought of myself as a full stack marketer, meaning like I never want to wait for somebody else. Like I, I got the idea, I'm gonna go into HubSpot, I can get the landing page done myself. Like what's possible now? It's nuts. I don't know if you're like a.
- [35:15]
Chris Walker
Big Claude user or anything but like, yeah, and Versal.
- [35:17]
Dave Gerhardt
Yeah, dude, I can make a landing. I could literally go make a landing page myself. Right? Or at least make a mock up so I can have the idea, I can have the copy, I can have the landing page, I can then hand that off to somebody. So, so what's possible with like shrinking the cycles? Like I've been at companies where it's like, yeah, what's up with that thing? It's stuck with the creative team for three weeks. There is a lot of bloat in marketing and I don't think the AI stuff is about writing, you know, shitty blog post copy. It's like making me giving me a superpower as a marketer where I can now do the job. I can now do four or five things that I don't, I don't have to. I don't need a developer, I don't need a designer. That's what's possible, that's what's really exciting.
- [35:53]
Chris Walker
So smaller internal teams, it makes the speed much faster. But if you're in customer insights, your competitive intelligence, your strategy suck, then no amount of volume that's created through AI is gonna or speed is gonna make anything better. And so AI is an accelerant. Just like many things, advertising is accelerant. Like it's an accelerant to something that's already working that you've already thought through a great strategy, such as a point that I want to make. When you do have smaller headcount, it allows you to be a lot more flexible, right? Like think about ecom, right? There's big buying seasons like Black Friday and Christmas and then there's very low buying seasons for certain products. And the factory that they have is able to flex up and down. It can make a million things for Black Friday and then it can make a hundred thousand later. And because they're able to buy less materials and things like that, there's no flexibility when you have so much fixed cost headcount. So lower head headcount cost creates more flexibility. Oh, demand is down in Q2. Let's lower advertising. We can just cut it down. We can keep our CAC down. We like, we know people aren't buying. We're gonna change our strategy for that period of time. Most people are just like, oh, we just run a hundred thousand dollars a month every single month. No matter what it is, it gets.
- [37:01]
Dave Gerhardt
Hard because it's like, that's someone's job, that's someone's team. And so like, what are they going to do and how are they going to feel valued at work if we don't have things for them to do? It's crazy cycle. Are there, Are there common? Oh man, people are going to get mad. Are there common? So of the bloat that you see, are there common, like pockets of bloat? Are there any patterns among the companies where there are parts of the marketing org that are overinvested that you would probably not need today?
- [37:28]
Chris Walker
The Places where I see companies reducing is probably a good way to look at it. Are partner SDRs, sadly content organic. And then basically all program dollars are just all tides. Boats sink and rise the boats or whatever the saying is. So like events and advertising and programs just coming down naturally because they need a lower cac. But those are the things that I'm seeing companies cut. Yeah. If you like have a smaller team, then all of a sudden you have 80% of your budget to spend on programs instead of 40%. Right. And that gives you double the amount of things that you can do that are creative. You can hire an expert like Dave to come in and give you a great strategy or something like that. Like where you don't have that budget because it's all tied up in W2 headcount right now. There's a couple other ones that I had that I think companies will just be a lot smarter around bringing external experts in. Like it's just like in development right now, product development, that is in software engineering. It's not about how fast or how much volume you do anymore. It's about do you build the right thing? The right thing. Typically someone from the outside might be able to help you narrow in on what the right thing is a lot better. And maybe that'd be a better investment of $5,000 than having someone. The fifth person that's going to do your organic social channel.
- [38:41]
Dave Gerhardt
You mentioned the strategy piece, but as a good one. I talked to a CMO recently and she was like, yeah, one of the most valuable things is we. I have this person who's amazing at positioning and messaging and I've basically hired her at every company and she comes in for three to six months. And we. It's not a full time role to have 50, 100, 200 grand in the budget to be able to do that and not have to like sacrifice anything else because the team is smaller. I think that makes a lot of sense. I have your list of trends. So smaller internal W2 fixed cost marketing teams, senior leaders getting back into execution. I think that's a result of having a smaller marketing team. You can't really just, if you have a smaller team, can't really just be in meetings all day, I guess. Right.
- [39:18]
Chris Walker
And just like I feel like you need to be doing it to properly direct your team. You need to get the, you need to be on the event to hear what the customer says, to see in the chat, to know that that message worked. And I've been this myself. Like in 2022, I was this myself as a CEO I got so separated from our customer that it's hard to drive the strategy of your team or your company.
- [39:36]
Dave Gerhardt
What else is on this list? Oh, follow up on the so one of your thing that this is a thing that should happen but probably won't. CMOs need to own the prospecting machine. Do you include like SDR in here too? Which is like the follow up like in your ideal world would they own bdr? Because those terms can mean different things. But BDR is like prospecting. SDR is like actually following up on leads and booking the meeting. Would the marketer would the marketing org own all the way to like getting a meeting booked and setting a meeting?
- [40:04]
Chris Walker
I mean I I wouldn't call it marketing anymore but yes in this org the pipeline creation org would be all those things together and it makes it way easier to understand what is the efficiency of all these investments blended and then how do we break it down more simply? And the split between BDR and SDR is simply whether you're using a third party data source like ZoomInfo versus a first party data source like your marketing automation, your website and event. To me those semantics are dumb for lack of a better way to say it. But yes, at a hundred million ARR the thing that will hold back a CMO that's responsible for pipeline creation as one of their core KPIs is the prospecting machine. Whether you call it BDRs or SDRs, you use AI to do it or you have like super high deals and your AES do it. It doesn't matter. To actually hit your pipeline KPI, typically you need a qualified account that's talked to an AE and so there's this layer between they fill out a form on your website to when they get there that you need to understand and have control over and influence and be able to move the investments and change how it's allocated and drive the strategy and create more cross functional alignment. And I watch a lot of companies specifically in the hundred to $500 million range that have pipeline problems and I it's basically the split of that function where SDRs fall under sales because they want to have a training ground for AES which by the way usually doesn't work anyway. That split becomes the reason they don't hit their pipeline target or one reason, let's put it that way.
- [41:28]
Dave Gerhardt
Good job. You earned your appearance fee on this podcast.
- [41:30]
Chris Walker
Get a gold star. You could send it.
- [41:32]
Dave Gerhardt
Yeah, I'll send it to you a gold star. I'll use Eric Our intermediary to send you a gold star from me. Sign. This is more of a personal question, but I want to end on this because I think it is also about marketing and about leadership. How do you find time to think? Right. You've created a lot of really strong and insightful opinions. You have ideas on strategy for those of us out here that want to be future marketing leaders, future entrepreneurs, future CEOs. Like, do you intentionally. Are you reading all the time? Are you listening to podcasts? Are you going on long walks? Are you going to Tulum and taking mushrooms? I don't know what you know, whatever it is, but how do you find the time? Because I even feel like myself. I need to stay sharp, but I also need time to like, write and think and to formulate opinions. And when I'm just, I get sucked into like, I spend my whole week on calls, reading emails in Slack, listen to podcasts, information, information. I'm like, I didn't take any time to like step away and, and put pen to paper and think and write out my philosophy. And so whether you're an entrepreneur or you're somebody listening to this podcast that's trying to think about the marketing strategy for their company, how does Chris Walker do it?
- [42:34]
Chris Walker
Yeah, when I discovered it was probably 2021, 2022, there's a theory between the manager schedule and the maker schedule. I don't know if you're familiar with this concept where managers just want to stack in 30 minute increments. How much can I get, how many meetings can I have and how much can I get done? From a productivity standpoint, that's how they get stuff done. Then you need the makers, the creators, where if you have a meeting at 9, then another meeting at 12, you don't get enough open flow to be able to actually create anything. And then you're thinking about the next meeting, what you need to do to prepare, and things like that. So I've shifted my schedule quite a bit where Wednesdays and Fridays are totally open. I take no meetings or calls during that time. If I want to call someone and brainstorm and do that, I usually do it through an audio call. But that. That's my choice to do it. I'm not obligated to have any type of meetings.
- [43:19]
Dave Gerhardt
This is how far we've come. He has to say audio call, is it?
- [43:22]
Chris Walker
Yeah, yeah. And then I stack all my internal meetings on Monday. I do all my podcast recording on Tuesday. I do most of my sales calls on Thursday. And then I spread out the rest of the sales calls throughout the Monday and Tuesday afternoon. Then I have two open days. That's like one thing that's been really working for me.
- [43:38]
Dave Gerhardt
That's important because it's the context switching. It's like jumping to then. Like now I need to go in deep work and like be in thought.
- [43:43]
Chris Walker
Mode is very hard, basically impossible, at least for me. I take at least a three, four day vacation. I leave my space and I go somewhere else. Not to do work or to do. Like sometimes I do writing and thinking. I usually it's off. Sometimes I go by myself. Sometimes I go with one of my sister. Last. Last time I did this. But then usually and it happened to me, I just got back yesterday from Tulum. It's funny that you mentioned that. A minute that I get back, it's not even like the next day. The minute I get back to my space, I have all of these amazing ideas flowing out of me. It's like I get a hundred days in productivity in a couple of hours. Like I solve a problem that I've been like, confused or lacking clarity for months in five minutes. I consider it an investment at this point, right? The I used to think about the. It's an expense, right? This vacation is going to cost $5,000. It cost me money. But then I get a million dollars in business value when I get back from it. So I see it as an investment now. And I think doing that at whatever frequency is, you know, financially feasible and right for you. To me, I found that six weeks is the right amount. So those have been two sort of tricks. And then the podcast recording, I do that for three hours a week. And I find that to be a very creative outlet. And I get most of the value because I re listen to the podcast. I find it like watching film as an athlete. Like, re listening to my thoughts, saying, oh, I could have explained that better. Oh, there's like something right there that really hit. I can feel that. Or I would use this word differently or like, this is how we should position this part of the product or whatever comes up. I find that to be a really interesting way for thinking as well. Especially when you do it on a podcast like this or live. Like, I can't right now. Say, hey, time out, Dave. Like, like time out. Let me like, write some things down and think about what I want to say. It becomes very organic. So I find those three things have been really helpful for my thinking.
- [45:23]
Dave Gerhardt
Oh, that's great, man. I love the idea of listening back. I think it feels uncomfortable, but I Find myself. I'm like, because you just, you just kind of just zone out and you're just talking.
- [45:31]
Chris Walker
Yeah, you almost like, especially when I do my own talks and it's like 20 or 30 minutes uninterrupted and unprompted. Like, yeah, you almost do just like black out and talk. And some people don't do it, so they don't understand it. But like, like I'm not consciously remembering the things that I said.
- [45:45]
Dave Gerhardt
Right, but you're trying to. It is the creative exercise. It's like free, you know, it's like if you could rap, but you're freestyling. It's just coming out of you. And then you listen back. You're like, that was really good. And then you cemented. And now you kind of have these takes. Right. Like, I'm sure that, you know, we're talking about your trends for B2B marketing. It's not like you, you didn't sit down to go right on LinkedIn and think, what do I think about? You didn't just like on the spot come up with like smaller internal W2 fixed cost marketing teams that has come up over and over and over and then you're able to label it, name it, and it becomes an ide. I also think just the schedule stuff. Let's remember that marketing should be a creative job. And, and there needs to be some of that in there for those of you who are, who are marketers that listen.
- [46:24]
Chris Walker
Yeah, there's a lot of, you know, it doesn't matter what the size, but like many of them, I find a pattern around 100 million AR. There's many creative CMOs that don't get to do marketing anymore, don't get to be creative. Literally sit in meetings all day and have to deal with politics and fires and someone's not happy with some other person in the department and, and that sounds like prison to me, kind of. And I think that some, I've, I've watched cmos from that position move to a series a company with three people and get to be creative again and reinvigorate their love for the practice and the, the profession.
- [46:58]
Dave Gerhardt
All right, Chris, great job, man. Great catching up with you. We'll do more of this. We'll do more of this. Eric, our guy Eric at Hat. So DM me if you think this is a good idea or a bad idea. He says that Chris and I should start a, a joint podcast together and just, just make the best show out there. I don't know if I'm ready emotionally and physically to commit to that. But if enough of you DM me about it, we could possibly float it up the chain. Chris Walker, always good to see you. I'm gonna take you up on that. We will be seen rucking together at some point in 2025, 2020.
- [47:28]
Chris Walker
And so, yeah, definitely gonna be in Vermont. I haven't been there in a while. You're right by Burlington, right?
- [47:32]
Dave Gerhardt
Yes, sir.
- [47:33]
Chris Walker
Yeah, can't wait.
- [47:34]
Dave Gerhardt
A member of our community told me on the way up here, he posts on LinkedIn. See them off to the. The B2B marketing Mecca of the United States, Burlington, Vermont.
- [47:42]
Chris Walker
Yeah. And then I know when I post this, I'm going to get 500 DMS that say you and Dave have to do a live event. You have to do this live. So maybe that'll be. It's a way to get started without committing to the whole podcast. So maybe that'll be a good one.
- [47:53]
Dave Gerhardt
Yeah, we'll just, you know, flirt a little bit and see where it goes. Right. So, Chris, good to see you, my friend.
- [47:58]
Chris Walker
Thanks, Dave. Always good to see you, man. See ya.