Sangram Verje (5:04)

Yeah, absolutely. And we will be going, you know, very, very detailed into that. But thanks for sharing how your thought process or how your experience has been built. And I personally would say, and for those listening, I'm sure they share as well the fact that you share knowledge for knowledge sake to a lot of people out there, it's great. You know, I don't know if you invented Demand Gen, but you probably popularized it. So that's really great and huge respect for that. So Sangram, I am so much of a fan that I had to stalk you at Inbound. That's how much of a fan I remember.

Dot (5:35)

You gave me the T shirt.

Sangram Verje (5:37)

Yeah, exactly. You know, I. Huge, huge respect for what you have done, you know, for the industry, what you have done for go to market, product marketing, sales maybe, you know, a lot of what you might be sharing today might be more of the ops side of things, but you could correct me if I'm wrong. But before we get into the details, you are kind of that person who has gone into the world preaching GTM to all nations, baptizing them, you know, in the name of GTMOs and so on and so forth. If you guys are familiar with Matthew chapter 28, how did you rise to become go to markets pastor?

Dot (6:14)

Well, it's so interesting that when Chris is talking about his journey of being an engineer. I did not know that. So Chris, that was like, that was great. We have known each other for so long, but I didn't know that about you. I had pretty much the same exact background. I'm a bachelor's master's in computer science. And when my group, I think in the master's program you could take electives and one of the elective was just write a code and present. All my team members would say, oh no, no, no, you don't, don't code, don't code. You know, you can just present. You're such a great presenter. And that made me think like, oh man, I'm really good presenters, presenters, the whole master's. I didn't write a code and I graduated with masters in that and Then few years later, they all met me and we were just talking about it and they said, have you ever wondered why we didn't let you write the code? And had you were, yeah, man, because of you, I have so much confidence. I get on, I speak. They're like, no, no, no, you're a horrible coder. We never wanted you to be anywhere close to coding anything. So we just pushed you in that. So in life, I feel like sometimes you get pushed into these areas of that that you don't really know, but you just go with some naivety around it and you end up doing it. That's really been my story as well, is I've done marketing. Somehow I got into marketing and part odd where I ran marketing, got a quad by exact target and Salesforce. So I learned a lot at Salesforce. I really got my chops here, really at Salesforce and then started a company called Terminus which you know, got to now over 100 million. So having that experience of starting from zero to grow all the way to 100 like Chris, I think you just recognize you fail a hundred times in that journey. Every few million you felt like you have it and then it all falls apart. You feel like you got marketing and it falls apart. You think you got sales, you got fall. And I used to always think, man, I got like bad marketers or salespeople don't know how to close deals or the CS people, man, they all need to let go because we need to get experienced people in. And all along I was so wrong. It was the process of go to market that was wrong. The mindset to Chris, what Chris said was wrong. And I have been very responsible for a lot of the mindsets and popularizing it. And I'm trying to carve out of my own thing. Like, no, no, like let's re go back to this and maybe there's a better way. So I think both Chris and I are on that journey to just learn and share because you're growing every single day.

Sangram Verje (8:40)

Yeah, you're right about popularizing some of the standards through which we define that these days, the GTM os. And I know, I'm going to ask you about that, but nice preface for you, but guys, like I said, if you're still on the pod, you need to invite anyone that you think should be here because we ask uncommon questions to common topics. Now, you know that our guests are both from engineering backgrounds and you know, I had studied computer science myself and just got really the best marketers have.

Dot (9:11)

In case go to a marketing School, you really are not a good marketer because you're learning the four P's and really not know the psychology of it. And I think what makes us all really into it is because I think at the bare minimum, I wonder, Chris, if you think the same as well. I feel it's really psychology that we're really talking about, of how people buy, how people engage. That's really what it is. It's not the rest of the mumbo jumbo.

Chris Walker (9:35)

Psychology, statistics, science, experimentation, qualitative, like intuition. Sometimes I think there's a lot of things that you can put together to be really good at. And when I think marketing at this point, you kind of split it off. You have business strategy, which some things happen through marketing, and then you have pipeline creation, which is an entirely different part of it. And so when you separate those two things out, you see one is like a lot of art and the other one is a lot more science and data.

Sangram Verje (10:02)

Yeah, absolutely. And what I see common in what you just said, you know, both of you, is really in the technicalities of it. You know, marketing has come from. I mean, there's still a lot of the fluff out there. There's a bit of a movement, B2B brand brand awareness, but it's balancing that and getting to the crux of what the business needs to succeed, which is really great. So, Chris, I'll stick to you here for my next question. Again, you've prefaced this a little bit, but I'd like you to really dive deep into how you've reinforced the need for or any kind of marketing, in my opinion, whether it's B2B, B2C, whatever it is. But we're in B2B here. So just to stick to the context, but every marketing should be tied to economics. Every marketing should be tied to unit economics. Knowing that fact, and I know a lot of people on this live stream know that. What would you think are your favorite GTM motions that you support? I should have asked Sangram this question, but I thought since we are in the ring, let's swap it a little bit.

Chris Walker (11:04)

Yes, let's talk background a little bit. So from 2012 to 2018, I started two bootstrapped e commerce companies. I would sell things on Amazon, I would run Amazon search ads. I got really good at Amazon SEO and Google SEO. And then eventually Instagram organic and Instagram and Facebook ads. And when it's your own company, you're bootstrapped. You don't have any money. You're spending your own money on Advertising in your own time and you have $30 in margin to get a customer or you're gonna lose money. If you spend more than that, you get a lot more clear on are these things that I'm doing in marketing working or not? And most B2B marketers have never been through that experience, right? At one point it cost me $60 to get a customer. And every time I got a customer I lost $30. And then that was my own money. And if you do that a thousand times over now, you've lost $3,000, right? And all the time that you spent there. And so that background, I then moved into running demand gen at a $35 million medical device company and started to see what people were doing and was just blown away by this. Like it feels very basic. Like we have this much money, we need to acquire this many customers and we need to think about the economics around it in order for our marketing to be considered working. So when I talk through the unit economics around like marketing, I have a lot of empathy and understanding because most marketing teams actually don't understand the full P and L and expenses. It's not due to lack of capacity, it's due to lack of visibility. Most marketers don't know how much is being spent on sales. They don't know how much is being spent on headcount outside of their own department or sub department budget. So all they can do is say we spent X on Google Ads and we influenced this much amount of money. And I think a lot of the issues stem the difference between B2B and B2C is really in. Often it's a generalization, but oftentimes that there's no sales team in B2C and so you don't have that additional layer. So marketers actually have to sell shit. And in B2B it's a little bit different where you can say oh, we got our leads or we got our website traffic or we got, you know, 500 people to this webinar. Marketing did our job and I think that we need a lot more sales revenue oriented mindset within the the marketing department. Specifically the people that are responsible for creating pipe and closing pipe. Is there any particular like metrics people should track? We at my company Petto have developed several proprietary compound metrics that will track the effectiveness within marketing that I'm keeping close to the chest. I won't be sharing those today, but if you want to become a customer, I'll tell you about them. But generally there's nothing that you know, a Mid level marketer or even a CMO can do to really measure this without understanding and getting a full export of all the expenses that hit C. And most marketing leaders don't have the authorization to get that. So any advice that I give you is not going to be helpful because you don't have the data to make the calculations anyway. And so it's tough. Like I think that marketers should be accountable to it, but even if they wanted to right now, it would be difficult for them to be. And so yeah, when I think about what the core problem is in marketing, the three questions that a marketing leader and a finance leader want to answer are where should I spend my next dollar to get the highest return? Where are the places that I'm spending money that I'm getting the highest performance and should try to figure out how I can squeeze more juice from them? And what are the things that I'm getting the lowest performance that I should cut or stop? And all three of those questions are not rooted in efficacy. It's rooted in return on investment. They're all finance problems that show up in marketing and then downstream impact sales. And so I'm trying to shift the conversation here about what the actual problem is. Multi touch attribution has nothing to do with finance data. It has nothing to do with roi. Most companies, you view that as the industry standard or any model that you use for attribution, if it doesn't include fully functional complete finance data, you're not going to be able to solve this problem.

Sangram Verje (14:51)

Yeah. And guys, when Chris Men's multitouch there is oh, here's my share of conversions or here's what I did. You know, that's kind of what he's talking about there. But you're right and I would like to, you know, just add a little bit before I get to sagram here in thinking business minded, revenue minded when it comes to your marketing, what do you see five years from now? Like, and I'll give you some context personally, pipeline is B, they go to accreditation for marketers these days. I drove, you know, 100 million in pipeline. And that's kind of in your credentials. But I say that we need to start saying I drove so so amount in revenue, not in pipeline. You know, pipeline. And I dare say this. And again, this is a boxing ring. So let's go. It's all, it almost feels like the next new fluffy metric, if you like. I'm not saying it's not valuable, but it almost feel like the next new fluffy metric. So where do you see five years from now in marketers, you know, and then these two you, Chris getting closer to revenue and getting maybe deeper, more difficult KPIs.

Chris Walker (15:54)

But even so, if you say I, you know, I drove $100 million in pipeline that won at 20% and led to 20 million in revenue but it costed our company 120 million to get it and we have a six year CAC payback that also doesn't work right. It's not just about how much pipeline or revenue drove the cost of it also matters a ton and actually is the root of the problem in B2B companies today. And so you know, I used to be the person and I love this because Sam Grimm will be in the same way. There are many things that I talked about five years ago that now I challenge myself on and are reinventing myself with new knowledge and new experience and a landscape change. And one of them is marketers should be focused on revenue. And that's what I used to say. And yeah, when we do marketing we definitely should be focused on how does this drive revenue for the company at an appropriate roi. But if you have a six month sales cycle, it's very difficult to be focused today and then trying to figure out and wait six months to see whether or not your thing worked. And that's why we use leading indicators and leading metrics that are controlled what we call closed feedback loop concept by winning by design that I love where you create pipeline and you monitor it against trailing twelve month win rate and you're able to create a feed forward calculation around the quality of the pipeline and the potential or the estimated gain of it and then you can pull your leading metric into 30 days from now instead of waiting six months to know whether or not it's working. That's one of the things that we have been working on tightly with Pesetto because we need to be focused on metrics and we need, we need to have a feedback loop much faster than waiting to revenue. As a person responsible for pipeline creation and pipeline generation.

Sangram Verje (17:29)

Yeah, yeah, that makes a lot of sense. So Sangam, I'm going to post that your favorite GTM motion question to you and just add a little bit of an extra to that. So in addition to what Chris has said, you know, how in terms of marketing approaches in general and just you know, marketing titles, unit economics, what do you think are your favorite GTM motions? And it doesn't have to be, you know, this is not a silver bullet livestream guys.

Dot (17:55)

So yeah, yeah, I mean there is none Right. Like there is what drives revenue in the right way. I hope people picked up on a few things that Chris was talking about. I think they need to go listen to some of the stuff that he just said and some of the videos that he went goes deeper in a lot of the stuff he's talking about. And I believe another way to frame those things is I think we've been asking the wrong questions for long periods of time. I'll give you a very classic example of this. We've been asking questions like where can we grow? And at the surface level, that sounds like a great question. Of course, where can we grow? Let's just start working on it. But we don't finish that question. And the way you finish that question is where can we grow the most profitably? That part just never got in our minds because of this growth at all cost and all the different models that we all have been part of. Same thing when you have more than one product. So if anybody listening and if they have more than one product, the question really shouldn't be that hey, which product creates value? Hopefully all products create value, but you need to figure out which product creates the highest gross margin and profit and value for a customer. So they can be sticky. And I can go through those eight questions that our research has has come up with in the last three years. I think that's what has been the greatest learning for me. I thought I knew the question. I start, thought I was sounding smart. Where can we grow? Where can this go? Which motion to. And these are all wrong questions. They're false positives at best because it will make you feel good about it. You will, the whole team will rally behind it. And then like to your earlier point, dots like you mentioned about the fact that, well, pipeline. Yeah. People say I generated 100 million pipeline and still got laid off the very next week.

Sangram Verje (19:48)

Oh my God. Yeah.

Dot (19:50)

The reason is. And they put it on LinkedIn, which is the hard part because I'm like, oh my God. I had to addict shut up because I don't want to make anybody feel bad. But if you generated 100 million pipeline and you still got laid off, I think there's something demonstrably wrong with the way you understand the business. And therefore this has been happening again and again and again to marketers who should have the most input and insights into customer journey like Chris was talking about. So I think if I have to pull it back, I said, man, can we start asking more deeper question about the business that we are in? And if we do That I think we'll start finding better answers and that's the beginning of it.

Sangram Verje (20:34)

Yeah. I would like you to get into those questions as well. And we do our homework well. So I've learned a little bit and I'm open to learn more as well. If you're on this stream, Dot, the host always learns from all his guests. So I digress here. But one question or one statement that you are very, very famous for worldwide is. And same for Chris in some ways as well. Is CEOs owning, you know, or being the sponsor of the, you know, old GTM operating system, if you like or think about it, the CEO of Salesforce. I have to be on Mad Money once a week. I have to be on cnbc, you know, another once a week. I need to be on CNN once a week. Now I don't want to say the rest of it. I have to be on Fox once a week. How do I have the time oversee a GTM operations? You know, I get it for small businesses, medium sized businesses, there's a lot of that roll your sleeves involvement. But at the enterprise level, how have you managed to engage leadership at the very summit to be part of, you know, GTM success?

Chris Walker (21:42)

Yeah. And Sangram, I'd like you to talk about SMBs too, because I feel like even in the midsize, it's not getting ownership the way it should.

Dot (21:49)

No, not at all. Yeah.

Sangram Verje (21:50)

So go ahead.

Dot (21:51)

Yeah. So two things. One, when Brian and I wrote the book move, this is 2021, when go to Market wasn't cool, by the way. Right. You know, we felt like we were like a couple of kids trying to write something, trying to see around the corner to see if he can cross the street.

Sangram Verje (22:06)

Many people call Chris a crazy man.

Dot (22:08)

Yeah, yeah. And it's like question, you know, framework and stuff. And it did really, really well. And that's when I became the student of Go to Market. When I was writing the book, I felt I knew it. Like we built Pardot, we got acquired, you know, terminus 100 million. Like we had a couple of good runs. So we thought we knew Go to Market and we're going to tell the world what Go to Market is. And then I walk into a conversation with Brian Halligan, the CEO of HubSpot. That's the story I talk about in the book. And I asked him who owns Go to Market and it's a publicly traded company CEO and he was the CEO since it was zero. And he's like, yeah, I own it. He didn't blink. So did When I went and talked to Nick Mehta, CEO of a hundred million plus company at Gainsight, didn't blink. Henry Schucks, CEO of Zoom Info Do a small advisory or agency company like almost every CEO apparently knew that they own go to market. But then I'm not going to tell the name of the companies. When I ask their CMOs or CROs they have this weird understanding of like well you know, I kind of own go to market or we both own or all five of us own. No, no, that's so we had to re really understand what is go to market and that's really goes back to going deeper with any and everything. Maybe that's the theme what we may come out of this thing and a question like well what is go to market? It's a transformational process. You actually made hundreds of go to market decisions every week. That blew my mind. You know, talking about that. For example, Brian was like well if you give more budget to marketing or sales, that's the go to market decision. Should you buy a company or stay within your own lane, that's a go to market decision. If you want to open an office in EMEA or stay in North America, that's the go to market. So when you start thinking about like oh my gosh, there are lots of go to market decision and who is the best person to make those decisions, that sure not marketer saying I need more money than the sale. Like it's sure not like a salesperson. He or she is going to hire sdr. So that really made me a student of go to market. Which is why I think Chris and I we are as rapidly as we can learning and sharing so we can learn more and know that whatever we know is probably not enough in the way that things are moving with the AI with AI and everything. So that's to me it's just going deeper on these things and it's no different for an early stage company or SMB company and it's definitely not different for publicly traded company. Just a massive we feel the scale will reduce will make you not focus on go to market. Actually you have to focus way more on go to market as a result of it. And we can get into in a minute with examples. But Chris, I'm interested how what you are seeing.

Sangram Verje (24:46)

Yeah, what do you see Chris?

Chris Walker (24:48)

I spend a lot of my time Recently I've spent sub 100 millions type of companies and I see a lot of those companies with unclear ownership over go to market many times saying hey we our CRO now the marketing leader reports into our CRO. So the CRO owns go to market. The problem is that finance is a massive critical part of the go to market and so is product. And so when you break it down at that level, it ultimately has to come from the CEO. And when you think about a lot of these types of decisions, the chief revenue officer role I've been challenging since 2019, 2020, because it feels easy and nice to say, oh, we'll just put someone in charge and all the things will roll up to it so it'll work better. The problem is that these people have certain experiences and tendencies and the people that own the CRO role typically are people that have experience in sales generally. I'm generalizing here, more marketers are doing that. But even on the other side, like someone that was a CMO for 20 years and now has to go run a 100 person sales team probably isn't going to be the best at doing that. And so when you look at some the mostly what I'm obsessed with is the investments and the strategic decisions and the prioritization around those things. And I feel like in companies at all levels there's a tendency to continue to delegate down in the, for the, you know, in the name of autonomy, in the name of empowerment and things like that. But there are many decisions that should be made at the CEO level only and there are many decisions that should be made in the C suite only. And I feel like I often see, oh like our director of Revops can fix that problem and they're just not equipped, don't have the experience, don't have the visibility, don't have the financial acumen to solve those problems or make those decisions. And so I feel like as C level executives we need to start owning the most important critical business problems in our business and the most important priorities and stop delegating down and start owning I think for a while and go to market. Teams started getting bloated. There was a lot of different people, the market was really hot. It was easy to just say, okay VP, go and figure out how to spend this $10 million on advertising. Today the CMOs got looking over all those pennies a lot closer than they were three or four years ago. And so I think there's just a lot has changed. We're seeing management layers compress, teams get smaller, get rid of that whatever, one or two levels of middle management that frankly just created a lot of politics and a lot of like separation between the people that make the supposed to make the Decisions, the people that do the actual work and work with customers. So we're seeing those decline and we're going to see C level executives get back into the work, get closer to customers and owning a lot of these problems is how I see it.

Dot (27:23)

Yeah, let me add one more thing and maybe even have both of you react to it. This has been my experience for the whole last year. One, we would never take an advisory client unless the CEO is in the room when we are actually doing the work. Like that is by default. We did the other way. And you use a simple example like ICP and like, oh, that's a marketer's job. And that became a whole nightmare because the marketer, the cmo, again, a good size company, couldn't make decisions around it or the sales team didn't feel like they were part of the decision making, so they didn't have the back. So we see this all the time and gosh, this company probably wasted 10, $20 million without even knowing on literally just trying to make sure that if they could be in the same room, make that decision together on it. And the marketing feels like, all right, I can go and go to bats for this. Now the sales team is saying, yeah, if you give me that particular type of icp, I will make sure they close. The CS feels like, all right, if you both are going to do that and these are the best customers we're going to have, I'll do whatever it will take to retain. That's what every CEO should want and actually wants. But they are not in the room. So they keep saying, marketing, go give me a lead. Sales close deals. See us fix this leaky bucket. And that has been honestly, most CEOs are not doing their job. That's what it comes down to. And it's a hard thing to hear, hard thing to say, hard thing to experience. We see that. So whenever a CEO is in the room, you can do this in like four meetings. You don't need a thousand meetings. It doesn't mean you're going to be bogged down. You're bogged down by the pennies and losing dollars here all day long. And people just are not thinking through those equations the right way. So I love what Chris, you just mentioned about where the arbitrage is between the two. I don't think people understand how big of a problem this is when the CEO doesn't own. And what does it mean when we say he or she needs to own? It's a gigantic problem.

Sangram Verje (29:19)

Yeah, absolutely. And you know, I would like to stick with you Sangram on the next question, you know, because there are a few more questions but just to add to what you said, I would respond from the marketing side and again if you're watching this stream, it's an honor to respond to a comment by the great and I think one of the biggest issue is transparency, especially from the marketing side. I think it's convenient for marketers and this is the truth here, it's convenient for marketers to act in silos because when they make mistake it's easy to be buried and you don't want, you know, the CEO to know about that so that you don't get fired. Fortunately for me, I've had three scars in my career so I can make these statements to say you have to get them involved. There's not really much to add to, you know, all have been shared. Transparency is very, very key whether you're at the mid level or director level. Transparency is very, very key in how you try to go to market depending on where you are within that commercial space. Because there again some questions, other questions that I still need to ask Sangra but I want you to give us a bit of an overview of that GTM operating system that you mentioned. Is this a Windows Vista thing or a Windows 11? We need to know the quality.

Dot (30:30)

Well, I know it's an Apple, you know you need that element of it. There are two parts to it. And let me just maybe you can come back to this one point before we jump into the operating system.

Sangram Verje (30:41)

Sure.

Dot (30:41)

We believe and I'm Chris, I want you to like be straight if you don't think like we got to give something to dodge that shows that we are against each other. So maybe this is it.

Sangram Verje (30:51)

I don't know.

Dot (30:52)

We believe business transformation happens in teams. It does not happen in individuals, it does not happen in silo departments. It actually happens in teams and that's like the underlying message for why the CEO needs to be involved in it. If you want to transform truly your business, don't make marketing better and think that's going to fix your business. It actually is not. You actually may be really good at marketing and that's when companies have great brand and sales sucks because you haven't really transformed the teams to actually transform your business. So whenever there is no team level focus on the most important questions from a go to market perspective. The business loses, the team fails, individuals fail, all of that. So we believe business transformation happens in teams. Chris, what's your take on that?

Chris Walker (31:50)

I totally agree. I think that you know, a CMO or whoever and it doesn't matter what title, will join a community or do continuing education and learning and they'll get, you know, 1% smarter at their particular thing and it actually just helps their career. Doesn't help the business very much. The problems that exist today are systemic across the company and all of the cracks between the functions and departments are where all the problems are.

Dot (32:17)

Yeah. And nobody wants to jump into those.

Chris Walker (32:19)

It's nobody's responsibility. Right. The CMO is going to deploy their 20 million against the marketing objectives and KPIs that are set there. We can debate whether the right KPIs later. Same with the sales leader. Same with the RevOps person. Despite that RevOps should be doing this. I don't see it happening. The only person that's going to stick their neck out and say we have a huge problem between the marketing and the sales handoff process or we have a big problem with from sales to customer success. We have a big problem with our data across our whole company is the CEO and those. That's the only person that can authorize those types of visionary cross functional investments.

Dot (32:52)

Yeah. And people listen to it. So the whole operating system is really designed around this. Like my whole experience having built marketing automation and then abm I was trying to fix marketing problem. Quite frankly with ABM I'm like well marketing can do better. So that's where the whole account based marketing and the books I've written were about. And then recognizing that no matter how much I fix marketing, it's not fixing the business. And that's led to The ABM is B2B part of it. And it's really my own evolution I think in that in the last 10 years. And then I wrote that to say well marketing and sales work together. Now if I go to another meeting where somebody says marketing and sales work together I'm going to lose it. Because the problem with that whole narrative that I have being the advocate for many many years has been who is going to make them work to better together like marketer or no, it's the CEO. So going back to that and that's where the whole go to market came about is that no, it's really a transformational process that you have to bring. So the whole eight question go to market operating system is designed for companies to bring their teams together at the executive level. Because that's another big thing. This change cannot happen at an SDR level. As much as we want to to say, well like to Christopher, empower People to do it. It's not gonna happen. Sdr.

Sangram Verje (34:11)

I mean, even in the age of AI. But I'll let you go.

Dot (34:14)

Yeah, you can't. It's not gonna happen if you're your marketing manager. Sorry, it's not gonna happen at your level. It has to. You have to rise. You can probably promote it, advocate, but nobody. The change management around go to market is so big and so important that those decisions has to be made at that level. So that is a big part of what operating system is supposed to do.

Sangram Verje (34:35)

Yeah. And I invited, or we invited a lot of business transformation folks to this pod so that, you know, if you're here and you manage to join, then you. You'll be able to, you know, appreciate some of the things that have been shared here. Not to get dragged into the CMO ownership conversation, but just a quick second talk myself, I know that both of you, even from the advisory side, most of the closes that you've made are from CEOs. I have a fairly good photographic memory and I know that, you know, Chris made a post that broke down, you know, deals won and CEOs won more deals. CMOs lost, you know, some of the other deals. And now you mentioned Sangram yourself speaking to, you know, the CEO of HubSpot and so forth. And you know, it's basically, it's almost the case in that regard. So that makes it, you know, a lot of sense. Now let's get into another topic. Chris here to you. And there might be a ring moment here, but we might be making B2B history. You've got a lot of more marketing acumen, I would assume. What are the more core marketing approaches? DOTS believes there is brand or brand awareness. There is demand gen and there is performance or direct marketing. Some people think it's too.

Chris Walker (35:51)

I can't wait for people to think that. Just throw a knee to the dog.

Sangram Verje (35:55)

Yes. Let's clarify this once and for all. I have thrown the first punch.

Chris Walker (35:59)

Chris, what's the difference between demand gen and performance marketing?

Sangram Verje (36:02)

Okay, explain that.

Chris Walker (36:03)

No, you explain it to me. You said, okay, I explained it.

Sangram Verje (36:06)

Yeah. So demand gen, I believe in drives customer consideration. Any tactic that drives customer consideration, Podcast, some will call it gated content, you know, and so on and so forth. Just you sharing your knowledge online, which portrays. Which helps a brand portrays.

Chris Walker (36:22)

Oh, you're walking into it. How's that different than brand awareness?

Sangram Verje (36:27)

Brand awareness is, you know, we're here, you're telling the story. It's not necessarily sticking to the job to be done of you know, the future customer performance. Marketing is sticking to just the conversion itself. So yeah, I've walked into it. Give me the punch now.

Chris Walker (36:41)

Cool. So first off, I think that marketing is a terrible category for all the things that this function and department does. So let's just sort of set that apart. I think that you have business strategy which includes product marketing, positioning, competitive intelligence, influencing the product roadmap, analyst relations, public relations, some forms of thought leadership, and some form of events based on the objectives of the events. So it's less about what we're doing and more about what is the goal of what we're doing. But you have this whole category called strategy. That thing influences across the whole go to market. It's not just about pipeline creation, analyst relations, impact retention and expansion just as much as it does getting a new customer. Right. So you have strategy, business strategy. Next you have demand creation which is taking I want to target this account or this set of accounts and getting those accounts engaged with your business. And you can decide how you want to define engage. We have a standardized definition for it. Going out and getting people that are not caring about you don't know about you. Maybe they do know about your brand, but they're not interested in buying engage with your company, coming to your events, things like that. We need to go out, get them, pull them into this next level. The next part is supply chain which involves taking the first party marketing signals and the third party outbound signals and combining them into one standardized process. Just because you get what it comes from your website versus it comes from zoom info, the goal is the same. We need a signal, a high quality signal with a qualified person and or a qualified account that our sales team can prospect against. Okay, so then you have the supply chain, all of it together, inbound and outbound. I don't know if we're supposed to swear on here, but I don't care.

Sangram Verje (38:21)

Please go ahead.

Chris Walker (38:21)

And then lastly you have prospecting, which is the objective of prospecting is to get the qualified account, qualified person from a signal into a qualified meeting and becoming a qualified opportunity that sat on a meeting with your sales team. And that's when the pipeline creation process ends. And you can do prospecting through AI. You can do prospecting with BDRs, SDRs, XDRs, whatever you want to call them. You can do prospecting with your sales team for deals that justify having your sales team do prospecting against high quality signals if the deal size is large enough or for other strategic reasons. And all of a sudden now you've taken marketing and broken it up into four distinctly different independent processes that can all be measured differently and all have different skill sets, talents, experiences and probably leaders.

Sangram Verje (39:06)

I see, I see. I'm sorry. Okay. Yeah. Jumping out. I just see that it's a. Chris is reshaping the go to market from a business transformer and I think, I see that. I think it's important to see that some people might be afraid to say, now am I going to take on a sales job or now am I going to take up some customer success job. Now am I doing retention? I guess if you want to grow as a commercial leader and we've seen some CMOs transform into Chief customer officers, you might have to lean into some of the things that Chris is saying. But I responded from a marketer's perspective and experience and we know a lot of thought leaders out there that some of them are still, you know, pushing the narrative of B2B brand awareness and saying why should we be changing what is not broken? You know, But Sangram, I'll let you get into that.

Dot (39:49)

Well, this is why a lot of marketers actually don't like Chris and I like, you know, like it's a reality.

Chris Walker (39:56)

I get the screenshots from Slack community, some of the cool kids clubs talking about what I'm saying from a bunch of CMOs. Yep. So I know, I know it happens.

Dot (40:04)

Especially, especially if you're a cmo. You probably hate us. You probably wouldn't want to say it publicly because we're likable people. But the reality is that whatever we are saying, we are completely saying, well, forget this siloed approach. This has what's killed your career and unfortunately businesses that you have been part of this glorified CRO title, the glorified CMO title who just do events and all. You are sabotaging yourself. And there needs to be a lot of self reflection. Which is why I think Chris and I have risen from our CMO roles to the CEO roles because we kind of are recognizing that. Yeah, Mark every single person and I want everybody to take a moment here to recognize this, that you are a business leader, you happen to be good at marketing, you happen to have experience in sales, you happen to have a good customer relational ability to do certain things. You may be great at operations, those are areas that you have specialty in. But you're ultimately, if you really want to take the mantle of go to market, you better recognize yourself as a business leaders. Everything changes once you take that suit off of a marketer or the lab Coat, whatever you got, you take that off and say, I'm going to put a business suit on, I'm going to figure out. Because if your business does well, guess what? You make more money, you make more equity, you make all of those things. People are just not ready to move across that chasm yet for some reason. And it may be fear, it may be a hundred different reasons why, but the more you lean into this idea that you're a business leader, like, gosh, you are, if you are a B2B company CMO or trying to become a CMO, you're really saying you're championing the cause, that I want to be a business leader. You want to know all the metrics that Chris is talking about. Like you should demand that if you are not going to join the role if you don't get those things. Because that's what happens. Going back to that hundred million dollar pipeline LinkedIn person, they get fired and they curse the CEO, then they curse the market. But the CEO probably has been trying to tell that person, dude, you're going or you know, you're going the wrong direction or trying to get them to own certain things and they're like, no, no, I'm killing it over here. And they're in their own little bubble and there are like fancy awards for it. And then we find out that, oh, you just lost your job through that company. Right? All those things. It's not that it's a business question what go to market is. And that's where I, I want people to take a moment and recognize that.

Sangram Verje (42:36)

Yeah, I'm going to ask you, Chris, you know, just to share some thoughts and some specific ways on sharing that thought. Obviously I've been knocked out here. So I, I, you know, I see what you're saying. I haven't done, I haven't been involved in nowadays more of, you know, business. Marketing. Marketing business. I think it's important for marketers who want to grow and based on how both of you have shared it, you know, to start to see marketing as part of business transformation. Not just like marketing as marketing or marketing as sales and you know, and things like that. But Sangram, one other question I wanted to ask you and again, maybe, Chris, you have to respond to two questions here, but I'm trying to manage our time is when it comes to go to market, you are going to market. I'm going to Home Depot to buy something. So some will go up market, some will go downstream. We're not discussing that yet. What I'm looking At and you've mentioned that partly during this live stream, is looking at other markets, geographical markets. Is that something you've done before in your career? Like how do you approach that? Even if it's just a very loose experience on how you think GTM can work when people are going through going from one market to the other, you know, going from, I don't know, North America to, if you get what I mean, and if there are other types of markets that I might be missing.

Dot (43:56)

Here, all of that are go to market decisions.

Sangram Verje (43:58)

Right?

Dot (43:58)

And just to finish the last point, maybe just to get everybody really hone in on this, we really understand in most of the people who are listening to this, they probably are really good marketers of their own little sliver of whatever. Maybe it's the design, maybe it is SEO, maybe it is people, whatever you understand, how do you market the business? Like the marketing of the business? You're probably very good at it. And I think what we are encouraging everybody to think about is to understand the business of marketing. It's not just a play on word, it's a complete mindset shift. If you understand the business of marketing, you would not have and say, well, I do pay per click. You will say, you got a menu of options and one of the options could be SEO, pay per click. Maybe another option is community and therefore the go to market motions we talked about, maybe it is that you need to open a new office in another location goes back to geography. It is understanding the business of marketing. If you understand that, or at least have a pursuit of understanding that, you'll start asking questions like is the market open in emea? Should we be actually opening up there? Because I can run this play over there. And because they're a little bit maybe at a different stage of their business, this actually will work faster over there and we'll get more gross margins and revenue. You're going to ask these questions, you're going to start thinking like that as opposed to let me get more budget for my pay per click. Like that's, that is what's killing the marketers. So the business of marketing is what's missing when it comes to go to market. We trivialize it. The, the idea of just going is very trivialized. And that's why Christopher Locket would say that. Like he would give actually on my book, if anybody would read it, I have a quote from him and it says, I have it here. It says love the guys but hate the book. Like he literally said, it's in the front cover. Of my book. The reason is because his point is you got to think categories and where you want to go, we can go deep on those. But the big issue is do you understand the business of marketing? And then, Chris, I'm sure you have ton of thoughts on this.

Sangram Verje (45:53)

Yeah, Chris, sorry, before you jump in, I just want to ask something. Does product to market fit play a role in determining that market? Because you're right, most of all these tactics maybe in five years will be automated by AI. So if you want to share a paid media strategy, for example, 70% of that will be business strategy before you start getting to the crux of ppc. So does product market fee play a role in that? Just in 30 seconds for me. No, for Sangram.

Chris Walker (46:19)

Okay.

Dot (46:19)

Oh. I mean, product marketing is a huge.

Chris Walker (46:21)

Piece of product market fit.

Dot (46:23)

Market fit. I mean you gotta have a great product. That's where if the product sucks, you would see that in the numbers left. Right. In every way, no matter how great of a marketer you are, you're going to die by the wine. There are lots of lookalike companies. They're all getting folded because there is no, not enough market. They're not in it. You got to figure out a product market fit. I think that's a given.

Sangram Verje (46:47)

Yeah. Now Chris, you can, you know, respond to that approach in the market and what it takes.

Chris Walker (46:51)

I think that for a majority of companies spending investing in advertising, less than 5, 7, 10 million ARR is a complete waste of money. And they should spending their time figuring out how do I engage with my customers in a more one to one intimate setting. Community, live events, podcasts, things like that. Advertising is when you have a machine of I can sell this to this exact person and I'm going to try and pour gasoline on it. And nobody has the machine and the fire brewing enough at 5 million ARR to do that. And so you just waste a bunch of time and money and meetings and opportunity cost of other things that you could be doing. You set a precedent around your customer acquisition costs and how the team you build around your advertising strategy and everything. I just think it's a huge mistake caused by the egregious amount of funding that happens at those companies at ridiculous valuations.

Sangram Verje (47:40)

Yeah. So Chris, I'll stay on you here. Can you please go over those, you know, approaches you mentioned again, the pipeline creation and stuff like just go over it because of our audiences.

Chris Walker (47:51)

So yeah, let's talk through it again. Okay. Everybody looks at this category of marketing and what I'm doing here here is Resegmenting how marketing operates based on the objectives of the things that we're doing. Okay, so number one, you have strategy. Strategy, product marketing, competitive intelligence, positioning, messaging, sales enablement, probably analyst relations, public relations. And you put this all in that one bucket. If you're going to put brand awareness somewhere, it would go there. But you get brand awareness through those activities. And brand awareness, while nice, is not enough to drive revenue, despite what anybody says. I'm very aware of all the ABM vendors names. I'm not interested in buying an ABM tool. I don't care how much I understand their brand. I talk about them almost every day on my podcast. There's a lot of people that are like that. There's a lot of companies that you know about that you just don't want to. It's not like I don't like them, I just don't need their stuff. I figured out other ways to do it. So brand awareness isn't enough. But you have this one section. If you look at that one section and think about how much money is spent in each of the sections, right? So that section is actually not that much of an investment. Then you have demand creation which is take a target account. We have these thousand or these hundred or these a hundred thousand accounts that we've decided these are our best fit accounts and every company should have that. We're going to go after them intentionally and we're going to try to get them engaged with our business. Coming to our live events on our website, talking about our business, asking questions in a community through distributing content that gets them aware of our business, our category, our problems. This is not a brand awareness thing. It's this is the problem that we solve. This is the category of the thing. You're going to want to buy this category and we're the best at it because we taught you it. Third, you have supply chain. Supply chain is taking the MQLs that you get from all your first party data that you confuse with marketing sourced and all the third party stuff that you confuse with outbound that comes from Zoom Info, user gems of the other trillion types of data sources third party. Put them all to together, stack them top to bottom and look at them as one holistic set of these are all the things that we can spend money on to get signals that our sales team can prospect against. That is where 90% of the money gets spent in marketing. Right there, that one sliver. And because we try to measure it with all these other things, we confuse the fact that this is what the objective and this is how we know whether or not it's performing in addition to the fact that it's split between two departments. So you lose all the the synergies between the two.

Sangram Verje (50:18)

Yeah, yeah.

Chris Walker (50:19)

Supply chain. And then lastly, prospecting marketing. If you want your marketing team to own pipeline creation, they must own the prospecting engine. Pipeline ends when we have a SAT meeting with our sales team. Therefore we need the prospecting engine there too. SDRs, BDRs, sales source, what however you want to do the prospecting that gets the qualified meeting sat on with our sales team as a qualified opportunity. That's where pipeline creation ends and closing new logos starts.

Dot (50:44)

Yeah.

Chris Walker (50:46)

Creates just a lot more definition around the purpose of why we're doing things. What type of investments fall into those categories and the most important part is what is the balance of those of our investments across those four things? And then how do we measure specifically against those four things instead of just measuring all of marketing with one multi touch attribution model which clearly isn't working for anybody. And then lastly, where are the imbalances between our investments and performance? If people looked at that, they would say wow, we spend 90% of our budget on the supply chain. Between all our data sources, the all the performance marketing and lead generation that we do, all the events that we do to get leads, 90% of the investment and look like we're way underperforming and we're actually not funding any of these other categories properly.

Sangram Verje (51:29)

Yeah, interesting, interesting. I'm sorry to cut you short there. I was going to ask, do you think this model also worked for the product? Net growth or product led work is just somewhere in this process.

Chris Walker (51:41)

Same exact thing. It doesn't matter what your go to market motion is. If you sell a 50amonth subscription or a million dollar to, you're still going to have a set of target accounts. They should be well defined. You're going to have allowable CAC targets. You're going to need all those steps in the process. Your target customer needs to be aware of you and engage with your business. Then they have to be engaged in the supply chain. The supply chain is no longer prospecting. It's going to go right into your PLG motion or however you choose.

Sangram Verje (52:04)

Yeah.

Chris Walker (52:05)

And then secondarily, most PLG companies when they grow up realize they need to sell to bigger companies and sell bigger deals and build a sales team. It's a foregone conclusion that you're not going to be PLG forever. Most likely.

Sangram Verje (52:15)

Yeah. Yeah. And thanks for Adding that point as well. Okay guys, it's been very, very intense so far and so we are going to have a lot of fun. This has been awesome. So it's the dots rapid fire. We already in the boxing ring. Now think of a boxing ring that now has a furnace inside where we are going to throw both guests into it. It's rapid fire. So as fast as you can, three questions each. You say the truth and nothing but the truth. So are you ready guys?

Dot (52:39)

Let's do it.

Sangram Verje (52:40)

Okay, cool. So first question I'll just focus on you. Sagram first three question and then we'll do same for Chris. So the first question is in terms of talking to recruiters in B2B marketing these days, what do you think should be the best role definition for a marketing oriented or I guess a business minded go to market person? What would be that job role? Is it chief growth officer? Is chief GTM officer? Is it chief PMM officer? I've had PMM before. Which one? What?

Dot (53:12)

Well, it's a shiny new toy. So yeah, go to market officer. Sounds super shiny. And it actually might work in companies that are bigger where there are multiple business units. But in reality the best thing you should ask is like show me the numbers, show me how do you make money? Show me where it is. Those are the questions that most marketers don't ask. They keep asking very lower level questions which forces the executive team to put them on a lower level jobs. They just don't understand that.

Sangram Verje (53:39)

Yeah, makes sense. Okay, so Chris, now to you throwing you into the furnace here. This is very casual question because it's rapid fire. When are you going to write your own book?

Chris Walker (53:49)

Yeah, the question is when am I going to write a book about go to market or demand gen? The answer is no to both of those. Honestly, Just because I don't feel that passionate about them and my thoughts are well documented across the Internet. I could probably have AI write the book for me in like 15 minutes right now. But anyway, what I'm interested in writing a book on, I want to write the book once I'm done with the journey, not in the middle of the journey. And the book is going to be the new way for entrepreneurs to build tech companies and that involves bootstrapping a services business to be able to collect the insights and solve customer problems manually and guarantee that your customer is successful, understand the problems deeper than anybody else, use the cash flow then to fund the development of a product inside of a new entity. And then when you build that product, you fucking already Know it works because you've proven it out with hundreds of companies already, and then you're off to the races, need no VC funding. You don't need to build a unicorn to become incredibly wealthy and be very fulfilled in your work and job. And so that's the book I'll be writing once I'm done with this journey.

Sangram Verje (54:46)

If you've seen the movie 2012, you heard it from us, from Charlie, you heard it from. From John Dot. So thanks for sharing that. Now, the last rapid fire question for both of you, and I'll go back to you, Sagram. What is your favorite business quote? I was going to say marketing, but now we are in business transformation territory.

Dot (55:04)

I don't know who said it. I'm sure one of you would remember this, but somebody said, you can have everything in life you want, but not all at the same time. That has been so true for me every single day. It's like, I wish I had all of these things, but I recognize the sequencing of it, and I need to appreciate that and live that out and recognize that eventually you'll have it, but you can't have everything all at the same time. But you can have everything you want. Just a matter of see.

Sangram Verje (55:33)

Yeah, so help you go, Sagram. So help you go again. Yeah.

Chris Walker (55:37)

Yours.

Sangram Verje (55:38)

Yours as well. Your favorite business.

Chris Walker (55:39)

It's just the motto that I've been living by starting in 2020, mid 24, and really embracing it right now, which is slow is fast. And, you know, you see the, you know, company that's paying all the influencers to promote how they raised $40 million at a $1.2 billion valuation. And I don't, I don't think that's fast. And when I've tried to go fast, it feels like you're going fast in the, in the short term, and then you pay the price later and you end up getting. It takes you longer to get to where you're actually trying to go. A talk for a great company. They're at 2.6 million in ARR and have 50 employees. I'm like, you could have. You could literally get to 2.6 million ARR with five employees these days. Why do you need 10 times more? I was going through a debate because we had a team meeting yesterday and saying we need to hire two more people. And the old me would have been like, yeah, if we hire two more people, we'll be able to go faster. More people makes it feel like you're going faster, but it actually oftentimes slows you down. The hundred person marketing team moves slower than the five person marketing team every day. The five person company moves faster than the 100 person company. And so I'm taking an entirely different approach to how I build and scale my new company. I'm seeing other people that are smart and innovative looking in the same directions. And it's hard for me sometimes it feels slower, it feels wrong. But I have learned the lessons before and methodically moving, making the right decisions, having the small team not looking for the quick fix or the quick hack or the big amount of money so you can dump it into something. All of those things make it feel like you're going fast and you're really going slower.

Sangram Verje (57:18)

Interesting, interesting. Efficiency and effectiveness. So that makes a lot of sense there. Okay, cool. So now we are slowly rounding this up and I want to get into the next question here. I will go back to you, Sangram, on this just to get your thoughts. I have heard someone say, and I thought it's an interesting thought, that you should spend most of your energy and efforts. The guy was bold enough to say 80% on lifetime value and the rest on customer acquisition or customer acquisition reduction. What do you think about that for B2B? Is that true? What is your context about that? If it's true or not true, man.

Dot (57:56)

The businesses that I've been part of, what killed or hurt the most was retention. If you cannot retain your business, like it doesn't matter. Like, I mean what Chris just said is so deep. Like I wrote it down, like you go, go slow to go fast. And it's so counterintuitive. If you would have gone slower, we could have grown in terms of revenue a little slower, but we would have grown much bigger and much more profitable and we wouldn't have to do all the right sizing and all the stuff that you have to do as you grow. It was just a wrong thing all along. So I don't think any of those numbers make a lot of sense unless you can figure out a proper retention or even better expansion play that will keep people in it and so you don't have to go and create a massive machine unless that thing is fixed.

Sangram Verje (58:47)

Yeah, yeah, that makes sense. So Chris, same to you. Do you think LTV should deserve more attention than CAC production or even CAC generation? Guys? I mean, customer acquisition or customer acquisition cost.

Chris Walker (59:01)

I think generally customer lifetime value is a made up projected number for most companies, especially the ones I interact with, because they're projecting. Oh, our, you know, our GRR is 90. That means our customers are going to stay for 10 years and they say, okay, it's 10 years and then we'll pretend that they're going to expand 15 every year. And they put all these assumptions in there and they say, oh, our LTV is going to be $900,000. I guess we can spend this much to get a customer. And then none of the equations play out in real life and the whole model falls apart. I think that we should be focusing a lot more direct. I think CAC payback period against 1st year ARR is a much better metric against that instead of CAC to ltv. And then I think GRR and NRR become the North Star metrics for a business. Once you're above 50 million in revenue, you're going to get more revenue from your existing customer base than new logos almost mostly. And the split is, I don't know what the exact split is, but between the companies that I work with, you basically you have companies that have figured both sides out. But then most of the time you either have 120 NRR and your CAC payback is five years or you have a one and a half year CAC payback and your NRR is 85 or 90 and 1 of the net revenue retention. So GRR plus expansion revenue more or less. And a hundred percent of the time I'm always like, I would much rather be the company with 122% NRR that has a 5 year CAC payback. Because figuring out acquisition is way easier than figuring out how to get GRR from 85 to over 100%. That takes years, potentially a half a decade, maybe more to fix your product, recycle out your whole customer base, bring on the right new customers. There's just so many variables to it that are fixing acquisition is a lot easier than fixing GRR and nrr.

Dot (60:40)

Yeah, people are listening to when they go back and relist and like 10 times at like 10 times slower speed if they can. What Prisoner said, because most marketers have no idea what just Chris. Chris said and it's just sad. It's really sad. What is it? How do you calculate grr? How do you calculate? That's when you lose jobs. That's when businesses don't do well because you're not focusing on the business at all. Everything Chris just mentioned is a business conversation that as a marketer you owe it to yourself, to your business to learn about these things.

Sangram Verje (61:11)

Yeah, no, absolutely. And guys, if you're listening, you know I have a bit of a small amateur free GTM unit economics templates that you can download for free at.lossmarketing.com but if you want to go, step ahead. You can really, really patronize Sagram and Chris.

Chris Walker (61:26)

It was awesome to spend some time with you man. We should do another podcast or chat one on one Dots. Thanks for arranging this out of like a little LinkedIn comment. I had a great time. Thanks all for being.

Sangram Verje (61:35)

I know, I know. Thank you.

Chris Walker (61:36)

Sorry I have to run. Yeah, catch y'all soon.