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- [00:00]
Host
You're listening to Revenue Vitals with Chris Walker.
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Max
Chris, thank you so much for coming out here. It's super exciting to have you. I've been following or actually a bunch of us have been actually following your B2B Revenue Vitals podcast for a while and listening and inspiring. Actually a lot of what Warmly is doing in Go to Marketland today. You've done it all from engineering, product management, all the way to marketing. Now helping we're helping marketing and go to market teams change kind of the way that marketing has been done and now you're even going bigger picture, helping the CEOs, finance team, ops teams really think about how to run business and get to the bottom line of pipeline. I know you had some topics in mind, so if you want to jump in.
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Chris Walker
Yeah. What's up everyone? Glad to be here. I couldn't make it on Tuesday because we had a little bit of a snowstorm, but good to be here and not be virtual. I think in person it's super cool. I'm going to set the table for 10 or 15 minutes about the big picture that I'm seeing and then we'll do some questions and then love the audience questions. And when we get to the audience questions we can take it in whatever direction, career development, marketing, anything that you want to know. I don't want to feel anyone restricted on the question side. I got some notes here so I'm just going to reference a couple of things to make sure I don't miss anything. But the take home point is that there is a massive transformation happening in how software and technology companies are built, how they're valued, how they should go to market and it creates a lot of downstream impacts on how we think about our strategy and things like that. The first point is that I truly believe what I'm about to say, and most people probably don't, is that a company of your size has a distinct advantage over $100 million company right now. Those companies have ingrained processes. It's difficult to change. A lot of their cap tables are underwater. So now basically all the stock is not worth anything. It makes it really difficult. And meanwhile here we are, we're flexible, we don't have a lot of constraints, we can move more quickly, we can build differently, we can think about how we integrate AI in our product as a native functionality, not as a feature or a bell and a whistle like $100 million company does. I think that just thinking about how that can work is a huge thing. The next point, and I see this in the big hundred million dollar companies and I've actually seen this for five years and I tried to tell them about it and they didn't do anything about it. And now they're paying the price. Big companies do not help their customers operationalize the product in a way that makes them successful. Think about sixth sense. Everybody buys it, nobody fucking can use it. It's not connected into demand based the same way. I'm not just shitty on 6 cents. They don't help their customers figure out how to connect it into salesforce. The reporting is super low level. They don't help executives drive organizational change. Most BDRs don't even use the product right. So the Companies are paying $200,000 a year for this product and they run $10,000 and display ads out of it and do some reporting. No wonder everybody is churning. And so what that means for us moving forward is that we need to take accountability not just in selling a product, but making our customers successful with the goal around that they have an actual business result, not a, not a tool or a utility, but actually getting what they need. So and that comes down to customer success. It comes down to implementation, account management, potentially other things that we maybe haven't explored yet. I think a lot of companies should consider having a paid professional services part of their company that make their customers successful. And then through that process you get back the insights around what product should we actually build. What product do our customers actually need instead of what they tell us they need, which is usually wrong. It's true. And I'm in there with a lot of companies and they tell you what they need, right? So I'm on more of like the analytics and attribution space at this point. And they're like yeah, we just need our Power DI dashboard and then we'll hook up ChatGPT to it. Or we just need to buy another marketing mixed modeling or multi touch attribution tool. And I've watched 100 companies do that and 100 companies failed. Literally a zero percent success rate. And so what companies think they need versus what they actually need is very different. And the way that you figure it out is being in there with the work with them. With a lot of companies solving the problem, they only see the problem from their perspective. We have the opportunity to see the problem at a hundred companies perspective when we work with a lot of companies at once, which gives us an entirely different view of the problem and what the market needs. I think that the evolution of AI is fucking incredible. Not just for product but for everything. If you haven't taken the two to six hours like I did six months ago and have Claude on one side of the screen and Versal on the other side of the screen and I'm not a dev and I rebuilt our whole product. It took us nine months in like three hours. And just to see it and understand the capabilities at that level and then you can see how it applies to how we collect our invoices, how we automate our outbound, how we accelerate product management and product requirements documents, how we accelerate content creation, how we build a website or a landing page in 30 minutes instead of six weeks when it has to go from, someone writes the copy and then we hand it off to do a wireframe and then we give feedback and then it goes to design and then we give feedback and then we do more design, then we give feedback and then we do development, then we give more feedback and all of a sudden it's taken us eight weeks to build a web page. Now that whole feedback cycle gets compressed. The person that writes the copy can get it 90% of the way done and then design and dev finish it off. And having that speed is something that big companies won't do. I think it's a huge advantage. The competitive landscape, you all play in like a incredibly competitive space. I know a lot of people like Adam Robinson, I think he talked on Tuesday, plays in a very competitive space. He was like the quote unquote first to market with that product and now he has 37 competitors, including ZoomInfo, which is a Goliath. The competitive landscape is totally changing. The copycatting is not just a five person company copying your product, it's the billion dollar company copying your feature and putting it into their platform. So it's coming from both angles right now, which is going to drive commoditization of features and products and require us to think about how we add additional value to our customer outside of just the technology, which has been, it's all been tech up until this point. Now I'm talking, I talked about professional services, making the customer successful, being smarter around how we innovate on the product, being smarter around how we use AI to be faster, more agile, learn faster. On the copycatting side, this is more like super C level strategy. But I think that you all should think about playing the game differently than you have before when it comes to how you think about your product roadmap, how you market your product. I know companies that are at your revenue size, that don't even have a website. Anymore intentionally and so complete stealth mode intentionally so that other people don't see what they're doing. At least it's not like you're handing it on a silver platter to them. And I'm not going to share my own confidential strategies, but I've been thinking about that a lot too and I'm adjusting in certain ways with my, with my new business, which is entirely different than how I went with my last business. My last business was basically tell everyone what you're doing and then if they tell them what you're doing, then they'll trust you and then if they trust you, they'll buy from you. I, I was the biggest beneficiary of that strategy and now no longer believe in it because of how the world has changed. The commoditization of product is going to put a lot of pressure on SaaS. Gross margin, it's going to put price pressure and then with price pressure comes gross margin pressure and that's going to put more, more pressure on the efficiency of the business, particularly in go to market. In a company like this, go to market, expenses are going to be 50% of revenue, maybe more at your size and scale. So the majority of the expenses like product development and other sorts. But when you think about customer success, account management, operations, sdr, sales, marketing, it's like most of the headcount and the cost that we have in this and it's going to force us to operate much differently. What you can get away with at 3 million ARR, you will not get away with at 20 million. It will break. And I go in and help companies fix that problem at 20 to 50 million and it slows them down for one to two years because they didn't think, they didn't have the foresight to see how that was going to happen. Then all of a sudden their CAC payback's at five years and their NRR is no longer 110% or 120% and basically they're stuck, they're not growing anymore, potentially going backwards, burning money. And so I think it gives us an advantage to think about that now so that we can be efficient, maintain a CAC payback period even if we grow a little slower. I think that in the long run, if you think about the long game, it's a, it's a much better strategy. As a last point, I, I believe the biggest issues in go to market today are twofold. Number one is that marketing is this big bucket of stuff that has competing objectives between long term and short term tactical and strategic that make it very difficult to do the job. I think that smart companies will break marketing into two functions. And you have strategy which includes product marketing, analyst relations, thought leadership, customer insights, competitive intelligence, sales enablement, that type of stuff. And then you'll have a different function called pipeline creation and that side is math and science, a lot of what your product facilitates. So that would include traditionally demand gen, a combination of marketing ops and like SDR ops. I think those two functions should just come together and be the pipeline team, advertising, content creation, some things like that. And the second part is that the companies think that Revops was the solution to all their problems and it's clearly not. And that they're asking people that are Salesforce admins and technology implementers to be a strategic C level executive and tell their CMO and CRO what to do. And you're asking people that don't have the skills to do something that they clearly can't do, thinking that they can. And so a lot of companies are hoping that Revops is going to solve their problem of a four year CAC payback. And RevOps, most of the people can't even read a P and L. How are they going to fix your lower your CAC payback by two years? So I encourage your company to think about those two things is what I'm seeing as the biggest issues that companies run into when they hit 10, 20, 30 million in arrow. I think that the traditional way that companies organize around the departments of marketing and SDRs and whether SDRs go into sales or marketing is irrelevant. And then they force whether it's like it has to be revoff centralized under finance or the CRO. And if we do that then we can't have marketing operations and thinking about customer success and account management as two different things and whether we need both of them or how that could be different. I think that the traditional way that companies organize should be challenged completely. You can't do that at $100 million company. It's too, it's like steering, trying to steer a cruise ship. We're a speedboat. So we can actually make changes like that and be able to adapt to how things are working. And some of the core issues that companies face as they grow this stage is to get to like true product market fit and scale specifically this year that's coming up for you. But then beyond that the challenges are different. It's not about figuring out how do we get these customers, it's how do we, you know, improve our NRR from 103% to 111% so we get extra 8% growth for nothing. Instead of a lot of companies that get to 10 million ARR and have an NRR of 93% and then they're playing behind the eight ball every single, every single year that at this point you can get away with having a four or five year CAC payback period. You don't have a lot of costs that that will effectively destroy your growth in a couple of years from now. If that. If that's. I don't know what your CAC payback is, just to be clear. But just thinking about those things right now, it's do whatever you can to get to 10 million in product market, fit with happy customers with a product that works and is differentiated. And then after that you have to think about the scale phase which is a whole different, whole different game. And so hope that sets some context. Karina asked some questions about what's relevant to you all right now and then I would invite like the open Q and A is my favorite part. So I'd invite that afterwards. Yeah.
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Max
Thank you so much. Actually a lot of what you said is super relevant too. I don't know if Max prepped you but those are great because. Exactly.
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Chris Walker
That's just what I'm seeing across a lot of companies.
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Max
That's what we're experiencing.
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Chris Walker
People think that their company's different than others but really almost every company has the same same issues stage makes it a little bit different but the broad strokes are generally the same.
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Max
Yeah, I mean we're definitely trying to. Yesterday we were just talking about company culture, trying to move fast to out compete like all these giants. The sixth Sense. We're playing in their space. Right. Six Sense competitor all the go to market. Max, the whole team has been really good on following your old strategy which is all the LinkedIn organic content and then Vax posts exactly what we're doing in the company and everyone's coughing so they catch up really fast. We've launched the website Intent Real time contact level trying to orchestrate that, automate that. Then there's five other orchestration companies that are doing the same thing. And so now I was like should we be sharing everything we're doing? Maybe we shouldn't. I'm curious of what is the I know part of it? You said it's like your secret strategy but what part can you share to us of what do you see working that isn't the just blast out the organic content and get word of mouth and all that stuff.
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Chris Walker
So yeah, I've thought very hard about my strategy around it. That's really business strategy. It's not marketing strategy, but it's just though, like what you give away is part of it. When you look at what's working broadly honestly, it's having customers that love your product, that tell other people about how much they love it, and then amplifying those things, like as simple as it gets. And then beyond that, I think it's being really intentional about what customer that you're going after. I think at this stage it's easy to say we're going to sell it to everybody. It's super counterintuitive to say these are the thousand accounts that we want and this is why they're exactly perfect to us and we'll get the other 9,000 later. And so I think niching down and being really specific around who your target customer is can be hugely beneficial. And sure, we're going to get inbounds from people that don't fit that profile and sure we're going to sell to them. But when we invest marketing dollars and outbound investments in time getting really focused on that. And then lastly, I'll say that the offer when it comes to marketing and sales and new logo acquisition is I think the biggest issue and something that I faced in my company right now about what are you offering when you do that outreach? Come by our $24,000 a year SaaS tool or are you going to be able to offer, hey, if you give us these three reports, we'll look at all your data and come back with all these insights and things like that and have a way different conversation instead of a discovery call and a pricing call. I think that when it comes to advertising, it's very clear that and even withoutbound messaging that the offer that you put forward on the table about what is this call about can be the number one thing that is the difference between your success rate or your reply rate being 3% versus 11%. Yeah, I don't think that a lot of people are like spend a lot of time thinking about the copy that goes on your website and things like that. And sure, we should do that and we should know our customer. But it's easy for a competitor to look at your website and literally put the same thing on their website. And people have been doing that to me for five years. So yes, we have to be in touch with the message and what the market needs. But messaging isn't a differentiator anymore.
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Max
Yeah, so you're saying like word of mouth and having customers actually spread that is something unique that people can't copy because they really get value.
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Chris Walker
Getting the customer the result, making sure that they acknowledge the result, and then being able for them to unprompted. It's not an influencer strategy. It's your customers love the shit that you do for them and want to tell their peers to be more successful too. And we all do that with different products in our life. It doesn't have to be a B2B product. Right? And so having that level of that's the number one way that people buy. And then sure, my podcast gets a lot of people interested, but most of the people that listen to my podcast for a long time will reach out to the people that have testimonials on our website and ask them, how did that go? I just had it happen to me yesterday. They reached out to somebody who didn't even ask me and just we had a testimony on our thing. They knew them, they asked and they said, you know, I talked to that customer. They said, you did a great job for them. Here's three more questions, then we're ready to go. And I think that sometimes we underappreciate the back channeling and things that happen that we have no control over except for did we deliver what we said to our customers. I think that is by far the most important thing.
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Max
Do you think that's enough for defensibility? And also how do you apply that to software? And how can we make software defensible in that it's so easy to copy messaging, so easy to copy features? What's your thoughts?
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Chris Walker
I don't think that companies sell software anymore. I think that they sell a service that gets delivered through software or they deliver a business result that gets delivered through software. But the blend of services and software is now essential. Like just for what I the reason I just said and the example that I gave about six sense, right? It's not just about selling the customer software. It's about making sure that they're successful with the software and not just outsourcing it to an agency and saying, hey, the agency is going to go and implement that for you. Fails most of the time. And so I don't think that software is that defensible anymore. I think the defensible, the true defensible moats are being closer to your customer than anybody else in your market. Not just the people that pay you, but the people that could pay you or should pay you. Getting the customer an actual result through doing the hard work that most SaaS companies don't want to do because they think it impacts negatively impacts their gross margin. But then they pay for it with GRR and NRR later and then leveraging proprietary data in unique ways. I think those are the three defensible.
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Max
Modes right now I actually jumped from heading product into customer success because we've seen we have our tool, you can orchestrate anything your go to market team wants to do in our tool and they're like great, but they don't have good strategy. But our current CSM team, they're not go to market strategy experts. But I was like, I think we need that in our team to actually help our customers get to success so that they stay around with our customers.
- [17:53]
Chris Walker
Right now at my company and we're like small millions, a lot smaller than you in revenue. We charge $2,000 a month for our software and then we charge $6,000 a month for our expert services that make you successful with the software, where we work with the executive team to implement it, educate their team, align people and make it successful. I'm not recommending that pricing strategy or that that breakdown of 2575, but I think that giving away customer success for free at this point is, is not smart.
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Max
And then who do you hire to be those go to market strategies like for our customer success team, does it make more sense to hire right. If we're not using agencies, are we.
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Chris Walker
Hiring at this point? I think you have two teams that work on the post sale side. You have professional services which are consultants, people that have done your customer's job before and helped them be successful. And you get paid 300, 500 bucks an hour to do the work with them or however you want to charge for it. And then you have account management. And account management is really a sales function of how do we get our customer to recognize that they get the result, how do we get them to renew, expand, multi thread within the account, know the right people that we need to have them all be on our side, understand and anticipate problems or churn or things like that and address it. And maybe that's what you're doing, you just call it customer success. But when I see it, you have professional services that you get paid for, you have account manager that does sales and then customer success is kind of in no man's land in the middle. And I think that it could be a terminology thing, but I think we should just have those two.
- [19:26]
Max
Do you guys have questions I can go dive into? I know basically like warmly right now we basically had focus on the sales side a lot of helping the sdr, the SDR manager, taking advantage of your website intent and creating a flywheel of like pushing, taking those website visitors, doing more marketing and stuff like that. So it's a whole flywheel we've now kind of shifted into like what's actually defensible and actually will help us in the long run. So we've been thinking a lot about the entire revenue team from the marketer to sales to customer success and really helping them narrow in on their ICP and also figuring out who to target at the right time and managing that entire CRM because there's not really a good CRM for the revenue team. It's kind of split on sales. Marketing has their automation, but there's nothing really helping people to manage that through the entire flow and smartly take advantage of who to prioritize your time, your budget. On marketing side. And I don't think our team is as knowledgeable on the marketing side or go to market besides the sales and the SDR team. That could be a helpful area that we dive into of just like what's the go to market strategy when you are especially when you're working more on refine lab side of like what's the go to market strategy that you're seeing in the past couple years and then the pain points with that and how, how we're shifting people and how can our tool maybe help do that? Movement built into our tool and then on the side we also have professional services helping people move towards that new marketing movement or go to market movement.
- [20:47]
Chris Walker
Cool. I'll just shoot the shit. And this isn't really advice for you. I'm just going to talk about the things that I'm seeing. I am quite interested slash obsessed right now with the concept of pay per deliverable or pay per outcome instead of pay per seed or pay per subscription. Meaning that instead of them paying you 2000 bucks a month or whatever, they pay you for your software that they pay you 100 bucks per meeting they book or $50 per engaged count or something like that. You can think about different ways of the billing model where basically if the customer is not successful and they don't get what you said they're going to get, then you don't get paid. Forces you to get the customer the actual result. So I think it's good actually and fair on both sides that if you get the customer a bunch of results, you get paid way more than you do based on the subscription model. I think that's interesting. I think that whoever can crack the signal tracking, plus having the analytics to know what signals work, plus automated AI based emails, LinkedIn messages and then charge based on a paper meeting, paper deliverable would be the most, one of the most valuable companies out there. So that's one thing like shifting the price. The pricing model is already happening, especially with companies that are AI native, that move more, way less on subscription and way more usage based on outcomes. When it comes to your own go to market strategy, I think that every company should have someone like me. And I'm not like tooting my own horn, but somebody that's probably like usually an executive level person. But like if you think about Sangram that did it for Terminus, like he was just the chief evangelist officer and a shareholder. So it doesn't have to be the CEO. A person that is seeing what is going on with our customer base, what do they need, what are they trying that isn't working? What are we doing that's different, that's making them work and then feeds that back into the top of the funnel, work inside of a podcast, live events, speaking at conferences and things like that. And then that can move into the sales enablements of the message in the sales process. That's all set. But I think that the main marketing stuff is taking the stuff that you're doing with your customers and then bringing it back to marketing, not the other way around. That's how if I like reverse engineer, what I've been doing, that's what I'm doing. And when people say you explain things in a way that I've always thought but never knew how to explain it, or I've been thinking this for years but didn't know how to say it. The reason is because they see it from the marketing side. But the reason I know it is because I watch 50 companies do something and fuck it up. And that's why I know the problem is the problem. And so there's something in there about using the stuff from your customers and then bringing into your marketing to, I call it twisting the knife, but basically like really driving home what the pain point is, what people are trying, why it isn't working and what you know that's different. And I think a lot of thought leadership content is total fluff. Yes, yes, total fluff. And no wonder their brand investments don't work. Like it's, they're not, they're not driving any real message into the market. I also think that having a podcast where you just interview guests is not a Good strategy. You're, you're promoting, promoting somebody else's message instead of your own. And I think that strategically using guests that can reinforce messages that you already think like I do that sometimes. But having a show where you just interview guests and then put it on I think is generally like a waste of time or a low value activity. I think that companies are in this either or of like anything, right? Don't do LinkedIn, it's rented. You got to build your email list instead. Or like paid sucks only do organic or organic sucks only do paid. And I think that we should get out of the either or and be in the and game and think about things and how they work together. That we use organic LinkedIn and podcasts for broad awareness. And then we take paid and we narrow in on, on the thousand companies that have been on our website in the last 60 days or the thousand companies that we know really need our stuff. I think that a lot of companies when they do advertising, they go really broad and they spend a lot of money. And I think that the new advertising strategy will be a lot more focused. I also think that moving out of what I'll call like intent based channels, think capterra, trustpilot, Google search, things like that for advertising and moving more into channels that I'll call like awareness channels. People that aren't like searching for what you do or looking for what you do right away and going out and getting knowing these are the companies that really need our stuff. This is the message that really works. I'm going to go out and get them instead of waiting for them to figure out they need us in search in Google. But being more like spearfishing than throwing out a huge net. I think that a lot of companies waste a lot of money on advertising. I know it, I run an advertising agency. And a lot of companies won't even, they hire us and they won't even follow our strategy. They'll tell us what to do and they'll waste a bunch of money for six months and then they'll let us do what we need to do afterwards. And so I think that problem is different than it was in 2021, where people will just frivolously spend and not measure it. People are a little bit more disciplined now. But using advertising differently than how it's been traditionally used, I think is a huge point as well. And we should, if the ACV allows it and our CAC allows it, we should be using that as a method to go and reach our target customer. And the target People in that company.
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Max
Yeah. What are the biggest problems that companies are coming to you to solve, especially in the go to market?
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Chris Walker
I kind of called them out, but I'll just say it more clearly. The C level executive team doesn't have the data insights and structure to be able to make what should be smart, easy, confident decisions based on data. So instead it falls back on somebody's opinion about what's happening and somebody's opinion about what we should do, which is generally whatever they did at the last company that they did. And like I said, there was a massive shift. So if you're following what you did at Marketo in 2013 or when you did at your last company that exited in 2017, those strategies are very unlikely to still be viable today. We're in a different world. Not only just the way that customers buy is changing, but the economics around software and how investors value software companies is totally different than it was even just three years ago. So I think that companies use technology as a crutch and they reach for instead of solving the real problems. You can see the change from marketing ops and sales ops to revops. The change from having a head of sales to a chief revenue officer. We don't have a chief marketing officer, it's a chief market officer. Companies look for the most superficial, easy to change things, which is change job titles or buy technology instead of fixing the real fucking problems that are deeply ingrained inside of companies. The process for how they do it, the structure of how they think about marketing versus sales, how they think about how they use data to make decisions, how they report back to the board, how they hold people accountable, how they comp their sales team, how they comp their marketing team. I think sales, sorry for the salespeople in this room. I think sales comp plans and the way that they work today are one of the stupidest things ever. It's the exact same thing that companies used in 2013 and 2007 when the salesperson had to prospect and then educate the customer and then close the deal and then onboard the customer and then account manage and expand the customer because there was no marketing support and they didn't have all the specialization and roles and sure, yeah, they should have got comped the way they did where they had massive commission plans and things like that. The way that sales works today, most of the buying happens independently before they ever talk to you. And sales is not. I don't want to discredit sales, but there's a lot of order taking that's happening there's a lot of work that happens too. So I don't want to discredit it. But I think the point that I'm trying to make here is that companies need to rethink things based on how the world works today instead of just reusing what's been happening for a long time. So that's the departments, the compensation structures. I think that compensation structures misalign, go to market teams, totally marketing, being on base salary, SDRs oftentimes being comped differently for an outbound meeting versus an inbound meeting. Yeah. So there's just a misalignment of the how the compensation structure works based on a world that doesn't exist anymore. So those are some of the, I guess elaborate. Some of the problems that I'm seeing.
- [28:39]
Max
Thank you. I'm going to open it up.
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Chris Walker
Yeah. All right.
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Max
Chris, he's our head of marketing.
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Keegan
Two questions that are generally related to each other. So the first one is going back to the pricing for outcome. And as personal experience. I was at a company that did a lot of pricing based on outcomes. This was for like Shopify. Sources are pretty price sensitive already. But the similar thing was that when we started to price per outcome or price in terms of like general return that they were seeing from our product, the first question that always popped up was, you haven't did it. That's kind of like, did your product actually do it? And it feels like when you start to charge for that, that question pops up a lot more. So, yeah, curious about how you start to like maybe handle that objection or set ground rules or whatever to start to kind of like avoid that rejection or that counter to what you're proposing.
- [29:26]
Chris Walker
So take one step back instead of charging based on a result and instead based on a deliverable. So there's a company called Algolia and they have like a search plugin for e commerce websites and they charge per thousand or per million completed searches. And those websites get maybe a million searches in a day. And so it allows a small company to be in there and pay them whatever. They pay them a small amount of money. And then the big hundred e commerce companies pay them millions or tens of millions of dollars a year. And it's not about did you get the sale. It's like Our search works 100 times better than your native WordPress search. They have enough data to show, you know, increase AOV or conversion checkout or whatever, and then they just charge per completed search. Another company recently is charging per ticket closed for an AI agent. So instead of having a Human do it, they charge $2 per ticket closed with an AI agent which is way cheaper than having a human manage that. So you can pay, you can charge based on deliverable instead of based on outcome, which sort of. It doesn't perfectly eliminate it, but it makes it a lot easier to justify what you're doing. So that would be my recommendation. I struggle with the result thing too in sales and marketing because a lot of things did it, you know what I mean? Like for example that I gave like how'd that person get to your website? You know what I mean? Are you going to take credit for that whole $70 sale on Nike.com because they searched in your website, in your website probably had a Google Ad, television commercials, branding, word of mouth, all these other things that were happening. And so specifically in sales and marketing, new logo acquisition. I think it's really hard to charge based on and take a percentage of revenue or something like that. So work one step backward. Companies are already used to paying SDRs per meeting or using an outsourced SDR firm to pay per meeting. And they'll pay in different tiers based on an SMB account versus a mid market versus an enterprise or strategic. And so you can look for places where companies are already used to paying per deliverable and then just work to automate it, make it more efficient or use software to do it instead of humans.
- [31:22]
Keegan
Yeah, yeah, that segues kind of perfectly.
- [31:24]
Chris Walker
Second question, love when that happens.
- [31:28]
Keegan
So the which relates back to kind of a little bit more about attribution. I feel pretty strongly that like Nobody will ever 100% solve attribution because that would essentially be solving for why somebody made a decision at one point in time, which is probably impossible to do. So the question is, you gave an example earlier about marketing's job or an example of marketing enabling or essentially amplifying word of mouth and you having content you brand up top, let's say on LinkedIn and then creating targeted ads on top of that in LinkedIn advertising that targets people who visit the site or engage with content. And so in that kind of example or other examples, what are your kind of thoughts now on how you sort of attribute that or attribute that across the funnel? I think obviously multitouch is probably also a bit of voodoo as well. So like how do you kind of view like marketing investment versus marketing results and is it more just like look number go up, unit economics stay solid. Good. And that's basically what you worry about in the aggregate.
- [32:27]
Chris Walker
Yeah, so let's. I'll cover one thing and then let's talk about attribution unit economics. So the reason that my podcast and LinkedIn content works so well is because I understand the problem deeper than anybody. So it's not that I'm like just amplifying what my customers are saying about what they like about us. It's that I see I'm in the work with my customers and I see the patterns across a lot of them. So I'm able to communicate and understand the problem in a different way. That's very different than how other people are marketing the problem and their solution for it. And then I'm able to understand and watch what companies are trying to fix it and then see whether or not it works, collect the data and then make a educated assessment around why it isn't working. And then when I'm able to say that, people then say that's different. That's interesting. I've tried those couple of things and those didn't work. Now I trust this person more. So at the top of the funnel to me, I look at it more about having a differentiated perspective around the problem and being able to frame that really well, which comes through working with a lot of companies and being in there, which leads to why you have professional services and things like that as a strategic advancement. And then on the measurement side, I agree. I don't think there's ever a perfect solution and I don't think that. And this is the space that I kind of play in now across the whole go to market but lot of it like the main problem is what the is happening before the opportunity gets created. That's where people don't really understand. So the core issues and I posted about this on actually I wrote a note, a long note to my one of my customers today about this exact problem because they're going through it. The core issues is that number one, C level executives don't own it. They delegate it to revops, they delegate it to a marketing director or someone like that. This problem is a finance problem that negatively impacts go to market. But I believe it's a finance problem. We have enough data to know not necessarily at least what things are doing something right, multi touch combined with single source or whatever, that type of stuff. The problem with that is that it looks like everything's working and we don't know which things are worth the dollars that we're spending on them versus not. That's the main conundrum that people have. So everyone tries to fix it by looking at the most tactical data first, which is Campaigns, touch points, email reply rates for SDRs, things like signals, things like that. And they try to build it up. And as they build it up, the thing doesn't, it breaks eventually and there's no finance data. And then you get to the C level team and the C level team's like, what the fuck am I going to do with this? Like, it looks like everything's working. Meanwhile our CAC has been going up for four quarters. Like, I don't know what to do. And so there's an issue with the way that it gets built. Bottoms up. There's an issue that C level executives don't own the problem, even though it's the most painful, expensive problem in their entire company. And the last one is that people do not clearly define what the problem is. It's not a technology problem, it's a process problem which involves technology, but it also involves people, how you structure your CRM data, how you use that data, what data you're looking at, why you look at it, and then how you make decisions against it. So it's really the process that is the issue. And there's one more that I forgot is people look for a silver bullet solution. I every single one of my discovery calls is we've been thinking about implementing this multi touch attribution tool and think that's going to fix it. Or you know, we've been getting really good with our Power BI dashboard and now we're going to put ChatGPT on it and we're going to be able to query it and something like that. And the problem is that when you look at all the things that are spent on go to market, there's a lot of things and there's a lot of different reasons why you spend the money in different places. And so applying one way to measure all these things that have different reasons for why you're measuring them means that you have a model that just basically inflates the effectiveness of one thing, which is generally performance marketing or highly trackable things. And so what we're doing at my company is one rethinking what is the reason that we're measuring all these investments. And then once you say, okay, like people on the little brand versus demand, I think those are not the right categories to put them in. But you said I want to be conscious of how I can answer your question without giving away sort of our secret sauce. So you have, I know this will go on my podcast. So in marketing there's probably like four or five reasons that you would spend money on something, right? Like some of the investment goes to drive up NRR. Like some companies will spend $2 million on a, on a user conference that's just for their customers, right? Then you'd expect some type of benefit in terms of a combination of renewals and expansion revenue based on that investment. And then you have a lot of things that happen for other reasons. Like we want customers to be aware of us, right? I don't believe in that theory, but like we need customers to be aware of us. Then what I call supply chain, which is like how do we get highly qualified accounts that have the right signals directly to our prospecting team to get meetings, right? There's like a very specific reason that money gets spent in that area. Then you have prospecting, then you have closing. And so thinking about all those different areas and then saying, what is the goal of this big amount of stuff? Let's just do supply chain. Because it's the most simple, right? So inside of that, instead of saying inbound and outbound, we just say we have first and third party signals and we're going to look at them all together. And I don't know why companies don't do this yet. Okay, so it doesn't matter whether they were in our marketing automation database and we sent four emails to them or they came from warmly third party anonymous website, traffic signal or something like that. So all of them get looked at together and then you have the costs of the software and the data and the people that run the stuff and the agencies that do it and then the advertising that has that objective and you put all that stuff together and then you say how much did it cost? What's the blended cost of a signal? And then you can look, stack them top to bottom and say which are the signals that drive the best results and the best roi? And if you did that, you'd probably find, you know, warmly and third party data sources have a much higher efficiency than paying per lead on a LinkedIn ebook. Same purpose way, different method and objective. You stack them top to bottom, you say here's all the shitty stuff that doesn't work, throw it out, put more on the top stuff. And then you basically have that same process in other areas. And then lastly is that there's a difference between measuring performance and tracking progress versus trying to look at the granular data to make it better. And I think people blend those two things together when they use attribution. And so at a top level it's like, what is our cac? What's our return that we spend all this money on how much pipeline do we get back? How much pipeline Dollars per dollar invested over there. Do we get is that going up or is it going down? Do we have enough, do we create enough pipeline to have quota coverage? Do we have scalability and things like that? That's the North Star. That's what I'm saying about having a two slide marketing QBR deck to the board. It should be very clear. These are the numbers. This is what it was 3/4 ago, 2/4 ago, 1/4 ago. Now is it going up, is it going down, is it flat, is it within our range in order to hit our plan and achieve our growth targets? Simple. And then underneath that, then you get into all the tactical stuff, breaking it into different investments and objectives, looking at that data and then making changes and then you make the changes and then you measure the effectiveness of the changes back up against the top level stuff.
- [39:39]
Keegan
So each channel, every initiative needs its own set of or it has its own purpose and extension, its own set of metrics. And then all of that needs to relate back to the core reason we're all here, which is again, number go up, you know, the right way, the efficient way essentially. And we're judging all channels on their ability to, to drive a number that maybe that's not their purpose and they all need to be assigned the correct purpose relative to the end goal. Kind of what I'm hearing.
- [40:05]
Chris Walker
Yeah, I mean we can't measure our podcast the same way we measure Google Ads. We can't measure Google Ads the same way we measure SDRs. We can't measure demo requests the same way we measure SDRs. A lot of companies try to do it that way. Cool, I love that topic.
- [40:20]
Host
Hey, I'm on the new business side.
- [40:22]
Chris Walker
Cool.
- [40:22]
Host
So no offense to you, but as far as you know, you mentioned obviously the buyer experience and journey is so different and we're trying to avoid being just those order takers. What do you think is most broken in the sales process and how can we improve that?
- [40:40]
Chris Walker
To be honest, I don't think that sales is a problem in 99% of companies. That if sales had the right amount of qualified accounts and buyers to achieve their pipeline targets, that a sales team can execute a process consistently and close the deals they need to do at a win rate that matches what their plan is, I think the companies can manage opportunity creation to close one very simply. And the real reason is that they do not have an engine to get enough people interested to create enough pipeline. And why is that? Because they don't get appropriate ROI and all the investments that they use to create the pipeline and then that forces sales to go and have to do low value pro low effectiveness prospecting and things like that, which is a band aid having seller that's going to make 200,000 or whatever they're making per year, make cold calls that they're going to get meetings at 1 1% or something like that, the meetings are going to win at 4%. You're just perpetuating unsustainable model and then you hire more headcount and it continues to get worse and worse. And so I think, yeah, I, I wish I could answer your question better but I actually don't think it's a problem. Across a lot of companies that I work with. It's like their sales team does what it needs to do. The problem is that they don't create enough pipeline or they don't have the right goals based on the historical economic performance. If you have a follow up or you want to like dig a little deeper, I'm happy to, I guess even.
- [41:51]
Host
From like as a seller yourself and as a buyer, what would you say and you kind of gave an example earlier of, you know, having a different process even from discovery. What do you think is a good buying experience? What separates our company from another?
- [42:07]
Chris Walker
I think that by the time someone is talking to you, they're predisposed to whether you're in third place or first place before they even meet you. So if you're in first place, don't fuck it up. And if you're in third place you're at a severe disadvantage. So it's about trying to figure out how do I get to the people before they have decided on what that list is. And oftentimes signals are too late. And that's why I get to the here are the thousand accounts that need us. We know this because that's all the similarities of our current customers that have the highest LTV or give the most testimonials or whatever you decide to measure it on. It's usually not as simple as there are 100 to 500 employee companies that are in this vertical. Like it's, there's a, there's different reasons that are harder to understand psychographically how their organization is structured, something like that. And then we have those thousand accounts before they have quantified the problem given budget for it decided. And then we can be the people who educate them on that. I think the best way to do that is by using an offer that is Free and provides a lot of value like what a consulting firm or an agency would use to get their data and then create a business case around the data. Like I think that is like professional selling today. Yeah.
- [43:25]
Max
Keegan HEAD OF REVENUE hey man.
- [43:29]
Head of Revenue
So I actually agree with a lot of points you're saying and I know you're very much extreme. Fun fact. How we built our pipeline is separate from inbound and outbound. So I can measure the velocity and ACV for each from watching one of your episodes. So I take a lot of what you say and apply it. Curious 1, 2 parter here. Do you believe cold calling is dramatically steady? Do you believe it's still as useful? We have an SDR team. I'm not going to say if you think we have a cold call or not. I want to hear your perspective. And two, if you were to build out the revenue engine of the sales, the comps, what would that look like on your team?
- [43:59]
Chris Walker
Cold calling is one dimensional. So I just think about it as like going out and getting a target customer through whatever vehicles that we can choose. Right. So like cold calling, LinkedIn messaging, Instagram, DMs, email, seeing someone at a local event that I happen to live in the city and there's an event that I go to on my own dime or whatever. So you have all these different ways that you can like engage a customer that isn't coming to you, that's not dead for sure. I think that the methods in which that they're used and I think are different and I think that there's a big element of setup that wasn't needed five years ago or 10 years ago that's needed now. People need to understand your company, know what you do, ideally understand the problem, have talked to people that have already used your product. I'll give you an example. In 2017, this is a long time ago. I could clearly see that our outbound SDR model wasn't working. And the reason it wasn't working is because we would book meetings and have success booking meetings and our sales team would have to trap our field sales team would travel for like half a week to go to this customer for one meeting. And we win those meetings at 2 or 3% and it just doesn't scale. And then I started to do market research and say and we interviewed, surveyed 500 of our target, the person who signed the check which was the director of respiratory therapy. Most often they work inside of hospitals. And one of the questions that we asked them is what steps in the buying process would you like to complete before you talk to a sales rep. And the answer was I want to see the clinical data about how it works and I want to talk to a peer in another facility that uses a product. And so we changed our outbound. Our advertising strategy started to be all about the clinical data. We started marketing, we call them key opinion leaders, people that are do the studies and things like that, videos of them or linking directly to the study and Facebook ads in 2017. And then on, on the outbound side instead of saying hey, do you want to have a meeting with our sales rep? It was hey, this person at this other facility nearby you that you know uses the product and has been having success with it, would you like to talk to them? And so understanding what steps your customer wants because if when our salesperson walks in and they haven't done those steps, they immediately are on the defensive and they don't trust you. And so figuring out like it's thinking outside the box around like how can we do this differently? Because I think the, if you just keep repeating the old way, you're just going to get diminished, continuously diminishing returns. So that's one example of what you could do on the comp plan side. Admittedly I haven't thought totally through it. I understand that it doesn't align with how the buyer buys anymore or the value that is created across the customer journey. Back in the day, sales owned 100% of the new logo journey. Maybe, maybe they saw your marketing at a trade show booth in 2011. The companies I worked for back then barely had a website, you know what I mean? Like and so sales had to do everything and it was mostly field sales and so they owned a hundred percent. And now if you look at the data, it's like 22% of the journey that they own. And I think that requires us to sort of rethink how it works. It's hard though. We want to get the best talent in our sales team, right. And all the other people are doing it in a certain way. And so it doesn't mean we should pay sellers less. I think it means that we need to rethink based on the objectives that we're trying to accomplish. How the whole team is, is compensated and measured, the cold go to market or new logo team and that could be, I guess I'll challenge the SDR like model as well. I think so. I'll tell you what I've tried that didn't work. So I tried no variable commission plan for sellers and it didn't work. And my thinking around it was it's my responsibility as the CEO to set up our go to market where our sales team has enough pipeline to hit the target. And I think it usually leads to people just sitting and waiting for inbounds.
- [47:47]
Keegan
Not hungry.
- [47:48]
Chris Walker
Yeah, exactly. I think that the nature of how companies try to use department source attribution at one level, maybe not for the whole thing, but like hey, marketing source that because it came through the website SDR source that because we got it from a third party signal and we went outbound sales source that because they sent an email and got that meeting. I think that that is fundamentally flawed because usually SDRs and sales, when they get a meeting, it requires lots of marketing activity for the person to positively respond and things like that. So I guess short answer is I don't have a perfect answer for you right now, but it's something that I've been thinking about a lot. So when I do, I'll report back. When I do these processes, the first thing that I do is identify what's the problem. Right. And it's usually we're operating in a way that about the world used to work, but now the world has changed and we haven't changed. So that's where I'm at in this area right now. And I'll keep trying to figure out what the right solution is.
- [48:44]
Max
One last question to you.
- [48:45]
Chris Walker
Cool.
- [48:46]
Max
I believe the company that will succeed in our space is going to be the one that can learn the fastest and apply those learnings and adjust fastest. You seem to have mastered that and I'd love what is your advice to our team to become that kind of speedy learner? How do you think about what are the right questions to ask? How do you choose what time or how do you choose what you focus your time on to keep learning really fast and becoming a thought leader constantly?
- [49:13]
Chris Walker
Yeah. So first off, I don't buy into the winner take all thinking. I think about in abundance that a lot of people can win. I also don't truly believe in the concept of competition. I believe that a lot of people try to do similar things as me, but because I understand the problem and look at it differently, that no one's really solving it the same way that I do, which breeds differentiation and things like that. And just from a mindset standpoint, it's way, way more fun to just be like, I just want to help my customers be successful and let the chips fall where they may and not have to worry about what the other fuckers are doing out There, it doesn't matter. And then how do you drive? Fast learning is I really care that my customer gets the outcome that I promised them. And I think that most people in whatever role in go to market are not taught how to be curious and listen to the customer instead of pushing the customer based on what you want them to think or hear. I think people get happy ears when they listen to customers and they more hear about what they want to hear or they ask leading questions to get the answer that they want to hear. And I think that over time what I have become a lot more conscious of is thinking about what is it about me and my experience that gives me a unique set of tools and skills to do something that other people wouldn't be able to do. And having a. It hasn't been this like the whole way, but having a really sense of self awareness around what are the things that I'm really good at and what are the things that I'm very different or gifted in and how do I put all my energy on those things and not try to do all the other stuff that sucks my energy and doesn't provide a lot of value that somebody else is much more equipped to do. I think that that is actually the secret to speed and energy. When I'm doing things that aren't aligned with that, I'm tired, I want to take a nap at 3 in the afternoon. Like I can't lead my team. And then when I am aligned with my purpose and skills, I can work for 15 hours a day and love it. And so I think it's. And that's, that's an internal thing and it can be. It's not like your max doesn't have to change it or any one of the leaders. That's just you understanding that stuff and then leaning into it because you can craft your job and accomplish your objectives in a million different ways. And so that has been my key to I think, curiosity, intense customer focus, the mindset of whatever I'm selling. I want to be the number one consultant for my target customer in the world. Like that's my. That's how I approach it. And then like really self awareness and leaning into your strengths or things that have worked for me.
- [51:53]
Max
That's awesome. Thank you so much, Chris.
- [51:54]
Head of Revenue
Cool.
- [51:55]
Chris Walker
Thanks y'all. It.