How to Improve Revenue Efficiency During a Bear Market with Eddie Reynolds, CEO of Union Square Consulting
In this episode of the Revenue Insights Podcast, host Lee Bierton speaks with Eddie Reynolds, CEO of Union Square Consulting, a consulting firm for B2B SaaS startups. They have a free-flowing discussion about focusing on revenue efficiency and plugging leaks in the sales funnel and revenue processes. Eddie shares his insights on how you can proactively spot leaks and simple ways to fix them. He also discusses how to drive more revenue from analyzing your sales process to spot where revenue is coming from. He also shares how to feed those insights back into the sales process to increase revenue through higher conversion without adding more at the top of the funnel.
Eddie Reynold is the CEO of Union Square Consulting, a consulting concern for B2B SaaS startups. He brings over 20 years of experience in the revenue management space. He is also a frequent speaker at industry engagements.
- Eddie Reynold on LinkedIn
- Union Square Consulting Website
- RevOps Corner Podcast
- The Revenue Efficiency Pyramid
- RevOps Weekly Newsletter
- Eddie’s book Recommendation Moneyball by Michael Lewis and Black Swan by Nassim Taleb
- 01:13 – 04:30 – Eddie’s Story
- 05:05 – 07:16 – The importance of focusing on revenue efficiency
- 07:55 – 14:16 – Common mistakes where sales teams are leaking revenue
- 15:36 – 22:23 – How to spot revenue leaks
- 22:53 – 24:59 – The 3 most common mistakes revenue teams make
- 25:12 – 39:35 – Why revenue teams need to be more efficient – and how to drive more revenue from less leads
- 39:36 – 40:53 – The challenge of attributing where revenue is coming from
- 40:59 – 43:49- Eddie’s Book Recommendations: Moneyball by Michael Lewis and Black Swan by Nassim Tale
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We might have a great relationship with one individual stakeholder and they’re super happy with our product or service.
But what about the other five or six people that could buy more products and more services from us?
Are we talking to those folks?
There’s so many different processes across sales, marketing, and service that get neglected. Because the mentality of the growth at all costs has been, let’s just pour more money into marketing, more channels, hire more sales headcount, hire more customer service reps, and let’s just keep pouring money into the funnel without really looking step-by-step at what’s working and what’s not working. Welcome to Revenue Insights.
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Together, we explore how they built their revenue teams, the journeys that they’ve been on, and the lessons they have learned along the way. Revenue Insights is brought to you by Epstor. We’re a revenue intelligence platform designed to help revenue teams to build more pipeline, close more deals, and retain more customers. Hello there. You are listening to Revenue Insights.
Today, I’m joined by Eddie Reynolds. He’s the CEO and Revenue Operations Strategy Consultant at Union Square Consulting. Eddie has worked across a variety of roles in revenue operations and sales across a 10-year plus career.
Eddie, great to have you on, great to chat today.
How are you?
I’m good. You’re making me feel so young. I feel like my career has been, I graduated college 20 years ago this year. It’s a little bit more than 10 years. I think you take it where you can get it right.
Eddie, for anyone that hasn’t followed you on LinkedIn, I know you’re posting a lot on there at the minute.
Anyone that doesn’t know who you are, could you give a little more background around your story and how you’ve got to where you are today, even though you reckon you’re pretty young?
Oh man. This infamous founder story. I’ve got to work on it. But basically, I wanted to start my own business since I was 14. I did start my own business when I was 14 actually. Everybody I talked to told me I needed to learn to sell. I ended up paying my way through college in sales and going on after college to work in sales for, well, pretty much ever since then.
I worked in finance for 10 years. I went and worked at Salesforce for a few years after drinking the Kool-Aid of Salesforce and then I started my own company.
About six years ago, is it six?
I think we’re going on year seven now. I still am responsible for all of our sales and all of our marketing. It’s something I’m very, very passionate about. But along this journey, I started to touch on revenue operations a lot. Ten years ago, I was the first account executive and an early stage SaaS startup. This company was actually built on top of Salesforce.
We had a lot of in-house expertise, but everybody was busy doing implementations for our customers. Me as the only sales rep, I had to do all the configuration and implementation of Salesforce for my own purposes as well as building out all of our demos inside of Salesforce. I learned a lot about the configuration of Salesforce.
But coming from the sales perspective, I was always thinking about the end goal of how do we actually drive more revenue through our revenue operation. When I joined Salesforce, I spent a lot of time talking to executives at high growth B2B SaaS companies here in New York. Inevitably, I would bring in Salesforce implementation consultants.
Many of them are really great, but a lot of them would get really deep in the weeds on the technology really fast. We’d be sitting in front of the entire executive team trying to talk about their goals and their go-to-market strategy. I’d see the conversation devolve into integrations and workflows really quickly.
I thought, this is not why we’re here today. We’re here to talk to this executive team about how they grow revenue and how they scale their business faster.
When I left Salesforce, I wanted to start an organization that not only helped them manage the tech stack but was really focused on the strategic direction they want to take their company in, and how we can leverage the tools and the data to drive better strategy and better process. I think it’s actually a really nice way of almost summarizing what revenue operations is to an extent.
Something that I know we were touching on pre-show around, what is revenue operations there to do?
I know you look at it from more of a strategic perspective, right?
I do. I spent the first 10 years of my career in banking and finance.
First, lending money to small businesses and eventually helping to raise venture capital on private equity funds from institutional investors. I spent the bulk of that 10 years trying to understand how companies and investors operate financially and how they make money and generate returns.
I’ve always been looking at things through this lens of, what is our ultimate goal here?
If we’re talking about a VC-backed tech startup, we want to grow rapidly and eventually have some type of an exit so that investors can get a return on their investment. The only way to do that is a combination of revenue growth and building a sustainable, scalable business. A hundred percent. At the time of recording, we’re at the end of February of 2023, couple of months into the year.
I’m interested to know, I know that you work with a number of different clients across the US and elsewhere.
What are the common trends that you’re seeing from businesses at the minute?
I’ll leave that as a fairly open question, certainly from a revenue operations perspective, but let’s talk about it from a revenue growth perspective, given the current global economic climate. Sure. In addition to the clients we work with, I talked to a lot of prospective customers as well, and a lot of people in the market through all the content that we do.
I see these recurring themes that I think you see as well, Lee. CFOs are carefully looking at every penny they’re spending and they’re trying to understand where they should cut budget, how they’re going to survive through a recession, what they’re going to do if they can’t get their next round of funding. We’re seeing layoffs across the industry. I think a lot of things I’m mentioning, a lot of people are seeing.
But the thing that I’m seeing that I’m not sure everyone else is acknowledging is that when you look at this through a CFO perspective, unfortunately, a lot of the companies that spent foolishly in the bull market are cutting foolishly in a bear market. There’s a famous case study by Harvard Business Review.
I wish I could remember all the details, but basically they talked about how companies weathered the storm through the global financial crisis. You basically have three options. You can just keep spending foolishly thinking, we’re going to spend our way through this recession, we’re going to grow at all costs and come out the other end of it ahead.
You can cut foolishly and say, we’re just going to just make cuts across the board. We’re not going to go deep and analyze anything, we’re just going to start cutting costs wherever we can.
Then of course, there’s this third option, which is obvious as I’m explaining it, where we’re going to really carefully analyze each area of our business and understand what investments are actually paying off for us, and what investments do we need to cut. No big surprise, the companies that made it through the financial crisis and came out stronger were the third category.
The reason for this is the companies that continue to spend foolishly, ran out of capital and just went out of business. That’s obvious. The companies that cut foolishly, what they did is they gave up a tremendous amount of market share and also competitive advantage.
They might have survived the downturn, but when they came out the other side of it, the competitors that spent more wisely built a better mousetrap, they built a better operation, they had better sales and marketing, and they were able to acquire a massive amount of market share and come out the other side of this recession way ahead of their competition.
That leads on to the obvious question I feel, which is, how do you do it?
I’m going to make an assumption that this is what you work with a lot of your clients on, this is what you’re engaging with people with through your content. For anyone that’s listening and going, okay, well, that sounds great. I want a piece of that, particularly for those of us working at smaller companies where arguably this period is an opportunity to make up that ground.
What does the process look like to really get a sense of, okay, where am I spending efficiently and where should I be making cuts rather than just going at it with a hatchet?
Yeah, absolutely. I can only speak to that in regards to revenue operations. I can’t speak in other areas of the business. Let’s focus on sales, marketing, and customer success. I think that when we open the hood and we look deeply into a lot of the companies that we work with, you just see a lot of glaringly obvious easy wins and low-hanging fruit. Let’s talk through what some of those are.
Let’s start at the very top of the funnel with marketing. If you have an MQL goal and you’re focused solely on lead generation, and or your systems are not connected from marketing to Salesforce, and you can’t see all the way through to revenue, that’s just an obvious gap.
You’re going to end up spending money on certain marketing channels that will generate a lot of MQLs, people that don’t actually want to talk to sales, but somehow engaged with marketing enough to hit a lead score, and then you’re investing money chasing the wrong thing.
Rather than looking at each one of these individual channels and understanding, how do these people go into pipeline and then actually closed one, and then if you want to go further, look at the lifetime value of a customer. Most of the time, we see organizations don’t have the data to do this. If they do, they oftentimes have the wrong incentives in place to incent marketing to focus on the right thing.
We even talked to marketers that understand this and want to do this, but they have a CEO that maybe doesn’t understand marketing and is pushing them in the wrong direction. That’s marketing. Let’s now talk about outbound lead generation. We are all the recipients of cold calls and emails that just completely missed the mark on having any relevancy for us.
Every day we’re receiving 10 emails that talk to problems that don’t have anything to do with the industry we’re in, the sector we’re in within that industry, the size of company we’re in, or the role that we serve in our company.
Now, what does that do for the company on the other side of that?
What it means is they’re spending a lot of money on people, on tools, on messaging that isn’t hitting the mark. A lot of times this is because they have insanely high activity goals. We need to do 100, 200 activities a day. There’s no time to research the account. We spray and pray this wide net. We have extremely low conversion rates.
We miss our targets and then we try to solve for this by saying, let’s increase activity quotas even further, exacerbating the problem.
Instead, let’s take a step back. Let’s lower the activity goals. Let’s narrow our ideal customer profile and our buyer persona and get laser tight on who we focus on and let’s find the messaging. Let’s go look at the data that we have, what emails were opened and read and responded to, what weren’t.
How do we reverse engineer what is already working?
What are top reps or SDRs are doing to generate pipeline that actually closes?
Let’s figure out what companies and people we should be targeting and get super narrowly focused on that. We just did a podcast on Wednesday or an event, the podcast was released yesterday on territory planning. We laid out a lot of challenges there. I’ve covered outbound. Now let’s look at actually closing deals. So many companies, especially early stage, don’t have a sales methodology.
So what sales reps will do is they will either just throw a bunch of stuff into pipeline at stage one or they won’t create it at all. And then when they’re ready to close a deal, they move that deal into closed one or they create the deal at the stage of closed one. This means two things. You have absolutely no ability to see any visibility into your pipeline.
So that means that the sales leader is getting the team together and they’re just going around the horn and saying, tell me what you’re working on, tell me what you’re working on, tell me what you’re working on. That is a gross inefficiency of time. You have your most expensive employees all sitting in a room together accomplishing very little.
It makes it much more difficult for the sales leaders to actually coach reps on how to get better. And it makes it more difficult for the sales reps to retain information and understand what they need to do to follow a process, especially junior folks and or folks that are new to the organization.
So instead, if you really break your sales methodology down and say, this is the gate or the entry exit criteria we have for stage one, for stage two, for stage three. Before we do a demonstration, this is exactly what we need. We have all of the information inside of Salesforce that’s staring you right in the face when you go to update your deal.
And on a weekly basis, if not daily, we’re constantly pushing our reps to update their pipeline and coaching them on when deals should be pushed out, what else they can do to increase their chances of winning deals, and just narrowing that focus so we can maximize our chance of winning our deals. Then let’s take it a step further and talk about customer success. Customer success is woefully neglected.
When we talk about rev ops, we’re lucky if we can get people on board with the idea that it’s not just sales, it’s also marketing. Rarely do I see companies encapsulating customer success into how they think about revenue operations as well as revenue leadership. Look at how many CROs are actually covering all of sales, marketing, and customer success. It’s very rare. And these are the easiest people for us to sell to.
So do we have a process for renewals?
Let’s start there.
Do we have a button up process where we have an opportunity in Salesforce that is assigned to one specific person and a step by step process to manage that renewal and maximize our chance for renewal?
Number two, do we have a process to identify customer health, looking at the usage metrics within our app to identify healthy customers and non-healthy customers so that we can address unhealthy customers and get them in front of a customer success manager and get them healthy, as well as signals that can indicate to us that we have an expansion opportunity and either an account executive or an account manager can call into them and try to expand that account.
Are we covering all of the personas in that account?
We might have a great relationship with one individual stakeholder and they’re super happy with our product or service.
But what about the other five or six people that could buy more products and more services from us?
Are we talking to those folks?
There’s so many different processes across sales, marketing, and service that get neglected. Because the mentality of the growth at all costs has been, let’s just pour more money into marketing, more channels, hire more sales headcount, hire more customer service reps, and let’s just keep pouring money into the funnel without really looking step by step at what’s working and what’s not working. Loads of really valuable points there.
And I almost want to take a step back a little bit because I think, certainly for myself and I suspect for our listeners as well, you kind of touched on it there, particularly around customer success. It will be like it is some kind of revenue operations up and running, perhaps not as mature as it certainly could be. And oftentimes it’s that case of, okay, here’s the situation for me at the minute.
And that might be a case where it’s like, okay, well, I’ve got sales and marketing, but I don’t have customer success yet. But for you, when you’re going into a business perhaps for the first time and for people listening, that’s probably the stage that they’re at.
What is the step by step process that you really go through to get a lot of that alignment set up?
So starting with that foundational layer almost, we know it very well from having good data. You need good data, accurate data to be able to make decisions from. But from a more simple perspective, how do you go about it from day one and go, okay, get this right, this enables you to do the next thing, to be able to do the next thing and so on.
To that kind of utopia, let’s call it, where you’ve got that alignment and detailed processes throughout the customer journey.
Sure, so I feel like your question is touching on a couple methodologies that we use, so let me take them one at a time. Let’s first start to talk about how we get alignment and how we do our initial discovery. Because everything here is about prioritization.
So the first thing that we do is we talk to the executive leaders, and we try to understand what their goals are and what the go-to-market strategy is. So if you think about data, data is driven by the architecture in your tools, which is driven by the process, which is also dependent upon the enablement of the team.
So you can have the perfect data structure and process, but if your team doesn’t follow it, doesn’t matter, you don’t have the data. That’s all driven off of your go-to-market strategy, which is driven off of your goals.
And then it’s a virtuous or a vicious circle, right?
If you do it right, each thing gets better, it comes back up and it forms better go-to-market strategy. If you do it wrong, it just gets worse and worse over time.
So we sit down with the executive team and we try to understand sort of, what are your goals?
You’re trying to triple revenue or double revenue this year, or maybe you’re in a bad spot and it’s just, let’s see if we can maintain revenue. You have other initiatives for improving the revenue engine.
What are they?
And how do you stack rank the priority?
We then go in and we look at each individual department, sales, marketing, and CS, and we meet with those department leaders. We sometimes talk to folks on the front line. We look at the systems and we try to see what’s going on there. And oftentimes we see very obvious gaps. We put that into a revenue operations roadmap.
We try our best to prioritize things and tying in the work that needs to be done in rev ops to the go-to-market strategy and then prioritizing it and saying, this is the very first thing that we need to do. We don’t have a sales methodology. We need to define what our sales methodology is and what our entry exit criteria is along the sales funnel, for example.
We then present that to the executive team to get feedback.
Hey, are we on the mark here?
Would you agree with this prioritization?
Would you remove anything that we’ve put here?
Would you add anything that we didn’t put here?
And we get that alignment with the executive team to say, for the next quarter and then some, this is where we’re going to focus. And then we update that at least once a quarter, meeting with them to do a quarterly business review, showing what’s done, what’s not done, and reprioritizing the work ahead.
Now, this is sort of sitting on top of the foundation of another concept, which we call the revenue efficiency pyramid. And so I’m going to pull up my own website really quickly here because we have an article that we published on this just recently and it’s gone somewhat viral.
And in this article, our VP of revenue operations, Joel Arnold, outlines these four levels of a pyramid as he sees revenue operations evolving from the very basics all the way up to sort of the advanced shiny object bells and whistles that we all really want like artificial intelligence and machine learning. And so he talks about this foundation, which is kind of sort of setting up your basic sales process.
So if you think about it, there’s no need for customer success if you don’t have customers, right?
Like you should be thinking about these things, but first you got to win a customer.
There’s also not a lot of use to marketing if you’re just going to pour leads into a leaky bucket, right?
So you really want to get your sales process down first so that you can move those leads into an efficient sales process. And then of course, like win those customers and have some customers to serve.
So things like establishing your sales methodology, setting up your initial CRM, setting your foundation for strategy, you really want to just like set that foundation and make sure that it’s really good and then train your team on the CRM and get them following a basic process.
So again, just to kind of hit this home, if I look at your pipeline and I see that all of your deals are in stage one or close one, close lost, and or you have a 30 to 60 day sales cycle for your close one deals, but your entire pipeline is 300 days old, I’m immediately going to look at that and just say everything you do across the entire revenue engine is going to be inefficient.
So let’s fix that first.
And then you go to the next stage, activation, right?
This is where you might want to start setting up your marketing engine. So we’re going to go and set up our marketing automation tool, whether it’s HubSpot, Marketo, Pardot, something else. And we’re going to be feeding these leads into Salesforce, into that hopefully efficient sales process.
Same idea goes for your sort of outbound dialing, right?
So as part of our strategy, we’ve defined our ideal customer profile, our buyer personas, that’s sort of that foundational element. And now we’re selling and prospecting and marketing to those people that fit inside of our targets. And we’re setting up our marketing automation tools, our sales engagement tools, and we’re feeding those leads into that sales engine. The third piece is more of professionalization.
And I will say that with this, none of these levels of the pyramid are perfectly mutually exclusive and collectively exhaustive. This is sort of a rough framework. But as you think about building on top of things, once you sort of have your sales and marketing foundation in place, this is where you want to start professionalizing the process. So you think about data enrichment, for example.
So this is something that Joel is really big on, and I completely agree with myself. We see a lot of organizations where they don’t have any process in place to get the right data into the tools and also to keep it clean. You can use a lot of tools out of the market. You can also hire a team out in the Philippines or in India to manually cleanse data.
You can do a combination of these things. You can obviously use tools like Zoom info, et cetera, to augment your data. You can do all three of these and just make sure that you have a really tight data set so that your marketing team is able to segment properly and send the right messaging to the right folks. Outbound is able to target the right people in your outbound sequences or cadences.
And then even customer success has the right personas to expand an account. And then sort of as we continue to go from there, and I’ve kind of skipped over customer success, so forgive me, but as we continue to go from there and we build the foundation across these three pillars of revenue, that’s where we can start to get into the shiny objects.
That’s where we can use automation, artificial intelligence, machine learning, et cetera, because we have this great foundation of solid data and process upon which we can build.
Really, really nice way of pulling it together. So what I’m interested to know then is as part of that, and I think really that you’ve kind of gone through that as a note, if the listeners, if you want to have a read and go into a bit more detail, we’ll put the link down in the show notes.
What would you say, Eddie, are the three most common mistakes that revenue teams, revenue leaders are making that means that they don’t have that strong, steady foundation from which to build on?
I mean, to pick just three, I think that going back to that pyramid is it’s sort of like a step-by-step progression. So let’s just talk about the most foundational layer.
Do we have a really tightly defined ideal customer profile, buyer personas, sales territories, and then to extend this into marketing, do we have really tight segmentation?
What this comes down to is do we get the right messaging in front of the right people?
From there, do we have a well-defined and documented process to sell and market and then ultimately to serve those people, right?
So what is the first step in our marketing process?
What is the next step?
I mean, think about how many sales and marketing teams just don’t even have the same data set because sales will add a contact to Salesforce, marketing will add a contact to the marketing automation tool, the systems aren’t synced, and neither team is targeting the right folks. Here’s another thing, and this is more of my personal opinion, though a lot of people agree with me on this.
I think the concept that we have inbound and outbound SDRs is kind of crazy to me. So you have somebody, let’s say we generate a thousand MQLs, 998 of them are people that don’t want to talk to sales.
Two of them are saying, hey, can I talk to sales?
I want to see a demo, I want to see pricing, I want to ask some questions. So you route them to the absolute most junior person in the organization that has no training on answering any of those questions instead of just sending them to an account executive because you’re so worried that those two people are going to waste your AE time.
Meanwhile, AEs are making cold calls trying to fill their pipeline. So it makes no sense to me.
All right, cool. So then we’ve got our inbound reps who are effectively making cold calls because somebody downloaded a white paper.
Like, woohoo, oh my God, this person is so interested in talking to sales. And then you got your outbound reps making cold calls to a different set of people that may or may not overlap.
I don’t understand why we don’t just combine both of these data sets and say, we have all these people that fit our ideal customer profile or buyer personas, we have the best contact data that we can get for them, and oh, by the way, let’s layer in the marketing data on top of that and let’s just pick who should we call first.
Why do you think that’s the case?
I mean, assuming we’re doing it for a reason, right?
Whether that reason is right or not, what do you think the root causes of why we have inbound and outbound SDS?
It’s evolution. And evolution is not always efficient.
Like, explain to me why we have a platypus. I don’t understand that. And so I think what’s happened is that if you go way back to the…
I mean, we’ve been doing marketing for thousands of years, but the early days of the last century, you’d go buy a billboard ad or a radio ad or whatever, and you have no idea really if that generates any type of traffic.
Maybe you have some kind of a specific call to action, you try to track back to the billboard, there’s a discount code or something like that, but it’s pretty difficult, right?
So I think when the internet took off, folks got really focused on this whole concept of like, I’m tired of not understanding which half of my marketing is working, and we got too focused on the metrics. As that evolved, we started saying, okay, we’re going to measure absolutely every single engagement that people have with our website, and then we’re going to call that a lead. We’re going to create this lead score.
All this makes sense, right?
It’s like, wow, if somebody downloaded 15 white papers and hit our pricing page 300 times, they’re probably interested in buying from us. We should call them. And I don’t disagree with that. But this just evolved into a point where marketing has these huge MQL goals to hit.
They keep lowering the threshold for marketing qualified leads in terms of like what the lead score has to be to qualify for it to a point where you just have like 99% of these leads have fake information. It’s somebody gives a fake email address or a fake phone number. They’re not in your ICP. They’re not the right buyer persona. They downloaded one single white paper, came to one webinar.
They’re not interested at all in having a conversation. They don’t have a need. They don’t have budget. And then now we have this army of SDRs calling down on them. And every single step in that evolution makes sense to me. But when you look in reverse and you say, what’s happening here, you see that these leads are just simply not converting.
And I think part of that is also systems not talking to each other and marketing being off in this silo over here where they’re using their marketing automation tools and they’re saying we’re generating all of these leads. And by the way, that’s their main goal is they have an MQL number they have to hit.
And I think I even talked to some marketers that get this and they say, like, I don’t want to be chasing MQLs, but that’s what the CEO thinks we need. I completely agree.
And therefore, what’s the answer to that?
How do you bring about that change?
And I know I think a lot of people listening will it will resonate, right, of that constant need of, well, we just pull more in at the top and we’re going to get more out at the bottom.
And to your point, theoretically, what we should be doing is going, actually, if we work on improving those efficiencies as part of the engine to generate more at the bottom, we actually don’t need more at the top. So I guess two parts to that question.
One, whose responsibility is it to really own that?
And two, how would you go about if you didn’t have the business and you were going in perhaps as a CRO or a sales leader or marketing, whoever, how would you go about bringing about that change with any luck with a fairly open minded CEO, let’s say?
I mean, I don’t care whether the CEO is open minded or not.
I would just show them the data, right?
So this might be a really difficult manual exercise where you got to download everything in Excel and compile it together, right?
We don’t have our systems connected.
But what I would ultimately want to do is look at what is working to generate pipeline and what’s working to generate pipeline that closes, right?
So this is where we go back to our ICP. I would want to see, and we’ve done this exercise in our own business as small as we are, we don’t have the most sophisticated revenue operation internally.
I don’t have a company with 500 employees, but it’s not that complicated to go and look at every single closed one and closed lost deal and just slice and dice it in different ways and see what the trends are, right?
So you form a hypothesis and then you test it. So I would want to see, okay, let’s look at all of our MQLs across each channel. So let’s look at white papers, let’s look at webinars, let’s look at this, that, and the other and let’s see.
Of all of those MQLs that we pass over to sales, what percentage of each channel converted to closed one revenue?
How does that compare to our outbound prospecting?
If SDRs are making 15 phone calls to each one of those MQLs, inbound SDRs, and outbound SDRs are making 15 calls to a cold list we bought off of ZoomInfo, let’s compare that.
Then let’s drill further, okay?
So if we break that down by different types of companies, we narrow in our ICP, what we’re going to inevitably see is that our conversion rates are much higher with certain types of companies than they are with others. So let’s break this down by geography, let’s break this down by size.
Whatever our hypothesis is, whatever we think it might be, and this can be informed by talking to salespeople, you know, like, kind of executives know exactly what’s closing, what’s not closing.
Like when I worked at Salesforce without looking at any data, I could tell you, it’s a heck of a lot easier to sell software to another software company than it is to a manufacturing company, for example, right?
So you can get these hypotheses and then go in there and test them.
And then you say, oh, wow, you know what?
It’s so much easier to sell to software companies. It’s easier to sell to software companies that just raised around funding, for example. It’s easier to sell to companies that like have this revenue range or this headcount range, et cetera.
And so what would happen if we made more calls to those folks and less calls to other folks?
My God, like, I think we might have like more pipeline and more revenue. And you just keep narrowing and narrowing the focus.
What would happen if we look at our marketing funnel and we see that there’s an extremely high conversion rate of our declared intent leads?
So, for example, our hand raisers, right?
People that request a meeting with sales, we say, wow, that converts very high.
What is working in marketing to drive people to raise their hand and want a call with sales?
Like, do we have the landing page on our website where people do that, request a demo?
Is that optimized?
Now, this gets a little bit over my skis because I’m not a marketer, or I try to be, but I’m not the world’s expert.
But how would we optimize that page?
I can’t tell you that, but I can tell you it’s probably pretty important to do. If we look at like, wow, we generated a thousand MQLs off of the white paper, but only one of them closed to revenue. I might want to rethink that strategy.
Yeah, as you kind of explained that, and perhaps I can give like a marketer’s perspective to it, it’s very much that from a marketing point of view, it’s what does that journey look like?
You know, perhaps it begins with an ad that’s on LinkedIn and then when they click that ad, where does it take them?
Well, it takes them to a landing page.
Now, depending on your marketing approach, you may have a form on that or you have it ungated.
You know, if they, if it has a form, for example, what’s the conversion rate on that?
How many fields do you have on it?
There’s so many different steps that go into it. And actually what I think is absolutely starting to happen more and more is taking that view of seeing it more linearly, of seeing that each step that goes into it and going, okay, here’s the conversion rate that we have.
Can we improve that by making a change, A, B testing it, for example, and then applying that over into sales, right?
You know, you’ve got your different stages of the sales cycle and looking at, okay, what’s our conversion rate?
So if it’s come in as an MQL, for example, how many of those are converting into a discovery call, how many into a discovery call, you know, being, but how many are then going to actually being delivered and how ultimately, how does that go through to revenue at the end of it?
And it sounds, it sounds almost so simple, like saying it out loud, but a lot harder to do by actually implementing it, right?
Yeah, I completely agree with you. When I say I’m not a marketer, I get everything you’re saying and I completely align with it. What I mean is I don’t know how to optimize that landing page, for example. That’s beyond my scope. But I completely agree with you. I think the challenge here though, is it comes down to attribution.
Do we do first touch?
Do we do last touch?
Do we try to do multi-touch attribution?
This is like a very hot debate, but ultimately we’ve got to decide like which of those channels are initiating the customers that we have today and how do we double down on those?
And Lee, I can tell you that I can tell that you really understand this and are on top of this, but if you have a marketing team that is only looking at MQLs and they don’t have access to the data for what happens after it’s passed to sales, you can’t possibly know what’s working or what’s not because you can’t even see it.
Yeah, and attribution is such an interesting debate, talking from the marketer’s perspective, because of all the changes around data privacy and stuff like that.
And obviously, you leave this generated from, maybe it did come from an ad, but you don’t know how many of your LinkedIn posts that they’ve been reading like before it that’s led up to it, right?
And I suppose it’s a great question that I wonder on your perspective of, well, attribution is really important to know where it’s come from and having that data is really valuable to make decisions from.
But so often, marketing and sales, not always, but almost fighting over the same bone, shall we say, when a deal closes, whose was it?
And arguably, what we should be moving more towards is more of a collective.
Well, at the end of the day, it’s about driving revenue for the business. It’s not really about who had the most influence over it.
Was it because they attended three webinars, listened to two podcasts and read four blogs before they decided to get a demo request?
And arguably, it’s more about what were the stages that they did engage with and what can you optimize as part of it to drive more of that through to revenue at the end of the day?
I completely agree.
I mean, let’s think about this from a strictly mathematical and scientific perspective, right?
Any science experiment requires that you have one and only one variable.
You’ll never find that in marketing or sales, right?
So when you’re saying, was it the webinar?
Was it the white paper?
Was it the SDR that reached out?
Maybe. Maybe not.
There’s absolutely no way to know that definitively, right?
So we’ve got to make our best guess. What I would say, though, is I think that I do see folks like Chris Walker talking about the challenges with attribution software and how it leads us down this wrong path where somebody is listening to this podcast and then they go to Google and type in one of our company’s names and then they end up on our website and it shows organic search.
I totally believe in that. It makes obvious sense.
So should we put a form on our website that asks, how did you hear about us?
Should we train our salespeople to also ask that?
So we have three different data points to validate and cross reference and try to get the best data that we can.
And at the end of the day, we just have to assess, is this marketing channel working for us or not working for us?
And what can we do to optimize it further?
100%. And it’s always interesting. And my background goes into media. And a channel that isn’t talked about a lot of in B2B is things like TV and audio. And the amount that B2C brands will pump into that and the best measurement that they get back is just impressions. And it all goes into that. And it’s actually so hard to be able to measure the tangible impact of it. It’s quite interesting.
And now coming back to the B2B side where we are getting even more kind of data driven than we have been in perhaps ever in the past. And yet it’s analysis paralysis, right, which is where we’re getting towards. So data is really valuable to be able to make better decisions from.
But there’s a very fine line between getting to the point, I think, of obsessing over it almost, where you’re trying to get it perfect. And I’ve spoken to a number of guests in the past that I think everyone has that challenge of trying to get attribution right.
And it’s a question of, I think, is a large debate of is it worth the effort or rather the resource that you put into it in terms of what you get out to really be able to definitively say whether it’s working or not. I completely agree with that.
And I think like in my own company, I have the advantage where I’m the one that is physically creating a big chunk of our content up until recently all of it. I’m the one that is physically going out and trying to initiate new relationships and running our sales cycles and closing deals. And then I’m also the one that is participating in our renewals conversations. I don’t run that, thank God.
I have other people on my team that help. But I do join those calls and I hear why customers renew or don’t renew with us. And I think as the organization grows, inevitably anyone, whether you’re the CEO or the CRO or the VP of sales, head of marketing, you get removed from that more and more as the organization scales.
And I just think about like one of our customers, Federato, they came to us through their VC, Emergence Capital, and it’s like, well, how did I meet Doug Landis at Emergence?
Well, I post on LinkedIn every single day. He does as well. I commented on his post. That turned into a meeting. Okay. He then referred one of their portfolio companies to us.
So do I just call that like outbound?
I don’t know.
Would that have worked if I didn’t post on LinkedIn every day?
I don’t know. But that’s not all there was. I also invited him onto our podcast, not once, but twice. I continued to comment on his post, like I built a relationship there.
Which of those things worked and didn’t work?
Like there is no scientific way to answer that question. All I know is, wow, it seems like running a podcast is fruitful for us. It seems like me being involved on LinkedIn is fruitful for us. Maybe we should do more of that. Yeah.
And I think that’s a really great way to summarize it, where you’re very much kind of dipping your toe in the water and getting a sense of this seems to be working, I think, certainly in terms of organic, for sure.
With paid channels, you can get a bit of a better sense of where they’re coming from, but ultimately you only really get a sense of the last thing that they clicked on, unless you’ve kind of got more awareness as running at the top of the funnel. And sorry to interrupt, but I also realize I totally ignored customer success, and so last I checked, Federata was really happy with our service.
So if they weren’t, then I’d rethink everything I just said, right?
So let’s say that they were really, really upset with us because we didn’t do XYZ because that’s not really what we do.
Well, okay, then I have to question everything that I just talked about.
Should I have built a relationship with their VC?
There are certainly VCs out there that work with the kind of companies that we don’t want to invest in, the type of companies that we don’t want to work with. So we have to really think thoughtfully about like, well, I don’t just like go and try to build a relationship with every VC on the planet. If you’re trying to invest in crypto, for example, like that’s not what we do.
It’s not going to be fruitful for us.
Eddie, last question.
If you could recommend one book to other revenue leaders, which would you recommend?
We’ve got more than one. It’s choosing, but I’ll allow it. I love Moneyball. Unfortunately, I haven’t read the book. I watched the movie. But in the movie, they do such a great job at articulating how you can use data to drive strategy and they also articulate this massive challenge of sort of winning over the executive team, winning over the frontline team, the managers.
I mean, you can see like where Brad Pitt is talking to his direct reports. He’s talking to players. He’s trying to drive adoption of a new process. You see the resistance there. There’s so much that ties into revenue operations about the old school thinking of like this crazy example of like, let’s go and get baseball players that have hot girlfriends because it means they have confidence.
Like, what a ridiculous notion. And I see so many corollaries, especially with sales, but also the rest of the revenue engine. The second book that I really love is Black Swan by Nassim Taleb. And if you’re not familiar with it, he’s a former Wall Street trader who made all of his money by understanding risk.
And the entire book and his whole series of books is all about how most people, even the most sophisticated, like finance folks and economists and world leaders do not understand risk. We put entirely too much stock in this concept of the bell curve, which oftentimes does not apply in many situations. And we have way too much reliance on data. So this goes back to our marketing attribution idea.
We think that data tells us something that it doesn’t. And I love how this book explains all of the fallacies that we run into and how much we need to take a step back and really question how much we can trust data and how much we need to just look at sort of what’s obviously in front of us. I love both recommendations.
I would just add with Moneyball having watched both the movie and read the book, if you are anything like me and you love data, you will love the book even more than the movie because it goes so much more into the into the theory behind Billy Beane and everything and everything that went into it.
Actually, the movie was more watered down, I think, for more of an audience such as myself at times. But the book is fantastic. Actually one of my favorite recommendations ever. Excellent tie-in with RevVolks.
You know, I’m not surprised by that. The irony is I’ve read a number of Michael Lewis books. And if you look at like the Big Short, for example, they go so much deeper than the movie.
And so, yeah, I knew you were going to ask me this question.
I’m like, why have I not read this book?
Add it to the reading list.
Eddie, you kind of you alluded to it kind of earlier on, but for everyone listening, if they want to hear a bit more about what you’re talking about, what you’re working with customers with, where can they find you?
So I post short form posts on LinkedIn. We do a podcast and a live event every single week. We also publish a newsletter and you can find access to all of this at unionsquareconsulting.com. That’s Union Square, like Union Square in New York here, and then consulting.com. I’ll make it even easier and put links down to all of them for you into the show notes. Love it.
Eddie, it’s been an absolute pleasure having you on. We enjoyed chatting today and to everyone that’s had a listen to this episode, thank you so much and we’ll catch you next week.
Thanks, Lee. Thanks for listening to Revenue Insights. If you want to learn more, subscribe to our newsletter and we’ll deliver every episode straight to your inbox. If you have any questions, feel free to connect with us on LinkedIn. Our links will be in the episode notes. See you next week.
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