About this episode
Eddie Reynolds, CEO and founder of Union Square Consulting, and Rachael Bueckert, marketing manager at Union Square Consulting, explore how companies can move beyond foundational go-to-market execution and systematically optimize their inbound marketing engine to generate more revenue from existing spend. Both bring deep operational expertise in building and scaling go-to-market functions across B2B companies.
The core insight is this: most companies that have solid marketing fundamentals jump straight from "it's working" to "let's spend more" without ever asking which leads actually generate profitable revenue and where they're wasting money. Once you've built a foundation where leads are being followed up with consistently, processes are reliable, and data is flowing into your systems, the next move isn't budget growth—it's optimization. This means building an attribution model, benchmarking inbound against outbound using CAC payback, segmenting leads by profitability, and making data-driven decisions in pipeline council meetings.
The reframe here is that optimization is not a feature or a one-time project—it's a discipline. It requires blending quantitative attribution data with qualitative customer feedback, running monthly pipeline council meetings where revenue leaders align on priorities, and executing a rolling go-to-market operations roadmap that tackles the highest-leverage improvements first. From setting the right performance bars and calculating lead value by segment to evaluating process effectiveness when segments underperform, this episode walks the full playbook for squeezing more revenue out of what you already have without necessarily spending more.
The episode covers the complete optimization framework: why attribution belongs in optimization rather than foundation, what a minimum viable attribution model looks like, how to use CAC payback to benchmark inbound versus outbound, why segmentation and lead scoring matter, how to structure pipeline council meetings, and how to build a go-to-market ops roadmap that turns decisions into execution.
What we cover in this episode
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0:00
Why optimization matters more than budget The case for optimizing existing marketing spend rather than simply increasing it to drive revenue growth.
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6:04
Attribution in the optimization stage Why attribution matters only after you've nailed the foundation of consistent lead follow-up and why quantitative and qualitative data must blend.
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15:25
Minimum viable attribution model What constitutes good enough attribution to make decisions: combining form data, last-touch tracking, and qualitative customer feedback.
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20:30
CAC payback as the primary benchmark Why CAC payback and gross margin return trump lead conversion rate and activity-based metrics for comparing inbound to outbound performance.
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25:55
Segmentation and lead value How slicing leads by geography, segment, product, and channel reveals which combinations drive the highest revenue and where to cut or double down.
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32:08
Process evaluation and lead scoring How to diagnose whether underperforming segments need process changes, new messaging, or budget cuts using pipeline council alignment.
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38:00
Pipeline council structure and decisions Monthly meetings with CRO, CMO, CFO, Head of CS, and go-to-market ops to identify problems, debate solutions, and commit to tangible action.
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44:00
Go-to-market ops roadmap Translating pipeline council decisions into a quarterly prioritized list of initiatives with clear OKRs, owners, and measurement to drive continuous improvement.
The lines worth sharing
What if we could identify areas where our leads are converting into the most amount of revenue and optimize that inbound marketing engine?
Eddie Reynolds · 0:15
If you don't have the foundation in place, why debate attribution models when you should be fixing consistent lead follow-up first.
Eddie Reynolds · 7:30
CAC payback trumps everything because it tells you how fast you recoup the money you spent to win that customer.
Eddie Reynolds · 21:00
Pipeline council is where sales, marketing, revenue ops, and finance sit down with imperfect data and make a decision on where to place bets.
Eddie Reynolds · 39:15
Common questions from this episode
Why should companies focus on optimization rather than just increasing marketing budget?
Once a marketing engine has solid fundamentals and consistent execution, spending more without optimizing wastes budget. Optimization means identifying which leads and channels drive the most profitable revenue, where money is being wasted, and making targeted improvements to CAC payback, conversion rates, and segment performance before adding spend.
What is a minimum viable attribution model and when should companies implement it?
A minimum viable model tracks where leads come from using a simple method like a form field asking how prospects heard about you, then validates it with qualitative feedback from sales calls. Implement only after fixing lead follow-up consistency, because broken processes make attribution data useless for decision-making.
How should companies benchmark inbound against outbound performance?
Use CAC payback first—measure gross margin generated per dollar spent and how many months to recoup that spend. Inbound should outperform outbound. If it doesn't, it may be more efficient to shift SDRs from inbound to outbound. Activity-based and lead conversion rate comparisons are secondary.
What should happen in a pipeline council meeting and who should attend?
Monthly meetings with CRO, CMO, Head of CS, CFO, RevOps, and go-to-market ops run by a dedicated operations leader. Review performance data by segment and channel, debate process improvements, and exit with tangible actions—not just reporting updates. Meetings evolve to exclude senior leaders once the team is aligned.
How do you prioritize optimization initiatives from a go-to-market ops roadmap?
Set clear OKRs tied to CAC payback, conversion, or segment revenue improvement. Stack rank initiatives by impact and timeline. Execute quarterly, then measure whether key results moved. If CAC improved from 24 months to 14 months, it worked; if not, adjust or reallocate resources to higher-leverage opportunities.
What is the difference between CAC payback and go-to-market efficiency ratio?
CAC payback measures months to recoup marketing and sales spend; go-to-market efficiency looks across all spend including CS and net revenue retention. For inbound optimization, CAC payback is more relevant. Ideally, measure both gross margin—not just revenue—to avoid favoring less profitable customer segments.
SEO meta description
Eddie Reynolds and Rachael Bueckert on how to optimize marketing revenue: attribution, CAC payback, segmentation, pipeline council, and go-to-market roadmaps.
Target keywords
marketing optimization
CAC payback
inbound marketing performance
lead conversion rate
segmentation and lead value
attribution model
pipeline council
go-to-market ops roadmap
Eddie Reynolds
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Read the full transcript · 71 KB
EDDIE REYNOLDSWhat if we could turn the knobs and get even more revenue out of that marketing spend, out of that marketing program, out of those leads, than just by simply like doing more of the same thing? What if we could identify areas where our leads are converting into the most amount of revenue and where our leads are converting into the least and optimize that inbound marketing engine? Welcome to go-to-market science. There's an art and there's a science to go-to-market. And in this podcast, we talk about the science by interviewing CROs, private equity investors, and other sales and marketing experts, as well as talking about what we learn every day in the trenches helping to build go-to-market engines.
RACHAEL BUECKERTWelcome back. My name is Rachel Buchert, the marketing manager here at Union Square Consulting, and I'm with Eddie Reynolds, our CEO and founder. And today we are talking about how to optimize marketing generated revenue. We are currently writing a newsletter on this. It's not finalized yet, but by the time this podcast goes out, it will be. And that link to that will be in the show notes. Eddie, how are you doing today? I'm great.
EDDIE REYNOLDSI'm excited to dive into this because I feel like, especially lately, we've been talking so much about building the foundations of go-to-market. And today we're going to talk about like, how do you actually optimize it? And once you've got that foundation in place. And so I was really excited to dive into this topic because I think so oftentimes we see companies that have like really broken fundamentals and they're in their go-to-market, but at a certain point it just, it gets exhausting talking about that all the time. And it's like, well, if people are listening to this and they've done all the right things and they've got that foundation in place, where do we go next?
EDDIE REYNOLDSAnd so I was excited to dive into this.
RACHAEL BUECKERTYeah. And the title says it's, we're talking about marketing generated revenue, but we do also talk a little bit about sales process and how that comes into play as well and how that can affect how you optimize your marketing generated revenue. So if you are not a marketing person, you're a salesperson, this is still relevant to you. So stick around. So to start us off, Eddie, can you paint a picture of what the foundation looks like when it's actually working and we're ready to move on to optimization?
EDDIE REYNOLDSSo the simplest way to put this is the foundation is that we have all the people on the team doing all the things that they're supposed to do and executing the process consistently. And when we talk about marketing revenue, we're really thinking about the point in time that a company creates an MQL all the way through to the point in time where you have a meeting generated or pipeline generated or revenue produced. In this topic, we're going to talk about really like that stage of converting the MQL into pipeline, which presumably if you have the foundation in place for your sales process and how you manage pipelines should get closed, right? The foundation is just getting people to do the right thing, such as following up with leads X amount of times or having like good speed to lead, things like that, or just the basic idea of defining the MQL in a clear way. And hopefully that definition results in a halfway decent conversion rate of those MQLs. Otherwise, we got to go back to that foundation. So for the purposes of this podcast and the related newsletter, what we're talking about is folks like have a marketing engine that's working. Now, obviously, like there's a lot that goes into generating the MQL in the first place. We're not a marketing agency. So even though we generate MQLs ourselves, we don't pretend to try to tell people the best way to do that. But once you've generated this demand and leads are coming in, if those leads are being followed up with properly, the team is consistently executing the process. Hopefully some of those leads are converting into revenue. And now not only do we have this consistent execution, but we've also got some accurate data. We've got leads coming in through our system like HubSpot. They're getting routed into Salesforce. We can look at the number of leads generated, the number of meetings booked, the amount of qualified pipeline generated, and what was closed, won or lost. So now we've got like some stuff we can work with. And we have an opportunity to start to dive into that and try to figure out how to optimize it. And that's what I wanted to talk about today.
SPEAKER_17So why isn't the foundation enough? And I feel like this might be a little bit common sense, but let's just spill it out.
EDDIE REYNOLDSWell, I don't want to say that it's not enough. It's just a start. Like, I think it'd be kind of like saying like, well, if you're trying to win an NBA championship, why isn't like shooting and dribbling enough? Well, it is in a sense, like if you have a really, really good jump shot and really, really good dribbling, that takes you a long way to winning an NBA championship. But it's not enough in the sense that like everybody in the NBA theoretically should have that. And so it's really important to master the fundamentals. But once you have the fundamentals in place, how do you put them together into a winning strategy? And what this ultimately comes down to is from like the most executive level, looking at a marketing engine and trying to understand how do we turn the knobs to generate more revenue with the money and resources that we have? And so it's not necessarily that it's not enough. What this content that we're going to go into today is for is ideally a company that has their marketing engine working. They're generating MQLs or marketing qualified accounts or however we do it. And that's converting into meetings and pipeline and closed one revenue. And everybody's happy that the system is working. Now, one approach to that would be to say, okay, great, this is working. Let's just pour more money behind it. Let's spend more money so we can generate more revenue. And that's what many companies do. And there's nothing wrong with that. But what if we could turn the knobs and get even more revenue out of that marketing spend, out of that marketing program, out of those leads, than just by simply like doing more of the same thing? What if we could identify areas where our leads are converting into the most amount of revenue and where our leads are converting into the least and optimize that inbound marketing engine? And that's what I wanted to talk about today.
SPEAKER_16So to start us off, the first section of the newsletter is about attribution. So Eddie, what needs to be in place before it makes sense for a company to focus on attribution?
EDDIE REYNOLDSSo this is an interesting question and an interesting thing to think about, right? Even as I was starting to write the draft of this newsletter and other content that we've done together, this begs the question of like, where does attribution go? Is it part of the foundation or do we hold it off for later? And you can make a case for either. But I think the case for attribution being held off a little bit is to say like, if I tell you that you generated X number of leads from paid ads and Y number of leads from webinars and Z number of leads from social. But none of those leads are converting to revenue because the reps never follow up with leads. We have terrible speed to lead. Sometimes leads don't get followed up with at all. Sometimes a rep falls up once or twice and it's just complete like haphazard whack-a-mole. What does having that attribution do for you? So here's where you spend all your money and time in marketing and it generated zero revenue. What you can do is you can say, well, we generated this many MQLs and we point the finger at sales and say, you guys need to follow up better. And it's just like, who cares? I don't know what that accomplishes. Or let's paint a more accurate picture. We're generating some revenue. Some of those leads, despite the fact that they are not followed up with properly, are making their way into meetings pipeline and close one revenue because sometimes reps follow up and maybe it's not enough times, but that works on some leads and we bring in some revenue. We could, in theory, look at our attribution model and we could say, okay, well, now we see that, you know, these channels are driving all of these leads and pipeline and revenue. Let's double down and let's spend more money in these areas. We could do that. But if we have a completely inconsistent process of following up with those leads and converting those leads, how much confidence do we have in those decisions? So I could argue it both ways. I could say, look, like you could do last touch attribution, especially if you're using software to do that. Like it doesn't take that much of a lift. We use a field on our form, which just asks, how do you hear about us? That's a fairly simple way to do things. We do attribution, although we also have our foundation in place. You can make an argument both ways. It could be valuable. But what I would say is it's going to be far more valuable if you get that foundation in place. And even more importantly, getting that foundation in place first, meaning like following up with the leads properly and having good speed to lead is going to impact revenue more. So like if you're looking at this and you're saying, where do we want to spend time? Do we want to like try to perfect our attribution model or do we want to like make sure reps are following up with leads consistently? You're going to get way more bang for your buck by making sure that reps follow up with their leads consistently first. But once you've done that, then we can look at attribution and we can start to have more faith in our data. I think the other issue with attribution is, is it's complex and it's controversial and there's lots of different ways to like slice and dice it. Some people believe in last touch. Other people believe in first touch. Other people believe in multi-touch. And I think we all know it's somewhat BS. Most people are aware that there are multiple things that are going to influence somebody to want to engage with a sales rep and to potentially buy. And there's no perfect way to figure out what's driving that. So we all kind of hate attribution, but we need it so that we can make decisions the best we can. And it just makes it really complicated. And so that's where I would say, like, if you don't have the foundation in place, why do you want to debate first touch, last touch, multi-touch? Try to figure all this stuff out just to come up with some really messy data that you don't really believe in versus at least if we're following up with leads properly, then we can have more faith like, okay, we can debate where this lead came from, but we have more agreement and alignment that, like, we did all the right things to convert this lead. And so if this batch of leads converted at X percent, we can have a reasonable amount of faith that that is probably close to as good as it's going to get versus where we were when we weren't following up with leads consistently. So that would be my case for getting that stuff in place before you do the attribution. Once you have that stuff in place, whatever attribution model you pick, now you can say, okay, we're going to do last touch. All these leads came in from our podcast. They converted an X percentage. Is that good or bad? Should we keep podcasting? Should we not do podcasting? Should we spend more money on podcasting? What should we do about this information? And that's where we'll go like next in the topic. But yeah, that's why I think attribution is sort of in that optimization stage more often than not.
SPEAKER_07Okay.
RACHAEL BUECKERTSo what would be that minimum viable attribution model? That would be useful for us when we're doing our optimization work. Is last touch enough or should we be doing something more?
EDDIE REYNOLDSOh, such a good question. Like I don't really want to get into attribution because A, like I don't feel like I'm an expert on that. B, I think it's just the most unscientific thing in the world. I think anybody can say whatever they want and it's all just pure BS. Because if you look at this from like a scientific perspective, as in the idea of having like a test group and a control group or whatever the terms are, I forget. You have one and only one variable. You never see this in marketing. So there's no way to say, okay, here's all this batch of leads that came from the podcast. We know for sure that they came from the podcast, which is rarely something that we can say. And we also know for sure that they had no interaction with any other marketing channels. Unless you have a situation like that, you can't argue with me one way or the other, the one attribution model is better than the other. I think a lot of people lean on last touch, but I don't really have a strong opinion on this. I would just say like, use what you think makes sense, do the best you can with it and realize that at the end of the day, it's not perfect data. You're making a judgment call on where you make investments in marketing.
RACHAEL BUECKERTSo how do we know whatever we're doing for attribution is good enough to start making decisions based on it?
EDDIE REYNOLDSHow do we know whether what we're doing for attribution is good enough? I think you have to blend the data with what you are
EDDIE REYNOLDShearing from customers. So for example, we keep using podcasts just because we're on a podcast. It's also something that's really hard to attribute because you oftentimes like can't track the link clicks, right? Oftentimes people just go to Google because they're listening to you in their car and they Google your name and then you come in as like organic search, right? You can put a form on your website and say, how did you hear about us? And we see on our website, a lot of people will list podcasts or the list newsletter or the list LinkedIn, which seems to correlate perfectly with the amount of like time, money and energy that we put into each of our channels, which is kind of interesting. But on top of that, like because I'm on these calls with folks, like we hear them like, oh, hey, like I really love your podcast. I've listened to your podcast so many times. It's that and the other. And it's like, okay, like we're blending that attribution data with what we're hearing in sales. And so I think the long answer to your question is we're blending quantitative data, meaning like the data that comes in through the form or through our attributions or whatever with qualitative data, which is what we're hearing on sales calls. But again, like I don't want to get too deep into attribution because I don't pretend to be an expert and I honestly don't think anybody is.
RACHAEL BUECKERTYeah, I don't think anyone can be unless AI gets strong enough to just, you know, be watching over our shoulders at any time and tell companies what we've been doing.
EDDIE REYNOLDSWell, it's possible if you have like enough leads, but even just think about AI, like what AI is essentially doing
EDDIE REYNOLDSis multivariate regression, which is just looking at like, okay, here's this batch of leads that were touched by the podcast and they also like subscribe to our newsletter and here's this batch of leads that only came into the podcast and here's this batch of leads that only came in through ads and like if you have like millions and millions of leads and I could firmly believe that AI could potentially take a good crack at that. But if you don't, I mean, I think it's just really hard
SPEAKER_29to answer that question. Yeah. But yeah, I don't want to go deeper on attribution because I don't think my viewpoints are going to be all that helpful for folks.
SPEAKER_17But just the point, the point of it is for anyone listening is just making sure
RACHAEL BUECKERTthat you have something after you have all your fundamentals figured out and you know that you're, you have the capabilities of tracking accurate data and you have these processes and follow-up processes and whatnot, making sure you have something to look at.
EDDIE REYNOLDSYeah. I mean, I'll skip ahead for a moment. We're going to talk about Pipeline Council towards the end of this podcast. It's towards the end of our article. And ultimately, what you're doing is you're going to a Pipeline Council meeting, which we'll get into in more detail later, and everybody's coming to the table and you're talking about what you're seeing in your attribution model as an example and then you're trying to decide how to make decisions. And somebody could say, well, hey, like I see that we're getting all this organic search. And you say, okay, well, the reason for that is because we've got a lot of people listening to our podcast. And, you know, I'm the sales leader in this example and I'm hearing from our customers that they listen to our podcast a lot and they love the podcast. So what do we do with that imperfect information? That's what a Pipeline Council
EDDIE REYNOLDSis for, that we come in and we start to discuss what we're seeing and what we're hearing and we make decisions about what to do about it. I won't skip ahead too far there.
EDDIE REYNOLDSWe'll get into that in a little bit. But I think that that is the answer to your question. Like, what do we do with this imperfect data? At the end of the day, we got to make decisions and we make the best decisions we can with the best data that we have, which is a combination of like the hard quantitative data that we can see on our computers and the more soft qualitative data that we see in conversations with customers and prospects.
RACHAEL BUECKERTSo the next section on our newsletter, setting the performance bar or the performance benchmarks. So Eddie, how should companies evaluate whether their inbound leads are performing well or poorly?
SPEAKER_07So I think there's three ways to look at this. One is we can look
EDDIE REYNOLDSat how our leads are converting, just the number, like the lead conversion percentage. Another way is to look at how our activities are converting. And a third way is to look at CAC payback. Now, I often like to compare inbound and outbound. Inbound should outperform outbound.
EDDIE REYNOLDSIf it doesn't, then there's a stronger argument to say, well, hold on a second. If we can generate more business by doing outbound, why don't we just move our inbound reps to outbound and stop fielding these inbound leads, right? Now, let's start with hand raisers. So folks that come to the website, raise their hand and say, I would like to talk to sales. If we aren't able to convert those folks into as much revenue as just pure cold outbound, like that's a real problem, right? Next, we move into like our non-hand raisers, the folks that filled out forms to download white papers or showed up to webinars or whatever it is that they did to exhibit some level of intent. And we look at how those convert in comparison to like our outbound prospects. Now, lead conversion, activity-based conversion, CAC payback, this could potentially be exactly the same thing, right? It just kind of depends on the motion that a company has. So let's say that we hand our SDR team 1,000 MQLs that came off of these white paper downloads, right? And they call all 1,000 of these MQLs. And let's say we tell them that you should call 10, 15 times before you give up. They do that. And then they call 1,000 cold outbound prospects or however many people they call. It doesn't need to be 1,000. Like we just take the total number and do some math. And we look at, well, which of these cohorts generated more revenue for us, right? I think the problem with the lead conversion to meeting is like we're only looking at how many of these leads like converted and what percentage. But if we look at how it converts all the way through to revenue, then we have a better barometer. And if we say, okay, we're going to hand our SDR team 1,000 MQLs versus 1,000 cold outbound prospects and the SDR team makes all these calls and they generate more revenue with the cold outbound prospects, then I think you really have to question why are we spending money to have our SDRs call down on these MQLs? Now, the other way to look at this is activity-based. So maybe for some reason it takes more calls to get folks to convert into a meeting or pipeline for the MQLs than for cold outbound or vice versa. So if we look at this from like a cost perspective, we could look at this and say, all right, so if we just, let's say, do 10,000 sales activities or however many sales activities we've done on our MQLs versus the amount of activities we've done on cold prospects on an activity-by-activity basis, which converts better. Again, we should expect inbound to convert better than cold outbound. If we don't, then like, why are we having SDRs make 10,000 calls on a bunch of MQLs if they could just make 10,000 calls on cold prospects and generate more revenue from that? The third way would be to look at this from a CAC payback perspective. So like I said, these are kind of similar ways to look at this, but depending on what, you know, data people have and how easy it is to measure this, we could just look at this and say, okay, well, if we have this batch of MQLs and we make all these calls, how much revenue and even more importantly, how much gross margin do we generate from those and what does it cost us to do that? Like we had to spend money on marketing to generate these MQLs and then over here on the outbound side, we may not have had to explicitly spend money to get these folks interested via marketing. We bought a list from Zoom Info or whatever data provider we use and we had our team call down on them, but there's a cost involved to get those leads from Zoom Info and there's a cost involved to load them into our system and there's a cost involved to have our reps call down on them. Okay, well, how much did we spend on each and how much gross margin did we get on each and what's the CAC payback on each of those? Now we have an objective comparison and if we had a giant batch of leads that we handed to our inbound team and we spent all this money to not only generate those leads but to follow up with those leads and then we compare that to our outbound efforts and outbound has a better CAC payback meaning like we get our money back faster which another way of looking at that is it costs us less money to generate a dollar of revenue or sorry, a dollar of gross margin then wouldn't we want to just like all other things equal which we'll talk about in a moment wouldn't we just want to shift our spending to outbound and now if we go back to our attribution we might look at that
EDDIE REYNOLDSand say well this particular channel is costing us more and we're generating less gross margin
EDDIE REYNOLDSfrom it whereas this particular channel we have a better CAC payback better than our outbound as well and so we wouldn't want to shift resources from that channel to outbound but maybe this particular channel we need to look at that we need to spend less money on that we need to cut back we need to find a way to optimize it etc. which we'll get into in a moment but this is I think one objective way of looking at this like how does inbound compare to outbound on a lead conversion rate basis
EDDIE REYNOLDSand an activity basis or a CAC payback basis is there some kind
SPEAKER_09of hierarchy between those different comparisons or does one trump another I think if we can get
EDDIE REYNOLDSaccurate data like CAC payback trumps everything right because at the end of the day if we look at go to market as stewards of capital we're given X dollars to generate and to spend on people and ads and what have you and go to market and we're trying to generate as much revenue or even better gross margin as we can then CAC payback is going to be the best way to look at that if we for whatever reason like that's too difficult to look at then I kind of would look at the activity based comparison or the lead conversion rate they probably should be pretty similar but if for some reason
EDDIE REYNOLDSit takes us way more calls on MQLs than it does cold outbound or vice versa then that might skew
EDDIE REYNOLDSthe results is it okay to do
SPEAKER_16just one or should you try and do all of them I think like
EDDIE REYNOLDSif you just look at CAC payback like that's perfectly fine right like what does it I don't care how many calls I have to make to generate revenue I don't care what my lead conversion rate is I don't care how many MQLs we need to generate in order to win a customer all I really care about at the end of the day is what is my CAC payback I mean let's look at this podcast for example if I could magically just spend twice as much money on our podcast and generate twice as much revenue unfortunately because I'm personally involved it's not that easy and that had like a healthy CAC payback well then I would just go do that right that's a really simple decision now there's a big if just because CAC payback is good at one level doesn't mean it will be better when you double down on it but I think that's the best way to look at it what about
RACHAEL BUECKERTgo-to-market efficiency because I know we've talked before about CAC payback versus go-to-market efficiency and when go-to-market efficiency ratio and or margin is a better metric to benchmark these things does that come into play here at all yeah so
EDDIE REYNOLDSthe reason I'm using CAC payback is just because
EDDIE REYNOLDSit's so common right I actually don't like the metric only because we're measuring the number of months it takes us to break even on our sales and marketing spend versus the gross margin that we're earning if we shifted that and there's not even really a name for this and we just looked at like the amount of spend that we have to put in in order to generate x dollars of gross margin that to me would be like an easier metric to work with but if you look at CAC ratio oftentimes CAC ratio measures revenue and not gross margin which means like if one particular type of customer is more profitable than another then you lose that go-to-market efficiency is the same concept but it looks across all of go-to-market right and so we're basically asking like how much does it cost us to generate an additional dollar of revenue across our entire go-to-market which includes like the amount of customers that we're churning so if we're strictly looking at inbound then CAC payback is more relevant if we're looking across all go-to-market to factor in our net revenue retention then go-to-market efficiency is more relevant and then that's where we get into go-to-market efficiency margin where we say well instead of looking at how much it costs us to generate a dollar of revenue growth let's look at how much it costs us to generate a dollar of gross margin growth right but if you're looking at this from the perspective of marketing CAC payback is as good as it gets I would love it if we were just looking at it through a different perspective and saying well how much does it cost me to generate a dollar of gross margin versus like how many months do I get paid back but that's just a different way of measuring the number it's the same number right so if we wanted to have the highest go-to-market efficiency ratio or better go-to-market efficiency margin meaning the cost to grow gross margin by a dollar from an inbound perspective we would just want to maximize our CAC payback from a net revenue retention perspective we would want to do other things to make sure that we retain and grow those customers
SPEAKER_07once we've won okay yeah
RACHAEL BUECKERTthat makes sense so what kind of results that we might find you know either we're doing the CAC payback benchmark comparison activity-based or lead conversion rate what results might justify a major strategy shift what would we be looking for well I think
EDDIE REYNOLDSyou know you're ultimately looking at this channel is not viable or there's a better opportunity elsewhere so we recently published a newsletter with some data from bench sites where the average public SaaS company was spending 40% of revenue on sales and marketing and now they're spending 33% right so you have a fixed budget to say okay we can spend this much money on go to market within that we have to decide like where do we place our bets and if one particular channel or one type of lead is significantly more profitable than the other then like the initial impulse is to say well let's cut back on the thing that's not working let's double down on the thing that is working however I think we'll talk later in this podcast as we have it outlined in the draft newsletter right now about there's ways to optimize those things maybe it's not working today but it could be working tomorrow but you ultimately need to make a decision to say okay where do we want to place our bets we only have so much money to spend we have a hundred million dollars in revenue we're spending 33 million dollars of it on sales and marketing and here we're spending three million dollars on this particular channel or this segment or whatever and it's not paying off and we can't see like a way to improve it substantially and over here like this particular thing is crushing it and we do have the ability to double down on that and expect more leads and more revenues so why would we not do that so moving
RACHAEL BUECKERTon the next section in the newsletters on segmentation and lead value why is it so important to be segmenting our leads and assigning the values
EDDIE REYNOLDSso I think assigning lead value is just another way of doing exactly what we have been talking about but just through a different lens right so I really love this concept where we're basically just saying okay like if we generate x number of leads and they convert at this rate into this much revenue then you know we can look at how profitable this channel is one simple way to look at this is like let's just divide by the number of leads and now our average lead through this channel is worth x dollars so for example we say okay like our average lead from our podcast is worth five hundred dollars whereas our average lead from ads is worth six hundred dollars well that becomes kind of an objective way to look at at leads well why is this lead worth five hundred and this leads worth six hundred well because ultimately either the conversion rate is higher or the average sale price is higher or what have you that basically means that it's generating more revenue so I like the idea of looking at it from a lead value perspective I think that's really interesting just makes it really easy to just kind of compare different different channels but the reason we want to segment our leads is that channels are not always enough right okay so we say like podcast is performing this way and paid ad spend is performing this way but what happens if we slice it by S&B versus mid market versus enterprise maybe our enterprise customers are not responding well to our marketing but S&B is responding really well and we're getting all these inbound leads from S&B maybe for a particular product we have marketing performing really well in one product and not so well in another maybe a specific geography and I think how we segment is going to be very different company to company where we need to start is to have a hypothesis where might we see a tangible and material difference and then we slice that those leads into these different buckets to see if we do indeed have that that difference and and then we might make some assumptions or conclusions there for example maybe the way that we
EDDIE REYNOLDSfollow up with leads that are coming from S&B versus the way we follow up with leads on enterprise needs to be different
EDDIE REYNOLDSwhat if we were to look at all the leads that came in from S&B and we have a certain lead conversion or a certain lead value and we look at all the deals that are leads that come in from enterprise and we have a different lead conversion we would expect it to have a higher lead value obviously and that let's say that lead conversion is much much lower or what if the lead conversion was so low that the lead value was even lower that'd be really concerning we might look at that and say wow maybe there's something broken about our fundamentals maybe like the follow-up that we're doing is working really well with S&B but it's not working with enterprise and we need to take a hard look at that okay so once
SPEAKER_11we've figured out what segments we should focus on and what segments make a
RACHAEL BUECKERTdifference for a company how should we walk me through how to calculate the value of the leads per segment I think you
EDDIE REYNOLDSjust look at the total amount of revenue produced in that segment you divide by the total number of leads like that would be that would be your lead value you could also do like a CAC payback by segment although there's not going to be a difference if you do a CAC payback for like the entire thing versus like by lead because you're just I can't think of the math in my head but you just have denominators and numerators on top of each other and so it's all the same but yeah if you just want to look at the lead value you just divide the total amount of revenue generated from that particular segment by the number of leads in that segment I know this isn't
SPEAKER_25in the current newsletter draft but
RACHAEL BUECKERTwe'll probably add it because it is a part of optimization for inbound in our go-to-market efficiency pyramid lead scoring so how does that come into play when we're talking about segments and lead values and stuff like that well all the lead
EDDIE REYNOLDSscore does is it tells you whether or not you want to put a lead in front of the sales team and possibly in what priority right so let's say like you know you have a lead score of 100 let's say that's your threshold any lead that has more than 100 points we send it to sales and if it has 900 points we send it to sales fast before we send a lead with 200 points whatever well lead scoring just like attribution is incredibly unscientific and it's all just a hypothesis that you try to test and there's all these different variables coming into play you're saying it's this many points for the webinar and this many points for downloading the white paper etc but ultimately you have a hypothesis that like if we pass this score we're going to pass this over to sales and then a sufficient number of these leads is going to convert to revenue to justify the expense of having sales follow up on that so as we segment and we say okay like let's just use the SMB versus enterprise example and we say okay like our SMB leads with a score of 100 went to sales reps and this was the conversion rate this was the lead value etc and the enterprise leads with a score of 100 went to our sales reps same thing as I just described and then we look at how that's converting through the funnel well we might look at our enterprise leads and say oh wow like our scoring methodology was off we gave it 50 points for a white paper download and 50 points for showing up to a webinar and so then they qualified and it sent through but what we're finding is like these are junior people in the organization that don't have access to authority and none of these leads are converting whereas in an SMB company you don't have that element and so and I'm just making this up off the top of my head here we don't have that issue and so we're seeing a good conversion rate of these these particular leads with the score of 100 in SMB but not in enterprise well again this goes back to the pipeline council now we all come together and like sales leaders and marketing leaders etc are all sitting around the table talking to each other rev ops etc when I say all I'm talking about the whole go-to-market leadership team and we're like well what do we do about this like our enterprise leads are not converting nearly as much as SMB what do we do about it one answer might be hey we need to raise the lead score because clearly like somebody did a white paper and a webinar that's that's not enough like we're just not seeing these leads convert maybe we need to change the way we follow up maybe we need to like cut back on marketing to the enterprise it's probably not a good example but all of these options are on the table awesome all
RACHAEL BUECKERTright so moving on the next section in the newsletter is on process evaluation so now that we have our segments and everything figured out what do we do when we see one segment is underperforming I think
EDDIE REYNOLDSthe first step as we've already alluded to is to try to evaluate whether or not the process is effective so
EDDIE REYNOLDSwe keep using this example of how we follow up on leads for SMB versus enterprise I think it's a good example because we might say okay like our follow-up process for inbound leads that come in via SMB or is relatively cookie cutter we've got some email templates and we've got some voicemail templates and we have our SDRs calling down and that seems to work we get folks into meetings we qualify them we hand them over to an AE that AE then requalifies them because that's so much fun for customers and then they do a demo and then they buy at a certain rate and that's working we try to run that same playbook on enterprise leads and we're losing all these deals why would that be well enterprise deals are harder to win maybe what we find is and in this example maybe this company is just beginning to like move into enterprise and this playbook doesn't work so maybe we say well what would happen if we had more senior AEs follow up on these leads instead what if we tailored our messaging what if we put more effort into like personalizing each email that we send to these leads to try to improve the conversion rate and again like we'll finally get to pipeline council in the next section these are things that we would talk about in a pipeline council meeting what hypotheses might we have across the sales and marketing team to approach this differently to try to change the outcome and if we can't come up with anything then we might then say okay we don't see a way to improve the process instead of trying to continue to tweak the process let's just cut our investment here now again I think it's like kind of a bad example I'm struggling to think about where we would say okay we're not going to market to the enterprise anymore that seems silly but there might be another area where we say wow like we just are losing money hand over fist by marketing to this particular segment so let's just stop marketing to that segment let's stop trying to like move these types of leads over to sales and let's spend more money elsewhere let's spend more money in the channels that are working really well or an outbound if that's performing better I'm trying to think of any other other examples but I think that that pretty much covers it I mean we're looking at the channels we're looking at the segments we're looking at how we follow up and we're ultimately making a judgment call like do we invest time money to try to optimize that so we can make it work better or do we just pull back and double down on another area yeah and I think this
SPEAKER_09is where like the sales process specifically comes into play as well because
RACHAEL BUECKERTthe issue with the segment not converting might not have anything to do with marketing side of things but maybe it's
SPEAKER_39you know pipeline management processes or the specific sales processes that you're running for that segment I mean
EDDIE REYNOLDSabsolutely and like for a lot of folks this is a stretch but I mean we could we
EDDIE REYNOLDScould even go into like CS right like what if we lost all this money acquiring these customers which is not uncommon but then you know we were able to double their spend in the first 12 months or 24 months and they're as much as I hate the whole LTV thing the LTV to CAC is really positive because in year two year three year four this customer spending so much money you can make a strong argument for that and that's why the pipeline council is a series of leaders it's not just sales or marketing it's also CS it's rev ops it's other folks like product that have a say in how we're spending money and where we're focusing our energies and go to market but yeah like while we're still on this topic of evaluating the process effectiveness we're first and foremost presupposing before we get into this that we have like a halfway decent process for how we close deals and that we're following that process consistently and so we have the foundation in place for pipeline management and not just inbound and this is a really big thing that I talk to customers about a lot so a lot of times people will come to us and I was like we need to fix inbound we need to fix outbound but their pipeline management is a mess I'm like okay so best case scenario we help you generate more pipeline but like you don't even have a consistent way of qualifying your pipeline so we won't even really be able to measure it accurately you'll say oh we generated 30 million dollars of pipeline from inbound and you're like did you do you feel confident that that 30 million dollars of pipeline is real pipeline well no I mean Joe over here throws every single person he talks to into pipeline and Jane over here sandbags it and waits until she's got a verbal and the contract is going through legal okay cool well then we can't measure whether or not those inbound leads converted to pipeline accurately because each rep runs their own process but if we have like that solid foundation in place while we could potentially improve that closing process I mean going back to our SMB enterprise example obviously closing an enterprise deal is very different from closing an SMB deal so that could be the problem there but hopefully we have like a baseline foundation where our team is consistently executing the process so that we can start to objectively look at this and do things like optimizing our inbound like we're here talking about today yeah so and
RACHAEL BUECKERTthat just reminded me to like the callback to what was it go to market efficiency margin and ratio yeah like that's where that can also come into play like if you want to calculate that too and compare it to your CAC payback or LTV to CAC and look at all those numbers together to try and get like fuller picture of the entire story of what's happening and what's possible because you don't want to miss those little things like maybe this one segment isn't like your highest revenue producing segment but they have the highest propensity to expand later down the road or churn yeah I mean
EDDIE REYNOLDSthis is all really
EDDIE REYNOLDSrelevant stuff right like I think ideally from like the highest level you're looking at your organization and you're saying how much money are we spending on on sales and marketing and CS and how much are we able to grow revenue and hopefully that's healthy unfortunately as we published recently like that's pretty unhealthy and getting worse every year with at least public SaaS companies right well whether that number is good or bad then you have to drill into it and you have to look at like what is our new business acquisition looking like and I think CAC payback is probably as much as I don't love the way that it's structured with like looking at the number of months it takes to get the payback that's probably the best way to just look at how efficient is our new business going and then on on the CS side and we can look at LTV to CAC I would love it if LTV wasn't like stretched out 20 years we've talked about that elsewhere and we can look at our overall processes for like what does it cost us to expand a customer what does it cost us to retain customers etc and we start to identify where the problems are but yeah I think if you look at well if this particular channel might cost us a little bit more to bring the customer in but then we're making money on the back end because these customers stick around and expand and that's that's fantastic and I think this is
RACHAEL BUECKERTthe beauty of go to market ops for me because it's not it's not just like oh how do we optimize marketing how do we optimize sales how do we optimize CS it's all interconnected and this go to market ops and this operational stuff that we're always talking about is just really how to create the connective tissue between each of these departments in order to optimize the whole of everything I mean this
SPEAKER_37is why I love it too but here's the problem it's very unscientific so I'm just going to
EDDIE REYNOLDSjump ahead of here because we're finally at the pipeline council section which is the next section of our newsletter ultimately what happens is you have to come in you know the VP of go to market strategy and operations the CMO the CRO the CFO potentially the CEO the head of customer success maybe product and we have to sit around a table we have to discuss this and we have imperfect data right all these things are overlapping right the reason that our LTV is what it is is
EDDIE REYNOLDSbecause of how strong our marketing is how strong our sales is how strong our onboarding process is our renewal process our expansion process what is happening in the economy what's happening with our particular customer segments all of these things come together in this very imperfect and unscientific balance to give us numbers that we can look at and as much as I love numbers I mean I don't talk about this law but for people listening I'm literally a certified alternative
EDDIE REYNOLDSinvestment analyst I spent like 10 years in finance I majored in finance in college I love numbers I was a math nerd growing up but like when you don't have perfect data there's only so much you can do with the numbers so we come into these pipeline council meetings and we need to discuss this and we need to make a decision with imperfect data and we look at all the things that we know about our different marketing channels in this particular example and we decide here's where we double down here's where we try to improve the process here's where we cut back we've got only so much money we can spend on go to market this is where we're placing our bets all right so I feel like
RACHAEL BUECKERTyou just did like a little crash course in what pipeline council is and what we're supposed to do with it but who should participate in a pipeline council Eddie well like I listed off
EDDIE REYNOLDSyeah I think it's run by the VP of go to market strategy and ops so what I mean by that is like no offense to like the sales source admins of the world but it's probably not a sales source admin it's somebody that really understands go to market hopefully you have that person on your team or a fractional resource like us if not then I would recommend like the CRO run it or just somebody that can like wrap their hands around the data and also understand like what that data means and then of course all the revenue leaders CRO CMO head of CS CFO should probably be there product might be there I'm trying to think about who else obviously the CEO could come and as we've talked about before and like there'll be a link in the show notes to the content we were we've gone really deep on pipeline council as well sometimes as the pipeline council meeting starts to progress and it gets really really efficient the most senior leaders like the CEO CRO might not keep coming because it's not valuable for them they don't need to play referee anymore now all of a sudden we're having really productive conversations and we're coming out of these conversations with here's exactly what we should do so as an example we talk about all these things we've talked about and we say wow you know I don't think that we're following up with our enterprise leads adequately let's sit down let's improve this process okay cool why don't we have the VP of sales or the head of like the SDR team that handles inbound leads sit down with go to market ops or rev ops let's map out a new process and let's go test that process great maybe we've had so many pipeline council meetings that the CRO would have just been sitting there nodding his or her head and now we're at a point where we're like let's just go do that that can be a really cool outcome of a pipeline council meeting where we get into this rhythm of identifying problems and solving those problems going and running
SPEAKER_07with them so walk
RACHAEL BUECKERTus through what the structure of one of these meetings might look like I believe and correct me if I'm wrong but if I remember correctly I think it's the head of go to market ops the head of rev ops that usually runs it yeah
EDDIE REYNOLDSthat's what I mentioned so I think you want to go into these meetings armed with data and also armed with a perspective on that data so you come in and you say this example we keep running with here's what's happening with inbound what I'm noticing is our worst performing segment are our enterprise leads so all the leads that are coming in from enterprise have a very low conversion rate and as a result our CAC payback is really really unhealthy it's taking us a really long time to recoup that investment so we need to do one of two things we either need to cut that investment and stop chasing these leads or we need to change the lead score or we need to change the follow-up process here's my perspective on this I think that our follow-up process is broken what I'm seeing is that we have all of these like this follow-up that works in SMB with these like cookie cutter templates we're doing the same thing with enterprise I think we should change this but now we have the marketing leaders and the sales leaders in the room to say well this is my opinion on what we should do and then you go through each of those things all the things that are working the things that are not working and you make decisions as a team on what to do about that and so what
RACHAEL BUECKERTshould we be able to walk away from these meetings with the biggest thing is
EDDIE REYNOLDSlike a tangible action plan right so what we don't want to do is come in and just report the news and then we are all like talking around the horn about what's happening and what's not happening and it's like cool like let's all pat ourselves on the back like that was a great meeting it's like no we came in here to identify opportunities and problems and decide what to do about them and so we should have tangible actions that come out of that in this example we keep harping on like the enterprise leads we say we're going to change the way that we follow up with enterprise leads so here are the tangible actions we're going to these people are going to sit down they're going to map out a new process we're going to map out new messaging we're going to go train the team and then we're going to go test this we're going to see if this works better and then come back to the next pipeline council meeting or in this case this might take a little bit longer than that to test this out and then come back and report whether or not that worked or not and then what to do about it from there and how
SPEAKER_25often should we be having these meetings I think
EDDIE REYNOLDSit really just depends on the team and and
SPEAKER_07their maturity but oftentimes I think once a month is sufficient okay
RACHAEL BUECKERTcool and yeah like Eddie said we'll have links in the show notes if you want to dive deeper into this we have another podcast episode on just pipeline council and we also talk about it in our pipeline management framework as well so moving on to the last section of the newsletter from analysis to action and this is all about actually putting all of these decisions into play in a go-to-market roadmap or a rev ops roadmap so Eddie what should a go-to-market roadmap include so it's an
EDDIE REYNOLDSinteresting question right because as I was writing this I was thinking we probably want to rehash our rev ops roadmap first and foremost just rename it to go-to-market operations roadmap I'm going to leave myself a little bit of like flexibility because I'm thinking about should it be a go-to-market ops roadmap or should it just be a go-to-market roadmap if we think about this like what are the improvements we want to make in go-to-market if we're changing messaging is that go-to-market ops or is that sales or is that marketing I don't know TBD but I think ultimately where we've had a lot of success with our customers is having this tangible what we have been calling rev ops roadmap and I want to at a minimum rename to go-to-market ops roadmap where we sit down and we like map out the strategic priorities for the organization so I'll keep harping on my example all right so let's say our CAC payback for enterprise leads is 24 months and we want to get that down to 12 months meaning that we like get our money back within a year which makes it pretty profitable if our customers stick around for more than a year great what do we need to do that so that's our that's our objective if you think about like OKRs objectives and key results our objective is to improve our CAC for enterprise leads the key result is we want to go from 24 months to 12 months meaning that our leads are much more profitable and then what is the initiative behind that
EDDIE REYNOLDSso the initiative is is that we're going to change the follow-up process and the messaging and the training for our SDR team or our account executives to follow up
EDDIE REYNOLDSwith those leads in a different way now as we stack that up against all the other things we want to accomplish and go to market and all the specific initiatives that we've identified and we do this with our customers once a quarter so we map out all the things that we want to do over the coming quarter and specifically the things that we want to accomplish in go to market and then go execute those things and then see if if by executing those improvements to the operations that has generated the desired result in go to market so we're not suggesting that like you want to redo your go to market ops roadmap every single month but these are the kind of things that you should be coming out of a pipeline council with and I think at a minimum you want to do this once a quarter but that's not to say that like as new things come up you can't come in and say okay well let's let's add this thing to the top of the list because we see the greatest opportunity here versus what we had already outlined but the go to market ops roadmap has been really helpful for us working with our customers because it gives everybody this sort of north star to say okay we've all met we've all aligned we've all identified that these are the most important things we want to accomplish and go to market such as like in this case improving our CAC payback on on leads and these are the things we're going to do to achieve that so what happens if
RACHAEL BUECKERTwe have multiple potential projects that come from an analysis how do we prioritize them to make sure we're focusing first on the highest impact stuff well there's no like
SPEAKER_29perfect science to this right you just have to make a judgment call but what we experience with our customers is
EDDIE REYNOLDSthe like as we play the role of go to market strategy and hops we make suggestions we say we think that this is how you should stack rank these and then oftentimes the CRO will come back and say why don't we move this thing here to priority number one and move this down to priority number four and let's tackle it in this order ultimately like the short answer to your question is is that like we all meet and we all decide on the priorities together and or the CRO makes an executive decision on that okay and how do
RACHAEL BUECKERTwe measure whether these optimization issues are working once we get the ball rolling how do
EDDIE REYNOLDSwe measure whether or not they're working well that's the whole benefit of having objectives and key results if we say that we want to improve our CAC payback on enterprise leads from 24 months to 12 months then the way that we answer whether or not that worked is to measure the CAC payback and determine whether or not we actually got to 12 months but even if we didn't let's say we move it from 24 months to 14 months it's like great well that worked but then we might say okay we've got a bunch of other areas where our inbound leads have a CAC payback of less than 12 months maybe we need to reevaluate that and double down on those things and cut back on these enterprise leads this is where a lot of this stuff is a judgment call right but to the short answer to your question is how how
SPEAKER_29we we do this as we look at those key results that we wanted to achieve in the first place so how
RACHAEL BUECKERTlong should companies expect this process to take from start to implementation like everything that we've talked about what's the timeline so
EDDIE REYNOLDSoptimization is a never-ending journey right I think that when you think about this it depends on
EDDIE REYNOLDSthe particular thing you're trying to optimize if for example we want to improve our lead conversion specifically from inbound lead to meeting set and we identify that let's say our speed lead isn't great let's say it takes us a day to get back to folks and we say we're going to change this to five minutes we are going to change the process and train the team and cause behavioral change such that our leads get a response within five minutes then we go do that and we have all these leads coming in we could see the change in the conversion rate from an inbound lead to a meeting set within days right that would happen lightning fast but if for example we want to change the way that we try to close and win enterprise deals from the point in time that we have a sales qualified opportunity in our pipeline to the day when we have a contract signed and we have closed one revenue how long is the sales cycle if it's nine months it takes a minimum of nine months to see that impact so it really depends on the specific thing that we're working on and I would say no company is ever ever ever ever fully done with optimization now we do have another stage in our go-to-market efficiency pyramid called acceleration where now we've got stuff that's like really working and we start to layer on AI and automation all these other things to try to get more squeeze more juice out of this but that's not to say that we are ever done trying to find ways to tweak our go-to- market we might hit diminishing returns where we say okay we've tried all these different things in this particular example that we've been talking about today to like improve how our leads convert to revenue and we can't really think of anything that we could do more that's really gonna have a material change okay well maybe that's where we start to go to the acceleration layer but then there'll be another area of the business where there's a lot more meat on the bone left I've never ever met a company that can go through their entire go-to- market and say like every single thing we have is like perfectly dialed in because even if you got to that stage tomorrow the economy would change the market would change and you'd have to reevaluate things things would stop working even if the company's
SPEAKER_66perfect the economy's never going to be perfect the market's never going to be stagnant that's so true no you're always
EDDIE REYNOLDSgoing to have some new competitor some new product like some new
EDDIE REYNOLDSshift that's going to cause like all of a sudden I mean let's just look at what's happened to the b2b sass and like the entire industry over the last few years things
EDDIE REYNOLDSthat were working really really well a few years ago aren't working anymore and we're not talking about little things like this particular segment of
EDDIE REYNOLDSleads that we're following up with we're talking about like an entire motion or even like the entire company I mean you look at like certain companies the amount of money they're spending to grow revenue just incrementally is massive I mean we reported on this a month or two ago where there are a lot of public sass companies right now that are spending 10 15 20 dollars on go to market just to grow revenue by just one dollar or a more tangible example is more like they grew revenue by a hundred million dollars and spent two billion dollars to do it like
SPEAKER_30that's insane but that's the environment that we're in right now yeah it still
RACHAEL BUECKERTblows my mind that profitability isn't a higher priority for for a lot of companies but I guess when you're backed by so much money you just want to grow still I don't
EDDIE REYNOLDSthink that's it I
EDDIE REYNOLDSthink that is hey we had a budget of two billion dollars and we wanted to grow revenue by a billion or whatever and we had massive churn and we had a bunch of things in new business that didn't work the way we hoped and this is how things shook out at the end of the year I don't think that anybody's going in and saying we want to spend twenty dollars to grow revenue by one dollar but like if you have massive churn you know maybe like new business is actually working fairly well but you're just like losing it all in the back end like there's a lot of stuff going on right now that makes this really difficult and so that was my point is like that company I'm mentioning it could have been you know two three years ago that all that stuff was working really well and now they're looking at this and they're going oh my god we have like massive churn we need to go and optimize the way that we retain and grow our customers or maybe they can't maybe there's a particular segment that is suffering and it's like there's nothing that we can do to retain and grow these customers substantially more than we already are the only thing that we can do is sort of sell to a different segment that's not struggling financially as much like there's a lot of variables at play here yeah absolutely so
SPEAKER_11when a company is looking at doing all this stuff what kind of resources or team
RACHAEL BUECKERTcapabilities or capacity do they need to have to do this well so for
SPEAKER_30optimization like first and foremost I hate to pitch our book here but you
EDDIE REYNOLDSneed like a VP of go-to-market strategy and ops or somebody that can do this work and what I mean by this is is first and foremost you need somebody that can wrap their head around the data and they can pull this data from various systems or get somebody else to pull this data and look at the data and make inferences from that data as to what it means for go-to-market so they need to understand the go-to-market data and they also need to understand go-to-market strategy this is where like if you ask a sales source admin to do this they can pull the report but they might not be able to connect the dots to say okay like this is what I'm seeing in the report and this is what it means for our go-to-market I'm not trying to like you know poo-poo all over every sales force admin on the planet I just mean traditionally speaking folks that spend their entire day in the tools don't get a chance to like exercise this muscle and learn how to interpret data to understand go-to- market if they if they do then that makes them more of a go-to-market strategy and ops person which is great this is a lot of work so I think like you need to have somebody that has that capability and also like the dedicated time to go do this then I think you also have to have the pipeline council meeting there's not a lot of value in doing this exercise if your VP of go-to-market strategy and ops does all this work and then just runs around to every like revenue leader in the company saying hey I see this problem we could fix it in this way I see this problem we could fix it in this way and then just nothing gets done like there's not really a lot of value in that if we're not committed to say okay like not only are we're going to listen to the insights that come out of this data we're going to actually like go do something about it and so I think like the combination of having this person to analyze the data and translate that into meaningful insights about what's working what's not working go-to-market and what maybe we could do about it and then also having that meaning to decide on something to actually go do about it and then lastly I think you've got to have some kind of a roadmap where you say like let's all put this on paper let's all agree that these are our priorities and let's go work on these things in a defined period of time such as over one quarter that's so
RACHAEL BUECKERTunderrated but so so important is having buy in from all the people that have influence and or authority over each part of the go-to-market organization that impacts revenue yeah because at
SPEAKER_41the end of the day like
EDDIE REYNOLDSwhen you decide to change something for example you say we're going to change the way that we follow up with these enterprise leads you then need to go to the people that are doing that work and tell them we now are asking you to do something different and then you need to hold them accountable not just hold them
EDDIE REYNOLDSaccountable but train them and enable them and then hold them accountable to go do that thing and that's not easy and so like common pitfall we have we see is you've got like a rev ops manager and I'm using that title because it's obviously more junior than a VP but it could be a VP those people don't report to that person so they're going in and they're saying like do you guys need to do this like different follow-up process with these leads
EDDIE REYNOLDSbecause these leads aren't converting and they're like cool I got other stuff to do today like I'll get
EDDIE REYNOLDSto it when I get to it if their boss is not asking for that it's probably not going to get done and even if their boss is asking for it it's still
EDDIE REYNOLDSprobably not going to get done unless they get reminded about it multiple times another argument that
SPEAKER_39you could say for CRO overseeing each department right yeah and that's why I
SPEAKER_37was kind of hesitating when I was
EDDIE REYNOLDStalking about like the CRO exiting the pipeline council meeting potentially if we're like meeting on a regular basis and there's like really granular little things that are coming out of that then I can see that being fine but in our experience like the second that the CRO steps out of the picture that's when it feels like for us at least our work starts to get a lot less valuable and all of a sudden we're making these recommendations and we're coming up with these insights and these conclusions on what could be done differently and then nothing gets done because the CRO is not behind it because they're focused on something else whatever that may be and then the go-to-market engine stops getting optimized and not only does it stop getting optimized it starts to degrade right because as the economy changes as new products get introduced in the market as things shift if we stay stagnant then our performance starts to go down by definition so if we're not constantly trying to iterate and actually seeing that iteration translate into tangible action being taken by the go-to-market team because the CRO is just not bought in on it then you're going to see guaranteed like poorer results and the flip side of this is is like well maybe things are working well enough that we can get the funding to pay for more sales people and pay for more marketing and that might work for a while because things are working and if we double down the spending in this area and we hire more sales reps we generate more revenue but then our overall efficiency gets worse and worse and worse until we get to the point that we can no longer get more capital to grow more because either our investors or our CFO or whomever is saying no more like we can't keep funding this because every year we spend more money to grow revenue less this is
SPEAKER_11why I I've always kind
RACHAEL BUECKERTof toyed with the idea of us having some kind of money-back guarantee for our services with the condition that they had to have every department head involved and like signing off on the things that we're suggesting and trying to execute if everyone is actually doing what they're supposed to be doing and involved in this who has the authority to make these changes and nothing still happens then we'll refund wouldn't
EDDIE REYNOLDSthat be nice I mean heck like I've I've toyed with the idea of just like shutting down the consultancy and just
EDDIE REYNOLDSbecome a private equity firm where we buy companies and then we tell them to do what we we do and and then we reap like the the equity from it but that's just not a realistic scenario and it's the biggest challenge that we face with customers is that CROs get busy and all of a sudden like there's a fire drill and they are scrambling to try to close some deals or hire some new reps or whatever it is they're doing or they get turned over and for whatever reason we stop optimizing the engine and we're sitting there we're seeing like oh these leads are not getting followed up with and that's why they're not converting but there's nothing that we can do to go in there and make them follow up with those leads because we don't have the power to to fire people that aren't following up those leads and that's a real challenge it's not just a challenge for us it's a challenge for folks that are full-time rev ops as well they see this and it's like I can see the problem and I see the fix but the executive team is focused on other things and I get it as somebody running my own company there's always always an issue where you have to like pick your priorities but it is really unfortunate to see like there's low hanging fruit like there's easy money here if we just follow up with these leads better we can generate more revenue but for some reason like that's not a priority yeah it's
RACHAEL BUECKERThard to convince people to change their priorities around especially like when we don't know what the rest of their day looks like but you can only do what you can do right yeah well
EDDIE REYNOLDSthis has been fun Rachel I think we're at time so we should probably wrap no I
RACHAEL BUECKERTbelieve so yeah so Eddie just as a closing question what is the one thing that you'd want revenue leaders to take away from this entire conversation well the biggest thing
EDDIE REYNOLDSis like first get the foundation in place so
EDDIE REYNOLDSnone of this is relevant if you have like fundamentally broken processes the team is not following those processes but the second thing is if you get that in place allocate the time money and resources to optimize your go-to-market engine whether it's hiring us or having a full-time VP of go-to-market strategy and ops or whatever there's so much low-hanging fruit that we see they're like wow like now we've got good data like this thing over here is working really well we can double down on that this thing's not working we can improve the process to change that there's so many things that can be done once you have the foundation in place that it's so much more valuable to just spend a little bit of time and money to lean into that versus like spending the next ad dollar or hiring the next sales rep awesome
RACHAEL BUECKERTwell we will close out on that note thank you so much eddie for this topic and all of your valuable insights thanks for putting
EDDIE REYNOLDSthis together and all these thoughtful questions absolutely
RACHAEL BUECKERTsee you next time
SPEAKER_41thanks for listening to the show if this resonated and or you'd like help with anything we talked about in the show please reach out to us you can find us at unionsquareconsulting.com and the info will be in our show notes
