About this episode
Eddie Reynolds, founder and CEO of Union Square Consulting, presents a decision tree framework for go-to-market operations leaders to prioritize their work and avoid the "whack-a-mole" trap of trying to fix everything at once. With experience at Salesforce and having built USC from the ground up, Reynolds has developed a structured methodology to help CROs and revenue ops leaders determine where to focus operational energy for maximum impact.
The core claim of this framework is simple but powerful: most go-to-market teams fail not because of execution, but because they lack a disciplined process for prioritizing what actually matters. Rather than chasing every initiative, the GTM Ops Decision Tree forces leaders to make two fundamental choices: first, should we focus on new business or net revenue retention? Second, within that choice, should we emphasize pipeline generation or pipeline management (or retention versus expansion)?
What makes this reframe critical is recognizing that improving a broken sales process often produces far more revenue impact than generating new pipeline. Reynolds walks through a concrete example where a company could double revenue by improving their close rate from 15% to 25% and reducing sales cycles, rather than doubling their pipeline generation spend. This compound, iterative return on process improvements dwarfs the one-time hit of an ad spend increase. Similarly, companies often overlook that net revenue retention tells you who your actual ideal customer profile is, and that strengthening customer health tracking can unlock massive CSM productivity gains with minimal investment.
The episode breaks down how to operationalize this decision tree through quarterly revenue operations roadmaps and pipeline council meetings, giving leaders a mechanism to get stakeholder alignment and guard against scope creep. Reynolds emphasizes the importance of having foundational processes (ICP definition, sales methodology, health tracking, forecasting rigor) before attempting optimization or acceleration.
What we cover in this episode
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0:30
The Whack-a-Mole Problem in GTM Ops Why go-to-market teams fail by trying to improve everything at once instead of focused prioritization.
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4:54
Decision Tree vs. Efficiency Pyramid How the GTM Ops Decision Tree relates to and extends the go-to-market efficiency pyramid framework.
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6:16
New Business vs. Net Revenue Retention The first branching question: which revenue lever should you pull first for short-term and long-term impact.
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11:23
Making Decisions with Imperfect Data Why you rarely have perfect forecasts, and how to choose priorities anyway using gut feel and partial signals.
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16:31
Measuring NRR and Defining ICP The foundational ops work required before you can accurately measure net revenue retention and identify your true ideal customer profile.
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22:00
When New Business Takes Priority Scenarios where pipeline generation or new customer acquisition is the right focus despite weak retention processes.
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25:13
Sales Process Beats Pipeline Generation Concrete math showing how fixing your sales methodology and close rates often delivers more revenue than adding pipeline.
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38:53
Building Your Revenue Operations Roadmap How to operationalize the decision tree into a one-page quarterly roadmap with OKRs and stakeholder sign-off.
The lines worth sharing
We end up playing whack-a-mole. We go three months, six months, a year, and we find that we've hired more people but the go-to-market engine is just as broken.
Eddie Reynolds · 1:45
If we could only improve one thing over the next one to three months, from an operational perspective, which thing should we focus on?
Eddie Reynolds · 6:45
We're going to take time to really think about what our top priorities are, write those down, get all aligned on that, and then focus all of our energy on those top priorities.
Eddie Reynolds · 7:30
If we have net revenue retention below 100%, then every single new business deal you close is being eroded away by that less than 100% retention.
Eddie Reynolds · 9:45
Common questions from this episode
What is the GTM Ops Decision Tree and how do you use it?
The GTM Ops Decision Tree is a prioritization framework that forces go-to-market leaders to make structured choices about where to focus operational energy. Start by choosing between new business or net revenue retention, then branch into pipeline generation vs. management (or retention vs. expansion). Use it quarterly with stakeholder sign-off to create a focused revenue operations roadmap.
Should we focus on new business or net revenue retention first?
Evaluate both short-term and long-term impact. Long-term, net revenue retention nearly always wins because it compounds exponentially. Short-term, run the math: a 20-point NRR improvement from 70% to 90% on $100M revenue yields $20M impact, while new business improvements may be harder to scale. Choose whichever offers the biggest, fastest win.
Is it better to generate more pipeline or improve your sales close rate?
Improving sales close rate typically delivers faster, larger returns. Fixing a 15% close rate to 25%, shortening sales cycles 30 days, and increasing ASP 10% can double revenue without adding pipeline. This is a repeatable, compound gain, whereas adding pipeline is a one-time hit requiring ongoing ad spend investment.
What foundational processes need to be in place before prioritizing improvements?
You need ICP and buyer personas defined consistently, a named sales methodology built into your CRM, a step-by-step sales process with entry/exit criteria, deal fields showing stage reasoning, and a management pipeline review process. Without these, your data is untrustworthy and you can't forecast accurately.
How do you get leadership buy-in on a GTM Ops prioritization roadmap?
Use a one-page revenue operations roadmap with clear OKRs (e.g., grow NRR from 70% to 90%), linked initiatives, and timelines. Present it to all stakeholders (CRO, CMO, CEO, ops lead), get written sign-off, and use it to defend against scope creep. Review and reprioritize each quarter based on business changes.
What is the relationship between net revenue retention and your ideal customer profile?
Your true ICP emerges from analyzing renewal, churn, and expansion patterns in actual customer data. Companies that renew and expand most are your real ideal customers. Without measuring and tracking NRR by segment, you can't define ICP accurately, which means your marketing and sales targeting may be bringing in the wrong customers.
SEO meta description
Eddie Reynolds breaks down the GTM Ops Decision Tree: a prioritization framework for revenue leaders to choose between new business and retention, then pipeline generation vs. management—backed by real Salesforce case studies.
Target keywords
GTM Ops Decision Tree
revenue operations prioritization
net revenue retention vs new business
sales process improvement
Eddie Reynolds
Union Square Consulting
go-to-market framework
pipeline management vs generation
CRO prioritization
revenue operations roadmap
close rate improvement
customer health tracking
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Read the full transcript · 52 KB
SPEAKER_01If we talk to full-time people in go-to-market ops or rev ops, they're running around like crazy
EDDIE REYNOLDStrying to plug holes in every area of the go-to-market engine at once. One second, they're like updating this thing in Salesforce for pipeline reviews. The next second, they're trying to analyze data for marketing to understand which marketing channels are converting the best. And we end up playing whack-a-mole. We go three months, six months, a year, and we find that we've hired more people. We've grown the team. We may have brought in more revenue, but the go-to-market engine is just as broken, if not more broken than it was six or 12 months ago.
SPEAKER_06Welcome 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, managers, and other sales and marketing experts, as well as talking about what we learn every day
SPEAKER_08in the trenches, helping to build go-to-market engines.
RACHAEL BUECKERTWelcome back to go-to-market science. I'm Rachel Buchert, the marketing manager here at Union Square Consulting. And with me is Eddie Reynolds, our founder and CEO. Hey, Eddie, how's it going?
SPEAKER_10It's going well, as always. Thanks for putting this together. I always enjoy these. Of course. Yeah. So today we're talking about a new concept to me, the go-to-market ops decision
RACHAEL BUECKERTtree. Eddie, can you start us off kind of explaining why this came up for you and what it is?
SPEAKER_06Yeah. And so the concept here is trying to answer the question of how do we prioritize
EDDIE REYNOLDSwhat we want to do in go-to-market ops? Or another way to put this is how do we prioritize what's most important to improve about our go-to-market engine? And the reason that this came up for me is that, you know, I'm on calls with CROs and also the private equity firms that back them every day, right? A lot of these calls are folks that are reaching out to us that are interested in maybe working with us. And we're trying to figure out where to start, right? Now they're reaching out to us because their go-to-market ops or their go-to-market engine isn't perfect. Otherwise, why would they be reaching out to us? And no company is perfect. So this applies to every single company. And most of the time when we talk to folks, if the company is mature, and especially if we talk to full-time people in go-to-market ops or rev ops, they're running around like crazy trying to plug holes in every area of the go-to-market engine at once. One second, they're like updating this thing in Salesforce for pipeline reviews. And the next second, they're trying to implement another system for CS. The next second, they're trying to analyze data for marketing to understand which marketing channels are converting the best. The next second, they're trying to fix something about their sales handoff process. And we ended up playing whack-a-mole. And when I say we, I mean the collective sort of go-to-market community. And we go three months, six months, a year, and we find that we've hired more people, we've grown the team, we may have brought in more revenue, but the go-to-market engine is just as broken, if not more broken than it was six or 12 months ago. And so when I'm talking with folks that we might want to work with, the first thing that I'm trying to accomplish is narrowing their focus, especially the CRO, who's extremely busy trying to build a team, manage people, get deals closed, forecast accurately, et cetera, and try to narrow their focus to say, if we could only improve one thing over the next one to three months in our go-to-market engine, from an operational perspective, sure, of course, we always want to close more deals. And I'm never going to say, hey, don't tell your sales reps to close any more deals. But from an operational perspective, if we could only make one thing function better, meaning that we improve our close rates on new business, or we generate more pipeline, or we improve our renewal rate, or more specifically, we do specific things that we believe will lead to improving that renewal rate, which things should we focus on? And if we get all of the energy that we have collectively as a go-to-market team, or at least the people that are relevant to that particular issue, focused on one single thing, how much more successful will we be? How much more impactful will our work be? And how much faster will we get to a positive result versus trying to run around and tackle 15 different things at once? And I think everyone knows the answer to that. What's hard is to take a step back and say, we're going to take time to really think about what our top priorities are. And we're going to write those down, and we're going to get all aligned on that. And then we're going to focus all of our energy and resources on those top priorities. And that's something we push really hard for with every one of our clients. And this newsletter that we're in the process of writing, and this podcast we're about to film, is an attempt to sort of crystallize that thought process and give somebody that may not be necessarily wanting to work with us a framework that they can use to do this in their own company. It sounds kind of similar to our go-to-market efficiency
RACHAEL BUECKERTpyramid. What's the difference between that? I think this is a way to look at the go-to-market
EDDIE REYNOLDSefficiency pyramid. So when you take a look at the go-to-market efficiency pyramid, we kind of like stack ranked it from fundamentals, which is basically like, what is the basic process for folks to do their jobs? And then we go into adoption, which is how do we get people doing that thing? Then we go into optimization, which is now that we have people doing that thing and we have quality data, how do we look at what's working and what's not and find ways to optimize it? And then fourth, how do we accelerate that? How do we take something that's working really well and is really dialed in and then use AI, automation, other things to really amp that up, right? We then break that down across four different areas. Pipeline management, inbound, outbound, and we really should add a slide for all balance since we've come out with that framework. And then of course, net revenue retention. I think the prioritization, which we already kind of have laid out in our go-to-market efficiency pyramid framework, is how do we select which of those things to focus on over the next one to three months? It's really a derivation of that go-to-market efficiency pyramid trying to answer the question of how do we identify our top priorities and focus all of our resources on the right place? Okay, cool. And so how does this ladder or this decision tree work? Well, the first step for this decision tree that I always like to ask CROs that I'm talking to is, if you could improve one thing in the short term, would it be new business or net revenue retention, right? Like there's really just two aspects to go to market. You're either trying to land new customers or you're trying to retain and grow your existing customers.
RACHAEL BUECKERTRight. And that's like the first branching question and then it branches off from there.
EDDIE REYNOLDSExactly. That's the idea, right? Okay. So as an example, like it's very common that I'll talk to somebody and they're like, well, we need to like improve our outbound program. We need to make more outbound calls. You're like, okay, cool. That statement right there makes a lot of assumptions. It assumes that new business is a higher priority than net revenue retention. And it assumes that generating more pipeline is a higher priority than closing the pipeline that we're already generating. And then it then assumes that the best way to generate more pipeline is to focus our energies on improving our outbound program, which may be true.
SPEAKER_06But what I don't think is happening is I don't think everyone is always thinking through those steps
EDDIE REYNOLDSbecause nine times out of 10, when I ask folks like, what's your top priority? They say, I need to generate more pipeline.
RACHAEL BUECKERTSo when we're trying to decide between these first two options in the first layer of the decision tree, what's the real question they need to be asking themselves?
EDDIE REYNOLDSI think there's a couple of questions here, right? The basic question is what is our top priority or more specifically, like what is going to give us the biggest, fastest impact if we put resources on it, right? And we have to look at this through a couple lenses. We have to look at this through a short-term lens and also a long-term lens. We have to look at what are our quarterly targets, our annual targets, and what is best for the business in the long-term. Now, when we look at the long-term, it's pretty obvious. Net revenue retention becomes the top priority because if we're looking to build a long-term business, if we're looking to build a company that is going to be much, much greater in 10 years, it's very obvious to anybody that we want to have customers that stick around and expand because that creates an exponential growth. If you have a net revenue retention above 100%, then you can grow your company with a zero new business, right? You then do a good job of new business and you just layer that on top and you get exponential growth. If, however, you have net revenue retention that's substantially below 100% or any amount below 100%, then every single new business deal you close is being eroded away by your less than 100% net revenue retention. So long-term, we want customers that just keep growing and growing and growing with us. And that's how we get exponential growth, especially in an industry like B2B SaaS. Obviously this can apply to any industry, but it's a lot harder to do in some other industries. The problem is, is like, let's say that we are, and I'll also caveat this with, we have to think about what realistic improvements might look like, right? We want to get to like 80% effectiveness at a minimum bar, right? And I use this as it's more of a thought exercise or maybe a metaphor, if you will, than a literal number. What I mean by this is what's the 20% of work that we can do to get 80% of the impact? The Pareto rule, right? If we look at our net revenue retention and let's say that it's sitting at, let's say it's at a hundred percent and we think, man, if we do all of these things, we could maybe get it to 105%. If it was perfect, perfect, perfect, it could get to 110%, but nobody's ever perfect. So maybe if we spent, did absolutely nothing as an organization for like the next three years, but focus our net revenue retention, we could get it to 107%. And let's say that we're at a hundred million dollars in revenue, just to use round numbers, right? So what that means is we have a difference between, are we going to turn that a hundred million dollars into another a hundred million or 105 million or 107 million? We then compare that to our new business. And so then let's say that right now with all the things that are working, we're bringing in $20 million a year in new business. And we look at that and we think, man, you know, there's so much we could be doing to generate and close more pipeline. We could turn this into $30 million in new business. And we could do that by fixing some very basic things about the way that we land new customers. Okay. Now we're looking at a relatively easy $10 million over here and a virtually impossible seven to $10 million on net revenue retention. Well, in the short term, it's pretty obvious. Like we need to focus on new business, right? Over the longterm, we might also say, okay, we might get to 107%. And this is assuming that we can even make this assessment, right? Like I want to be really clear. We have benchmark data we can look at. We have our gut. We can look at specific areas of our go-to-market and try to like ascertain how broken it is. But at the end of the day, like we're making an estimated guess as to like what improvements we can make. And then we have to pick a horse and go with it. But in this scenario that I'm painting, like we have pretty good net revenue retention, it's pretty obvious that we're probably going to benefit short-term and long-term more by improving our new business. If however, our net revenue retention is 70% and we think we could get it to 90%, now that's a $20 million gap where we look at our new business in this scenario and we're bringing in $20 million a year and we're thinking, you know, this is working pretty well. We could add some more AEs. We've got capacity to do that, but there's nothing that we can do that just magically takes us from $20 million to $40 million in new business generation. If we really focus on our net revenue retention, getting it from 70% to 90%, that's $20 million right there. That's clearly the winner on a short-term basis, right? On a long-term basis, it's really obvious. What B2B SaaS company wants to have 70% net revenue retention long-term. That compounds year over year over year. New business is a one-time hit, right? But if we improve that 20%, I mean, what is 0.7 times 0.7? That's 0.49. Our business has halved in two years. What's 0.49 times 0.7? That's like 0.34. We are now down to a third of our business in three years. If we instead change that to 0.9, what's 0.9 times 0.9 times 0.9? That's like 0.72. Right? And so instead of losing two-thirds of our business, we've lost a quarter of it. That is a monumental difference, right? So these are the assessments that we have to make in terms of trying to identify our priorities. And then we might drill that down into the quarter. And I'm sympathetic to CROs and even CEOs that have quarterly numbers they have to hit. We're owned by a private equity firm. We're publicly traded. Maybe the PE firm is saying, we need to operate at 30% EBITDA margins. They're saying, we're looking to exit. We need this, that, and the other. We need this much growth. These are all factors we have to consider. We can't ignore these, but we have to compare what is most important in the short-term and what is most important in the long-term and how do we pick our horse and then focus our resources on that horse.
RACHAEL BUECKERTAnd is it always as easy as that? It's like just doing the math and deciding, okay, we can make more money if we focus our energy in new business versus retention? Or are there signals that are a little bit less obvious if one or the other maybe doesn't have the loudest problem,
SPEAKER_19but it actually is a problem?
EDDIE REYNOLDSAnd not implying this is easy. I think first, if you talk to a lot of leaders, I think there's like a Colin Powell quote that like, you know, I usually have like a fraction of the information I need to make a decision, but that's all I have. And I have to make that decision. It's something to that effect. You know, we very infrequently have perfect information. I know it's like every rev ops or go-to-market ops pros like dream to have like the perfect data. And we can just like forecast even when we have the perfect data. I don't talk about this a lot, but my background before I got into SAS, I was working in investment management and private equity. And, you know, these masters of the universe that sometimes have all the data in the world still get this wrong, like nine times out of 10, right? You look at the global financial crisis. Like we had all the data in the world staring us in the face and the smartest people in the world didn't foresee the collapse of mortgage-backed securities and the overall economy. This stuff's really hard. But what I'm saying is whether we pick the right horse or not, what's more important is just to focus our energies on it. So we look at that scenario and we say like, well, how bad is our net revenue retention? How bad is our renewal rate? How bad is our expansion rate? How bad is new business? Which one seems to be the greatest opportunity for improvement. And we make a decision and that might just be gut feel. I mean, Rachel, you and I faced the situation when I first hired you where we looked at the conversion rate on our website and it was pretty bad. I think it was like 0.2%. And we had a really cheap website. And I thought, you know what? If I look at benchmarks, conversion rates are anywhere from 1% to 10%. I take this with a grain of salt because what are these conversion rates? Is this B2B? Is this B2C? What is the conversion rate measuring? Are these people converting into paying customers? And are they paying six figures for enterprise solutions? Or is this PLG? I don't know. There's a lot of unknowns there. But I looked at that and I said, well, if I invest a few months and $50,000 to redesign our website, could we maybe get our website conversion rate up to 1%? And if we did that, what kind of impact would that have? How many leads are we getting? What would a 1% conversion rate mean for us? And then I very quickly made a judgment call. And I said, I think I'm going to make this investment. I also think from a long-term perspective, if we're pumping out content, we can't afford to have a broken website. So that's the horse. And we focused all of our energies for one quarter on improving that website and making it the best we can make it. Now, do we have the perfect website conversion rate? Was that a good investment? These are hard questions to answer, but all I can tell you is we got it done. We put all of our resources into it and I'm happy with our website right now. Could it be better? Yes. But is that where we are now focusing our energies? Right now, you and I are looking at this and we're looking at the numbers coming through our podcast and we're saying, you know what? We need to improve our podcast. And what's one way we can do that? We're going to produce more and better podcasts. I'm not trying to insinuate that we need to overcomplicate this. Okay. And on the topic of wishing we had perfect data and perfect forecasting
RACHAEL BUECKERTinformation, before a company could even start truly analyzing their net revenue retention properly and getting data that can actually help them, what needs to be in place for them operationally?
SPEAKER_04What needs to be in place for them operationally to measure it or to improve it? To just start analyzing it properly and knowing that the numbers are as accurate as you can get them.
EDDIE REYNOLDSI mean, I think, and this is amazing that like so many companies struggle with this, but the first thing is just actually measuring it, right? In order to measure it, we need to have like
EDDIE REYNOLDSa definition of what is a customer? What is ARR? Customer signed this contract. What does that mean for our ARR? And I think the first time that somebody shared this concept with me many years ago, I was so confused with this. I'm like, how do you overcomplicate ARR? But it does get complicated. And we have a lot of customers where you ask them like, how much ARR do you have? Or what's your net revenue retention? And it's really hard to answer that question. So you have to put the work in there. At the base of our pyramid everywhere is ICP. And this is one reason why I say that net revenue retention is ultimately like the long-term solution. Our net revenue retention will tell us who our ICP is, right? So like ideal customer profile is quite literally the definition of the customers that are easiest to land and cost us the least amount of money to attract and serve and retain and grow the best. They're our most valuable customers in a literal sense, right? If we can't measure that, then it's really hard to even define our ICP accurately. So by looking at like, how do we define our customers? What information do we need to track about our customers? What do we think our ICP is? How does that compare to the actual data that we have for the customers that have renewed, the customers that have churned, the customers that have expanded? That gives us incredible insight into what we might do differently going forward. We then think about the step-by-step process in net revenue retention from sales handoff, to onboarding, to implementation, to monitoring customer health, to what CSMs do with unhealthy customers, to how we expand healthy customers. And that's a really big thing. And a lot of organizations have massive gaps in some or all of those areas. And so again, going back to your previous question, like, how do we determine what's the top priority? Well, if we've got our whole process dialed in on new business, but we have no way, I just was literally talking to a company a week ago that has no way to even track which of their customers are healthy and which customers are not healthy. I don't think I need a lot more information than that to say, you're probably going to get some incredible bang for your buck by just implementing the simplest way. And what we recommend to them is just go red, yellow, green for now. We can go integrate the backend usage data and get super complicated about like an algorithm, but like tomorrow, can we pull up whatever tool has your customer usage data and just identify red, yellow, green accounts, create a simple field in Salesforce, red, yellow, green, and bam, our CSMs now know which accounts are red. And if they have to toggle into the other system or ask for a report or what have you, they at least have an idea where to focus their energies. How much more impact are we going to get on a renewal rate by telling our CSMs which accounts are at risk? Probably a lot. I could be wrong, but I don't need a lot more data to like make that claim. And that's also mind-blowing just
RACHAEL BUECKERTgoing back to the ICP thing. As a marketer, I don't know how you can define or really know what your ICP is if you have no idea how your customers after the sale are doing, you know, while you're working with them. Because how do you know if they're ideal after the sale? If they're churning all the time or if they're not using your product as well as they could be or a variety of different reasons?
SPEAKER_06Yeah. I don't know how you do it either. What I will tell you is, is that we had a lot of this
EDDIE REYNOLDSstuff dialed in even from day one. And when I started this company, we were doing, you know, much, much like a lower ticket services and we would charge folks like five or 10 grand to like set up Salesforce for like their first time. And after, I don't know, six months of doing it, I took a look at our data and I found that almost every customer that we charged $5,000 to never, ever worked with us again. And almost every customer that we charged like $8,000 or more to doubled their spend with us because the companies that were spending 5,000, it was like all the money they could ever possibly spend. Cause they were like a super early stage startup. And when we came back to them and said, Hey, we got your foundation in place, but we'd like to help you take it to the next level and actually drive adoption. For example, they would say, Oh no, like we, we have no more money. We'll just try to figure it out on our own. And then the company that spent $8,000 said, yeah, that's not a problem. Like they had looser purse strings and they said, yeah, no, like, let's make sure that we get value out of this investment and like, let's drive this thing forward. And that's a small and simple insight that we got from that data. But like you, I don't know how you're supposed to look at new business without that insight. Like what is the point of us going and landing more of these $5,000 customers in this example, just to churn them immediately. Yeah. And I mean, and just that insight changed
RACHAEL BUECKERTeverything we thought about our ICP and that like, let us down this journey of like really analyzing who these best customers were and why they were our best customers and how do we capture that in our marketing. And we created a whole new go-to-market strategy around that in our content and how we show up. And I mean, it started CRO stories, for example, knowing that CROs were our ideal buyer persona. So yeah, if you don't know how to analyze your customer base and see who's actually your ideal client, I don't know how you do anything else at the beginning of the funnel either. No, I think it's pretty tough, but I think we're getting really deep in the weeds
EDDIE REYNOLDShere. And so let's take a step back and let's go back to this decision tree and let's talk more
EDDIE REYNOLDSabout how folks can use that to prioritize the improvements they want to make. Yeah. So we talked
RACHAEL BUECKERTa lot about NRR, but what about when new business actually does take the priority? What kind of situation would that make more sense, even if retention is still a bit messy?
EDDIE REYNOLDSWell, so I want to be careful here. Like what I'm trying to do is to articulate like a layered approach, right? And so the first layer is new business versus NRR. The second layer would be pipeline generation or pipeline closing, which also includes forecasting, right? On the new business side. On the NRR side, it's retention versus expansion or growth, right? So that's sort of our layer and we want to ask that question of which thing is the next priority. Again, I'll say, let's focus on thinking about this through a short-term and a long-term lens. Over the long-term, retention is obviously going to be a priority over expansion, at least in so far as we get to 80%, right? If you tell me, hey, we have a really halfway decent retention program, we have strong sales handoff, we have strong health monitoring, we have a strong process for addressing unhealthy customers, strong implementations, onboarding, et cetera. But our expansion process is non-existent. And I'd say, okay, well, you probably have some healthy customers since you have a halfway decent retention process. You're probably going to get more bang for your buck by going in and trying to improve that expansion process. But if you have terrible retention processes, that's where I'd start. You can't expand unhealthy customers or maybe you can, but it's really, really hard and unlikely and infrequent. And for context, anybody listening to this, I spent three years at Salesforce serving both new and existing customers. So this is literally what I did in my patch and triage these customers. And I'm like, these are my unhealthy accounts and these are my healthy accounts. The unhealthy accounts, I run a CS process on them and I try to get the right person in front of our CSM so the CSM can save them or maybe an implementation partner. And then I like forget about them for three months and I come back later and I hope that that is now a healthy account, but I'm carrying a quota and I got a responsibility here. And then I focus on my green accounts and I try to figure out how to expand them. This is where I think people should prioritize on the new business side. It's kind of a similar concept. What is the point of generating a bunch of leads and pipeline if you're just losing deals because you have a broken sales process, the sales process, just like ICP is literally the definition of the steps that you need to take to win the most amount of the right customers and lose the least amount of the right deals and to walk away as quickly as possible to the most amount of the wrong deals, right? Like our sales process comes from our sales methodology, which in theory should be helping us to reverse engineer, not losing deals. We should be closing and not wasting time on deals. We should walk away from. So if you look at like medic or med pick as an example, you have questions like, what is the decision-making criteria? And what is the decision-making process? Why do people ask those questions? Well, because if you don't follow that stuff, then you end up running a deal cycle where you don't know when they want to make a decision, how they make a decision, what they're deciding on, and you end up chasing a deal that you lose. Why is that important? Because you have reps spending a lot of time chasing the wrong deal and or losing a deal that they could otherwise win. Why is that important? Because as an organization, you're spending a ton of money to generate that lead or generate that pipeline just to lose it through a broken process. So from a long-term perspective, we want to look at this and say, is our sales process good enough? And here's the question I ask CROs every day, because they always say yes. And then I say, okay, great. Can I pull up a report of your pipeline right now? And we go deal by deal. And you'll tell me that the vast majority of those deals should be in pipeline and are probably in the right stage or close enough to it. And I can see why I can see what's going on with that deal, such as med pick fields, for example. And we can both look at this and just understand this isn't a stage three and here's why. And then I get the, ah, no, I mean, I wouldn't go that far. I mean, it's pretty messy. Like it's really broken, but we really need to generate more new business. Why? It costs so much money to do that. You're already generating pipeline. Wouldn't it be both a long-term and a short-term impact or better impact if we just go and shore that up and like just plug the leak and close more of the deals that we already have in our pipeline? That is going to be a much faster turnaround than trying to generate more pipeline. And it's also much better long-term because just like with net revenue retention, everything we feed into the top of the funnel has this exponential return as it goes through
EDDIE REYNOLDSthe middle of the funnel. If however, you're at 80%, you're like, you know what? We've got a strong
EDDIE REYNOLDSpipeline. You know, we're even forecasting somewhat accurately. What we really need to do is just generate more pipeline. Then great. Let's generate more pipeline. And I get why people always lean on that because you think, however my revenue engine is working, whether it's good, bad, whatever, if I can just pour more leads into the top of the funnel, assuming that those leads are the same quality, assuming that our team has the capacity to work those leads. And I use leads to talk about both inbound and outbound or whatever partners, PLG, what have you. Assuming that we have like the same quality of leads and capacity, then in theory, it should come out the other end the same.
EDDIE REYNOLDSBut when we take a look at that engine, it might come out the end the other same. And so it's like simpler in concept, but in the impact to the bottom line, it's not as massive as other things that we could be doing. And so that's why I harp on this so much. Anyway, I feel like I'm rambling a bit, but I hope I've answered the question.
RACHAEL BUECKERTNo, no, I think so. And so correct me if I'm wrong. It sounds like when we're going through this tree and let's say we've chosen new business, the way to figure out whether we need to do one or the other is to look at the numbers and then look at our processes and see like, can we see the numbers? What are the numbers? Can we see the processes? Are they in place? How well are they in place? And then knowing the answers to those questions, we can decide, okay, we should focus on generating
SPEAKER_40more pipeline or we should focus on fixing our pipeline management.
EDDIE REYNOLDSI think that's mostly right. We have this debate a lot internally because there are some of us that we want to see the numbers and there are others. And I think they're right about this. They point out that you can't see the numbers or if you can see the numbers, you can't trust the numbers if you don't have the processes in place. So as an example, let's say we're going into a new client, we're trying to figure this out, or someone was listening to this and they take on a new role as the VP of go-to-market strategy and ops. And they're like diving in and they're like, let's try to figure this out or a new CRO. And you walk in the door on day one and you're like, let's pull up a pipeline report. Before you even pull up that pipeline report, you ask some really simple questions. Do we have a sales methodology defined? Actually, sorry, before that, do we have a clear definition of our ICP and buyer personas? Does everybody, if we ask five sales reps, who's our ICP? Do they all give us the same answer? What sales methodology do we subscribe to? Do we have a defined sales process step-by-step? Here's what you need to do in step one, two, three. Here's the entry exit criteria. That's built into the CRM. Do we have any fields on the deals in our pipeline that indicate to us like what's going on and why those deals are in pipeline and why they're in the stage that they're in? Yes, yes, yes, yes, yes, yes. And yes. Do we have a pipeline review process? Do managers actually review that and hold reps accountable to following that process? Yes. Okay, great. I've yet to look at the report. I'm going to go on a limb here. I'm going to bet a good amount of money that that pipeline is probably going to be pretty clean and pretty accurate. And we're going to be in a position that we can forecast accurately. If the answers are no, no, no, no, no, without even looking at the report, I can tell you it's probably not data that we can trust. We can then go pull that report up and we can look at it. But if those answers are all no, then I say, well, we probably need to go do those things. And if our net revenue retention is in a really good spot and we have plus
EDDIE REYNOLDS100% net revenue retention and we have all these processes in place. And by the way, you could have plus 100% net revenue retention and have terrible processes in place. Maybe NRR should be 150% because you've got such a great product and such great product market fit. And you're just like so
EDDIE REYNOLDSsuccessful despite like a really broken go-to-market. We've worked with customers like that before. I can think of a customer that we're working with right now that fits that description. They're just absolutely crushing it with nothing in place. I mean, we're putting that stuff in place and they have a new CRO and it's very exciting stuff, but they're crushing it without that. But what could they be doing with it? That's the premise for why we came in. And we look at this and we say, okay, great. NRR is in a good spot. There's nothing substantial we can do to improve it. Now we move on to new business. We look at our pipeline closing and forecasting and we're like, yep, that's at 80%. That's great. Now let's look at pipeline. Okay. We have a completely broken process for the way that we handle our inbound leads. Great. Let's go fix that. This doesn't have to be an overly scientific exercise because most of the time we don't have good data to go by anyway. And so we're just kind of looking at it and we're saying like, which thing is broken and which thing do we think if we fix it, we'll have the fastest and best impact on the company. This is pretty interesting to me because, you know, most revenue leaders or CROs
RACHAEL BUECKERTcome in and their first thought is, okay, the first thing we should tackle is generating more and better leads, right? That's like the big flashy thing everyone wants to do. But looking at the decision tree, it seems like everything needs to be more or less pretty buttoned up before you even start focusing on that. Like everything with your retention, expansion and your processes and your pipeline management should all be taken care of. Doesn't have to be a hundred percent, but should be pretty well taken care of before you even start looking at that new pipeline generation portion of the tree. Unless of course you think that you can generate so much extra pipeline that it outweighs the
EDDIE REYNOLDSimpact of improving your ability to close. Let's use a concrete example. I think the average B2B SaaS company right now has a close rate on their qualified pipeline of somewhere around like 15, 16, 17%. I can't remember the exact number. It's somewhere in the high teens. I think that you can realistically get that number to 25 or 30%. So we take a company that's got, let's say a 15% close rate, and let's say we get them to 25%. Why am I confident about this? Because I asked the same questions. Do we have a clear definition of our ICP and buyer personas, sales methodology, sales process built into the CRM, and a process for management to review the pipeline and hold reps accountable to following that process? There's a lot in there, right? Effectively, can we get our reps to follow the right process to close deals instead of just like winging it on every deal? What impact might that make? Well, let's say that we're generating a hundred million dollars a year of pipeline, right? We're closing 15% of it. So that's $15 million. We bring that to 25%. We are now at $25 million. What else happens with this? Well, if we follow the right process, we have a faster sales cycle. Let's say we reduce the sales cycle by 30 days. That's an extra month of selling. So now instead of going $15 million in new business, we got a $25 million in new business, what's 25 over 12? Let's round to $2 million. We get an extra $2 million. Now we're at $27 million. What else happens when you button up your sales process? We get bigger deals. Let's say we improve our average deal size by 10%. Okay. Let's say our average deal size was $50,000. Now it's $55,000. Okay. Now we have $27 million plus 10%, 2.7 million. We get to $30 million. We've now doubled our revenue. Now what I would ask is, is that easier than doubling the amount of our qualified sales pipeline? Do we have some lever we can pull somewhere else where we can get double the leads with the same conversion rate, the same ASP, et cetera, as easily as we can do that? That's a judgment call, right? You're looking at a crystal ball and it's a hard question to answer. But what I would say is, is like, if you could do that, if you could just pour more money into ad spend, then do it. But also what impact would we have if we shore up our sales process? And then, oh, by the way, we're also able to forecast more accurately now, which means we can invest more money in the company by making more data-driven decisions. Also, this isn't a one-time hit. That's 25% this quarter, next quarter, the quarter after that, and the year after that. And so we get this like compound interest return. Whereas if we just say, well, let's pour more money into an ad campaign, that's one time. And the next quarter, we got to put that money into the ad campaign again. Maybe it works, maybe it doesn't. But you can see the long-term impact of shoring up these resources over just saying, let's generate more pipeline.
RACHAEL BUECKERTAnd I love this conversation because it's not only showing, you know, revenue leaders and CROs how they can try and make these decisions, but it also creates kind of like a rubric for how they can build their case for what direction they want to go in to leadership and get buy-in from it.
EDDIE REYNOLDSThat's the idea, right? I mean, the big thing is that we get everyone aligned. And this is the most challenging thing of anything that we do with our clients is do we have the CRO and the CMO and the CEO and anybody we're working with in ops all aligned on the most important priorities? And if we do, the rest of the stuff becomes kind of easy. Like it's not rocket science to go implement a sales process, build it into Salesforce, train the reps to follow it, and then get management to stay on top of them so that they're following that sales process. What's so much harder is to get everybody aligned to say, this is our priority. We're going to do this. This is the most important thing.
RACHAEL BUECKERTSo what's the next layer? So after we decide, you know, if you want pipeline generation or pipeline management and then expansion or renewal, how do we dig down deeper?
EDDIE REYNOLDSLet me get into that in a second. What I will say is Rachel, like you're going to come up with a graphic that outlines all of this after this podcast. And I'm really excited to see this. And we're going to link this in the show notes. We're going to have a newsletter on this. And so by the way, if anyone's listening, we're trying a new tactic where instead of writing the newsletter first and then film the podcast, we film the podcast first and then write the newsletter. So we're kind of figuring this out on the fly. But the next layer that I look at is, and it's hard to articulate this because now we've got to break down four different things into like the next chain. So let's talk about pipeline generation. We now break that down by channel. We have inbound, outbound, all bound, partners, PLG, et cetera, right? That's channel, not source. I'm not talking about ad spend and SEO. I'm talking about inbound, right? That'll be the next layer. For pipeline management or closing and forecasting, it's closing or forecasting. Now that one's kind of simple because it's really hard to forecast if you don't have a strong like pipeline management process. So you kind of have to get the pipeline management process in place before you can really have like any halfway decent forecasting process. Okay. That covers pipeline management. Now we go into retention. Retention breaks down into each step of that customer journey. So we have the sales handoff and I don't want to skip over ICP. ICP is a component of this. It's like, we got to sell the right customer in the first place, right? But assuming that we're doing that, we have the sales handoff. We then have onboarding and or implementations. We then have ongoing customer health monitoring. We have how we, the process to respond to that customer health. Like what do we do with unhealthy accounts? And then when we go into expansion, we have, you know, what do we do with the healthy
EDDIE REYNOLDSaccounts? We can break expansion down just like new business into pipeline generation or pipeline management, right? Like expansion deals. I mean, when I was at Salesforce, we literally had the exact
EDDIE REYNOLDSsame process for new business and expansion. We had the same stages in Salesforce. We had the same questions. We had the same forecasting. It was literally the same thing. Like quite literally, like we didn't even talk about the difference between new business and expansion that much. It was just like, we have deals, right? The pipeline generation could come from outbound or inbound or partners or all kinds of things, right? If you think about it, like we tend to think about expansion, kind of like outbound, like you call into your existing customers, you set up meetings, you present things, but you can get lots of pipeline from your marketing efforts. If you're marketing to your existing customers, well, if your partners brought you into customers, there could be a process for your partners to help expand that relationship. You obviously have PLG, right? I don't know exactly how we define that, but PLG is quite literally expansion of an existing customer. Whether or not you consider them a customer, if they're not paying or not, that's a sidebar. And then of course, like it breaks down into what particular channels, right? We do this podcast and our existing customers listen to this. And so that generates expansion opportunities for us and renewal opportunities for us. So that's kind of like that next layer. And then the next layer after that I've already kind of alluded to, it would be like, what is your individual sort of like lead source, so to speak, right? So if we're talking about inbound, are we talking about ad spend? Are we talking about events? Are we talking about our podcast? Are we talking about SEO, et cetera, right? For outbound, that could just be one channel. It's just outbound, unless I can't think of a way to split that. Obviously we've talked a lot about all bound in the past, but outbound could also like have events that are associated with it. There's a thought. Then we go into, let's see here, if I can remember my line of thinking, we now go into pipeline management. And I think like, really that just breaks down to what we have in our pyramid, like which step in that process is broken. And usually we just start at the bottom, like do we have a strong ICP defined, right? If we don't have a strong ICP defined, then that's where we want to start. And that kind of goes with everything, right? So as we get into the pyramid, it's like the ICP is the base of everything, right? And then we think about the process for each thing. Okay. So we go into that. And then now let's talk about net revenue retention. We talked about each individual step in the renewal process. I can't really think of a way to break that down any further, unless of course we want to like get deep into like, well, what is the step inside of our onboarding process or our implementation process? I can tell you that like, because we implement Salesforce and HubSpot and Marketo over the years, we have defined a really rigorous process for how we do that. And that breaks down into steps, right? So if we're thinking like, wow, our implementation and onboarding process is broken, we could drill into that. How we manage customer health, we could drill into that as well. But that's where we start to like hit this limitation of like, okay, we're at a point where we have something that we can pick. We are either going to work on improving our implementation process, or we're going to work on improving like how we do outbound cold calling, or we're not. And that's how like we end up with a revenue operations roadmap, which we have a framework on this on our website. And we say, okay, our goal is to grow net revenue retention from 70% to 90%. That's our objective and key result. We literally have OKRs built into our roadmap. If you'll take a look at it on our website, if anybody's listening. Next to that, we have our initiative. Well, our initiative is, we are going to redefine our onboarding and implementation process. We are going to build reporting for our onboarding and implementation process, et cetera. And now we have a single document that's preferably one page that we can put in front of all of our stakeholders and say, do we all agree on this? Is this the actual goal? Is our priority NRR? Is our target going from 70 to 90%? Is this the initiative that we want to take down? And we get sign off from everybody. And then in theory, in theory, that enables us to push back on anybody that comes with one of these like random
EDDIE REYNOLDSfire drills and say, oh, we now need to like go and load these new leads so that we can like do this, like cold calling campaign. It's like, OK, maybe we do that. That's fine. But depending on the lift here, is that going to delay everything that we just agreed on that is a top priority? And, you know,
EDDIE REYNOLDSthat might be a bad example because we might just need to do that in order to run our day to day outbound program. But are we going to launch a new outbound program and we just agreed that those were all the things that we were going to focus on? This is where companies get in trouble. This is where they say, like,
EDDIE REYNOLDSwe got to improve NRR from 70 to 90%. We have to do all these things. And then we all leave the meeting. Like, we should make more outbound calls. Like, let's spin up a list. And now all of a sudden, we're not working on the thing we all agreed is a top priority. Yeah. And I think we could talk for hours on like each of these little sections that the tree breaks
RACHAEL BUECKERTdown to at the smallest parts. And, you know, we have actually in our past podcasts and frameworks and stuff, we have so much content on all of these topics. But yeah, Eddie, how would you wrap all of this together? And like, what would you suggest people listening to this do right now after this podcast? If there's one thing that you'd happen to do. Okay. So let's say that I am a CRO or a VP
EDDIE REYNOLDSof go-to-market strategy and ops. And I've listened to this podcast and I'm like, I want to go execute on this, right? First, by the time we publish this podcast, hopefully we have a newsletter that outlines this. So I'd go read through that newsletter. Second, hopefully we have a graphic that explains this decision tree so I can actually visualize the thing. Next, we have our revenue operations roadmap framework. I go look at that. I would then sit down and I would try my best to assess through that decision tree, what our top priority is. And I'd, and I'd sit down with the rest of my key stakeholders. And I'd try to build out a rev ops roadmap for the following quarter. And I'd say, guys, this is what I think we need to focus on. Can I get your feedback? I'd work with everybody to reprioritize it. And then I'd get official sign off either via email or via meeting. And I'd go in and I'd get everybody to say, yes, we're all aligned. This is what we're going to focus on for the next
EDDIE REYNOLDSquarter. And barring anything that is just like an insanely urgent fire drill, we're not going to do anything else. And then we're going to get all of our resources stacked together. And we're going to focus on this. We've also written about the pipeline council. If we have a concept like this, where we
EDDIE REYNOLDSget all of our key stakeholders together for a regular meeting, we would then talk about those things in the pipeline council. The example we were giving is that we were going to like fix our NRR vis-a-vis our retention process, vis-a-vis our onboarding and implementations. And in that pipeline council meeting, we're focused on what are we doing to improve our onboarding and implementations process. We got all the key stakeholders there and we're tracking and focusing on all those tangible things that we're doing to improve that process. Only once we've done that, can we start to focus on other things. And then what I would do is I'd keep doing that. And this is what we do with our clients. Every single quarter, we revisit that. We try to look at how the landscape has changed, how the business has changed, the economy has changed, and reprioritize based on the best estimated guess of where we think we can have the greatest impact by focusing our energy.
RACHAEL BUECKERTAnd we're going to have the link to these frameworks in question in the show notes as well. So you can check that out. Awesome. Awesome. Well, this has been great, Eddie. Thank you so much for putting this together. I believe you put this together more than I did. This is all your concept. You do all the hard work though. I just like
EDDIE REYNOLDSall this stuff into a chat GPT and then you like put it together into some cohesive format that we can actually talk through. And then you're going to go like write the newsletter, which I'm really and create the graphic. And I'm super excited to see all that. Couldn't do this without you. So thank you. Thank you. Awesome. Rachel, like what else should we plug? Like what else could people
EDDIE REYNOLDStap if they want more information or resources from us? Oh man, we have so much. So the frameworks
RACHAEL BUECKERTlink will be in the show notes. You can check out other episodes of our podcast. We have a lot of content there. Also, if you want to get ahold of us, if you have any operational projects that you need to take care of strategic or execution, process design, anything like that, you can give us a shout and that will be in the show notes as well. The link to talk to us. Or that giant pink button right on our
EDDIE REYNOLDSwebsite. Yeah. Not to plug us too much, but if anybody's listening to this, you want to reach out. Most of these calls come to either me or Jerry who runs our entire delivery team. We're happy to even just lend some free advice and talk through some stuff with you. Or if you want to engage our team and we roll up our sleeves and help you out, obviously that's why we're doing this podcast.
EDDIE REYNOLDSYeah. We'd love to work with you. Awesome. Thanks, Eddie. Thanks, Rachel.
SPEAKER_06Thanks 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.
