About this episode
Eddie Reynolds and Rachael Bueckert address one of the most frustrating questions revenue leaders face: What's the ROI of go-to-market ops? Eddie, who leads Union Square Consulting, brings both analytical rigor and empathy to a question he hates but understands deeply. CFOs, CEOs, and boards demand proof before authorizing investment in GTM ops infrastructure, even when the business case seems obvious.
The core problem is that you can't measure ROI accurately when your baseline numbers are fiction. If your sales pipeline is a mess, your close rates are unreliable because reps are either sandbagging deals or chasing opportunities that will never close. You can't measure improvement against a broken baseline. This creates a chicken-and-egg paradox: you need to fix the process first to measure the impact, but the measurement is what justifies the investment.
Eddie reframes the conversation using the Warren Buffett principle: you don't need exact numbers to recognize an opportunity. Instead of demanding precision, revenue leaders should start with qualitative assessment. Ask objective questions about where execution breaks down - do leads get responses within five minutes? Are reps focused on the right accounts, or chasing everything? Is there a defined sales process that everyone follows? If the answer is no, you're leaving millions on the table.
The episode walks through a detailed financial model using a $100 million company as a baseline. Conservative assumptions show how small improvements cascade: moving from a 15% to 16% close rate generates $1.6M in new ARR from inbound alone. Adding improvements in outbound efficiency (1% better conversion rate), average deal size (+$1,000), sales cycle compression, retention (85% to 86%), and expansion reveals $7.1M in additional ARR - a 50% lift in revenue growth. These aren't aggressive assumptions; they're incremental fixes to broken processes. The episode also explores how this foundation enables leadership to rise above firefighting and scale strategically.
What we cover in this episode
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0:46
The ROI question that frustrates Eddie Why revenue leaders struggle to justify GTM ops investment to CFOs despite obvious problems.
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3:34
Kitchen fire analogy Why measuring ROI before fixing broken processes is like debating the value of putting out a fire.
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6:00
Baseline measurement problem Broken data makes ROI calculation impossible; close rates are fiction when process is inconsistent.
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8:42
Qualitative vs. quantitative assessment Start with objective questions about execution gaps before building financial models with conservative assumptions.
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16:28
Conservative improvement model Detailed walkthrough of financial spreadsheet showing how 1% improvements across pipeline, conversion, and retention compound.
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32:56
Compounding effects across funnel More customers plus higher retention plus better expansion process creates exponential growth beyond first year.
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40:18
Time savings and strategic capacity Fixed processes free leadership from daily firefighting to make bigger strategic decisions and scale.
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44:24
Engine vs. fuel metaphor You fix leaks in the engine before pouring more fuel; don't add sales/marketing spend without fixing operations.
The lines worth sharing
If the engine is springing leaks everywhere, you don't pour more fuel into it, you fix the leaks.
Eddie Reynolds · 0:46
You don't have to know if a guy weighs 350 pounds or 300 pounds to know that he's overweight.
Eddie Reynolds (Warren Buffett quote) · 4:46
If your pipeline is a mess, then we don't even have a baseline for measurement. Maybe the close rate's not 25%, it's actually 15%.
Eddie Reynolds · 6:00
If we can improve our close rate from just 15% to 16%, that would be an additional million dollars of revenue, and it won't cost a million dollars to fix.
Eddie Reynolds · 12:15
Common questions from this episode
How do you measure ROI of go-to-market ops if your baseline data is broken?
Start with qualitative assessment: ask objective questions about where execution gaps exist. Then use conservative financial assumptions to model impact. Don't wait for perfect data; fix the process first, measure accurately after.
What is the ROI of improving sales process from inconsistent to consistent?
In a $100M company, moving close rate from 15% to 16% alone generates $1.6M in additional ARR. Add improvements in lead response, outbound efficiency, and retention, and you unlock $7M+ in new revenue from a few hundred thousand dollar investment.
How long does it take to implement GTM ops improvements and see results?
Results vary by area. Lead response improvements show in hours. Inbound conversion changes appear within days. Sales process changes require one full sales cycle to measure accurately, typically three to nine months depending on deal length.
What should a revenue leader say to a skeptical CFO about GTM ops investment?
Use the engine vs. fuel metaphor: you're spending $33M annually on sales and marketing. Fixing operational leaks costs a fraction of that but unlocks millions in additional revenue. Frame it as fixing what's broken before adding resources.
Why do executives sandbagging deals and hiding pipeline complicate GTM ops measurement?
When reps hide opportunities in the CRM or wait to log deals after verbal commitment, management loses visibility into what's real. This inflates perceived close rates and makes it impossible to coach or follow up if that rep leaves.
How does fixing GTM ops enable leadership to think more strategically?
When process is repeatable and leadership isn't firefighting daily, they can analyze data to see which customer segments win more often and retain better, then allocate resources accordingly instead of reacting to crises.
SEO meta description
Eddie Reynolds on the ROI of go-to-market ops: why measuring improvement is hard when your baseline is broken, and how to make the financial case to your CFO.
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Read the full transcript · 46 KB
EDDIE REYNOLDSThe engine is the thing that we're talking about today. The fuel is the marketing budget, the salespeople, the marketing content, et cetera. If you don't have the fuel, then the engine doesn't go anywhere. But if the engine is springing leaks everywhere,
SPEAKER_01you don't pour more fuel into it, you fix the leaks.
EDDIE REYNOLDSWelcome 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. Today, Eddie and I are talking about the ROI of Go-To-Market Ops. And this is a bit of a familiar topic because we have talked before about the ROI of RevOps. Eddie, what inspired this topic for you?
SPEAKER_06And what's the difference here between the Go-To-Market Ops and RevOps?
EDDIE REYNOLDSOh, wow. Well, what inspired this? I hate this topic so much, but I'm excited to get into this because I think it's important. What inspired it is people keep asking this question, like, what is the ROI? And so I talk to CROs and CEOs and CFOs every single week, and they come to me and they share all these problems in their go-to-market. They tell me that their pipeline is a mess, that they're losing deals that they should win because reps have an inconsistent process for closing deals. They're not following up with leads, even hand raisers. People are asking for sales meetings and demos, and nobody's following up with them. Their outbound is broken, spray and pray. They're casting out a wide net, and they're aware that this problem, that their go-to-market is fundamentally broken. And when you start talking about solutions to these problems and how our team or even someone else come in and fix these problems and help them take all this money they're spending in sales and marketing and direct that into a process that is defined and well-executed, and it's very obvious that this is going to drive improvement and go-to-market, and then all of a sudden they turn around and they ask me, well, how do we measure the ROI? And I'm just like, I'm so taken aback by it because, for one, it's just so obvious to me. But I also understand and empathize with people asking me this question, which, by the way, the last person asked me this question was a senior executive go-to-market ops leader. And I was like, well, you understand this as well as I do. The reason they were interested in hiring us is because they had limited bandwidth. But I realized that it was their CFO asking this question or their CEO or the board trying to understand, how can we justify this investment in fixing this problem? And as much as it is so obvious to me that when something is this broken, you're going to get a massive impact from fixing it, I wanted to try to tackle this problem. And so we wrote out a newsletter on this. I put together some specific numbers as examples. And I wanted to talk through this on the podcast because I get this question so much that I understand that a quick, flippant answer for me is not going to be sufficient. And people are out there, whether they're trying to hire a firm like Union Square Consulting or hire a full-time VP of RevOps or make some other hire,
SPEAKER_08they know that their go-to-market engine is broken, but they're trying to find a way to justify spending money on fixing the engine
EDDIE REYNOLDSversus spending money on the next marketing campaign or the next sales hire.
RACHAEL BUECKERTIt's interesting because maybe this isn't a great comparison, but to me, it's like you have a fire in your kitchen and no one just stands there and scratches their head thinking, what are the benefits of putting this fire out when maybe I could just buy a new house or I can use somebody else's stove to cook my meal instead? It's like, no, there is very obvious benefit to putting the fire out, but people don't do that in this scenario at all.
EDDIE REYNOLDSThere's obvious benefit to putting the fire out if you're standing there looking at the fire, right? But to empathize with the people asking these questions, if you are a CRO, you understand that these things are broken, but your CFO might not understand that. And everybody's asking for more budget and the CFO has to be careful with where that budget goes. And so I do understand it. But I will also say like, I'm always reminded of this quote by Warren Buffett where he says, you know, you don't have to know if a guy weighs 350 pounds or 300 pounds to know that he's overweight. And he's considered one of the best investors in history. And what he's trying to say is, sometimes you see an investment opportunity and it's obvious. And you don't need to know exactly what you're looking at to know that the right move forward is to make the investment. And we're going to talk about why this is difficult to measure. I think part of this thing that frustrates me so much about this ROI question is, if go-to-market is broken, then we don't even have a baseline for measurement. If, for example, our pipeline is an absolute mess and you tell me your close rate is 25%, I say, I don't believe you. Reps are sandbagging. They're putting deals into the pipeline that shouldn't be there. They're not putting deals in the pipeline that should be there. We don't actually know what the close rate is. Maybe the close rate's not 25% like the report shows. It's actually 15%. And we can go in and improve it to 16% or 20%. That actually looks like a degradation of our close rate, not an improvement. But if we don't trust the number, which every time I have this conversation, it's not like the people I'm talking to don't understand this. It's not like they say, oh yeah, like I believe that our close rate's really 25%. They know they can't trust that number, but we don't have a baseline for measurement. So that's part of the reason why I have such an issue with the ROI question. The second piece is that like it's this chicken and egg problem, right? Like if we fix the sales process in this example, then we can measure the close rate accurately. By fixing the sales process, we would then improve the close rate. Think about it this way. If you're doing like a diet and exercise plan or you're thinking about it, right? The analogy I'll use here is imagine that you look in the mirror and you say, you know, I'd like to lose some weight, but my scale is broken. So it's going to take me six to 12 months to order a new scale for some unknown reason. Should I wait six to 12 months to start diet and exercise so that I can have an accurate baseline and I can measure my improvement? Or should I just start diet and exercise? And this is the situation a lot of companies are in. If we go and fix the sales process in this example, and then we wait one sales cycle or more, then we might have the opportunity to accurately measure our close rate because we have to wait for these deals to actually be closed, won or lost before we can measure the percentage of those real deals that we won or lost, right? Well, now our team is consistently executing, which should already provide an improvement on its own. And then we're able to measure it and now we can start to tweak other things and say, well, okay, we got it from whatever rate it was, we don't know, to let's say 20%. And how can we get it to 21%, 22%? And this is where we can start to tweak things and test things. And this is like the real value of go-to-market ops. But that's not the question we're being asked right now. We're being asked, like, what is the ROI of like fixing the thing that's fundamentally broken? And it's this chicken and egg thing where we can't even measure the thing until we fix it. And then after we fix it, then we can measure it, but then we can't go back in time and know like how well we fixed it from zero, except for the fact that it's really obvious. Like if we ask objective questions and we say, okay, well, if we qualified our deals really hard and only worked on the right deals, do we think that our team would do a better job of closing the right deals if they're not chasing everything else? Would our sales team have more time to prospect if they didn't spend half their time chasing deals that they'll never close? Would our sales team close more of the deals that they can close if they asked better questions in the discovery process? Would our team close more deals if we were talking to more of the right people in the right organizations? Everyone knows the answer to these questions, but we're talking about operations here, which is how do we turn these concepts into a repeatable process that our team is consistently executing?
RACHAEL BUECKERTSo if ROI is the wrong question to ask, but you still need to show your CFO or the board or somebody that this will be a good, worthy investment, what's a better approach at quantifying the impact of go-to-market ops?
SPEAKER_01So I think there's two ways we can go with this. We can go like the qualitative route, meaning like not numbers,
EDDIE REYNOLDSor the quantitative route, meaning using numbers with some extremely conservative assumptions. And I'm going to attempt to do both here in this podcast as we've also outlined in the newsletter. So let's look at this qualitatively first. Let's start with pipeline. So we're using this close rate example. We know that the way that we are managing deals is inconsistent, that each rep is running their own playbook and doing things differently, which means that whatever way is best for managing a deal, most of our reps aren't doing that. So we can qualitatively look at this and we can ask some questions. Do we think that if we do all these things that I just mentioned, we can significantly improve the close rate? Do we think that if we have our reps only focused on the right deals with the right people and the right ICP, we can improve our close rate? Do we think if we ask the right questions, if we give ourselves an avenue to get in front of the right decision makers, if we understand their decision-making criteria and their decision-making process, if we follow all the right steps that we know are necessary to win a deal and we can get our team to do that consistently, do we think we can win more deals? It's kind of an obvious answer, right? Now let's try to quantify that. Let's say, for example, that our close rate is 15%. And I'm just using that number because I think A, it's bad and B, it's kind of average. Like we're seeing a lot of B2B SaaS organizations that are like having close rates between 10 and 20%. I don't remember the exact stat, but I know close rates are really low right now across the industry. And I also know that most organizations have these problems that I mentioned. Well, if we're a $100 million company and let's say that we need to land $15 million of new business for simple math, well, if our close rate is 15%, then we need to generate $100 million of pipeline. Well, if we can improve our close rate from just 15% to 16%, that would be an additional million dollars of revenue. Just that alone. Now, what are we spending in order to achieve that result? A million dollars? Okay, so we recently published an article talking about how the average SaaS company is spending $2, actually $2.07 to grow their ARR by $1. So, instead of spending $2.07 to hire another sales rep or to spend more money in marketing to generate $1 of ARR, we spend that million dollars in order to generate a million dollars of additional ARR by having a better close rate. Okay, so we're now, that investment is now paying off 2x versus what our investment in sales and marketing is paying off, even though I think that's an awful ROI. Is it going to cost us a million dollars to hire a company like Union Square Consulting or a VP of RevOps or any number of other people just to sit down and document our sales process, implement it into our systems and our reporting, train our team, and then get our team to execute that? No. It's not going to cost anywhere near a million dollars. It's going to cost a fraction of that. And if we do that, do we think that we can improve the close rate from 15% to at least 16% or more? It seems highly likely. I mean, we can qualitatively look at this and say like, why are we losing deals? Oh, when we go around and we ask our reps, like, do you know who the decision makers are? Do you know how they're making their decision? Do you know what steps they have in their process? And rep after rep after rep tells us, no, we didn't ask that question. No, we don't know the answer to that, right? And we transformed from that to having a consistent execution of a defined sales process. It's hard to believe that that's not going to result in an uptick of just 15% to 16%. And we've only talked about one single example. Now, we cascade this across the rest of go-to-market market and you think about what impact that might have and you're in the situation where you're like, should I spend a couple hundred grand in order to improve revenue by millions of dollars?
SPEAKER_23So, at what point do we need to communicate this
RACHAEL BUECKERTwith either prospects or companies themselves need to talk about this internally before they start talking to potentially hiring assistants
SPEAKER_06and go-to-market operations?
EDDIE REYNOLDSI don't think that they necessarily need to get ahead of this. I think that this is a simple conversation that a CRO can have with their CFO and the goal of this podcast and this newsletter is to arm them with that information. I think what I'm trying to do, like I said, is to strike the balance between saying let's look at things from a qualitative perspective that are pretty objective and pretty obvious. In this example with the sales process we're not doing the right things we're skipping steps our reps are burning a lot of time and they're losing deals that they should be winning what could we maybe expect from improving that and how do we justify the ROI of hiring a VP of RevOps or hiring union score consulting or whatever hire we need to make in order to do this we can then look at this across the entire go-to-market engine so we can look at this across our inbound lead generation and we can ask qualitative questions here we can say what is our current lead response time do we even track it do we believe in our heart of hearts that we are getting back to our inbound leads especially our hand raisers within less than five minutes most of the time when I ask this question the answer is no are we following improve that process what could we potentially expect to see from our conversion rates let's now look at outbound have we done a capacity plan and a territory plan can we say confidently that our reps are focused on the absolute best prospects and only the best prospects or do we have reps that are lucky if they can cover 200 accounts and they have 2,000 accounts instead and they're playing whack-a-mole trying to figure who to call and they're not calling the best prospects this is the case that I see most of the time right so if we got them laser focused on only the best prospects with the best messaging and we dialed in our process for outbound do we think that we could reduce the number of calls it takes in order to generate a meeting and qualified pipeline the number that I put into our spreadsheet that we're going to share in the newsletter is let's say it takes a thousand calls to generate a sales qualified opportunity via outbound what if we could reduce that to 990 calls that's a really small change right that's basically like a 1% improvement but 1% improvement if we make the same number of calls could potentially result in millions of dollars across an entire sales org right and then we look at the net revenue retention side right so if we've improved our new business we now have more customers to retain what would it take to change our retention rate from let's say 85% to 86% if we have a broken handoff process a broken onboarding process if we're not tracking the health of our customers if we don't have clear processes for what to do with unhealthy customers if we don't have enough staffing to actually have the QBRs and the customer success calls necessary to turn around unhealthy accounts what would it take to have like a 1% improvement in our retention rate and if we make that improvement okay we now have more customers and we're retaining a higher percentage of those customers and then so we have a higher percentage of a larger number of healthy customers and then we improve our playbook for expanding healthy customers so we've got more healthy customers to target and a better playbook for targeting them to grow them what would it take to get a 1% improvement there and then what does that look like as you roll that out across the organization and I don't want to jump ahead here because I assume you're going to ask me this question later but we've outlined this in an entire spreadsheet and I can try to go over this high level and outline like what these little 1% improvements could add up to across all of go to market and
RACHAEL BUECKERTeverything that you just talked about like that's not even touching on overhauling the entire go to market motion or anything like that this is all just executing properly executing what already exists and finding those little incremental 1% 0.5% increases in many different places across the funnel that's
EDDIE REYNOLDSa really great point right so you think about this like we have our go to market efficiency pyramid and in that we outline like the fundamentals and the adoption like the base layer of the pyramid to say like these are the basic things that you need to process that's being consistently executed once
SPEAKER_08you get there you now actually do have accurate data this is where you can do
EDDIE REYNOLDSthings like lead attribution and looking more carefully at your close rate and your retention rate and your expansion rate etc and you can say where can we turn the knobs and turning those knobs may be like disinvesting in a certain area it may mean going and optimizing the let's imagine that we have this close rate problem where we don't really know our close rate we get our process dialed in and maybe we use some tools to augment our data even further and now we're able to see that our close rate is 30% in a certain industry or 30% for a certain size or type of company or 30% if we're able to get in front of this particular stakeholder what does that do to how we think about prioritizing our resources and go to market like what if we're able to double down on that and say okay let's spend more money in marketing let's target more of these people in outbound so that we can get in front of more of these folks where we're winning at a 30% rate instead of a 10% rate like we've talked a lot about like unblending the funnel where you say okay I've got this blended rate of 15% which is actually a blend of 10% and 30% well when we unblend that and we see oh wow like we're winning at 30% over here let's double down on that you can't do that until you have a basic process in place because you don't trust the data and
RACHAEL BUECKERTif anyone's listening to this and they're wondering like well where do I even start with asking these questions to figure out where these gaps and opportunities might be we do have and this will be in the show notes the link to our frameworks we have a couple of frameworks to help with this Eddie mentioned before the go-to-market efficiency pyramid for trying to figure out where your operational drill down and find out where some base level bottlenecks might
SPEAKER_06be that you should focus your attention on yeah
EDDIE REYNOLDSthe go-to-market ops decision tree stems from trying
EDDIE REYNOLDSto boil the ocean and saying we have to pick a horse right so if we have to pick a horse do we think that we can have more impact from improving net revenue retention or new business do we think we can have more impact from generating more pipeline or doing a better job of closing our pipeline of retaining our customers or expanding our customers and it takes you through this like choose your own adventure to drill down into the one thing that might have the most impact where you want to initially focus your energy so you know we could get all the way down to say okay we need to do better job of you know improving our outbound sales motion and then you look at the revenue efficiency pyramid and you say okay have we clearly defined our ICP have we done capacity and territory plan and we've outlined those fundamental steps for outbound and you can look at that and you can say okay like if we don't think these things are good we can allocate resources to fixing that and then we just have to ask the question which is what we're trying to ask today is is there an ROI in doing that and my point here is that when you see how broken these things are you don't need to measure it to know that you're going to have a strong ROI from investing and fixing that but we're here talking about this article we wrote for the folks and
RACHAEL BUECKERTwe're also in the middle of creating more content and tools to help people figure this stuff out themselves maybe some of that stuff will be finished and published by the time this podcast goes out and if so you can find that in the show notes as well but if not follow us and be up to date on when we launch that because it will be very exciting and helpful oh
SPEAKER_31what a teaser what
RACHAEL BUECKERTa teaser right so Eddie you kind of like touched on this before the numbers that we might be able to see throughout the funnel from making these shifts and changes you mentioned the spreadsheet that we're going to have in the newsletter yeah
EDDIE REYNOLDSso I'll go over the spreadsheet right now it may be a little bit hard to follow if you're listening to this like
EDDIE REYNOLDSdriving behind it so let's start off with like very top of funnel pipeline generation inbound and outbound right so the example I shared earlier is and for frame of reference we're going to use a company that has revenue starting at the beginning of the year of 100 million dollars just to make for easy math and industry average at least for public companies they're spending 33% of revenue on sales and marketing so they're spending 33 million dollars a year right just for a frame of reference right so if you spend a million dollars and go to market ops which I think is a gross overestimate you don't need to spend that much especially to fix the kind of problems we're talking about today but it's a nice big round number and I'm like I think I can say that you can solve this problem for way less than a million dollars so I want to be conservative and just call it a million dollar cost so we're going to start off with our outbound activities we've got 33 million dollars you're spending on sales and marketing and some big chunk of that number is going to a sales team to make a bunch of cold calls and emails etc let's imagine that it takes a thousand calls to generate a sales qualified opportunity now just like reverse math I somehow came to this number of 583 thousand calls right so a thousand calls per opportunity we generate 583 opportunities if we can improve our efficiency instead of a thousand calls it takes 990 calls it's a 1% improvement well we have the same sales team we're still spending the 33 million so we're going to make 589 opportunities so that's six additional opportunities right there now let's talk about our inbound leads let's say we have 108,000 leads right and we convert 1% of those to pipeline so that's 1,083 leads right well what if we could just improve that from 1% to 1.1% really small uptick well instead of 1,083 leads we have 1,192 qualified sales opportunities I didn't mean to say leads I meant to say qualified opportunities so you know we have over 100 additional deals in our pipeline so when we add those two things together our new business pipeline goes from 1667 to 1781 so like I said about 100 more deals we're much more optimistic on the inbound lead conversion than we are on outbound in this particular example these things are always hard to do you're just punching numbers into a spreadsheet but if our ASP is $100,000 we've gone from basically $167 million in pipeline to almost $180 million in pipeline with this little 1% or 0.1% improvement right now what if we're able to increase our average sales price from $100,000 to $101,000 that's part of the math I just gave so we're growing our pipeline from $167 million to about $180 million so that's $13 million of additional pipeline right now are these crazy assumptions is it crazy to think that if we have an outbound team that is doing spray and pray every person has 10 or 100 times as many prospects in their name than they can possibly cover and they're just canvassing them with this like inconsistent process and inconsistent messaging and instead we dial it in and we say like we're going to identify the absolute best prospects for each and every rep and only that number that they can handle and we're going to dial in our messaging and our segmentation and we're 1,000 to 990 to me that seems pretty conservative do we think that if we have leads that are coming into the system and we're not responding to them it takes us two days to respond to a hand raise or inbound lead we only like follow up once or twice instead of 10 or 15 times do we think if we implement a consistent process that we can improve the lead conversion from 1% to 1.1% to me that seems pretty conservative but since like we have this inconsistent process we oftentimes can't even measure it now we had this exact scenario with one of our customers if you'll remember we've talked about 0.25x that was
SPEAKER_34started at 0.5% up to
SPEAKER_06wait or was it 0.2% to 5% or 0.5% to 2% I can't remember I think
EDDIE REYNOLDSit was something percent to 5% conversion from lead to close yeah
SPEAKER_06and
EDDIE REYNOLDSthat was exactly what we're talking about just like a complete lack of process and just turning that into like a consistent process right so I think of being pretty conservative here saying like okay instead of going from 0.25% to 5% we're going from 1% to 1.1% so what we're doing is we're generating more pipeline via outbound and inbound we're slightly increasing the average deal size from 100,000 to 101,000 and we're increasing our close rate from 15% to 16% now each of these things on their own will pay off massively right so if we were to go and say let's just look at our leads right we've increased our lead conversion from 1% to 1.1% so that's an additional 108 opportunities in the pipeline if we multiply that by our average sales price of $100,000 then we get an additional $10 million in pipeline which is massive right if we close 15% of that remember our close rate was 15% that's an additional $1.6 million just changing our inbound process our inbound lead process from inconsistent to consistent so we shared that like we had a customer with revenue in the hundreds of millions that improved their lead to close by 25x and I'm talking about what if we could increase it by 0.1% and we get an additional $1.6 million in AR that's insane right now when we couple that we're not just talking 1.6 million in AR because we're also improving outbound we're also improving our ASP by just like 1% from 100,000 to 101,000 we're improving our close rate from 15% to 16% this takes us from 25 million in new business AR to almost 29 million it's an uptick of $3.8 million again if you're driving in the car I know it's a little hard to follow these numbers I hope that you're following the assumptions that we're making here and what you're hearing is if we have these little 1% improvements there's an extra $3.8 million to be had here just on new business that's not even including sales cycle what if we can improve our sales cycle from 90 days to 75 days well now we have 15 extra days of selling this year which increases our ARR by 4.1% that by itself is another additional $1.2 million so now instead of $3.8 million we are sitting at $5 million in additional ARR just by improving our new business process right now you could say Eddie like you're insane you think you're going to go in here and a VP of revops is going to $100 million company that would have otherwise brought in $25 million of new business and you're just going to magically find an additional $5 million of ARR these little 1% improvements are going to improve revenue production by basically 20% you're absolutely insane Eddie it's like okay maybe I am maybe I'm way off okay maybe I'm off by a factor of 10x so instead of $5 million in $500,000 okay well the average company is spending a million dollars to generate $500,000 in additional ARR and as we said I am not being crazy here to say that you don't need to spend a million dollars in order to fix these problems so let's go into the retention rate I didn't go into as much detail here because we could go into so much like from sales handoff to onboarding to how we track customer health etc etc but what if our retention rate is 85% and we just see these things broken across the entire customer journey is it crazy to think that we can improve it by just 1% so instead of 85 million retained of our 100 million in revenue we have 86 million dollars that's an additional million dollars from that 1% improvement and the way that I would look at this I would just ask like how many of our customers have a smooth handoff from sales to onboarding how many of them are successfully onboarded that we have a step-by-step well-defined process that we run every customer through to get them from contract signature to healthy customer and how successful are we getting them to healthy customer are we measuring the health of our customers based on our product usage data and other factors like customer service tickets and any other data that we can get to understand which accounts are red yellow and green and do we have a process to address those red no no no no and no or I don't know or I don't feel confident about that then is it crazy to think that by fixing that we could potentially improve our retention rate from 85% to 86% I don't think so if that's possible that's a million dollars if I'm off by a factor of 2x that's a half million if I'm off by a factor of 10x that's still $100,000 and by the way this is recurring revenue so that's $100,000 this year and next year and the year after that and the year after that and it's not going to cost $100,000 to fix that problem so let's get into expansion we think about the same concepts our ASP our close rate our sales cycle what would happen if our ASP for expansion was $50,000 and we took it to 51 cycle went from 60 days to 55 days that right there and I'm being pretty conservative we're not even talking about generating more pipeline that would be $1.1 million in additional ARR now here's the other thing we have a compound effect right we have more new business which means that if our retention rate goes up we have a higher percentage of more customers being retained if we're then trying to expand our healthy customers we have more new customers and a greater percentage of those customers being healthy and then we have a better expansion process to turn those healthy customers into expansion pipeline and so now that I look at my sheet here I didn't even factor that in like literally zero expectation that we're going to generate more expansion pipeline from having more customers and a higher percentage of them being healthy which is just crazy to me and you add these numbers up and we came out to 7.1 million dollars for making these little incremental improvements in a hundred million company so in this example we brought in 25 million dollars of new business we churned 15,000 and we found a few million dollars of expansion we ended the year at 116 million dollars how did I get to that number well if the average company is spending two dollars to grow ARR by one dollar if they spend 33% of 100 million that's 33 million dollars divided by two that's 16 million dollars in uptick that is we just published this article like a week or two ago on this that's what we're seeing across public SaaS companies right now but instead of growing from 100 million to 116 million by making these tiny little improvements that I mentioned we get to 123 million that's a 50% improvement in revenue growth which is just crazy so I challenge anybody to call me crazy and say that I'm being extreme here I think I'm being really conservative here but even if I'm wrong and I'm wrong by 10x you're still getting a pretty strong ROI from improving these operations and the other thing that's missing here is we're only looking at one year we now have more customers next year with a higher retention rate and a better expansion process so this is going to work out exponentially throughout the years to come and we've set the foundation that we can start to tweak because we can actually measure our close right now so now we can start to tweak and test things and see what works to move from not 15% to 16% but 16% to 17%
SPEAKER_24to 18%
SPEAKER_03now we can actually forecast what more ROI we can get from continued improvements and maybe even eventually
RACHAEL BUECKERTan overhaul of go-to-market because so far we've only just been making little tweaks of what we've already been doing and if anyone is listening to this and wondering what are the time and resource costs of doing all of these that happened after I think it was three or four months of us working with them that we were able to get that and I mean not every single company is going to be the exact same can expect the exact same result but that's kind of an idea of how little it takes to make these changes that makes such a huge difference yeah
EDDIE REYNOLDSI think like when you try to do a really really long time but if we take one of these examples for example our inbound lead process and we say okay what is a marketing qualified lead like have we clearly defined that how do we route leads what is the expectation for when people respond to leads what does the follow up process look like how many times do we follow up through what channels with what frequency how do these things how do we get our team to consistently execute on this process that doesn't take that long especially in this example where you have lead conversion where you can see reports change in a day you can start to tweak things really fast like the sales process is a little bit harder like we're talking about an enterprise sale that's nine months like we've done all these different things and response time in 24 hours like if you say we want to respond to all of our hand raiser leads in five minutes okay you build that process out and then you launch it and you can see the results of that on the first day you can see that in the hour obviously by definition so it doesn't take that long and the way that we work with our clients which is the way that I would recommend any go-to-market ops organization work with any whether it's a client or the company they work for is do things iteratively plan out one quarter at a time and say okay over the next three months or even two or one month what is the number one thing we want to improve in this example here if it is the fact that we have all right people from the sales source admin up to the chief revenue officer and chief marketing officer that are aligned and saying this is our number one priority we are going to fix this we are going to drive people to adopt a new process we're going to train them on it we're going to hold them accountable to doing that if we don't do that this won't work and there is different people aligned on this being the top priority and
RACHAEL BUECKERTnot everyone is going to like the stuff that we find because you know sometimes people are kind of hiding behind improper data or bad processes and stuff like that or like
SPEAKER_42you know people who are sandbagging things like that so it can be difficult sometimes to work on these things and keep everyone happy yeah
EDDIE REYNOLDSI think I mentioned this in the article I was looking at one of our customers and
EDDIE REYNOLDSthe close rate rep by rep spanned from 15% or actually no I think it was like 5% all the way up to 85% and you're like what's going on here how is one rep only closing 5% of their deals another rep is 85% like even without looking any further into the data which I did do you objectively know like that's not real there's no way that's real but then you look deeper into the data and you see okay well this rep doesn't have very many opportunities and they close 85% of them it's like okay what's happening here it's very obvious also their sales cycle is really short you can see this stuff in the data they're clearly sandbagging they're holding the deal until they get the verbal and then they send out the proposal contract whatever and 85% of the time they win the deal the rep on the other side of that equation has no idea what a qualified sales opportunity even means and every time that they talk to a warm body they create an opportunity in Salesforce the problem with this is that we don't know which of the deals the second rep is working are actually real and it's really hard for management to like even like coach them on any one particular deal because they've got so many deals and they're all just an absolute mess the other rep that's sandbagging we have no visibility into what deals that person is working and so we don't know if they're losing deals that they could have otherwise won if that rep leaves the organization we have no way to follow up on those deals because we have no record of them so this is a really serious problem for organizations but it requires holding someone accountable there's a reason that rep is sandbagging for whatever reason they think it is in their best interest not to put that information in the CRM and make it public and that's detrimental to an organization that is trying to scale and
RACHAEL BUECKERTwe've talked about this before in other pieces of content stuff like zombie pipeline where there's a bunch of pipeline that will never close for whatever reason but reps are afraid to put it as closed loss they're afraid to close them out and either that's like an issue with management or their compensation or their way they're judged or whatever it's detrimental to the entire pipeline because now your forecasting is completely off and you think you have a certain amount of open available pipeline when you actually have you know three quarters of that or two thirds of that and when you finally go to clean out all of that dead zombie pipeline suddenly you've lost $30 $50 million in your pipeline
SPEAKER_24yeah that's a tough conversation to have yeah
SPEAKER_06and it all comes down to process yep
EDDIE REYNOLDSthere's one question you have in your
SPEAKER_34talked about a lot of stuff that could contribute to how you think about the ROI of go-to-market ops but we
RACHAEL BUECKERThaven't even touched at all on the way that all of this stuff is building a foundation for the company to scale further than where they're at right now not just by like 7 million out of 100 million error business but like further to like 200 300 500 million like you need these foundations in order to scale to the next level yeah
EDDIE REYNOLDSand I'm going to go ahead and just ask the question that you wrote out as the last question you said like if a CEO is skeptical about investing in good market ops what's the one argument that might change their mind it's exactly what you just laid out one way to think about this is you're only as to have to do is to sit down with each rep or each sales leader and go deal by deal spot checking and asking questions which is incredibly inefficient trying to coach reps ad hoc and they spend all of their time trying to like dive in and save deals now I'm not saying that like fixing all this stuff suddenly means that they can just like sit there and stare at spreadsheets all day I worked at Salesforce for three years where we had this stuff in place and sales managers still spent a lot of time trying to help reps close deals but what they didn't do was repeat this same thing to every rep every single day again and again and again for years on end they built out a repeatable and scalable process and what that enables the organization to do whether it's a sales manager a CRO or a CEO is to elevate their job to the next level to solve bigger problems and if revenue leadership is stuck in the weeds every day putting out fires and trying to win deals instead of getting their reps to consistently follow the process that they know will help them generate and close business and retain and grow their customers if they're stuck in the weeds all day every day then they can never rise above it and start to think more strategically and say wow like well now that we have the process and the data we can objectively look at what's working well and what's not working in the business we can start to see that with these types of customers we win more often and we retain them better which by the way is also something i saw at salesforce but they literally came to me and they're like here are the six codes of the companies that we do best with as an organization surprise surprise it's software companies and professional services and manufacturing it's like these aren't like huge surprises but it's validating to see that and then they can say like how do we rally our entire sales and marketing engine around that what size of bigger more strategic questions because we have the data and also because we have the time because we're not stuck in the weeds all day every day and this applies across any level of the organization as a CEO myself I think about this in every area of my business the more that I can systematize things and I can make things repeatable even though we are a small company the more this process we train them we know that they're doing it I don't need to micromanage everything I can let them go and continue to execute and I can move on to a higher order of thinking and have more time to do things like this podcast exactly
SPEAKER_06okay so one last question that I have for you Eddie and then we can wrap this up what piece of
RACHAEL BUECKERTadvice would give a CRO or revenue leader that's listening to this and maybe they're facing this issue where they're trying to make a financial case to their CFO or their board or the CEO about hiring help like us or somebody else and go to market ops what's the next piece of advice that you'd give them to do after they listen to this podcast I
SPEAKER_08think it depends on the stakeholder
EDDIE REYNOLDSbe able to access from the newsletter which will be linked in the show notes so that might be helpful to look at these really conservative numbers and say take a look at this and tell me what you think do you think that if we do all of these things that these are crazy and unrealistic expectations but I also recommend that they look at this qualitatively going back to Warren Buffett's quote about the 300 or 350 pound man being overweight sit down and walk through the actual problems hey we haven't defined our ICP carefully enough we have reps that have giant territories and they don't know who to focus on our inbound leads aren't getting the proper follow-up our reps are chasing a bunch of deals that they can never close because we don't have a consistent qualification process and we're losing deals that we should be able to close because they have too many deals in their pipeline and they don't have a consistent process for managing the deals that they can win and the same problems in onboarding customers and tracking their customer health running a new renewal process and expanding customers if we fix these things we should expect to see a huge uptick I would even advise that they focus even more narrowly and say look like over the next quarter we want to fix this one problem and you know that's the go-to-market ops decision tree sit down and think like if you could fix one thing and only one thing would it be net revenue retention or new business within that would it be closing deals in your pipeline or generating more pipeline or the renewal rate or the expansion rate and drill down and say okay we've landed on we've got to fix our onboarding process or we've got to fix our process for responding to inbound leads what do we think we could achieve if we fix all these problems we just mentioned and I think that if you go to a CFO or the CEO or the board or whomever and you explain these things in really simple terms most people can get it here's all the areas where we're dropping the ball today we need to invest in building a better engine and not just pouring resources into that engine one way I think about this is Emily Kramer who's a marketing thought leader she talks about like the engine and the fuel the engine is the thing that we're talking about today the fuel is the marketing budget the sales people the marketing content etc if you don't have the fuel then the engine doesn't go anywhere but if the engine is springing leaks
SPEAKER_01everywhere you don't pour more fuel into it you fix the leaks and if you're pouring $33 million of
EDDIE REYNOLDSfuel into your go-to-market engine it's probably worth spending a few hundred thousand dollars to fix the leaks absolutely
RACHAEL BUECKERTand if anyone listening to this has further questions on this I mean I think Eddie you'd probably be very open to people emailing you people
SPEAKER_08do people email me all the time I try to respond to every email LinkedIn DM etc
EDDIE REYNOLDSwe
RACHAEL BUECKERTmight even turn it into a newsletter we did
EDDIE REYNOLDSawesome
RACHAEL BUECKERTwell thank you so much Eddie this was great likewise
EDDIE REYNOLDSthanks for taking the time to outline all these questions for anybody listening all this stuff will be in the show notes I hope that excel sheet was reasonably easy
SPEAKER_24to follow but check out the link it'll probably make more sense when you look at the link
