Marketing for Marketshare in 2021 - Inside look at a modern marketing department. - The Summit Podcast

Episode Transcript
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Intro (00:00):
Welcome to the summit.
A podcast focused on bringingyou the knowledge and insights
for industry leaders.
I'm your host Kyle hammer, andI'm on a mission to help you
exceed your potential.
As a sales guy, turned marketer,I am passionate about building
sustainable businesses.
And if there's one thing I'velearned in my 20 year career is
that you won't find an overnightgrowth scheme, a shortcut to

(00:20):
success or way to hack yourselfto the top.
Nope.
Success is the by-product ofhard work, great relationships
and deep understanding done overand over.
We're here to help you unlockthat success with some secrets
from other people, oneconversation at a time.
Can you hear me?

Kyle Hamer (00:36):
Hey Chris.

Chris Walker (00:39):
Hey Kyle, how you doing, man?
Good.
How are you?
Things are great.

Kyle Hamer (00:44):
Good.
Can you hear me okay?
Yeah, absolutely.
It sounds great.
Awesome.
I still trying to figure out tothis pull audio thing.
So yeah.
Tell me, tell me a little bitabout yourself.
Like you know, I've, I've, I'veseen you online, it looks like
maybe you're in a shared spaceor something, but I mean, I did

(01:05):
a little bit of like backgroundcreeping on your LinkedIn
profile, but I'm months agoyou're a director of marketing
and now you're like doing yourown thing.
So tell me about that adventure.

Yeah, absolutely.
Well, it's been quite theadventure, so I, I studied
biomedical engineering incollege, which was weird.
I really was passionate aboutalways passionate about about
medical devices and then got outof college and into an, into a

(01:39):
job and quickly realized that Iwasn't, I wasn't a really good
engineer and, and too, I caredway more about how customers
applied the product and actuallybuilding the technology.
And so I was lucky to be in avery large corporate
organization that helped me movein that direction.
So I slowly moved fromengineering to product

(02:02):
management, focused on newproduct development, and then to
product management focused moreon downstream with existing
products that were commercialand then marketing management,
which was all commercial.
So we had a separate team thatwas building the products, and
then once they werecommercialized, then I was
responsible for marketing tothem and, you know,
commercializing the product andthen and then took a, the, this

(02:27):
director of marketing role at astartup.
And so what happened was thelast two companies that I worked
for, one was called beta thermventure backed medical device
company growing at somewherebetween 25 and 40% year over
year during the time I wasthere.
So like, and they're, they're a40 or$50 million business.
So they're making someconsiderable moves in that

(02:50):
space.
And and so I, I came in, Iapplied what I call this like
formula, which was a mix of atechnology stack, modern
marketing and communication, andmaking it easier for buyers to
buy.
And it, it accelerated thebusiness growth.

(03:13):
And so, and then the nextcompany I went to when I left,
they put their own was Emerson,much smaller company venture
back.
I applied the same formula.
The business grew at a similarrate, but I was able to
accomplish it more quickly.
And so they put their arm, ittook 15 months to see like some
really good traction.

(03:34):
And at every sound, the secondtime I did it, it took nine
months.
And so I got, I felt like I madethem some mistakes.
I got better at it.
I learned, and now I, I applythat formula to a lot of
clients.
And so that's, that's kind ofwhat I did is, is it's an
interesting perspective too,from if you think about other
agencies that most agencieshave, people that have only

(03:55):
worked at agencies.
And so what what I've done isI've, I've been in house for
seven years.
I understand organizationalchange challenges.
I understand you know, what ittakes to get some of this stuff
done.
I've done it myself incompanies, and now I, I help
other companies take some morejourneys to either modern

(04:17):
marketing or martyr modern go tomarket strategies.

Kyle Hamer (04:22):
Cool.
So are you like a one man showor do you have like, w where
does, where does, where doesengaging with Chris begin in the
what what's

Yeah, for sure.
So, so I started this fourmonths ago as I thought that I
was just going to be aconsultant for a handful of
companies and probably make moremoney than my job and help some
people grow.
And that was it.
And it picked up a lot moreattraction than I was expecting.

(04:59):
And so at this point I have myfirst full-time employee
starting on September 1st.
We're thinking of having asecond employee, we're moving
into an office and now I havethis, I have a much different
vision for what, what this couldbe.
And really what we're, whatwe're after is we're trying to
build a, a revenue generatingmarketing agency that helps

(05:23):
small to mid-sized B2B companiestake on modern, progressive
marketing techniques as agateway to grow their business
faster.

Kyle Hamer (05:39):
That's a mouthful by the way, modern, modern
marketing techniques.

Yeah.
I mean, when you, when youassess what's going on in the,
you know, let's just takecompanies under 50 million in
revenue in B2B, we focus mostlyon hardware.
We have some software clients aswell, but it's mostly be B2B.
Hardware is where the, where themain client base is.
And when you look at thosecompanies, 30, 40% of their

(06:05):
marketing budget spent on tradeshows and events and
conferences.
So they, they have a very largeinefficient Salesforce, usually.
They're spending money on, onprint and on conference
sponsorships and on brochuresand collateral for the sales
team that's printed.

(06:26):
And so when you look at the theactivities that they're doing,
they're, they're wasting a lotof money on things that aren't
as effective anymore.
And so what we try to do is onehelp them make the most of their
existing marketing budget.
So yes, you should absolutelystill go to that conference, but

(06:47):
don't buy the 20 by 30 booth.
What's do a 10 by 10, and let'ssend an extra sales rep because
what you're actually gettingvalue from in a trade show right
now is moving for existingrelationships, not generating
leads.
And so we're changing a tradeshow strategy for them.
But we're not addingincremental, incremental budget

(07:08):
at the beginning.
So we, we move around theirmarketing budget.
They start to see results.
We add incremental budgettypically is what happens.
They start to see more results.
And then we start to, as theystart to see it work, they have
the power to start to change howthey go to market.
So maybe they start to shiftaway from an SDR outbound model

(07:30):
because they have enough inboundflow and they have confidence
that there's consistent inboundflow as they don't need.
As many SDRs is.
One is one way when with, withthose outbound, you typically
have lower win rates, longersales cycles overall just less
efficient revenue generation.
And so those are some of thethings when I talk about modern

(07:51):
marketing techniques is that'skind of how I think about it.

Kyle Hamer (07:56):
So, I mean, are you, are you working with companies
who have marketing departmentsin play and they're just bloated
and lazy and don't know what todo, or is it, we don't have it.
We've been working with thetraditional agency and now
we're, you know, our sales teamis getting frustrated.
So we're looking for a way to,to modernize our, our agency
relationship with, I mean,what's, how are you finding

(08:18):
these, these

Yeah, 100.
So the, the place where themodel works best is when the
company has an existingmarketing department and just
needs the guidance and thestrategy.
And so we provide a moderncontent strategy, but they have

(08:42):
the tools to get it done.
So they have marketing managersthat can go out and build the
content and can execute thewebinars.
And we help them through thatprocess.
We then create distributionstrategy.
We handle the distribution.
So once you do, once you havethe webinar ready, how do you

(09:03):
promote it?
How does that workoperationally?
How do you deliver therecording?
How do you chop up thatrecording into six pieces for
LinkedIn three for Facebook ads,a couple of blogs, a couple of
YouTube posts.
How do you, we call itpost-production, but how do you
make the most out of that?
One piece of content is anotherservice that we offer.

(09:23):
And so that's, that's where itfits really well, too.
I mean, the companies that, thatsee the most, the fastest
results have already taken acouple of the big quote, unquote
marketing steps.
They have a grip, they have amodern website.
They have marketing staff,typically somewhere between at
least four marketing staff.

(09:44):
They have revenues over 25million, which is a surrogate
for that.
They have traction and productmarket fit, and they have a
sustainable sales process.
And so once you, if they havethose core elements and you
layer on top, just effectivecommunication with the market,
you can see really awesomeresults.
And so that's, that's, that'swhere we love to play.

(10:07):
And we also have clients thatare in a smaller revenue range
where we do everything, andwe're, we're the outsource
agency for them outsourcemarketing department.

Kyle Hamer (10:19):
Cool.
just and curious, cause but youknow, at some point I'll, I'll
share my story if you'reinterested, but it definitely
how many clients are you, areyou handling right now?
So is it I've got five, is thatyou've got 20 where, I mean,
how, how rapid has your growthbeen over the last five months?

Yeah, so right now we're, we're with, we work with
five companies all on long-termagreements and the and the idea
is to grow that to somewherearound 15 by this time next
year.
And so we are, and that's,that's the, that's the growth

(11:03):
path right now.
So we spend we spend a lot oftime really trying to help
companies.
And one thing that's differentabout how, how I go about it is
that eventually I want theclients have the option to not,

(11:24):
w not have to work with us,which is not typically a value
prop of the agency.
And so at the last two companieswhere I was employed by them,
what I did was I came in, I ranthat formula.
I built the tech stack.
I hired people.
I gave them the contentstrategy, I'd be able to the
distribution strategy.
And they, at that point, theycould go on their way and I

(11:45):
could leave.
And so I've done that at, at twocompanies.
And so my, my goal and how we'regoing to continue grow, what
we're going to do is basicallymap out a vision where in nine
to 24 months, the company couldoperate a really great strategy
without us.

(12:05):
And we would love to continue towork with people.
But that is something that Idon't think a lot of other
agencies are talking about.
The reason that I say it isbecause the reason that I
positioned it like that isbecause it's better for my
clients, if they can do itthemselves.
And so my goal is just to makethem as successful as possible.

(12:26):
And so over the next, I mean, Iwould say today, but over the
next five years, certainly youneed to have these capabilities
in house.
You need to produce content.
You need to know how to prosepost produce it.
You need to know how todistribute it.
And so a lot of companies don'thave these capabilities.
In-House, they're outsourcing itto an agency.
It will be a, it's a competitiveadvantage in the short term and

(12:49):
not being able to do it will bea vulnerability in the longterm.

Kyle Hamer (12:58):
Hmm.
So w w I mean, are you morefocused on content production
and, you know, the, the groundgame, if you will, the organic
or inorganic ground game, ifthere's a guy that posted and I
think he's a political scienceguy or a political marketer,

(13:22):
and, you know, there's a,there's a time and a place for
having the expertise in house,and there's a time and a place
for, for shopping it out.
Are you really focused onsaying, okay, look, we come in
and we act as a contentaugmentation or content
development, and thendeployment, you, you've got the

(13:43):
expertise, we take the expertiseand we show you how to talk
about it, show you how tosegment it, show you how to make
it interesting.
And then drive traffic inbound.
Is that the, is that kind of theniche or the I'm not trying to
put pigeon, that's just whatI've kind of heard and to do.

Yeah, no, I appreciate you kind of bringing
it back to me.
So so our, our strategies arebuilt entirely on how do you
effectively communicate withyour target audience?
And so how do you do thatpresent day?
The most effective way tocommunicate with people is over
the internet, right?
At least at scale andcost-effectively.

(14:21):
And so we, we don't pretend tobe a content production agency,
because what I've learned overworking with a lot of different
businesses is that you need tobe a subject matter expert in
order to produce good content.
And so we, you know, we workwith companies that sell, you
know, huge fire extinguishingsystems and different SAS

(14:44):
platforms, and we are notexperts or understand their
customer base well enough topretend like we can produce for
them.
My content has been working onLinkedIn because I am great at
marketing.
And I talk about marketing.
And so, right.
So if I tried to translate thatand be an outsource content
production house for the fireextinguishers, like I don't

(15:06):
understand people that work atBoeing or general electric, I
don't understand their buyers.
And so we, don't, what we do iswe, we provide the guidance for,
for what content to create, howit's positioned, what, what
priorities should be.
We help the team, we guide theteam and how to go in and build

(15:28):
the content.
And then we focus on there-purposing and deployment of
it, as well as the, themeasurement, the conversions,
the tracking through the salesprocess, looking at ROI and
attribution for how well it'sworking.
They can bring that back totheir executive team and look

(15:48):
for further investment so thatwe continue to move the model.
And so you just build this, thegoal is to build a communication
machine that is, that drivesawareness, education and
convergence.
And so we typically do thatthrough through, we accelerate
that process through paidadvertising on Facebook as a

(16:12):
content distribution mechanism,not as a lead generation
mechanism, which is what a lotof people have wrong today is
they're using those, these typesof tools like LinkedIn or
Instagram or Facebook, mostaren't using Facebook, but
they're trying to use them aslead generation tools.
We use them as contentdistribution tools.
And so it's a, it's a nuance.

(16:36):
But when you have, when you putout a blog that has nothing to
do with your product, and youshow it to 50,000 people in your
target market and they read itand they're on your website and
they see your logo, and thenthey share it with that decision
maker.
And that decision maker comesback on desktop and sees your
value property converts.
That's, that's the model thatwe, we execute on, which is

(16:59):
different than how a lot ofpeople are doing it today.

Kyle Hamer (17:06):
I mean, is that fundamentally, that's just a,
it's a ground game for anaccount based marketing
strategy.
At least I'm not trying to putit into buzzwords, but that's
the, you know, if you get itright, that's really what you're
doing, right?
You're, you're targetingsomebody who's downstream that
can't make a decision with somecontent that's interesting and
engages them with the, the hopethat they share it with their

(17:28):
boss or communication for theperson who can make a decision.
And that they're the personwho's, who's converting on the
website.
And as you look at themulti-attribute across what's
happening against an accountthat that helps create insight
for, well, the value in eitherbrand awareness or content that
we're creating, those elementsare actually coming from

(17:52):
somebody who can't make adecision, but they are having
heavily influenced conversationswith somebody who is, and that
you're getting more.
Decision-Makers it's more of aquestion.
So you're, you're driving more,decision-makers through this
more decision-makers into thefunnel through this through the

(18:14):
tactic of, of reaching just kindof more of a blanket audience
initially, is that myunderstanding?

Yeah, a couple of things on that one is I really
don't like to position it asaccount based marketing for, for
a couple of reasons, we, wecertainly have, and we talked
about Boeing and generalelectric for some clients, we
have an account-based strategy.
But I think that there's a lotof confusion in the marketplace

(18:44):
created by the industry of ABM,which is that having an
account-based strategy is verydifferent than what the ABM
companies are selling.
The ABM companies are selling aSAS platform.
That's expensive to deliverbanner ads and measure how your
direct mail works.
And so we don't do that.
Mainly because I don't believethat those, those executions are

(19:07):
effective or actually drivebusiness results.
And so what we do is agnostic,but there's, there's a nuance
here, which is the companiesthat we work with have average
contract value is less than 50 K, right?
So maybe it does make sense tohave an ABM strategy when your
clients are, you know, whateverACV is over a hundred K or a

(19:30):
million dollars or somewhere inthat range.
I still wouldn't do it the waythat they're doing, but I think
that it does make sense at somelevel, but we're targeting
broadly.
Like, let's say for instance,we're the going after we have a
product for the emergencydepartment we're going after
emergency medicine physiciansthat work in a hospital.
I am not, we're not targetingBoston children's hospital,

(19:54):
we're talking, targetingemergency medicine physicians
broadly, and the influencersthat work with those people.
So there's nurses, respiratorytherapists direct, you know
medical directors.
And we, what we're doing is justdelivering educational content,

(20:14):
because if you deliver goodcontent and you have a good
product and people are aware ofit, we just trade on basically
the awareness that's generatedthrough that.
And so I kind of went on a rantabout ABM, so I'm not sure that
I fully answered your originalquestion, but I I've tried.
So if I, and you can just, youcan maybe reiterate it.

Kyle Hamer (20:36):
Okay.
Just again, just curious, Chris,I mean, how you define it.
There's, there's a lot of nuancein, in marketing, and there's
definitely a lot of buzz wordstoday.
What, when I say account basedto me account based is not what
we think about at an enterpriselevel where I'm targeting an IBM
or a Google or a Walmart.

(20:57):
That's a, that's a nuancestrategy in and of itself.
What I'm, what I'm speaking of.
I think more specifically foraccount-based is, is this is a
targeted group of folks who arelikely to convert.
And I may not be able to get tothe decision maker because I
don't own that contact, or Ihaven't created that

(21:20):
relationship yet, but I do knowthat by focusing on either this
geography, this account type,this specific job title, and in
the way that I put together mycontent and my education I'll
influence the account toactually come in as an inbound
lead.
And that, I mean, at its coreaccount based marketing is

(21:44):
actually marketing.
Somebody just put a bigger or adifferent term on it.
It gets more complex as you lookat, you know, trying to get
Walmart to buy your e-commercepay-per-click solution or
something, right?
Like there's so many layers thatyou're trying to convert to, but
I guess it's my belief thatevery business, if they know

(22:05):
their market, they know who theywant to be, their customers
like, they're like, Hey, I knowI want these 50 or these hundred
hospitals in your example, oracute care facilities or
clinics.
Right.
If I could get these 10 doctors,right.
Those would be the people thatwould make a difference to my
organization.
And you don't necessarily getthere directly.

(22:30):
I mean, I suppose you could.
And some guys do, but thereality is, is that there's a,
there's a ground game or amarket development strategy
using content and the internet.
It sounds like maybe you figuredout a formula that seems to
work.

Yeah, it has.
It has really been working.
We have, I mean, we built it.
We've made it go faster.
And for every business we'veworked with, since, since I was
doing this in 2016 has seensimilar growth path, very
predictable.
And so we've been able to figureout one the order of the
activities to do we've figuredout what tools we need, what

(23:15):
tools we don't need, we've mademistakes.
And so we don't make them again.
And so, yeah, I think we do havesomething that that's working.
One thing that you mentionedthat I thought was, I'd never
thought about it this way, butthere are a lot of businesses
that target broadly across a lotof industries.
Right.
And so like a SAS platformthey're selling you know, VIP

(23:40):
phone solution or something likethat.
They have so many industriesthat to after then, it's really
hard to create meaningfulcontent for any of them.
And so one thing that I've just,as you were talking about it,
that I realized is that all ofthe clients that see really
great success from our work havea well-defined target ideal

(24:07):
customer profile that allows youto go very deep in that area.
Right.
that was something that I hadn'thadn't thought about, but that
might be why our contentstrategies work so well.
Is that over time?
We just, yeah.

(24:27):
Like we're putting out contentrunning ads on it.
So we're getting feedback fromalmost the entire market.
Like, you know, we we're runningFacebook ads.
There are 50,000 respiratorytherapists in the United States
and we're touching 46,000 ofthem in 24 hours.
Like that's just the power ofthe platform.

(24:47):
And so we can put something out,get feedback immediately, you
get 200 comments from peoplethat feeds your content
strategy.
It's just like this never it's,it just continues to perpetuate.
And so that might be why itworks so well because we can, we
can iteratively understand theaudience better and continue to

(25:11):
give them what they want andcontinue to learn from them,
which creates this cycle of alsoimproving just your general
marketing messaging.
So we've used it to testmessaging before as well, or
launch products or promotewebinars.
The application of the tool isFacebook ads that is, or I'd say
Facebook, it includes Instagramor other media properties that

(25:32):
Facebook owns is just sopowerful and has so much
attention of the United States.
And so people will sometimestell me my, my audience doesn't
use Facebook.
Like, that's great.
I understand that it works for,it's worked for those six
businesses, but you know, ourwe're going after brain surgeons

(25:57):
and they don't use Facebook.
And then all you do is it takesme three seconds to go in and do
the research and look for thetitle, you know, brain surgeon
or whatever the actualprofessional title is for that
position.
And it'll tell you immediatelyhow many daily users in that job
site will go on Facebook andit's not zero.

(26:18):
And so I think people, the onethat they have an adapted to, to
the idea, because it's a socialplatform, but it's our job as
marketers to, to know wherepeople are and then adapt our
messaging to the platform thatthey're using.
And so that's something elsethat I think we take, we do very

(26:41):
well here is how to communicatea B2B message within a platform
that is traditionally viewed asB2C.

Kyle Hamer (26:56):
Interesting.
All right, look, it, it, it it'sobviously working, which is
fantastic for you, but you knowwhat, one of the reasons that I
wanted to get together today andchat was, you know, we you
posted something and said, Hey,look, this is no longer the this
is no longer the 19 hundredslike marketing can actually

(27:20):
attribute there.
They're probably driving as muchsales specifically, as you get
into SAS, the blend between asales person, a marketing person
is, is is very that the variancethere is getting smaller and
smaller.
And you said, Hey, maybe it'sabout time for marketing to step
to the table and start talkingabout their value and maybe

(27:41):
earning variable comp equitableto, to a CRO or a VP of sales.
And, and what does that looklike?
So it was really interested toget your perspective and where
that kind of came from.
And then talk about that alittle bit.

Yeah, 100%.
So a couple a couple points tomaybe clarify on that.
And I try to do my best in thecomments.
One is that in order for that towork, the marketing team needs
to be advanced.
And by advanced, I mean, theyhave to be able to actually
drive results and actuallymeasure them.
And so that eliminates quite afew marketing teams from this

(28:21):
discussion straight away, right?
There are a lot of teams,marketing teams that are doing
these activities.
They're not measuring them in away that makes, that is able to
have a compelling proposition.
And so those people, this maynot be the right conversation
for it, but there are alsomarketing teams that are, that

(28:44):
are communicating effectively,are driving leads that are
closing faster and at a higherrate than outbound.
And so the way that I looked atit, and I think it's a good way
to communicate is we are payingSPRs on variable comp to
generate leads that are A'sclose.
So why wouldn't we think, atleast consider the idea of

(29:05):
paying marketing on variablecomp for doing the exact same
thing that SDRs are doing justin a different way, because
that's what we're doing, right?
We're delivering content, we'reeducating people, we're creating
leads.
That's what an SDR does.
We're just doing it a differentway.
And so I think when you thinkabout it that way, it's, it's
it's a more interestingconversation because the, the,

(29:29):
the value that marketing bringsto a business has changed
dramatically over the past 10years, the, the importance of a,
of a high, exceptional marketingteam inside of an organization
that's trying to grow fast isreally, really important.
And I think that the analogy Imentioned to the post was that

(29:51):
this it's not Salesforce 2002anymore.
You can't just hire you.
Can't double the size of yoursales team and expect that
you're going to double yoursales.
It actually doesn't, it used to,it did work like that at one
point, but it was probably inthe, in the 1980s and nineties,
but it does not work like thatanymore.
And so, and, and I'm not sayingthat in theory, I've watched

(30:13):
companies make that mistake andhire twice as many double the
reps from 20 to 40 expectingthat the revenue is going to
double because they doubled thequota and that's not how it
works.
And so you need, you need amarketing engine to fuel your
sales productivity.
And if those pieces of therevenue engine aren't aligned,

(30:33):
then all you're doing is justlowering your sales
productivity, because you arerefusing to invest either the
right marketing talent or theright marketing activities.
And so that's the way that Ithat's the way that I see it.

Kyle Hamer (30:49):
So you said a couple of things that I think are, that
are interesting.
The first thing you said ismarketers who are doing it
right?
Could it's at least implied.
It may not be explicit, butimplied that could replace us
the RS.
The, the other thing that Ithink you said that was, was
interesting there, Chris is thisconcept of you need the right

(31:12):
talent.
What, so first, first questionfor you is, is, does marketing
really effectively replace SDRs?
And then the second question iswhat, what are the right
skillsets that you think arerequired for these companies
that have the four to six personteam in that$25 million a year

(31:33):
to, to effectively have animpact on sales?

Yeah, absolutely.
The answer to your firstquestion, is this a mechanism to
replace SDRs?
The answer is no.
I think that you will, youshould have contributions from
multiple sources, but the factof the matter is that outbound
sales is declining ineffectiveness for most
companies, unless you have anabsolutely killer product.

(32:01):
People are harder to reach.
And so and I've seen this at allthe companies that we work with
that use an outbound model andwe'd go into them and they're
doing outbound.
Their outbound leads areconverting from demo to sale, to
sale somewhere between two and7%.
And if you can layer on aninbound model where we've had

(32:23):
this happen, where inbound leadsare closing at 30 to 35%, it
just balances, it balances yourpipeline and it lowers your
sales overhead, and it increasesyour revenue efficiency just by
making these small tweaks.
And this is, it's not, it's notgoing away.
It's kind of like, this is thestart of getting on the

(32:46):
treadmill for when you're goingto run the marathon in five
years.
Like you, you need to have thesecore capabilities because the,
but outbound SDR model, as itstands today is not going to
work for that much longer in myview.

(33:09):
And I, and there's plenty ofpeople that would argue that
point.
I believe that people that theway buyers buy things is
changing considerably.
I look at my own behavior.
I look around, I see how smartcompanies are changing, what
they're doing.
They are no longer dating demos.

(33:30):
They're publishing a demo liveon their website.
They're publishing all of theirpricing.
You can buy a$30,000 contractover the internet and people do
that.
And so, and that's, that's goingto become the norm for the smart
companies that move in thatdirection.

(33:52):
Then the other side you'vementioned, what are the skills
that companies need?
So let's say they're in the$25million range at the$25 million
range.
Your, your communicate marketingcommunications downstream
marketing team is probablysomewhere between three and
eight, depending on what type ofbusiness you're in and the
business model.
And so what skills do you need?

(34:15):
The number one thing that youneed is you need the architect.
So the person that can see, Imean, you could call that the
director of marketing, you needsomeone that can see the whole
field.
And, and then you buildspecializations around that.
But without the, I I've madeanalogies to being the conductor
of the orchestra or anything,there needs to be someone that's

(34:39):
delivering the strategy, becauseif you just hire a bunch of
specialists with no cohesivestrategy, you're not going to
get the effect that I'm talkingthat you could get.
Okay.
And so underneath that you neednumber one, somebody that can
produce content.

(35:01):
So I would think that person, Iwas on the phone with a startup
in San Francisco on Monday, andthey were talking and they were
like, we try, we have the SASproduct, and we're trying to
sell it to sales enablement, butwe want to hire a content
marketer.
And I said, no, if you want tosell to sales enablement, then
you should hire someone.
That's an expert in salesenablement, and either teach

(35:21):
them how to do content or hiresomeone else that can pull the
content out of them and thendeliver it, if that makes sense.
And so you gotta have a, youhave to have someone that's an
expert in the audience thatyou're going after.
Number one, the second one isyou got to have someone that can
build pictures, videos, all ofthat stuff.

(35:45):
Cause that's how we, that's howcommunication happens over the
internet today is in videos andpictures and words on websites
and social media platforms.
Essentially the last person thatyou need is the person that does
the distribution.
So ads analytics, measurement,all of those types of pieces to

(36:12):
deliver the content to the rightpeople.
And so if I was building builtbuild teams like this, so it's
not like if I was, I had builtteams like this you need, you
need that's.
The core is you need those, the,the leader in those three
people.

Kyle Hamer (36:31):
So you get the, the leader in those three people who
gets compensated like the SDRs,who gets the variable portion of
the comp.
So is that the, the entiremarketing team, is that just the
leader and the architect?
Where does, where does, youknow, as we explore this topic
of paying marketers, like asalesperson, who's the variable
comp actually rolled down tolike, who's, who's got upside

(36:52):
tied into this.

Yeah.
I mean, I think to be honest, Ithink it's all or nothing on
that, on that side.
And so I think it's the, in thecompanies where I've operated in
and I've seen the revenuegeneration, and I understand the
sales commissions that are paidon, on the leads that I'm

(37:17):
delivering that are convertingto revenue.
You know, I wanted, when I wasworking in this company
companies, I wanted a piece ofthe action because I could
consistently deliver leads thatwere converting to revenue much
better than other lead sources.
And so I, you know, I would feelcompelled to, to get on that
program and, and have the entiremarketing team aligned on the

(37:40):
same thing.
And I don't, I really don'tthink this works for a lot of
businesses.
I do think that for a selectfew, it would work well, and I
would not in any, any fashionpay marketers on leads, the
metric, the metrics would berevenue.

(38:05):
And so potentially, and I'm, I'mreally thinking out loud here.
I have not thought about this atall.
Is that a, what's a say for sakeof congregants, say community
numbers, a hundred grand salaryinitially for a marketer with
like a S a small, but let's justsay 10% potential bonus.

(38:25):
So they, at most, they're makingone 10 and their current thing.
And the way that you couldchange it to is instead of the
hundred salary go to 70 insalary, but they get a 50%
upside.
So that could what their, theirOTE somewhere.

(38:47):
I mean, I'm doing the math in myhead right now, and I thought it
was going to be simple, but it'snot.
Part of which has go back topart of their variable
compensation could be on thecontribution of inbound revenue.
So in, in teams that I'veoperated in that are running the

(39:09):
model, you should have aninbound contribution to revenue
of at least 30%.
And so if that's the case, scorethem on that gross value of the
contribution.
And then potentially there'sanother piece of the, of the
comp plan where it's just didthe company hit their revenue

(39:29):
goal, which would be mainly,would be objective of creating
more alignment between themarketing communications team
and the sales team.
And so I'm trying to find wayshere.
I think one of, I mean, there'sseveral real issues that I see

(39:50):
in sales and marketingalignment, and it's just kind of
like my, this is from myexperience.
And all of them are a lot ofpeople give these tips on, you
know, have more meetings withyour sales team, but the sales
and marketing alignment issuesare created at the executive
level and at a strategic level,not a tactical level.

(40:11):
And so the, the issues with thealignment are the sales and
marketing, the CMO, and if CROor whatever their titles are,
are not aligned on go-to-marketstrategy, they're not aligned on
their compensation plans.
They have misaligned metrics andthat just moves downstream
throughout the organization.
But the, the how you solve thealignment issues are, is that

(40:33):
you've fixed the metrics, thecompensation and the you have
full alignment on go to marketstrategy is, and that's put
very, that's a very simplisticway to think about it.
I know it's much morecomplicated.
But that's, you know, some ofthe things that I would start to
look at if I was, if I reallycared about sales and marketing
alignment, those are some of thethings that I would look at.

Kyle Hamer (40:55):
So, I mean, there's a, there's a couple of questions
I have in there that, you know,one of the things that you said
was, is, you know, I watched, Iwatched it was coming in and I
saw that we converted better.
And I knew that we had a 30%attribution to the inbound
portion related directly to therevenue.
So we were contributing 30%, youknow, some sales leaders is
going to look at you and say,Chris, that just sounds like

(41:17):
sour grapes, man.
I mean, you're the guy whosigned up for the guy who signed
up for marketing, and we're thepeople that actually have to get
them across the line and close.
How do you, how do you resolvethat for the sales leaders or
the, the organizations that areresistant to this, this concept
of, you know, commission-basedmarketing.

So the way that I always try and look at this is
from a long-term businessperspective.
And so if we look at itlong-term as a CEO CRO CMO
conversation, like right in themiddle of this, bro, I'm like

(42:00):
right on the call.
Can you, yeah.
I mean, sure.
It's just really distracting.
Sorry about that.
What was the question again?

Kyle Hamer (42:13):
So the question is, is sounds like sour grapes, and
you said, you know, if you werereally thinking about this,
trying to align sales andmarketing and make it a
commission-based marketing,right.
So marketers are going to getsome sort of sales action.
How would you, how would youtalk to the, the sales leader?
How would you, you know, howwould, how would you move an

(42:34):
organization away from thinkingabout it as you know, the
salespeople are the only peopledoing the closing?

Yeah.
So I th I, I think we need tolook at this from a, from a
long-term business perspective.
And so when we look at that thefirst, the first thing that if
you don't recognize this point,then it's never going to work is
that the value of marketing hasincreased consider that the
necessity for marketing hasincreased considerably over the

(43:05):
past 10 years, 10 years ago, youcould have a 40 person sales
team and one marketer and dowell, that does not exist
anymore.
You're going to burn cash orhave a cost center from, as a
sales team.
If you operate that way, thereason being is that buyers

(43:25):
changed.
And so the, this is not a it's,it's a really tough conversation
to have, if you think about itfrom your own perspective.
But if you look at it from abuyer's perspective, there's
plenty of research out therethat shows that buyers actually
spend more time with theinformation that marketing
distributes than they do withthe sales team.

(43:45):
The, the estimate from Gardneron this year is that during B2B
complexity to be buying process,they'll spend a buyer will spend
6% of their time with a vendor.
17% total split across threevendors is 6% of the entire
buying process is they're goingto spend with our sales team.
And so how do we make that 6% ofwork so much?

(44:10):
Like how, how do we as marketersuse the rest of that time so
that when our sales rep getsthat slot of time, that they are
the most effective, they can be,how do we arm the buyers with
the right information?
How do we deliver the rightmessage?
How do we get them so ready forthat conversation, that the bot
that the sales rep can do, theydo best, which is help someone

(44:35):
solve a problem and, and, andbuy a product.
Right?
And so I think a lot of there'sa lot of stuff going on in sales
right now, where salespeople arehaving to convince people that
the product is right for them.
If you do your marketing, right,the buyer's already convinced.
And so we see that, and thatshows in sales cycles and win

(44:57):
rates when inbound leads comein, and this is the assist from
my experience.
But if you're not seeing theseresults and there's something
wrong with your inbound activityis that inbound should, should
close at a rate at least three Xhigher than outbounds.
So if your outbounds are closingat 10%, your inbound should be
closing at 30% or higher.

(45:18):
Your sales cycle length shouldbe at least 50% shorter on
inbounds.
So if your sales cycles are one80, they should be at least
nine, at least under 90 daysfrom inbounds.
We've seen them at under 60days.
So like, if you think about itfrom a pipeline velocity, how
fast you can move deals throughyour funnel, you've just

(45:40):
accelerated your growth by threeX by cutting your sales cycle
like that.
And so when you kind of bring itback to a macro business
conversation, how do we get moreof those opportunities in the
funnel that are closing fasterin the higher rate so that our
sales team can be moreproductive and more efficient?
It's a, it's a, it's an obviousbusiness conversation to have,

(46:00):
if you understand the concept ofpipeline velocity.

Kyle Hamer (46:06):
So what do you do with the so what do you do with
the revenue?
I mean, it's, it's or your costof goods sold.
Do you expect that inbound leadsare retained better?
Do you tie a retention metricagainst that for your marketing
team, or is the marketing teamonly focused on driving leads?

(46:29):
I mean, there's marketing is somuch bigger than just just
demand gen.
How do you, how do youcompensate fairly and
appropriately across the other,the other elements of what a
marketer's got to do?

Yeah, I mean, that's a, that's a fantastic
question.
So I mean, one of the businessesthat I've worked with most, and
that's what I'm going to bespeaking to right now, it's
businesses that have very highcustomer lifetime values and
very high retention, and theyhave a great success program.
Okay.
The hardest part is acquiringnew businesses, which is going

(47:09):
to fuel the growth because asyou bring more customers in, you
can, it's usually a land andexpand.
So you have a small sale, you goin and you go, and you do run
that success program to get thecustomer to recognize the value.
And you grow in that accountconsiderably.
The problem is actually gettinginto account.
So most companies will havethis.

(47:33):
Most, most companies will havesome type of similar model
unless they're doing somethingvery transactional or super
enterprise, right?
So if you think about HubSpot'sprogram, they want to get you
into the$50 plan, and they wantyou to see value so that you get
on the$4,000 a month plan,eventually that's their goal.
And so we will look at companiesthat do that at varying scales

(47:57):
of terms of money.
And so, yes, I do believe thatthere's a piece on there, that
marketers should be focused onbrand and success and things
like that.
My real narrow focus has been onthe acquisition because I think
it's the most, it's the easiestplace to attack right now with,

(48:23):
with these types of activities.
And to be honest, most companieshave already had a very good
retention program.
So it hasn't been a focus forme, to be honest, I guess I
didn't answer your question.

Kyle Hamer (48:42):
No, it's, it's, it's, it's just, it's, it's
interesting when you say verygood retention, what is that?
Is that a 90% retention rate?
Is that a 70% retention rate?
What did, what do you

Well, well, yeah, above 95, 95 to 97.5.
And so that means your[inaudible] are 20 years.
Like that's that's or, or your,your customer lifetime, if
you're at 95% or 95% retentionis 20 years.

(49:18):
Right.
And so obviously not everycustomer is going to stay that
long, but on average, at leastif you extrapolate out based on
the current retention rate,that's a, that's a strong
retention.

Kyle Hamer (49:28):
Well, it sounds to me, like up to this point,
you've been, you've beenfortunate with companies that
have, have that figured out, buta lot of, a lot of organizations
don't experience that time.
I mean, in, in a hyper-growth,right.
So, I mean, we, we cause the,the model you're mixing here,
which, which is interesting isyour mint, you're mixing a

(49:51):
highly sticky long-term can'tlive without you.
Great product market fitorganization with a hypergrowth
compensation model, which istypically drive lots of logos
into the organization, convertedhigh velocity and expand your
market footprint.

(50:12):
But the systems, the operationof the business is usually not
built to digest that type of, Imean, they're there they're
built for steady, consistent,you know, predictable growth.
If you know, all of a sudden youstart, you start converting at a
higher rate or start driving ina tremendously you triple their,

(50:36):
their closing volume.
The organization is going tohave trouble maintaining that
same level of, of customersupport and customer care, just
because it, it, it's going to bea shock to the whole system,
right.
Accounting is not going to knowwhat to do because they're
processing more invoices,customer services is going to
know.
I mean, we haven't scaled,right.
I mean, it just, it causes lotsof organizational challenges as,

(50:59):
as a by-product of, you know,compensating a marketer as a
salesperson, at least that's athought, did I miss that?
I miscategorize that from, froma like, Hey, we've got this
really healthy whole land, notlate.
Yeah.
Late in expanded model, but youknow, they're going to be around
for a really long time in thishyper-growth model.
Like who, at least who, who doyou know, that's out there?

(51:23):
That's doing that well today.

Yeah.
I think one interesting pointthat I want to make is that I
actually don't believe that thecompensation model changes
behavior.
Like if I was compensated this,that way, I would be doing the
exact same things that I amtoday.
The reason that I think thatmarketers should be confident

(51:48):
that the right marketers shouldbe compensated that way is
twofold.
One, because they are socritical to a modern revenue
engine, they should becompensated that way and aligned
with sales.
Number two is that you need toretain top marketing talent, and
this is a mechanism to do so.
And so you know, I don't think$150,000 salaries for marketing

(52:15):
managers is the right way to dothis.
But I do think that if you havea team of three marketing
managers that are crushing anddriving considerable business
and your sales team is beatingquota, and all the AEs are
making one 20 to 200, that themarketing managers should be
able to celebrate that from afinancial perspective as well,

(52:37):
because they are part of theengine.
And so that's, that's really,

Kyle Hamer (52:42):
Yeah.
Look in, in you know, I'm, Imade this, I made this comment
in the, in the LinkedIn comment,I think.
Yeah.
I think there's a couple ofthings here.
There's a couple of things herethat at least I wouldn't say
need to be thought through, butyou need to be careful with the
perspective a sales manager ontarget earnings, right?

(53:04):
A sales manager is going to make120 to$180,000 a year, depending
on the organization.
That's a sales manager, thesales leader, the director is
going to make one 80 plus.
And if you get into the VP andCRO levels, you're looking at
two 50 plus, right.

(53:26):
For an organization to say,okay, now we're going to pay the
marketing person equally.
There's a, there's a, there's atremendous consideration that
has to happen there rightacross, across the whole, the
whole organization.
And what I don't want to do isget out here and talk about
equitable pay for marketers and,and retention, and then undercut

(53:49):
the market.
Because if the value is thevalue is right, how many people
say, why do value based pricing?
Great.
You charged$60,000 for somethingthat costs a penny to make cool,
pay me, like, like pay me likethe value that I'm bringing to
the organization.
And I don't think that there'sanything wrong with that.
But there's a lot of riskassociated with that.

(54:11):
And there's a lot of risks onthe building, right?
If you, if you're a marketeryou're Chris, eight years ago,
right before you took this firstjob before you had all these
mistakes, before you figured outthis whizzbang, you know, Hey, I
got this philosophy, you'reeating ramen noodles, dude.
Right?
Like you're starving.

(54:31):
Right.
And by the way, so as theorganization, like, there's a,
there's a challenge with that.
And then what do you do?
What do you do when they changesales mechanisms?
What do you choose when theychange sales strategies?
Then they go, they go from I gota sales leader, who's high
velocity to a sales leader.
Who's like, man, I'm a littlemore applauding.
We'll get there.
When we get there to a salesleader, who's like, you know

(54:53):
what, this is more of anenterprise sale.
It's going to take 90 to 180days or more.
I'm not worried about it, butyour compensation and your model
and your velocity trap is builtaround the you know, the high
velocity guy.
Like how, how, how do marketersnavigate those types of things
as it relates to compensation?

(55:13):
Because those are the thingsthat they can't, they can't
control.
Ultimately, a marketer cannotcontrol what's closed, and
that's gonna be the that's goingto be the, the rub for this
conversation.
I think for a very long time isthey're gonna say, well, the
marketer didn't actually closethe deal the sales person did,
or the sales process data, theconversations that we had.

(55:36):
What do you, what do you thinkabout that?
Like,

Yeah.
Yeah.
I hear you loud and clear.
And I think he makes some reallygreat points.
One, one thing I am not in anymeans advocating for equal pay.
I do not believe that a marketerand a salesperson shouldn't be
paid equally.
I believe that they should bethat they should have aligned

(56:00):
incentives.
Right.
And so that's, I think that's anuance that I might've missed in
the post.
I don't want both people to bemaking the same amount of money.
I, as a, as a marketer thatworks with plenty of
salespeople, the salespeopleshould make more money.
Like if they're doing their joband the marketers doing their
job, the salesperson should makemore money.

(56:21):
And I I've met would neverargue.
At least, at least I would notargue that today.
And we'll see in a decade, Iwon't say never.
But for now, absolutely thesalesperson should, should be
compensated at a higher levelthan a marketer for, for that.
I

Kyle Hamer (56:43):
Can, I, can

I, can we comment on that statement?
Yeah.
So here's where I think you andI might disagree

Kyle Hamer (56:53):
If it's a high velocity transaction, let's say
it's sub 20 days.
Okay.
The sales rep, how much sellingare they really doing?
Like, like, let's be reallyhonest if you said it's 6%,
right?
6% of the time they're going tospend in this sales cycle.
It's 21 days.
That's how long it takes toclose this transaction who

(57:15):
actually did the majority of theselling, the marketer or the
sales person, like who reallywants to go backwards.
Right?
Like it's,

You're preaching, you're preaching.
I think,

Kyle Hamer (57:27):
I think to, to a small degree, actually, I, to a
small degree, I think to a largedegree as marketers across the
board marketing has giventhemselves a black eye by
saying, well, we're not actuallyselling.
Yes, you are.
The second somebody isintroduced to your Facebook ad
the second even if it's just apiece of content, right?
Oh, I'm not selling.
Yes.
You are like, you're starting aconversation.

(57:48):
It's like, it's like somebodysaying, Hey, I walked into the
bar and I saw somebody who isattractive of the opposite sex
or the same sex or somebody thatI was interested in.
And I didn't dressappropriately.
But I came back in my, my wellto do's and then over like three
weeks, they're like, Oh, Iremember you.
You're the person with thewingtip shoes, whatever it is.
Right.
Like that is part of selling.

(58:09):
But it starts as like the salesdoesn't start at the point,
which the lead is handed tosomebody that becomes the phone.
Like, Hey Chris, this is Kylefrom XYZ company.
And I'm calling you because youfilled out our lead form.
Like that's not where the salestarts.
And, and I agree.
And I think in, in, in marketerstoday, we're like, we're also
focused on leads or we're alsofocused on you know, brand

(58:32):
awareness.
Yeah.
Looks like, ah, yes, that'simportant.
Don't get me wrong.
Like, I'm not, I'm not sayingthe brand is not important, but
the sales team only has X amountof days to engage with somebody
the rest of the time.
We're, we're, we're cutting ourT moving a lead through the
process, trying to figure outwhat the sales process is before

(58:55):
they entered the closing cyclebefore they enter that here's my
credit card, right?
Our job, if we do our, I knowthis is a personal belief.
My personal belief is that ifmarketers are doing their job,
somebody shows up and says, Hey,Chris, I'm Kyle, here's$30,000
in my credit card.
I want this.
Right.
Like if we did our job, right,the sales team is effectively

(59:16):
the drive-thru order-taker.
And McDonald's like, it's, it's,it's transactional.
If we

Did with great marketing holes just pulls
product through distribution.
And so right now teams or teamsare built on pushing their
product into the market.
And the companies that, thatreally grow in win are the ones
that have marketed.
And the customer pulls theproduct through the channel.

Kyle Hamer (59:40):
Yeah.
It in your green here.
Oh no.
I th we we've been in agreementthe whole time.

I wasn't an organization

Kyle Hamer (59:50):
For for, for quite a while where I was compensated
equitably.
And when I say equitably, Imean, on the pay scale was the
exact same as the VP of sales.
Like it was when I walked in andsaid, I'm not taking the job.
If I'm equal, equal work, equalpay, and you have a, you have an
engine that's busted right now.
If you want to get it fixed,this is how we, this is how we

(01:00:11):
fix it.
And I'm going to tell you forthe first year and a half, I
didn't make a single penny incommission.
And it was Rudel.
Right.
I took a pay cut.
I took a step back.
And you know, I didn't, I didn'tmake as much money now when we
got to figure it out, the upsidewas pretty nice, but it took a

(01:00:32):
year and a half to figure itout.
It took a year and a half tofigure out what was, what was
busted in that particular model.
And it would, you know, I camehere with same as she was like,
I got a preconceived, if this ishow this flywheel works, and
this is how that goes, but theorganization wasn't in a
position to execute well.
We also went through four salesleaders in three years, high
velocity guy, mid mid range guy,guy didn't really know what he

(01:00:55):
was doing.
A person that wanted to build anenterprise SDR STR model.
None of that had, but if youbuild your flywheel for one of
them, and new guy comes in, yourflywheel, doesn't work for the
next guy.
And so those are things that aswe have this compensation
conversation, most marketers areadaptive enough to handle the

(01:01:16):
next, the next transition, thenext person coming in.
But the, the, the reality ofwe're excited with this, Oh, the
, the reality of, of the chain,the time it takes to change how
they're working, somebodythrough that sales process,
based on the closing or thefinal, you know, the final 60

(01:01:37):
days, the final 20 days, thefinal 15, it takes time to
change all of your tacticsupstream to make that, make that
velocity change or make that,make that flywheel work.
And, and those are things thatthe marketers who are going to
try and pound the table forequal pay, they need to
understand, Oh, this is going tobe, they're going to hire a new
high velocity guy.

(01:01:57):
And I'm more of an enterpriseplay.
There's probably not a goodplace for me to try and get my
commission, right.
Or, Hey, you're an enterpriseorganization when you sell this
and it takes 180 days, but I'mreally good at delivering
transactions that happen under20.
Yeah.
I probably, I probably shouldn'ttake on this position and expect

(01:02:18):
to make this thing.
And it just, it's, it's settingour own expectations so that it
doesn't create fodder for, forfailure.
It's knowing when to say no.

Chris Walker (01:02:28):
So when we, when we hire a new sales rep, they
get a ramp.
And depending on the business,that ramp is three to 12 months,
right?
They gotta, they have to learnthe product.
They need to build pipeline.
They need to they were in thesales process, any of the, where
the market.
So if you had had, if we weregoing to move to this model,

(01:02:50):
then marketers should get a rampto,

Kyle Hamer (01:02:52):
So the, the nuance to that ramp, and it depends on
the organization because theorganization that I was involved
in there was a ramp, but theramp meant you, you weren't
making commission.
You weren't, you weren't evenactually getting overhead the,
even close to your OTE.
You were getting your base, youwere getting costumes, like,
look, you either do thesethings.
These are the things that you'regetting to get your base.

(01:03:12):
Your base helps offset thatyou're not making any money
until you start delivering quotauntil you start delivering
deals.
So there wasn't a, Hey, youstart out at$9,000 a month.
And then by the time you'refully ramped, you're down to six
and you make up the differencewith commission.
It was, you start off at three,$4,000 a month.
You want to start earning$9,000a month, figure it out fast.

Yeah.
I mean, I, I don't think that'sthe winds for anybody.
Like, I don't think that's themodel that I would, that I would
implement.
I have also been at a at acompany where it was where I was
the head of marketing and I wasequal pay with the head of
sales.

(01:03:58):
And let's be very clear thatequal, equal pay does not mean
that everything is just going tomagically work, right.
That is embedded.
It's absolutely not.
That is absolutely not how itworks.
And so there are there's a,there's a big ecosystem of

(01:04:22):
decisions here.
And think variables that are inplay that come down to
leadership, culture, budget,compensation, you know trust,
like they can get into a lot ofdifferent, different places
about how that relationshipactually works.

(01:04:42):
And we need to make sure as acompany that we are, that we're
compensated, if we are goingmove to a variable compensation
model that we're using on theright marketers, right?
Because we can not havemarketing strategists that are
responsible for longtermbusiness outcomes of
sustainability compensated onshort-term metrics.

(01:05:06):
That's where this starts to getreally messy.
Because I, I take pride that Iam both at a tactician.
I think that I'm a very good oneand the strategist, so I can
see, I can see both sides.
I'm far better tactician, but Ican understand and, and deliver
a, a well-thought-out, you know,compelling strategy.

(01:05:29):
And so if we, if we havestrategists that are on variable
compensation plans, they're notgoing to do the important work.
And so that's, I mean, when youstart getting into larger
companies that are on you know,traded on stock market, and you
have a CMIO that's bonus for thestock price, that's, that's why

(01:05:51):
you see businesses not do thingsthat are going to make them
successful in the longterm.
What do you think?
So

Were just laid off 400 people, right?
I mean, Uber, Uber, just havinga$5.2 billion loss in the last
quarter, the marketing engine iswhat grew them.
They don't have a traditionalsales, right.
So marketing grew them to wherethey were and they're like, Oh,
look, we lost$5 billion andwe're going to blame it on

(01:06:17):
marketing.
And you're right.
Like the, the behavior of thedepartment head has to align
with the, the expected outcomesfor the street in a large
organization.
So I did, there's a conversationthat he's going to go on for
years.
I don't, I don't think it's, Idon't think it's going to fix
itself overnight.

Yeah.
And I mean, it it's Uber'sproblem is a business problem,
not a marketing problem.
They have a unsustainablebusiness model.
That's built around raising abunch of money and trying to
grow top line and losing so muchmoney right there.

(01:06:59):
They lose money on every ride.
They are trying to acquirecustomers.
Their customer acquisition isflat.
There's more competitors in themarketplace.
Like they have they have a realproblem.
And that there's a lot of verylarge brands that are considered
successful that lose billions ofdollars every year.

(01:07:21):
And so, I mean, at some pointthey're going to have to
generate a profit if they wantto be a business, because you
can't just continue to lose$5billion every year.
And the problem is that thelosses grow like the revenues
growing, but not as fast as thelosses, I'm in a WeWork right
now, and their losses areoutpacing their revenue growth.

(01:07:48):
It's a problem.

Well, and I think the nuance there though is
Amazon posted losses for years,right?
And now they're the first orsecond trillion dollar company.
They flipped it.
The challenge with these othercompanies is we're either going

(01:08:11):
to experience what weexperienced with the housing and
the bad debt crisis, where youhave these companies that are
coming in bad debt overleveraged bleeding cash, and
we're going to make the publicbuy them.
And they're going to, they'regoing to go bankrupt.
I mean, just look at, just lookat the transition.
Tumbler went through, right.
Tumbler sells to Yahoo for 3billion Yahoo sells to whatever.

(01:08:35):
I mean, I was reading today andthen today they were sold back
to WordPress, the owners ofWordPress for$3 million.
Right.
Like we, we've got thesecompanies out here today that
there's some really goodmarketing or, Hey, there's some
really good salesmanship goingon and we're selling the public
something that there's, there'snot a whole lot of profit or

(01:08:56):
sustainability or, or meatinside of it.
And you're basically purchasingsomebody else's debt.

Yeah.
I mean, I've worked at I workedat worked with and worked at a
lot of venture backed startupsthat I mean, this is this isn't
specific to these, the companiesthat I've worked at it's across
the board is that thesecompanies are, are just trying

(01:09:25):
to make it to the next round.
They're not, it's not a it's,it's not a businesses can
survive longterm.
They're just trying to make itto an exit and dump dump it
either on the market or onacquire, right.
They're just trying to hitmetrics on profit margin and

(01:09:46):
revenue growth and a coupleother like tack a couple other
metrics so that they can sellto, you know, Google or whoever
the, the, some of the, you know,the consolidators in that
whatever space they're in.
And, and then that company goeson, it gets integrated with
Google.
And three years later, thebusiness unit fails.

(01:10:09):
Like that's, that's what we seeI've seen a lot and that, you
know, that it gets blamed for acouple of different ways.
It could be that the integrationof the company into the larger
organization was flawed, butmore often it's because the
large organization bought thiscompany and either the company

(01:10:31):
was destined to fail or thecompany, in some cases, the
company has set themselves up tobe sold.
They stopped investing in R andD.
They hired more salespeople.
They had, they had one productthat they could talk about that
wasn't close tocommercialization, but help
their story to sell.
And then they get a, you know,eight X valuation on their

(01:10:53):
business.
And it's, it's dead once it'sbought, because you have a, you
have no innovation, you have noproduct pipeline, you just
pumped up the, the margins andthe profitability, but you have
not built a business that cansustain itself longterm.
So see a lot, you see a lot ofthat going on right now.

Yeah.
It, look, it what I think, youknow, you come back around to
this, the compensation for salesand marketing being paid
equally, you know, getting somesort of very sustainable or, or
slice of variable comporganizations are going to have
to figure out how to do theirpricing models differently.
They're going to have to do, tofigure out how to do they're the

(01:11:38):
underpinnings of their businessfor sustainability you know, in
the VC and PE world, I'm surethat it's more attractive
because you can get guys thatcan drive a velocity wheel on
the front end.
The challenge I think is, isthat for it to be sustainable
and really to have an impactacross the, across the business

(01:11:59):
front, and truly aligned salesand marketing I genuinely think
that it's gonna change the, thefinancial model and it's going
to take time for that to happen.
Like it's, it's going to take along time for that to happen

100%.
So it's, it's a reason why I'vepicked the target customers that
I've picked is that they'resmaller companies.
They're more malleable.
They can change like theenterprise customer.
I'm not going after because theycannot change.
They are stuck, right.
But the$25 million company canmake some, some changes as they
start to see things work atleast a lot easier than, than a

(01:12:38):
larger company.
And so the, my theory on this isthat you actually need, you
actually wouldn't have to changemuch about the business model
for this to work.
And so if you were investingmore in marketing, which in
theory, it should drive sales,channel efficiency, that's ho

(01:13:02):
that's better than what'shappening today and is, is more
efficient than what's happeningtoday.
Then you could, you would justrebalance your budget allocation
that allocated more tomarketing.
Your salespeople could make thesame money, but you would have
less of them.
And they would, it might makemore money cause they'd all be
operating more efficiently,right?

(01:13:23):
And so if you gave each salesrep an extra, you know, it
really depends on the scale.
So the analogies not going towork.
So just kind of go with me hereis that if you get each rep,
each rep's quota was a hundredgrand a quarter and you gave
them, you know, and they'reproducing three X their
pipeline, and you gave them anextra three X pipeline every
month.

(01:13:45):
Is it feasible to consider thatthey might be two times more
productive once they have thepipeline full?
I think that's a reasonableconclusion.
It could actually be even higherthan that.
If you're in, are converting ata higher rate and they're
winning faster.
And so if marketing can do theirjob, and in my view, the job of

(01:14:09):
a modern marketing person is toeducate the market and increase
sales efficiency, and, andimprove the, the overall
customer buying experience.
Then you may not need to makethat many changes to your
pricing or your margins orthings like that.

(01:14:30):
It's just a reallocation of thedollars,

Maybe.
I mean, maybe,

Yeah, it's a complete theory.
It's it has not been it has notbeen tested

Look having, and again, having gone through four
different sales leaders in threeyears, seeing different models,
seeing how each sales leaderwanted to handle its budget,
seeing the total overall cost ofgoods sold and understood where
when business operators come in,they look to cut in the first
place they look to cut is inmarketing because they think

(01:15:10):
marketing is advertising, Oh, weneed to cut our marketing
expenses.
Okay.
you know, and then six monthslater, they're like, well, why
isn't our sales?
Aren't where they're supposed tobe.
We doubled our sales side and wecut our, cut, our marketing, the
, the business fundamentals.
And that's why I said, I thinkit's going to take some time for
these models to change andoperators to change the, the

(01:15:31):
market is shifting.
And we've got a lot of stars.
Mark Bennett from Salesforce isone right where they've grown
their organization throughspreadsheets,

Brute force sales.
That's right.
Yeah.
I mean,

Gorilla sales.
And as people become less andless responsive, they come more
and more mobile and less andless responsive to people
calling them.
And there's more and more AIflooded into the market that the
balance is going to shift.
I mean, I, I genuinely believewe'll see a day in our lifetime

(01:16:13):
where sales and marketing is nolonger distinguishable one
department from another.
They are literally the samething.

100% agree.
And the reason that the bruteforce sales model doesn't work
as well anymore is not becausepeople don't answer their phones
as much.
It's because buyers have morepower.
They are armed with education.
They don't need to talk with arep to get the reviews, the

(01:16:43):
pricing, the integrations, theyhave all of this information.
So they're when they have theinformation, they have more
power over their own buyingprocess.
And that is the reason whyoutbound brute force sales is
becoming less effective.
And so what we need to do asmarkers, I call it buyer

(01:17:04):
enablement.
That might be a buzz word thatwe can use on the is we need to
empower buyers with theinformation that they need so
that they can make their ownbuying decisions.
How do you, how do you guide abuyer through a buying process
and not need a rep?
You make demos available, youhave, you know, on demand

(01:17:28):
support, waiting to answerquestions.
Do you have all of thesedifferent guides and
information?
That's where I think this is, isgoing to move because people
will continue.
I mean, there are very few salesprocesses and I buy a lot of
software and I advise ourclients on a lot of different

(01:17:49):
B2B business purchases that canbe in the range of 2000 to
50,000 ACV.
And we pretty much decided whatwe want to buy before we ever
talked to someone.
And that's just the truth.
And so yeah, I just think that,I think that companies need to

(01:18:13):
take a hard look at whatbehaviors buyers are actually
having and adapt to them.
Well, I think that's a goodplace to, yeah.

I w we've we've been all over the spectrum today.
I appreciate the time to, tochat.
We've kept you longer than wethought.
And I, I do have that here inabout 10 minutes.
So we'll go ahead and wrap andthanks for, thanks for taking
the time though.
It's good to actually kind ofmeet you, hear your story and

(01:18:45):
you know, two on this big oldtopic of sales and marketing
being equally compensated, Imean, it's it's, it's a meaty
topic and I'm sure if we inviteda sales person or, or sales
leadership to it, it'd be evenmore, right.
There'd be, there'd be a lot.
Yeah.

I mean I kind of, I mean, a lot of the points made
, I kind of have rethought myposition on it.
Like, it's just, it's justreally interesting to to debate
it, right?
Cause it's not, there's no,there's no real right or wrong
answer.
It's just, what's, it's allindividual business decisions.

It is, but it's also, I mean, it, it is
important.
I think to, to keep an open mindand explore, explore is probably
not the right word to understandthat the, the behavior mechanism
for transacting a sale ischanging quicker than our sales
force and our our currentbusiness models are, and that's

(01:19:44):
going to lead to a lot ofconflict and friction that
organizations are gonna have tosort through.
So, all right, man.
Well, I gotta, I gotta bounce.
Yeah.

Do you could be, want to get ahold of you shoot
me the zoo.
Oh yeah.
Sorry.
you could find me on LinkedIn.
That's probably the easiest way.
Cool.
or my email email is refinedlabs.com.

Cool.
Yeah, I'll shoot you the zoom.
I'm going to listen through itto make sure that I don't I
don't get myself in any hotwater with the previous
organization.
I'll make a make.
Yeah,

Yeah.
Do it, man.
But I'll do what you gotta do.

I'll send it, I'll send it to you once I have it
done.
We've got the video recording.
We got an audio and then, youknow, I'll get that to you in
the next day or two.
Okay.

Yeah.
That's cool.
Yeah.
90 minutes should give us a tonof stuff to chop, to put out on
social.
So, and I'll tag in stuff.
Cool.
Thanks man.
Have a good one.
Cool.
Thanks man.
Good to meet you.
See ya.
Bye.

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