Growth is a Holistic Objective: Measuring Success Across the Revenue Cycle

[0:05] Intro:  

Welcome to Revenue Rehab, your one stop destination for collective solutions to the biggest challenges faced by marketing leaders today. Now head on over to the couch, make yourself comfortable and get ready to change the way you approach revenue. Leading your recovery is modern marketer, author, speaker and Chief Operating Officer at Tegrita, Brandi Starr.

[0:33] Brandi Starr:  

Hello, hello, hello and welcome to another episode of Revenue Rehab. I am your host Brandi Starr and we have another amazing episode for you today. I am joined by Duane Dufault. Duane is a college dropout, construction worker who made a complete shift in life over a decade ago to be home for the kids. Duane has sold just about everything from newspapers, toilets and flooring, to printers door-to-door, SMB SaaS, mid-market and all the way up to Fortune 100 enterprise software. You name it, Duane has sold it, sold into it or help someone sell it. Duane, welcome to Revenue Rehab, your session begins now.

[1:21] Duane Dufault:  

Thanks for the intro. It's interesting to hear that read back to me. I appreciate being on the show. Love the intro video on that too, which is really great and I'm really excited for the conversation today.

[1:33] Brandi Starr:  

Awesome. Yes, I am excited to talk to you. I know your intro is one of the most unique. It's fun for me to get something different. But before we jump into what we're here to talk about today, I like to break the ice with a little woosah moment that I call buzzword banishment. So tell me what industry buzzword would you like to get rid of forever?

[2:01] Duane Dufault:  

Dark Social?

[2:03] Brandi Starr:  

Aaaah. Why do you hate that one?

[2:11] Duane Dufault:  

Dark Social the way everyone explains it or thinks of it, it's literally just old school relationship building in business, where everyone always talks about oh, these are the people that just scroll by and don't do anything but then refer you to someone who takes action. I'm like that's just called networking. The way it's being treated it's just old school relationship networking, the handshake type of situation to where the person you talk to or market to isn't the one that buys it's always the person after them. I'm like, well that's just kind of old school way of doing business. And so I just think there's just been this buzzword floating around about dark social, just call it what it is. It's just networking and relationship marketing, so people can kind of get the better idea what it is. Because it has like this weird, negative connotation to it almost; and from what I've seen, it's just old school relationship marketing.

[3:07] Brandi Starr:   

And it's funny, because anytime I hear like dark funnel, dark social, I think of dark web, which is where all of the criminals are. Are we hiring a hitman or I watch a lot of crime drama TV, dark social is where you go to get a hitman. What does that have to do with marketing? But you are right, it's the people we can't track. And I think because everything now is so focused on tracking and metrics, that anything that falls outside of that is like, ooh, this is the dark, we got to solve for our funnel. I'm all for measurement. It's important, but you can't measure everything.

[3:56] Duane Dufault:   

When we look at dark social or organic traffic on websites and that type of stuff, it's all tides raise ships type of scenario where if you're doing your job correctly and effectively, then all parts of the funnel should increase by a certain amount. Some of it is unmeasurable, like it's really hard to measure organic, just like it is on this "dark social". If you're doing the work and making the connections and being consistent with your market and your audience, then everything's going to go up. And so the dark social thing just makes it feel wrong to a certain extent. So hopefully, we can kind of get out of that phase as an industry.

[4:34] Brandi Starr:   

I am with you there. So now that we've gotten that off our chest, tell me what brings you to Revenue Rehab today?

[4:42] Duane Dufault:     

One of the conversations I find myself having a lot is we still in our industry, whether it's software or retail or transactional type of sale, there's still this big issue where we have all these siloed perspectives and activities between departments. Where we talk about being one company and one brand but in reality, there's still that friction between sales and marketing, and then sales and customer success, and then product is kind of just sitting in between everything. Where no one is really focusing on the customer journey. And then you end up having marketing teams that are optimizing for KPIs that don't really make sense to the customer because they're getting compensated or being measured on just form submits or their definition of MQLs, and then sales is measured on something else. But then they don't really get the support they need for marketing to hit some of those numbers and they're forced to do cold outbound type stuff that's not really effective in their market, in some markets it is. And then same thing with success, it's like success might as well be the redheaded stepchild of the organization because too many companies either a don't prioritize customer success as an actual revenue function and a very important function to keep revenue the business. And they don't use them as a highly effective source of feedback for both marketing, for both sales and for product. We need to have more of a holistic approach to how we're acquiring revenue in a business rather than just get the lead or get the connected call or make sure they don't turn and get the annual contract and then call them in nine months before their renewal comes up, or stick some legalese in their contract knowing that they really can't get that 30 day out, because they don't get the email. And so just feels like we're trying to be more departmentally focused for our customer, rather than actually being customer focused. So that's kind of my thought process lately.

[6:43] Brandi Starr:   

Awesome! So you gave me a good bit of meat there to dive into. But before I do, I believe in setting intentions. It gives us focus, it gives us purpose and most important, it gives our audience an understanding of what to expect from our conversation. So tell me, what is your intention for today or what would you like to be different after our conversation?

[7:08] Duane Dufault:    

I want people to look at their customer journey, and how they determine their go-to market, not just what's possible in their marketing metrics or what sales should be doing in phone calls, and so on and so forth and down the line. It's looking at how the customer interacts with your company and your product throughout their buying cycle, and then inserting the individual responsibilities to support that, not the other way around.

[7:42] Brandi Starr:   

Yes, I love that. And it makes me think back to Episode 22, with Ed Frame where we talked a lot about the journey and the process, and really unlocking the value within your current customer base and focusing on that journey. And I think this conversation really is an extension of that, in that our go-to marketing efforts have to be based on the journey as well.

[8:09] Duane Dufault:   

And understanding that go-to market is the initial strategy and then there's the marketing plan that supports the go-to market and all the functions beneath it. But the customer cycle and the buying process needs to be front and center as you design all functions of the revenue teams being marketing, sales and CS. And it feels like we're trying to just take some VC playbook and just apply it to any situation and hope that it works from the way we structure sales comp plans to the metrics that we hold marketing teams accountable to or even the tools that we tell start-ups to go and implement right out of the gate because they happen to go get some funding. We have to understand what the ideal buyer process is, and their journey they're going to take to then align what our marketing metric is going to be, the tools that are going to support that stuff, how we're going to compensate the customer facing teams to encourage a better customer experience throughout the whole lifecycle. And so it's just flipping it on its head to make sure that we're focusing on what's best for the customer rather than what's best for our KPIs.

[9:19] Brandi Starr:   

Yes, and in preparing for our conversation today, I did grab my book CMO to CRO: The Revenue Takeover by the Next Generation Executive, and I think there's a quote in one of my favorite chapters which is Chapter Nine - The Domino Effect, and I'll just read it to you quickly. In the modern front office model of revenue takeover, a business operates like a set of dominoes. All functions within the customer lifecycle, from lead to sales to customer experience, line up closely enough to impact one another, yet far enough apart to move freely. Together they create a perfect formation, your revenue team. Like dominoes, the revenue team players must communicate with players ahead of them and behind them. One person or functions output feeds into the next, so each must be aware of where they fit into the line-up, each must also see the grand design, and how they will fit into that as well. Aligned functions like aligned domino's work together to create the desired end result. And I think this hits on what you are getting at in that we've got to make sure that all of our goals as we move through the cycle are aligned so that we're all working towards the same end destination. And that's revenue.

[10:40] Duane Dufault:   

Agreed. The main thing I pulled out of that was aligned functions. And one person working with the next person, whether it's up or down or side, it's just being aligned with what everyone's working towards whatever that northstar is for whatever you're trying to go and achieve. So that means on a regular basis, marketing should be meeting with customer teams. And that's not just with sales, not just with CS, but that's also support too. Support has to deal with kind of the shit end of the stick on the results of the product. And so we have to include the voice of the customer in our messaging and our positioning on the front end so we're driving the right kind of business, that sales then goes and kind of finishes off. And so if we don't have that alignment through the process, then you miss out on that, and then you just end up optimizing for whatever Google happens to tell you is a good conversion, rather than what's actually driving good business down the funnel.

[11:40] Brandi Starr:   

Customer service is a wealth of information that I do think is so untapped by both marketing and sales, because they hear all the complaints. And a lot of times what happens is some feature or functionality is sold to them in the sales process as being the greatest thing ever, and then in reality, that's not how it pans out. And that's what customer service is hearing or support. And that's important information to understand or if there's common use cases that people are calling in -- I'm using software as an example but this really applies to other industries as well. But if there's things that people are consistently calling in to figure out how to do, that might drive the product roadmap, it might drive the sales conversation, things that should be highlighted in marketing. And I do think that this really is a missed place. I know one of my previous guests challenged us to listen in to sales conversations to really hear how people are talking about the products. And I'd almost extend that to say try to also listen to customer support and customer success. Really all of the conversations that are being had with your customers are a wealth of information in terms of how do we grow drive revenue, how do we differentiate ourselves, which all leads to growth?

[13:11] Duane Dufault:   

I 100% agree. From a sales leader perspective, because that's mainly the seat that I've held in the companies that I've worked with or worked for over the last decade. And I've learned that it's vitally important to get the perspective from outside of just a sales conversation, to listen to phone calls, account reviews, onboarding calls of customers that we've sold, and then also review chats or support calls that come in, because that's going to shape the better customer experience better sales experience, in that mid part of the funnel for the customer lifecycle, because then if you're not actively coaching your sales reps on how to disqualify people, then you're just potentially driving the same headache behavior when they're a customer. You could be potentially driving churn six months down the line if you're not disqualifying prospects, based on things that we know that customers don't like or constantly have issues with, all the while feeding that back into product. So whether it's a software or if it's a piece of furniture or whatever, there has to be that constant feedback loop in connection up and down the funnel. So that way, like we said a second ago, everyone's aligned. And so if you're not listening, if you're not implementing those pieces of insights that you're getting from those calls, then you're still just shooting from the hip. It doesn't matter what the CRM or what the marketing technology tells you if you don't get the voice of the customer, you still only have half the information.

[14:42] Brandi Starr:  

A few weeks ago in Episode 23 I talked to Helen Baptist about leading all of the revenue teams and one of the main reasons I wanted to talk to Helen is because she leads all of revenue. And one of the challenges that I've seen in actually achieving what you're saying is you have multiple leaders. You have someone who is leading marketing, and they have their incentives and their perspective on how we grow, we've got someone leading sales. You have all these leaders with their own agendas, making it more difficult to break down the silos to actually create alignment. So I would ask you, where you don't have a single leader that is leading all of revenue, how do we get there? How do we actually get to a place where we are aligned if companies are not ready to move in that direction, we're putting everyone under the same umbrella?

[15:50] Duane Dufault:   

And that's a really tough thing to just kind of put a blanket statement on, because so much of revenue alignment is dependent on your type of buyer. What is your ideal buyer? What's the market you're selling into? What is their buying behavior? What is their buying potential? And how do they interact with your product? Let's just say you're selling into a high ACV, so a high contract value technology company where the purchaser, the decision maker is the CTO. Versus if you're selling into the blue-collar industry and your ideal persona happens to be a mid-market owner of a landscaping company, your revenue acquisition process is going to be vastly different. But all too often I see the same framework applied to those types of situations, and then you reach uncertainty and pain. So first off, you have to understand your buyer and you have to understand your market. Secondly, you have to understand what is the acquisition process for your product? Is your product easy to understand? Can people get into it? Can they use it? Whether it's a piece of software or if it's a physical product, how is the actual interaction and functionality of your product and then what is the ongoing maintenance of your product? Again, if it's service or software it doesn't matter. If it's easy to consume, if it's hard, if there's a lot of doodads, a lot of settings, constant manipulation of the tool, because once you get an understanding of how those three primary functions are, then you can go back to the drawing board and look at where you need to align in order to encourage each step to the buyer in their process based on marketing, sales or CS. Because you can't hold marketing to the same type of KPIs that you would in either one of those scenarios and expect success to happen. Same thing for sales. You can't have one of those traditional SDR to AE relationships and an SMB trial driven software company. Because you're going to be spending way too much money on cost of acquisition, the sales cycle inside of the trial is going to be way too long and it's going to be overwhelming for the buyer potentially, depending on the outreach that is happening between the sales reps. And so you have to align yourself with who you're selling and what you're selling before you can align anything. And then to add to that, there's this recent conversation in the sales world of removing commissions from sales team’s comp plans, and just paying them where there OT is, because the argument is pay sales the same way everyone else is paid. It's like well, people in sales are there to control more of their income and if that's the argument, why don't we incentivize the other departments based on how we need to align to acquire revenue? Not having marketing teams have some type of quarterly incentive that gives them additional money for achieving goals is besides me. How are we expecting human nature to go in the direction we want it to do if we're not incentivizing the behavior, we're pushing them to do? And then we continue to increase their not quotas, but in marketing their requirements, the KPIs, the benchmarks they are supposed hit. They are constantly increasing them but then they're still making the same amount of money. Well, let's level set a little bit and talk about how we can actually align our human nature, our interests and our outcomes around revenue to where when we achieve the revenue targets, they benefit from it, because then guess what's going to happen next time? They're going to work harder. I think it's just a top-down audit from how are we focusing in the very beginning to how are we then rewarding and compensating the people doing the work? Long winded answer, but...

[19:29] Brandi Starr:   

No, and I agree wholeheartedly, and I honestly think that those fundamentals of the job itself is where things are broken. Because you're right. If you took away commission, salespeople are money motivated. They are competitive, they have that drive, and I'm being stereotypical here, but they are like the people that want to stick their chest out and say I'm the best. 

[19:56] Duane Dufault:

Yeah, and you want those people you and you want those ones to work hard.

[20:00] Brandi Starr:   

And so you can't take that away. But I do like your idea of really flipping that and saying, let's not take away commission because that's what drives those people, but let's figure out how do we measure and incent people to exhibit the behavior that we want them to exhibit? 

[20:23] Duane Dufault:   

Even on the marketing side, I had a really interesting conversation with the VP of engineering a couple weeks ago, where traditionally in engineering, and I love engineers and product people. They are a wonderful type of breed of individuals, because they're very logical and black and white, it's great. He's sick and tired of the only leverage to incentivize engineers and product people as to firing them. Because it's all about major salaries. It's like, well, what if we were able to find KPIs and measurables for engineers and product people to give them quarterly bonuses as well? Measured on bugs fixed or releases without bugs or hitting timelines, or UI design release dates. There's a way to incentivize teams to rally around the primary KPI, which is revenue, and make sure that we're all aligned and on track. Because I've been a part of multiple organizations to where revenue isn't even reported to the engineers. And so they don't know what the results are of the work they've been doing for the last six months on this big release. So it's interesting, some of the mindset is to remove variable and to just level set everyone. There was a nation some years ago that tried to do that, they knocked down a wall for that whole thing. And it's instead go the other route and incentivize people with money for their success and their hard work and their efforts in reaching that stuff across the whole company.

[21:58] Brandi Starr:

So I've been in marketing, over 22 years now. And early in my career, I've only ever had one company, where as a marketer, I had a direct incentive to my performance efforts. And I had counterparts that we all marketed different things and I can say that we all fundamentally worked differently. We broke down our own barriers. I was incented on MQLs, that period where MQLs were a thing, but my real bonus was based on conversion from MQL to opportunity. And so for me, I had to figure out how to make sure that number was high. I knew how to control driving leads, that's what I had done my entire career. I knew I kicked ass at that. But when it came to how do I make sure those convert into opportunities, at that point, I had no understanding of what even happened after I lobbed those leads over the fence. So I had to take it upon myself to not only figure out what they did, but to understand what they cared about and what they were incented for. So that when I lobbed them over the fence, they'd accept them and they'd become opportunities, and I'd get my bonus. And so without leadership without policy changes without any of those things, myself and my marketing counterparts, at least the ones I worked closely with, we were all doing the same thing. We were all chipping away at the silos because if we didn't, that meant we weren't getting bonused. And our bonuses at that time they weren't super significant, it was still primarily salary but it was enough of a chunk of change that it did matter.

[24:03] Duane Dufault:   

I love that because one there's an argument of oh, you won't have people to take the job. I was like cool then they probably aren't going to be the ones to do the job the right way. I think variable compensation weeds out the people that just want to clock in and clock out. Same goes for sales and CS handoff, compensating sales reps based on their churn. Not clawbacks, I don't like clawbacks, it's a very interesting way to do it, it's very old school, but you can easily put in comp plans to where their commission percentage could be impacted by their level of churn from the last quarter. So there's ways to do it. You just have to get out of whatever playbook you are handed from the VC firm you got your money from, and actually think about what's beneficial for your customer and what's going to help your business grow because every single business is different. Every customer type is different, and you have to think outside of the box in order to make it work.

[25:00] Brandi Starr:  

And we experienced that. I mean we're obviously a small company. But we initially had more than just those people who were in the role of sales, the role most similar to account management for us also received commission. And it was great for attracting people with high drive and those sorts of things. But when we really started to look at it, we recognized that we actually were incenting behaviors that we didn't want from them. And there was this huge focus, not that anybody was like making poor decisions to drive permission but if you think about where you spend your time day-to-day, they were spending time on the things that directly tied to how much they'd make on commission and less time on the things we really needed them to do to make the client successful. So we actually had to change our comp model, because it was kind of like our heart was in the right place when we did that but we realized that it actually incented people the wrong ways. And so that is a key. People take jobs to make money. There seems to be this weird misconception, oh, they're in it for the money. That's the point of a job. 

[26:27] Duane Dufault:   

Well, yeah. That's why I'm working. I wouldn't choose to do this 10 hours a day. Let's just be real for a minute, people have jobs because they want money. If they didn't want money, they would just be in a box or living in a forest somewhere. But I applaud you in the organization to having the ability to take that step back and see that and make the adjustment. Too many organizations wait until it's too late to do that. But again, I've seen the same thing in CS, they don't they only compensate their account managers to CSMs, on upsells and expansion, but they're like, oh, our churn is through the roof. And I was like, well, because your team isn't compensated to create happy customers, they're only trying to sell. And I love comp plans because they are really big lever when they're implemented correctly. You just have to understand your buying behavior, and the interaction with the product to know where those levers are. And unless you have an identical product and identical buyer, it's not going to be the same thing as this person over here. 

[27:23] Brandi Starr:   

So another question related to KPIs that has been a little bit of a debate is, what are the right KPIs for marketing? Historically, they've been MQL. We know, that's not where it's at. I think there's a universal agreement that it's not the MQL. But then there's argument of how far through the pipeline does marketing have an influence in which they can be measured independent of sales? In some cases, it's like it should be an all for one kind of thing. So there's lots of conversation and debate around what are the KPIs that marketing should be held to. Any thoughts on what you think is the right thing?

[28:16] Duane Dufault:   

Again, I don't want to put any blanket statements out because it's really particular to the situation. But what I would say is MQL is not a bad word. MQL is just highly speculative based on the situation, if you've got one type of customer that pays one type of fee or revenue stream, that only purchase in one particular way, great, you've got one definition of MQL that you can run with. Because the intention of MQL is good, because it puts a measurement behind the type of lead that sales needs to work in order to close a customer. But the problem is, is we're only labeling that as one thing. MQLs needed to be expanded. An SMB customer that's very early on their buying cycle, even though they submitted a form should not be an MQL. Let me step back, if that's not a good MQL for your business. But then do the same thing if it's a high CV, high contract, enterprise type customer, and they submit that form like it should have been an MQL earlier on in the buying cycle. So we have to adjust our definitions of MQL in order for that to be a measurable thing for marketing. Because it is hard to measure non-measurable things for marketing, because then you get into specifics because then you're like now we have to take into account all of our social media, we have to take into account the rise and fall of organic, we have to take into account how are we performing to budget when it comes to paid, and how are we conversion converting across all the different paid channels. Because then there's just way too many things to try to measure in order to hit one specific KPI. And so there's little ones that add up to the end-all goal but again, marketing is just part of the picture. So if we can define the different types of MQLs for the business and measure which ones lead up to the revenue goal. So the number of MQLs have to match what the revenue goal is. And then two, that's just for new sales. We need to make sure that there's a customer marketing segment in place as well, that is serving our customer base and aiding into the health of our book. So we can't just compensate marketing on net new business, we need to make sure that they're included into the rise and fall of our existing revenue stream. So again, I wouldn't blanket statement anything, but I just need to make sure that companies when they're compensating on MQLs or anything like that, you just need to make sure that your definitions match what leads to revenue. And you can argue of, okay, no, we need to compensate marketing on opportunities or PQLs if you're in a PLG type company. But there's a level of which marketing can't control that. Opportunities, if your process is to generate quality MQLs and handover to sales, and you've got kind of a shitty SDR who doesn't update the CRM regularly and your bonus is highly dependent on that person checking that box, then you can't control that. And so I'm always trying to find ways to compensate teams on things they can control. to certain extent where they have a high influence on. And so I like the opportunity side I, when I'm optimizing marketing plans or go-to market strategies or whatever, I do look at the opportunity as a driving force to that. But I go backwards, and I look at what is our definition of MQL and is that holding consistent? So it's a long-winded answer, but it's just making sure that your organization is aligned and understand what their "definition of an MQL" is and always making sure that is in line and measuring or on track to what's driving revenue, rather than just here's an MQL and we need a thousand of them, go get them. It's like well, no, because if you get a thousand MQLs, in low ACV, low churn and low acquisition cost, because Google seems to be liking you that month, but they don't go anywhere, that's not in alignment with the company goal. So it's always it's always making sure that you're refreshing the definition of MQL and that it is aligned with the primary KPI for the company, which is revenue.

[32:24] Brandi Starr:

I love it. Well, talking about our challenges is just the first step and nothing changes if nothing changes. So let's talk about where we go from here. Because in traditional therapy, the therapist gives the client the homework, but here at Revenue Rehab we like to flip that on his head and ask you to give us some homework. So if you can summarize your key takeaways around approaching growth as a holistic objective, and give us our one thing, what is the one action item you want us to take away today?

[33:02] Duane Dufault:   

Talk to your customers, that's two parts of that. There is talk to your customer facing people who talk to your customers and then also get on the phone with one of your customers. Not a lead. So if you're a marketing leader, if you're a sales leader, if you are a CS leader, you are a CRO, whatever, you're responsible for revenue, at any level. Don't just talk to leads, don't just get on the phone and try to do a demo because they don't have the full picture of the product. You are getting one side of the story. So talk to customers, existing customers, and talk to them in a way of learning and guidance from them not just asking targeted questions. Sit and listen, sit and hear them and listen to their experience after being in the product six months. Listen to your sales members, especially the SDRs. Listen to what are the things they're hearing. What are the successes, what are things enjoying and really listen for action, not just listen for validation. That's a really big indicator, really big thing to pay attention to. Because all too often sales executives want to get in and just pat themselves on the back and cool, that's what we want to hear. But you have to listen to learn, listen and hear what's happening on the other end of the line, whether you're talking to a customer facing rep or the customer themselves, but you have to fight to get the voice of the customer at all costs.

[34:25] Brandi Starr:    

I love that listen for action, not for validation. Because I do think sometimes, we do listen to hear the pat on the back and to hear where customers are happy. But there is a lot that isn't said so even being able to listen in on tone, reading between the lines a little bit and hearing where things are not going ideal so that you can take action. I think that is a great action item and one that we have definitely heard before. And so I think this conversation really reiterates that talking to customers and the people who talk to customers needs to be an everyday activity.

[35:15] Duane Dufault:   

Yeah. 100%.

[35:17] Brandi Starr:

Well, Duane I have enjoyed our conversation. But that's our time for today.

[35:23] Duane Dufault:

Awesome. I love this topic. So I'm happy to be here and continue the conversation. So anything I can do to help the cause.

[35:32] Brandi Starr:

Well, definitely. And before we go, tell our audience how they can connect with you. And I heard that you've also got a podcast. So you have to share more about that?

[35:44] Duane Dufault:

I like to think I'm more active on LinkedIn. So it's just my name Duane Dufault on LinkedIn. On the different socials under the same name between like Twitter, and yes, Tik Tok even. But my podcast is The Selling SaaS Podcast. And so it is focused, yes, primarily around software sales and growth and success. But we really break into a few primary categories of, you know, sales leadership, talking about holistic growth, we're talking about here and bringing in specific tactics for revenue acquisition, whether it's in sales or it's in CS. So we really try to stick to those three primary categories.

[36:24] Brandi Starr:

Awesome! Well, thank you so much for joining me today and thank everyone for listening in. I hope you have enjoyed my conversation with Duane. I can't believe we're at the end already. See you next time.

[36:40] Outro: 

You've been listening to Revenue Rehab with your host Brandi Starr. Your session is now over, but the learning has just begun. Join our mailing list and catch up on all our shows at revenuerehab.live. We're also on Twitter and Instagram at Revenue Rehab. This concludes this week's session. We'll see you next week.