In this episode, Nick talks with Nelson Gilliat, author of “The Death of the SDR: And the Birth of Buyer Centric Revenue”, about why some sales and marketing teams miss the mark when they pursue the traditional “Predictable Revenue” model of revenue generation. They discuss:
- How SDR’s can be potentially incentivized to create negative customer experiences
- The pro’s and con’s of account executives being responsible for quota
- Marketing’s place in the modern buying cycle, and the importance of content
Nick: Welcome everybody to this week’s edition of “Mind The Gap,” Enablix’s only podcast seeking alignment between sales and marketing teams. My name is Nick Ziech-Lopez, and this week we have Nelson Gilliat on the podcast.
Nelson: Hey everyone. Thanks for having me, I am really excited to be with you today and I think we are going to have a great discussion. I think I have pinpointed one of the big reasons why there’s a marketing and sales alignment, or misalignment, rather and I’m excited to dive into detail about that.
Nick: Now, you mentioned that you’ve pinpointed it, and you are the author of “The Death of the SDR,” so you’re kind of taking shots at your book, but before we get into that, can you give us a little bit of introduction? Who are you, where do you come from and, and how did you get to sales and marketing?
Nelson: I’m the author of “The Death of the SDR and the birth of the buyer centric revenue model”. I’ve been in B2B marketing and sales for six or so years and have worn all the hats, SDR, AE, AE and CSM together, product marketing, demand gen, content marketing, et cetera.
I’ve just seen a lot of the problems that I think a lot of people are starting to see- marketers, sellers, SDRs who were very frustrated and it feels like we’re sort of in an operational straight jacket. I see a lot of turnover. I see low tenure. I see low performance among teams.
I see low job satisfaction across marketing, sales, and SDRs. It got me thinking about what’s causing this, what’s been the history in B2B marketing and sales. That led me to realize that marketing and sales are running on an outdated playbook from the late 90s and early 2000s that jams markers and sellers in a straight jacket.
That is causing frustration and people to have less productive and fulfilling careers. What I’ve done in the book is explain what that playbook is, how it came about, why it’s no longer fit today, and why it’s the cause of the problems today. Then I presented a new playbook called the buyer centric revenue model that I think is an alternative and hopefully will help folks move in the right direction and liberate us for more enjoyable careers, especially SDRs.
Nick: And that is the hat, right? You are, you are the, the liberator today.
Nelson: Yeah, you know how marketers can be. You have to put a little sizzle razzle-dazzle, exactly. I think that’s sort of the message here. That’s why you have to have the hook. And I think that’s my call to action to people- I think that there’s a turning point in B2B as there was a turning point 20, 30 years ago with that old playbook.
Now, you have a chance to make a change in your field and to help modernize that B2B, go-to-market playbook so that we can have more enjoyable careers. I encourage people to think on this, discuss this, and to some extent act on it. You won’t have many opportunities in your career to do something like this.
Nick: I do like that in your book, you outline what you see as the issue, and you also provide a solution- and we will get to that. But first, let’s talk about the problem.
You posit in your book that you’re upset about the predictable revenue sales model being used today. Can you give us a high-level outline of what is the predictable revenue sales model, how is it being used today, and why has it upset you?
Nelson: Great question. As you pointed out, that old playbook from the 90s, late 90s, early 2000s is called the predictable revenue model. That is the playbook that B2B companies run on to some extent- they don’t always do it to its fullest and take it straight, they have to dilute it because it’s such an outdated model.
I’ll explain what the predictable revenue model is. Aaron Ross popularized the predictable revenue model about 10 years after it was put into practice in 2011 in his book, called predictable revenue.
It calls for two things. One is a marketing thing and the second is a sales thing. The marketing thing is prospecting through SDRs. Rather than having sales do it, which they did historically, we would have this new unit called SDRs that would do prospecting full-time. And we’ll talk about why I think prospecting is marketing and not a sales thing and what is prospecting.
The second thing that predictable revenue talks about is a sales thing and it’s the sales assembly line, or seller specialization, or buyer hand-offs. Today, that’s typically the account executive or AE, and then the sales engineer or the SE, and then the customer success manager, or the CSM, followed by the account manager or the AM and various other subdivisions within that sometimes, it depends how many subdivisions there are. It’s basically putting the bar on assembly line and stunting sellers with them only being able to handle a certain aspect of the sales process and the buyer relationships- we’ll talk more about that. Fundamentally, this model that was created 20 or 25 years ago hasn’t really changed.
The changes in buyer preferences, technology, what marketing can do nowadays, and what sales can do nowadays is totally different. I think that this old model delivers a bad buyer experience which is why I call it the buyer centric revenue model. If we’re going to be successful in marketing and sales as companies, we need to conform to how the buyer wants to be wooed and not try to jam them in a lousy buying experience.
Nick: You reference a lousy buying experience, but there was obviously a reason for it at a time, right? You say it’s by experience, but I’d rather, as a buyer, work with an expert in each part of the journey. What has changed to make that no longer, in your mind, applicable to today’s B2B?
Nelson: So, I think fundamentally from a buyer’s experience and why it doesn’t work today is that they don’t like SDRs. They don’t like that pushy, aggressive marketing and they don’t like prospecting. They don’t like telemarketing, email spam, or LinkedIn spam, which is what I think prospecting is.
The essence of the SDR role is primarily telemarketing and that’s not how buyers buy today. There’s so many better ways that buyers are learning about products and services and gathering information themselves. They basically self-educate themselves thanks to marketing. There’s a lot of things that marketing can do to facilitate that in a buyer-friendly way so that buyers become aware of you- they like you, they consider you, they value you, and they hit that speak to sales button or get a demo button. When buyers do want that, they want to connect directly to the expert. They want to connect directly to sales. They don’t want to have the whole ring around the rosie with the SDR, who’s B.A.N.T’ing them.
Nowadays, marketing can automatically qualify buyers right on the website and then connect them directly to a seller’s calendar, just like in ZocDoc. For anyone unfamiliar with that, when you book a doctor’s appointment, you pick a time and you’re good to go. That’s what buyers can do nowadays on the website and marketing facilitates that.
Nick: I was going to say, so much of what I see too is that people are shoehorning it in. The other day I was looking for a gifting platform. Nearly every platform I saw did not list the pricing on their website. Instead, they had the SDR two-step. I knew I had a minimum price, and it ended up that they were all above it, but, the reticence to put information out there to get better qualified, they almost shoehorned the SDR into the middle of what could otherwise be a seamless process.
Nelson: It creates a lot of friction- marketing today – being able to provide all that information out there on their content, and their social media, and their ads. They’re doing events or influencer marketing, co-marketing, customer marketing, community marketing, thought leadership, and a million and one things that marketing can do nowadays to get your message out there and get it consumed by buyers.
They do this for when buyers come to your website so they can learn what they need to learn, how the product works. They can learn things like what are the outcomes and benefits? What are the features? What’s your pricing like? Historically, companies were sales led and there really was no marketing. You had sellers and sellers would do this manual marketing and they would do sales. All the information for buyers was hidden behind sales. Now that information is out there on the internet, marketing is basically giving buyers information, giving them value, giving them content, helping them level up in their profession and do all this stuff so they become aware of you. So they attend your events, they consume your content, they consume your message. That, fundamentally, is what I think marketing should be striving for. I think today that prospecting should go. I see it as a very inefficient and ineffective way to do marketing relative to what good, modern marketing can do nowadays- particularly demand gen. I see demand gen as the unit within marketing that’s basically replacing SDRs, it can replace SDRs, and should. I think there’s a lot of hidden costs.
Today companies have a mixture of SDRs and demand gen. They have a mixture of prospecting, or what I consider bad marketing, and a mixture of good marketing. I think one of the reasons that this prospecting still continues while you have people full-time who are knowing buyers with telemarketing email spam and LinkedIn spam is that companies haven’t distinguished or separated good marketing from bad marketing and then analyzed them both separately and factored in all the costs and the opportunity cost. This is not prospecting and SDRs are not worth it.
What I suggest companies do is that they do this comparison, and then they have an experiment, and then they gradually transition. They repurpose SDRs. They give them quota relief. Then you do a gradual transition phrase, the SDRs end up doing more fun marketing stuff, which they would be thrilled with- they can’t wait to escape the SDR role anyway.
Nick: That’s true. If you could, explain what is bad marketing and what is good marketing?
Nelson: Bad marketing is annoying your buyers with telemarketing email spam on LinkedIn spam, trying to get them to come speak to sales and just being this pushy, aggressive, spammy, intrusive, type of marketer. It’s like the guy who comes up to you on the street trying to push you into the store. Or, it’s the jerk at the bar who’s saying, come home with me. What I see as good marketing is the opposite of that, and it’s more effective in the short-term and long-term.
It’s basically, we’re going to get our message out there. As I mentioned, it’s content marketing, it’s social media, it’s events, it’s thought leadership, it’s community, it’s customer marketing- you could do a free trial. You could put all the information out there on your website. Things such as case studies, there are a million and one things that marketing can do nowadays. Other good ideas are paid ads on social media, having a podcast like this and inviting your guests on, doing co-marketing.
Bringing on the people in your audience who you want to sell to and co-creating content, then distributing that on social media. You can do referral marketing- refer a friend or whatnot, or hit people up for referrals. All of this stuff is what marketing can enable.
Nick: In your book, you outline it, and it’s there in the title, the idea of buyer centric revenue and the buyer centric revenue model. Can you talk a little bit about what that is and how it differs from the predictable model.
Nelson: The buyer centric revenue model, basically sunsets prospecting in favor of good marketing or demand gen.
Then, it basically sunsets the sales assembly line or seller specialization and buyer handoffs in favor of a one-to-one relationship where you’ve got one seller who has a portfolio of customers. It’s a one-to-one relationship between buyer and seller, which is what the buyer prefers- they don’t like these handoffs and it’s also good for the seller. Then, they have more growth, more efficiency, more responsibility. They can probably build a relationship. Then, that seller can bring in a project manager, they can bring in other people within the company when needed to help the buyer purchase or if they need a technical expert, they can bring in a technical expert, they can bring someone from product to product management.
They can help with certain technical questions that the seller can’t handle or bring in someone from the implementation team to help customize the solution. The seller has a separate department called customer service that helps customers with sort of troubleshooting and stuff like that, but fundamentally it is just a one-to-one relationship. This seller isn’t going out there and doing bad marketing, they are receiving really good leads, hot leads, website demo requests from marketing, people that are in buying mode and are more likely to close and close faster. Sales is wasting their time chasing people. These buyers- when they come in through the website- those are great buyers and hopefully they also have affinity to your company.
They’re less likely to include other people in that evaluation because they’re like, I really like you guys and you have clearly educated me very well, I feel very comfortable with you. I think oftentimes buyers shop out different folks because they have no idea about what the solution is.
Nick: This certainly creates a shorter, cleaner sales cycle. You advocate for doing away with the SDR AE handoff, right? So get rid of SDRs, prospecting, and have an account executive. When you change sales, do you also do away with the sales and customer service manager handoff as well and just have a consistent company point of contact the entire time?
Nelson: Yeah, that AE/CSM split, which is the main subdivision within sales. So you’ve got one seller that helps the buyer with the initial sale and then they just chuck them over the fence to someone else to handle expansion retention. The buyer is like, what’s going on, you’ve sold me and now you’re handing me off to someone else so that they can then sell me something else or sell me more? And it’s just this terrible handoff that buyers hate and a poor experience. You asked any buyer about that. If you think about how you want to buy in your own life, it’s the same thing. You want one point of contact who is accountable throughout and for sellers, it’s the same thing as. I’ve been an AE and I’ve been in AE and CSM together where I had a portfolio of customers. I think that’s why people go into sales. You help this customer and you help them be successful and you help them grow and buy more, and it’s great.You feel pretty good about helping them have a really great sales experience as opposed to just being part of an assembly line. If you think about it from the company’s perspective, you’ve got a bloated sales org, and that’s where I think a lot of companies suffer because they’ve got too much head count, too much bloat in organizational complexity, you’ve got marketing and then you’ve got inbound SDRs and you’ve got outbound SDRs. And then you’ve got account executives and sales engineers, and then you’ve got the CSMs and then you got the account managers. That’s seven different teams within marketing and sales, which is why- as a band-aid- they’ve created revenue operations, who are the people behind the scenes trying to manage all the different tech and processes and tools.
I mean, that’s just a band-aid, it’s not solving the issue that you’ve got all this unnecessary and counterproductive complexity. For companies it’s very expensive to employ this model. You need a lot of head count and you need to raise a lot of money and give up a lot of ownership of your company to venture capital firms in order to waste a lot of money into this model.
Nick: Speaking of high spending, you come up pretty harshly against the idea quota. The idea of salespeople needing to hit a quota, exceed quota, saying it’s not equitable and that a salary or a base plus bonus is a far better structure. I think that for a lot of time, that’s been a discussion among the best ways to do sales. I do know a lot of people go into sales for the idea of uncapped income and the idea of going out and making your own pay. First of all, why is quota unfair and inequitable? And second of all, can you get the benefits of quota without quota? Can you talk a little bit about that?
Nelson: So, in addition to challenging the particular revenue, in addition to challenging prospecting and the sales assembly line, identified two other problems that primarily affect sales, but also downstream effects on marketing because marketing and sales are both joined at the hip and are responsible for revenue and all the business metrics. If sales isn’t doing well, that’s bad for marketing. If marketing isn’t doing well, it’s bad for sales. In any case, those two problems are quota and commissions and I think those are two ills that affect sales. I think primarily sales today is in dire need for monetization and elevating this role.
I think it’s the reason why sales remains to have a really bad reputation and why sellers are suffering the high turnover and low tenure and low productivity, low performance and low job satisfaction- why it’s so churn and burn and why it’s unnecessarily this high pressure environment and this starview of compensation. They give you these short-term production requirements and say that you are responsible for this revenue in this short amount of time, and that’s all we’re going to measure you on and also we’re going to tie 50% of your pay to it, which is what the commission is.
I’ll break down both quota and commission, but I just want to set that table overall in the sales profession. If you’re a salesperson today or you want to get into sales, you’re forced to do prospecting full-time until you get to the SDR role. When you finally get into sales, oftentimes you’re still forced to do prospecting. Then you’ve got the sales assembly line commission quota to deal with. I think that’s what makes the role so undesirable and why many people don’t last very long in it and typically go into management or leadership or something else.
A quota should not be confused with a goal. No other department has quotas, so there’s a very subtle distinction in that. According to this short term, you have to produce X amount of revenue and it’s tied to 50% of your compensation versus what commission is. A commission compensation package is basically 50% salary and then 50% commission pending quota attainment. So it’s half upfront, they guarantee revenue, you get your salary. And then half pending this outcome- the buyer’s decision to purchase. I think the whole purpose of having commissions and quota is not to benefit the seller. It actually hurts the seller- which I’ll cover why- but it’s basically to pressure the seller to pressure the buyer and encourage pressure selling and basically to create desperation in the seller so that they go and nag buyers and pressure them, which is a lose lose for sellers and for buyers and also for the companies who do that. There are a lot of smart companies who’ve gotten rid of commissions like Monday.com and Pluralsight and CultureAmp and Barclays and Microchip technology. They have seen the light, have concrete results on it, and just have better sales teams. I think that if you’re a sales leader today, you should really stop wasting your time with quotas and commissions and build an effective sales team and get the best talent and give the best buyer’s experience. You’ll be way ahead of the game.
Nick: You mentioned pressure selling, and then you mentioned a lot of names that are, as you say, forward thinking- going less quota and commission-based. Is that only possible once you hit a certain marketing level, a level of name recognition. The companies you mentioned have some level of people knowing who they are, they’re national brands.
Is it possible that introducing urgency into the sales cycle could be a good thing for smaller companies, and if not, why not?
Nelson: I mean, no one wants to be pressure sold and it turns buyers off and they tune out. Anytime you try to pressure someone it’s a lose lose.
Fundamentally, get a good marketing engine and marketing precedes sales and, you’ve got good leads and then it’s sales’ job to sort of facilitate that purchase and close that demand from marketing. The best thing for our sales team is to have a really good marketing team backing you with hot leads, like the point guard in basketball, who’s really good and can give the ball to the center to slam dunk it, you know? So it’s like, give that layup. Fundamentally, just to kind of go back to quota and commissions. I recommend, regarding commission, just to unpack- and I spend a lot of time in the book talking about this- because I think a lot of sellers get screwed over with it and there’s a lot of misunderstanding, 50% of your full OTE essentially more or less as salary plus a bonus.You get the whole cake plus icing, whereas with the commission, it’s like half a cake, it’s just your salary. And then the other half of the cake, which is commission, which you have no idea if, when, and how much you’re going to get. The buyer’s decision to purchase is largely outside of your control, you can’t force the buyer to buy. You’ve got actually very little influence over that decision. If anything, marketing has more influence than sales. The buyer is self-educating most of the way. By the time they come to sales, it’s just like checking off a few boxes and things like that.
A seller could do everything right, but it’s still up to the buyer. Oftentimes a buyer may buy despite the seller, because the need is dire or marketing has done a good job and the product’s really good. It’s like, yeah, the seller didn’t really help me that much and the seller wasn’t so good, but I know what I need to know and this product is going to work. So, for a seller to then basically be in a position where you have a very low salary and you’ve got unpredictable income that’s largely outside of your control is very undesirable. It depends also on marketing, if marketing is going to give you good leads? Also on the product, is the product any good? Is there a demand for the product? It’s not a desirable form of compensation. If you’re going to go work for someone else and get a nine to five, the whole point is that you get a steady paycheck and benefits.
Nick: There are a lot of people that like that. There are a lot of people that directly like that and go and seek that.
I think that you’re advocating for two different models. I think you’re arguing for much higher compensated sellers that are also much more cross-functional and a resource allocation to market, which marketing brings in more qualified people. The seller handles most of it, but all in all, they make more money, as you said. More money, more stability. And I think that can work when you have a predictable marketing engine, which we’re not going to address here, there are hundreds of pages. I think that what you talked about- unpredictable income- potentially huge upside. I think there are people that seek that out. I think that in B2B sales that’s still possible, but I think that there just needs to be a time that a company shifts from a more sales driven to marketing culture.
Does that make sense? And do you see reasons for, not for each model to co-exist within a company, but for a company to pick one and graduate to the other when they’re ready?
Nelson: I would say,, commission is so undesirable for a seller. I think there’s some sellers who look at commission, they look at gambling or, or stock speculation, and they try to chase that sort of thrill and I think that’s foolish financial decisions. As you’re a seller, you should want predictable income. You should want the salary based on what is within your control. If you also think about commission and you think about not only everything else that Nelson has just covered, but on top of that, there’s all these complicated nuances and thresholds and accelerators that usually change every year and on top of that, your commission resets when your quota resets and oftentimes your quota is unrealistic and it’s a stretch goal and this and that. When that quota resets quarterly or annually it makes it very difficult to plan and budget, especially if you’ve got financial obligations, like a mortgage and a house and kids and things like that.
It’s variable, unpredictable income so it also makes it harder to get a loan and it gets taxed higher. It’s treated differently than a salary. I think you need to kind of take into context all this type of stuff. Under a full salary and a bonus, you’re getting a full salary and a bonus, whatever your OT is.
You’re getting paid or should get paid a good chunk of money, like other people in B2B. And use that money wisely. You save, you invest, maybe you have a side hustle. If you really want to make massive money, the way to do that is to have side hustles and passive income and investments or start your own company and own your own company. If you’re going to go work for someone else, the smart thing to do financially, and also as a lifestyle, it’s like, you get pressured so much because of your commissions and it’s like, it drives you nuts and all the gimmicks with commissions and then all that unpredictability.
It’s really not smart financially. It’s not smart for the company to instill that in their sellers. You look at how sellers are suffering today and the cost of turnover and all that type of stuff and then you look at the harm it does to buyers with pressure selling and bad fits and over-promising, under delivering and all that type of stuff that it can encourage.
It doesn’t benefit anyone to have commissions. One of the best things that these companies who I’ve mentioned got rid of commissions is that the sales teams have done so much better and the sellers are happier, they can take vacations and they can work together as a team. They can work as a cross-functional team who aren’t like, you’re standing in front of my paycheck. Or, it’s the same thing with the buyer. It’s like, you’re not standing from the buyer’s paycheck. It’s also a great buyer’s experience and it’s a massive competitive advantage if you say we have a no commission sales team, we’re paying our sales people properly, they’re going to help you properly and they’re not going to try and pressure us.
Nick: As you mentioned, side hustles, I have a really cool side hustle called buying 10 lottery tickets a day- guys, this works. I’m joking, don’t buy lottery tickets as a side hustle. Speaking of side hustles though, can you tell me a little bit about how you came to the book, given your experience, what made you write it and what going through it was like?
Nelson: I started off as an SDR at a very big company, and then I became an AE and you know, I was still basically an AE and an SDR combined at that company. I still had to do prospecting. In other words, I was a quote, unquote full cycle AE, which is basically a fancy word for saying an SDR and an AE combined, which is the worst. I saw how bad that was. I saw how ineffective and inefficient it was. I saw all the costs and the harm. One thing I want to stress to people that I think would be very helpful is to unpack how inefficient and ineffective that is. Compare the leads generated from prospecting versus the leads generated from good marketing. In other words, website demo requests. Compare those two, look into your CRM and look at the metrics that matter to evaluate marketing- revenue, number of customers, number of opportunities, cost per opportunity, conversion rates, sales cycle, cost per acquisition, cost per acquisition payback period. Then you’ll see which method of marketing produces better results and better cost, which has better ROI. Then, you consider how much resources you’re pumping into either one, how much resources you’re putting into SDRs and prospecting versus good marketing. SDRs and prospecting are massively resource intensive, time, capital, labor intensive.
You’re basically saying, I’m putting a lot of resources into that, and I’m not really getting much out of it- maybe I need to rethink that. You also need to consider the fact of what it does to talent. You’ve got all these bright, young folks who could be doing much more productive and fulfilling careers, whether they’re aspiring sellers or they want to get into marketing or revenue operations or whatever, and you are wasting them and they are suffering high turnover, low tenure, all that type of stuff.
Nick: Is that what drove you to the book or, what made you decide to sit down and be like, I’m going to start writing.
Nelson: Yeah, sorry. I went off on a tangent there, but I want to come back to that point because that’s something I think that people really need to understand the hidden costs of prospecting and then be able to look at their own company and be able to analyze this and take action, but maybe we’ll come back to that.
Basically, I saw how bad it was at that company. And the company had no marketing, the marketing was terrible. I saw it looked pretty naked looking at the SDR prospecting mode. The company suffered and the company wasn’t making any money and the company eventually got sold for $300 million loss and it ran at a loss and a lot of money was sunk into that company. Then I went to a startup and we were a six person team for a year.We had a great marketing engine and it brought in those website demo requests. I was basically the AE/ CSM plus wearing a couple of different hats, like product marketing and a little bit of demand gen. It was a game changer for me because I saw what good marketing looked like and I saw what good sales can look like. Then, at that same company, we were also selling to, at some point, SDRs.
We had a marketing tool and we were selling to both SDRs and demand gen and I saw how ineffective SDRs were with this tool versus demand gen. And I said, we need to focus on demand gen. Once we focused on demand gen, everything changed. The company grew massively and it was just way more successful.
I saw that there’s no need for SDRs. There’s no need for prospecting, you know, you’ve got demand gen. And then I started to learn more about what demand gen is when I was selling to this audience and marketing to this audience and plugged myself into the demand gen world. I understood what good marketing looks like. I mentioned at the beginning that companies don’t separate the good marketing from the bad marketing. A lot of companies also don’t realize what good marketing is nowadays. And marketing has made tremendous advances in the past years and can do so much stuff nowadays. Some companies are still running the outdated marketing playbooks. A lot of companies, even, they don’t even have great marketing or the marketing isn’t doing so well because they’re still trying to work on this whole SDR type of thing and they’re still doing things from like 10, 15, 20 years ago that don’t work anymore or are very inefficient and ineffective. I saw that at that company. I said, okay, let me sit down and write. And I was trying to build out the ideal model for this company for this small startup to kind of go to market.
That’s when I made that model which then ended up morphing into a book. I said, in order for me to have the freedom to have this model, I think you need to get rid of the old model. You need to challenge that you need to change CEOs and CMOs and CROs and venture capitalists’ ideas of what a good marketing and sales playbook that companies should use for growth.
My contention is that to the extent that people run the predictive revenue model is sort of the extent of its harm. Buyers buy, marketers market, sellers sell and companies grow despite it, and that is because they have to do other stuff instead of it. You can grow a company with bad marketing, depending on the quality of your product, and product market fit, and demand, and competition, and margins, and venture capital financing. That growth will still be less with bad marketing, it’ll still be harder and take longer, it’ll be more costly and I was like, you have to write a book because a LinkedIn post is not enough.
People need a book. People need a framework that they can strive towards written down and codified in something. And, that’s what I set up and what I needed to do in order to be able to do the type of marketing that I want to do.
And right now, I’m all about marketing. I think that marketing, right now for B2B companies is probably the strategic place to be winning right now in the market. I would say that companies are now moving towards marketing led as opposed to traditionally sales. And that what we sometimes call product led is really marketing led.
You know, a free trial is just one component of good marketing. Educating buyers enough to the point that they can take a free trial and take it for a test drive or that they can purchase. But there’s even good marketing that drives people to sales, that is what people should be striving towards
Nick: Is that the next book, all about marketing?
Nelson: The first book lays out the theoretical foundation, and sort of a model for people to strive towards to the extent that they can and sort of adapt to their own needs.
The second one will probably be the playbook saying, okay, based on the learnings and all the testings, here’s the best way to go about it. A big part of my book in the current one is to help companies take action. What I recommend to people is to fix your marketing engine.
First, you go and you analyze prospecting versus good marketing and do that comparison of the leads I showed you. Then, factor in the cost, what it does to talent, the fact that it turns buyers off, and it causes them to tune out. If you’re doing all this telemarketing, email spam, and LinkedIn spam, a lot of buyers are getting annoyed and they may not tell you that and you may or may not record them as CRM, but they are pissed off and they are turned off, and there’s a cost to that. If you also consider the opportunity costs of crowding out good marketing, all these resources that could go into good marketing, all the stuff that demand gen wants to do but they can’t because they have to do all this stuff to support the SDRs. This is why demand generators are rebelling against the so-called MQL hamster wheel because demand gen and a lot of marketing is stuck having to generate a lot of contact info on interested buyers, which is what an MQL is so an SDR can go and do the prospecting and telemarketing.
I would also say that one of the reasons why sales is struggling today and why they’re missing their revenue targets is because marketing is producing junk leads. We talked about misalignment. The fundamental reason for misalignment is that marketing is producing junk and then sales is caught on the hook for revenue.We talked about commissions and how half their compensation is tied to that thanks to quotas. I think a big reason of that is prospecting. It’s like, you’re putting a high volume of junk through the pipeline and sales has to deal with all these low quality buyers that aren’t interested in buying or are just kind of price shopping or whatnot. You’re just putting a lot of junk through, and then that creates a lot of misalignment and it creates sales inefficiency as well. There’s a lot of costs to take into account.
Nick: So we’re, we’re just about at time. Do you want to let the listeners know anything that you’ve got coming up? Is it the new book, what’s next for Nelson?
Nelson: Follow me on LinkedIn, I’m trying to break this stuff down, check out the book, run this experiment at your company, and compare the two models. Compare the old playbook and the extent of the new playbook that you have at your own company. Prepare a business case experiment.
I recommend that you automate inbound demo requests on the website, and the qualification scheduling right to an AE, so you sunset the inbound SDR, and you repurpose them to other marketing stuff. Give them quota relief, they’ll be thrilled. On the outbound side, gradually reduce their prospecting, the number of telemarketing calls and emails, spam, and LinkedIn spam that they do in gradual increments and repurpose them, give them a quota relief and let them do other fun, more productive marketing stuff, and work on your good marketing engine. Eventually, you sunset prospecting and SDRs are in better roles within marketing. From there, they can go to other roles in sales or in revenue operations. I would encourage people to run that test, to run that experiment, and be able to transition towards good marketing.
And then for sales, there’s a similar type of setup that you can do to make gradual changes in your sales org. Right now, I’m sort of promoting the book and getting the word out there and having discussions with people to kind of help people implement or move from A to B.
I founded a B2B marketing and sales consultancy called Buyer Centric Revenue- it’s a very creative name- in order to help people transition and to see what good marketing looks like and good sales to the extent that they want to adopt it. So that’s kind of what I’m up to now.
Nick: Ladies and gentlemen, Nelson Gilliat turning marketing around. Thank you very much for coming on the podcast.
Nelson: Thanks Nick. Thanks everyone.
Nick: This has been Mind the Gap, a podcast about sales and marketing alignment put on by Enablix. My name is Nick Ziech-Lopez. Thanks for listening.