Sangram Vajre [00:00:00]:
What companies need to do, especially in 2023 right now, is help your customers tell a really good ROI story.
Heather Cole [00:00:10]:
This is Go-To-Market Magic.
Steve Watt [00:00:12]:
The show where we talk to go-to-market leaders and visionaries about the AHA moments they’ve experienced.
Heather Cole [00:00:16]:
And the pivotal decisions that they’ve made.
Steve Watt [00:00:18]:
All in the name of growth.
Heather Cole [00:00:21]:
And we don’t just mean the growth that goes up and through the right.
Steve Watt [00:00:23]:
Although that’s nice, too.
Heather Cole [00:00:25]:
We’re talking about how they improve their teams, their industries, their careers, and even their lives.
Steve Watt [00:00:29]:
Because growth isn’t quite what it used to be.
Heather Cole [00:00:32]:
I’m Heather Cole.
Steve Watt [00:00:33]:
And I’m Steve Watt.
Heather Cole [00:00:34]:
Let’s uncover some of the magic that makes it happen.
Okay, Steve, who are we talking to today?
Steve Watt [00:00:42]:
Sangram Vajre. He’s a fascinating guy. I’ve known Sangram for years. You know, a lot of people know Sangram from his background in account based marketing. I mean, he was one of the real leaders in that movement, but he’s gone on to be so much more than that. He’s Co-founder and CEO of GTM Partners, a data driven analyst firm that is really helping firms get a handle on what it takes to thrive in today’s world. In his own background, he’s been through a lot of growth. I mean, he led marketing at Pardot, which was acquired by ExactTarget, which was in turn, acquired by Salesforce. I mean, what a crazy amount of growth that was. And then he co-founded Terminus, which went through their own tremendous growth cycle. He’s got a lot of interesting perspectives on what it really takes to thrive.
Heather Cole [00:01:36]:
Yeah, I’ve always known him as the King of ABM, and obviously, from his background, he knows so much and has experienced so much about growth at different sizes of companies as well.
Steve Watt [00:01:47]:
Absolutely. Yeah, it’s going to be great. I’m looking forward to this one.
Heather Cole [00:01:50]:
Yeah, me too.
Steve Watt [00:01:54]:
Sangram, great to see you. I’m so glad you joined us on the show today.
Heather Cole [00:01:57]:
We’d like to get to know you just a little better, so we’re going to do our lightning round of questions. Sangram, looking back, what role shaped you in ways that you just didn’t expect?
Sangram Vajre [00:02:07]:
My role at marketing at Pardot, because at that time, Pardot was 100 people company. Then we got acquired by ExactTarget, and then all of a sudden, we became part of this 500 people company, and then six months later, Salesforce acquired us, and now I became part of this 10,000 people company. So that time was just insanely beautiful.
Heather Cole [00:02:29]:
What manager or mentor from your past had the biggest impact on you and your career and why?
Sangram Vajre [00:02:35]:
Well, from a faith perspective, like, I’m a big fan of Jesus, so as a mentor, I’ve always thought about and looked at like, well, if he can serve people like Jesus did, it’d be great. So that’s my personal role model and mentor.
Heather Cole [00:02:47]:
So, I love this one. What is your business superpower and what is your kryptonite?
Sangram Vajre [00:02:52]:
It’s actually the same thing. It is literally the same thing. So, I’m big on ideas, and now I have 100 million ideas just going through my head all the time. And as a result of that, I would spout out those ideas and tell people about all of that. So having ideas is good, but I can hold off on a few of them, because not everybody needs to know every single thing going on in my brain.
Steve Watt [00:03:16]:
Tell us a little bit about your current venture, what kind of companies you’re working with, and specifically how you really help them thrive.
Sangram Vajre [00:03:25]:
So when we wrote the book “MOVE” and it hit Wall Street Journal bestseller, we started to get a whole bunch of inbound on like, hey, can you help with go-to-market? And it wasn’t as acute as it is right now. So the book has just continued to do much better. But we found out there are 15 common go-to-market problems. If you go to gotomarketpartners.com, it’s literally listed out there. So every company has at least three to five of these go-to-market problems, straight up. As an example, my churn is killing my business, or I can’t predict forecast for the next two quarters. We hear this a lot. Our customer loves us, but they can show ROI or the team is not aligned as marketing. Sales and customer success are out of sync. So we have these 15 go-to-market problems very clearly identified. And note, I’m saying go-to-market problems, not marketing, not sales, not product. Go-to-market problems. So what we do is we literally say, tell us what your go-to-market is, or help them with the assessment and literally help them go fix it in the next 90 days. That’s one of the most typical engagement we do. In addition to that, we have a very proprietary partnership with G2 that allows us to look at behind the scenes, the category movement. We want to look at what’s the next new category, what is the adjacent category, where the market moving, what the intent looks like.
Steve Watt [00:04:38]:
There’s a lot of different places we could go. I want to focus on flywheels. You start early in the book saying flywheels are the new funnels. Take a moment and explain for our audience, really what you mean. I think everyone’s familiar with the concept of funnels. What are you really getting at with flywheels?
Sangram Vajre [00:05:00]:
Most of my career, Steve, I have been so focused on net new acquisition and this fine tuning, this funnel either is upside down or sideways or any other way you would see a funnel. And I’ve been obsessed. And I think most of us in marketing would probably confess that that’s the obsession, that’s what the demand waterfalls of the world and others taught us to do. And we did that. And what I’ve learned, especially through COVID and where we are in this efficient growth mode that every organization is right now, is that no, for the first time, I learned that. Well, maybe instead of just focusing on fine tuning this funnel, we need to really focus on our existing customers. And not just for the sake of oh, that sounds great. We should be customer obsessed, but financially, it makes sense. So, for example, I wish I knew this before as an operator, if I work, if my company has 120% NRR, which is net revenue retention, which means I can sell to existing customers more of my products, if I have 120% NRR, I can double my revenue every five years without adding a single new customer. When you put that in context, that’s the flywheel effect. That means you can grow as a business without net new customers. So ten years ago, Sangram, if you told him, like, hey, you don’t need to figure out or worry about net new customers, I’d be like, crazy, that’s my job. But now I feel like my job and every marketing leader’s job needs to be around, how do I drive efficient growth for my business? And that doesn’t have to come always from a net new customer.
Heather Cole [00:06:34]:
So that’s really fascinating because especially in the way we’re thinking about the economy now and what we’re seeing from a perspective of go-to-market, this is not a new concept now that the macro environment is dictating, that people behave this way. But I believe your book preceded that. So tell me a little bit about the macro environment now, and are you getting more interest or more leverage with this thought process?
Sangram Vajre [00:07:02]:
Oh, absolutely. It’s so funny. Like, Steve and I have worked on ABM together for many years on that concept and doing events together. And ABM was the new black, and now I think GTM is the new black. So it’s really interesting to be part of it. And I think what’s also driving that most people don’t really think and talk about are all the go-to-market motions. Most of us have grown up in either an inbound or ABM outbound motion. And that’s pretty much how we define any and everything around go-to-market. But if you really think about it now, most organization, most leaders are faced with inbound outbound, PLG, channel led, event led, community led, ecosystem led, like seven different go-to-market motions that they have to figure out, how do I work with? My board is saying go PLG, and then somebody is saying that no go ABM, and how do I pull all that together? In the existing funnels and metrics that we have? It is mind boggling. So in many ways, this COVID and this efficient growth model has forced all of us to recognize that there is more than one way to go-to-market. The question is, what is the right way for your organization? And even more importantly, what is the right way for the product that you’re taking to the marketplace because not every product in your company has to fit in with that one go-to-market motion that you and I grew up with.
Steve Watt [00:08:25]:
It’s standard practice when you start talking about go-to-market to talk about alignment, sales, marketing, customer success, they need to be aligned. Easily said, really hard to do. In practical terms, in operational terms, what does it take to get aligned? I mean, does that mean that those three teams all need to report to the same leader? Does it mean they have to have the same North Star metric? What does it really mean to go beyond paying lip service to alignment and making it real?
Sangram Vajre [00:08:57]:
Man it’s a hard question, Steve, because I think everybody knows the need for it, but everybody’s challenged with it. As good market partners, we are helping a ton of companies apply this principle called the CAT Framework: Clarity, Alignment, and Team. And what it really does is to help, like, look, we all know what the problem? There are problems, there are concerns, there are challenges. Maybe it’s a marketing issue going on with certain things and sales. The problem is none of us individually can solve the problem. And most of us are very familiar with whenever there’s leads not coming in, oh, it’s marketing’s problems, sales not closing. Oh, it must be the sales team. Let’s fire the sales team and then get a new set of people automatically. Problems are going to solve. Never happened. Customer success, we get churn is killing our business. Maybe the customer success team is junior. Maybe we need to get a new success team. And we go through this Motion as if the problem seems to be solved by a single department. But if we are really mature about it, what I have been helping companies think about you don’t have a marketing problem, you do not have a sales problem. You do not even have a customer success or a product problem. What we all have is a go-to-market problem. What that helps companies think about is that, well, wait a minute, that means that a single department cannot solve that problem. So let’s say you have a marketing issue going on that you think, which is we are not getting net new leads for a particular product. Maybe your product needs to change and maybe your product is a PLG. And now we need to drive a different go-to-market motion that will drive inbound for it. So product can be the answer to the marketing problem that you’re solving for. So until you bring these teams together in a room, it’s really hard. And it’s not typically just go bring these people in a room and do it. It does require a North Star metric, and I think NRR is one of those metrics.
Heather Cole [00:10:47]:
So is it metric based alone or is it also reporting structure? Because CRO is the new title where we see organizations where they have marketing, sales, and success all going into one. Does that really solve the problem?
Sangram Vajre [00:11:03]:
I have not seen as much. Most organizations, really CRO is a glorified role for a salesperson. It really does not include marketing and sales in it. Most marketers do not want to report into a sales-driven CRO, so you would not find a lot of marketing leaders reporting into that, which means then all of a sudden, the CRO has only sales and customer success. And there again is the gap. Most organizations are struggling with this, like, in a big time, in a big way. And one of the biggest roles I’m seeing is solidifying and helping this thing is the Rev Ops. Rev Ops is starting to become a truly unifying role because typically a Rev Ops person or a team should report into the CEO or a CFO or a COO. Not CMO, not CRO, not any other role, but really one of those top three roles, purely because they need to have the depth of understanding of what’s happening in the business and be able to, without any bias, be able to say that, hey, I don’t think the problem is here. I think the problem is there. And there’s no other person in the team that actually can have that unbiased response than a Rev Ops leader. So I think what’s moving more towards what we are seeing from a go-to-market research perspective is that Rev Ops is really almost the second most important role in most organizations.
Steve Watt [00:12:20]:
So a strong shared North Star metric, most likely net retention, a strong independent Rev Ops function, reporting to the CEO. Anything else that we need to really think hard about?
Sangram Vajre [00:12:37]:
The other part that we have been saying and doing and thinking about and getting a lot of research on is a very clear ROI. I was talking to CEO literally this morning around this, where they’re like, look, we know our customers love us, but they can’t renew with us. Every time they’re about to renew, their CFO seems to be asking hard questions. And our customer, even though they love it and they get it and they use it, they’re not able to show ROI, and therefore our product is no longer there, so we can’t renew. And I’ve heard that too many times. And I think what companies need to do, especially in 2023 right now, is help your customers tell a really good ROI story. Like, really teach them, really give them the framework to say, hey, you know what? At the end of this year, you’re going to come to a place where your CFO and CEO is going to ask, hey, we need to cut 20% of our tech. And you need to be able to very clearly not wake up that day. But you need to have like, oh yeah, of course we want to have efficient growth. We need to take 20% of the tech down. But you cannot take this tech down because this tech does this. You have to have that answer. And if you cannot teach your customers to speak that language with their CF on CEO, we’re going to see a huge churn for a lot of different companies. Because by default, every VC firm I’m talking to, every CEO, they’re literally asking their CMO and the team’s like, hey, just have them cut down by 20% and see if they can operate like that. You got to have an answer for that. So clear ROI story is going to be really important.
Heather Cole [00:14:03]:
In the past and even in the present, velocity is a huge piece. How quickly can we get to it? Tell us a little bit more about how you think about that.
Sangram Vajre [00:14:13]:
Yeah, velocity was one of those pieces where I did play with the word value. I was also thinking about, is it velocity or is it some different kind of variable that keeps executives up? But the more interviews we did, like Brian Halligan, the ex-CEO of HubSpot, or some of the VC folks that we interviewed for this, everybody said that, look, one of the biggest questions we have is how can we scale and where do we scale and how do we think about it? When I dug deeper in, it, what we found out, brian and I, my co author on this book, we found out that it’s not the velocity. Most folks would look at that, well, maybe it’s just the ramp velocity. How quickly can we ramp an SDR to an Ae? But you need to look at Velocity across the board from a go-to-market perspective. You need to look at how quickly can a marketing manager can produce net new demand. If that’s a Velocity ramp, you need to look at how a salesperson SDR, two A, that’s a ramp. How a CS person can not only take care of the account, but also upsell cross sell, we like to call it upserve. Your existing customers, how quickly can they ramp to it? And not only for these go-to-market functions, but almost all areas of your company. So the ramp the velocity part is a big driver for a lot of companies. The challenge that we have seen most companies face is that nobody’s tracking it. Nobody’s understanding more than the SDR. Nobody else looks at anything else, and they make this spreadsheet decisions of saying, well, we should just cut this down and we should cut that down. Oh, one person is fine for 20 accounts, but nobody’s actually looking at the ramps. And if the companies that we saw that are focused on ramps, how quickly can I make my salesperson or CS person or marketing person ready to do X? Oh, wow, they’re doing really good.
Steve Watt [00:15:59]:
Going back to the point you made a few minutes ago, I’ve just been stewing around in my head. You said CS needs to get better at teaching their customers to tell an ROI story. Most, or a lot of CS teams, at least those that I’ve seen, get stuck at the product feature level. They’re experts in the product. They’re not necessarily particularly seasoned in the business. How do you get over that? I mean, is that a training function? Or how do you really help your CS team to become true business advisors? Who can lead that ROI conversation?
Sangram Vajre [00:16:42]:
Oh, it’s a very hard problem to solve right now. And traditionally, companies have solved with the TEI report. The Total Economic Impact report that Forrester and Gartner as go-to-market partners. We partner with G2 to help with the reviews and show proper ROI. So use case. So we help with a ton of different companies with ROI studies. But the problem is not creating any of these reports. You absolutely should have something to support that, because CFO is going to probably pay attention to a third party validated ROI story. What’s really important for a CS person is to understand the reasons why that individual bought that particular product and what goals they had, and keep on it. Keep on it. A lot of times, because the point of contact changes, because priorities change, people just forget what the rules were when they started and they haven’t really adjusted to it. So by the time the renewal comes, either the point of contact person is completely different or their goals have completely changed and nobody has taken the time to look at that. And even furthermore, because most CS people are much more of a serving mindset, they’re all about, hey, I’m there for you. I’m right there. They’re more about responding back. They need to get out of that mode and actually recognize themselves as partners. And I’m here to really get you promoted. That’s the mindset they need to have as a CS leader. And when you start thinking about like, my job is to make this person get promoted, that will mean that my job is to make this person’s job better, faster, easier. So a lot of times I’ve seen CS people create executive decks for them, say, hey, this is what you need to present at your next. This is how you should show the overall value, not just of my product, but the overall value of what you do in your organization. That requires a lot of strategic thinking, which is why I’m so bullish on the fact that in 2023, the companies that will really focus on NRR, their top set of customers, keep them, retain them, and accelerate with them, they’re going to be the ones who are going to come out there not only surviving, but thriving.
Steve Watt [00:18:43]:
One final question before we let you go. Sangram, at the top of the show, Heather asked you about your business superpower. I was anticipating you were going to say community building because you’ve done such an exceptional job of that. You did it around ABM. You were one of the leaders in teaching marketers to think differently and operate differently. I presume you’re doing it again around GTM. What are you doing on the community side?
Sangram Vajre [00:19:09]:
We’re literally bringing go-to-market executives in a room and teaching the whole business of go-to-market. Every one of our events, we do invite only director and above because we believe go-to-market are business decisions. You’re not talking about SEO hacks. You’re really talking about how do I take care of my churn problem, how do you do NRR? How do I create a better value prop? How do we go from a product to a platform company? These are go-to-market problems that companies are facing. So we’re trying to help educate go-to-market leaders to become and act like business leaders. And that’s the community that we are building called Go-to-Market Made Simple Community.
Steve Watt [00:19:53]:
Beautiful. Well, Sangram, thank you so much for joining us today. You’ve given us a lot to think about, and we look forward to catching up with you again.
Sangram Vajre [00:20:01]:
Sounds great, Steve, thank you so much. Heather, it was so good to see you and appreciate the time with both of you.
Heather Cole [00:20:01]:
So, talking to Sangram is always fascinating because he just knows so much about the go-to-market engine.
Steve Watt [00:20:06]:
Yeah, I’ve known Sangram for a long time. I’ve long respected him. I mean, he really made his name as one of the pioneers in account based marketing, and he taught a generation of marketers to think differently about marketing. And it’s really cool to see him expanding now and tackling even bigger business problems.
Heather Cole [00:20:28]:
Yeah, it’s interesting how it’s morphed from ABM to what ABM then became, which was really the go-to-market structure and how he’s brought that and really progressed it even further.
Steve Watt [00:20:40]:
Yeah. What were your main takeaways from that conversation, Heather?
Heather Cole [00:20:44]:
So, I think one of the things that struck me was his conversation about customer success, piece of it, and how do you measure value? And thinking about it in terms of customer success, I thought it was fascinating the way that he put it. As far as saying their job is to make sure that their customers get promoted, as opposed to focusing on engagement with the product and making it stickier and getting the value out of the product, I think you still have to get value out of the product. You still need to demonstrate that, obviously. But switching that and flipping it as he likes to do and say, your job as a CS person is to think about your customer and how to make them ultimately successful, which I think is a really amazing way to put that. It also makes companies start to think about the people that they have in those roles. Because if you’re going to make your customer successful and you are going to show that type of value, you really need to have CS organization who can deliver on that. And that is enabled to actually do that.
Steve Watt [00:21:43]:
For sure. And I think it’s especially true in an economic downturn. You need to be able to defend that spend. And then that was my takeaway from that part of the conversation, is that your CS team needs to get better at aligning with your customers business outcomes, not just the capabilities of your product, but how you are really driving ROI for your customers. They have to teach their customers how to tell that ROI story up and down their organization. So, when it comes time for cuts, your spend is defensible. And if you don’t do that, your spend might be on the chopping block.
Heather Cole [00:22:21]:
Well, not just defensible, but spending more. Which brings us to that North Star metric, which with the NRR and the net revenue retention is about how much more are they going to spend with us? So what do you think about that?
Steve Watt [00:22:32]:
Oh, yeah, that’s probably my top takeaways. Everyone talks about alignment, but what does it really mean in practice? I thought Sangram was going to talk more about reporting structure. I thought he was going to talk about the rise of the CRO. Now, he did talk about the importance of rev Ops and that that’s an area we could talk about, but I thought he was going to talk about CROs and these various departments reporting to one single person who owns revenue, but that’s not where he went. He focused on a shared North Star metric and specifically that net retention, and that it’s less about who you report to and more about what outcomes you drive. And if you can get sales and marketing and CS all really focused on that single metric, then that’s how you get alignment. I thought that was a really interesting perspective.
Heather Cole [00:23:25]:
Yeah, I like it that it’s taking it to the measurement and away from the management of the functions because it also becomes less personal. And it’s one thing that people can really focus on no matter what we’re seeing in different industries and sizes of companies and how they’re handling that. The actual measurement and how you’re looking at the outcome of it is so much more important than looking at the reporting structure.
Steve Watt [00:23:50]:
Absolutely. Great, great conversation.
Heather Cole [00:23:56]:
Absolutely. If you enjoyed this episode, follow the show on YouTube or your favorite podcast app.
Steve Watt [00:24:01]:
And check out gotomarket-magic.com for show notes and resources.
