SaaS Interviews with CEOs, Startups, Founders
$10m playbook for getting sales/marketing to work in harmony
29 Jun 2023
Chapter 1: What is the $10 million playbook for sales and marketing harmony?
I'm very excited to share this recording with you guys, which happened at our conference, sasopen.com, with over 100 speakers, all founders of B2B SaaS companies. We have a very high bar for what speakers share on stage, so you're going to enjoy this episode where we dive deep into revenue graphs, real tactics, and real growth metrics.
You are listening to Conversations with Nathan Latka, where I sit down and interview the top SaaS founders, like Eric Wan from Zoom. If you'd like to subscribe, go to getlatka.com.
We've published thousands of these interviews, and if you want to sort through them quickly by revenue or churn, CAC, valuation, or other metrics, the easiest way to do that is to go to getlatka.com and use our filtering tool. It's like a big Excel sheet for all of these podcast interviews. Check it out right now at getlatka.com.
Thanks, everybody, for coming.
Chapter 2: Why do sales development representatives and marketers often clash?
This is the $10 million playbook for getting sales and marketing in harmony. Thank you for coming to this talk instead of watching March Madness. If any of you are watching on your phone, it's fine. Michigan State just beat USC. Xavier's about to get upset by Kennesaw State, so your bracket's probably busted. Thank you also for coming to this conference during National Couch Day.
I'm pretty much out of words at this point, so I'm gonna keep this light. All right, over the next 20 minutes, we're gonna talk about why SDRs and marketers don't get along, when to invest in those channels, when to reinvest in those channels, and also a new way to look at a lot of these things.
I think there's a lot of talk and there's a lot of content about what is good demand gen marketing, what is good SDR work, what is good sales development. What I want to propose is a few of my contrarian takes that I've built up through my career in both of these roles.
I started my career at Andreessen Horowitz on their market development team, helping their go to market for their portfolio companies.
Chapter 3: What cultural differences exist between sales and marketing teams?
I was an intern. And while I sat in the intern room, I learned a lot from the finance MBAs that were there as well, and I also learned a lot from the portfolio companies. And what I had found, and well, during that experience, I moved around a ton of logos, so I'm now having aversion to PowerPoint, so these slides are gonna be pretty brief.
But what I saw is that a lot of companies have a lot of different go-to-markets, and I asked for advice, what should I do with my career? I was asking some of the Andreessen partners, and one of them, Frank Chen, told me you can either, in Silicon Valley, and I knew I wanted to work in tech, you can either sell or you can build.
And I was, you know, all of the credit short of a computer science degree, so I decided to go into sales. And I started my career as an SDR at Zora. At that time, I was really divorced from the marketing side of things, and then I went into marketing after. But before I jump into more of those experiences, I want to talk about why we should care. This is a chart that is a linear regression.
I'm sure you thought you were done with linear regressions after college economics, but sorry to bring it back. That shows the more that marketing touches your leads before and after a close, your clients, your prospects, the more revenue you can generate per client.
While that sounds super intuitive, there's necessarily a handoff between marketing and sales at different parts of the funnel, and it's sort of an unspoken taboo for marketing to ever touch existing customers. So what I wanna do is try to break down some of the walls between sales and marketing, but first I wanna talk about the cultural differences.
So raise your hand if you've ever been in sales, you've ever had sales in your job title.
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Chapter 4: How can marketing and sales work together more effectively?
Raise your hand if you're a CEO. Okay, so that's all the people that are in sales. Now raise your hand if you've ever been in marketing. Raise your hand if you're a CEO. Okay, so that's roughly two, like three quarters of the room has been in sales and marketing. Who has hired and recruited SDRs? Okay. Marketers, what do you think of SDRs? Just shout out keywords. Anyone else? Come on. Hungover?
More on that later. So when I was in SDR, at the end of every quarter, we had a sales, we had an end of quarter party, and I thought about including this picture in the slideshow, but I decided against it.
The photo was two SDRs and then two AEs, and it was a wheelbarrow competition where the AEs grabbed the SDR's legs, and the SDRs ran with their hands, and the first one to win got like an extra 100 bucks.
Chapter 5: What are the misconceptions sales teams have about marketing?
And there's also a gong in the photo and a lot of beer and red cups. When I was in demand gen marketing, our end of the quarter party was we had a nice hike and we drank white wine in Napa Valley. And that tells you everything you need to know. So I surveyed a bunch of marketing and sales folks. So for context, I'm the founder and CEO of Bloom Growth.
We are a growth agency that combines outbound sales development and demand gen marketing, as you can tell from my background. And so I just wanted to list some of those conceptions. I would even call them misconceptions. So sales thinks, and this is the gripe that I heard around the water cooler when I was in SDR and in AE, is that sales, that marketing doesn't know the customers.
They give you a bunch of leads that they can't follow up with.
Chapter 6: How does the MQL (Marketing Qualified Lead) concept affect sales and marketing alignment?
They do a whole lot of nothing. They spend time ideating and meditating and going and drinking white wine in Napa, but they don't actually know the customer or the product, and they sit in their ivory tower. And then, I got to demand gen marketing, and I was in charge of generating a lot of leads. I worked for a satellite imagery company called Planet Labs.
And our goal was to generate as many people interested in downloading satellite data. I ran the free trial, and I commissioned satellite data from my own satellite, which was very interesting. And in that time, I gave a bunch of leads to the sales leaders and the SDRs. What I had found is they didn't really follow up on those leads. No matter what kind of lead scoring I did, they were impatient.
If a lead wasn't really ready to buy, they didn't want to talk to them. And they were self-serving, and they only wanted to close deals that helped their quota. And if you've ever seen a CRM after a sales team's been through with it, it's like a messy room. So here's the original sin separating marketing and sales. And this is this pipeline that everyone's seen.
Chapter 7: When should a company consider hiring a sales development representative (SDR)?
Awareness, interest, consideration. There's the handoff between MQL and SQL. And then sales takes it to close. Marketing, like I said, does not often engage with signed customers. There's this unilateral designation. It's marketing qualified sales. There's the M and there's the S. And don't touch it if it's on the other side. So common mistakes that cause this. So this is my contrarian take.
Like, look, this funnel has worked for a lot of big companies. A lot of people made a lot of money with this. But I think that this model is broken. This is my contrarian take. Because people don't buy from salespeople anymore. I run an outbound agency.
Chapter 8: What metrics indicate the effectiveness of integrating SDRs with marketing?
I've been in sales. I've been in a bunch of tech companies. I've advised and invested in a lot of tech companies. And people don't buy from brands unless your brand is Salesforce. So For every Salesforce, there are thousands of CRM companies trying to make their own brand.
People buy from people, and SDRs are the face of your brand and are typically under-trained and don't understand how representative they are of the brand marketing. So why are these... The executive misalignment, you know, you have a pipeline goal for marketing and a revenue goal for sales. Those two things are different. That's pretty self-explanatory.
The focus on acquisition only, so like I said, marketing only being focused on, okay, these channels drive revenue. Do they drive renewals? What are the churn rates? All that kind of stuff. And like I said, my contrarian take is that SDRs are actually brand marketers and should be treated as such. So how many people have SDRs in their organizations right now?
Okay, how many people have a marketing budget of over $1,000 a month? $5,000 a month? $10,000 a month? Okay. So this is another contrarian take. So this is a very simple product market fit pyramid, and this is what companies do. They create a product, they figure out what the use case of the product is, they find their target customer, and they try to serve a need. And
They want to validate that they have product and market fit before they invest too much in marketing itself, especially because VCs, they tell them that they need this. Nobody can really quantify what it is. You sort of know it when you see it, but there's no one North Star stat that tells you what product market fit is. What companies don't do is they don't look for channel market fit.
So a lot of companies that fail or spend a lot of money doing the wrong thing is they think they have product market fit or they're experimenting product market fit. And what they find is their product didn't work because they couldn't sell it. But what they didn't do is they didn't find the right channel.
And a lot of companies, they sprinkle a lot of channels because they want to have a big, robust team, somebody managing paid search, paid social, LinkedIn, Instagram ads, whatever it may be. When in truth, you fit basic PMF, you have an MVP, you find a target market, you find a channel that works, and you continue to invest in that. When is it time to hire an SDR? This is fairly straightforward.
The inbound leads for marketing aren't being followed up with. Again, I'm saying marketing in the second, but it's before inbound. So before you're actually talking to the leads, that slowing down, which means you have to go out and find more leads.
And then your closers are prospecting because your closers, while they should be prospecting to a certain extent, you always want to keep their calendars full. So... How can we marry these ideas and create a better playbook considering marketing and sales? So first of all, we have the broken MQL. MQL is another thing that is entirely dead.
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