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Price vs Service Load

Every business should aspire to be in the top left quadrant -- where Price is higher but Service Load is lower. This is when margins are the highest and can be reinvested into building an even better product and business.

This is why some of the biggest companies in the world are B2SMB SaaS companies. Shopify, Hubspot and Atlassian all fit in that quadrant.

It is also why Product-Led Growth companies with price points around $1K eventually end up trying to move upmarket and why B2B Enterprise companies try to lower their service load with better software that needs less customizations.

It is where the most value is created for the customer the fastest. There is more automation, better self-service, more transparency, better outcomes, better experience.

Win-win.

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Step Function Expenses

Revenue increases gradually while expenses increase like a step function. This is a key dynamic to understand whether you're the CEO or a team member working in a business.

Every time you ramp up expenses, it cuts into your profitability. This is why ramping up expenses in the right areas is critical.

The right expenses are better framed as investments. They ramp up revenue as well so your profitability curve smoothes out.

Every time you bring a budget proposal to the CEO or board for an expense that doesn't ramp up revenue, the likelihood of getting that budget drops to 0.

They have so many places where they can invest additional dollars that investing it in a place with no ROI has a high opportunity cost as well.

This is why many functions, including marketing, are viewed as cost centers by companies.

Marketing costs look more like expenses than investments when the marketing leader cannot explain how added cost, program or headcount the company will ultimately grow the business...

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AAARE Understanding

End to end understanding of all the levers and conversion points is how you build the right growth model for your business.

1) Acquisition -- building the right model to generate the right demand at profitable CAC levels.

2) Activation -- building the right framework to get the right prospects to activate and onboard on your platform.

3) Adoption -- building the right infrastructure to have your customers embed your solution into their environment, while getting all stakeholders involved.

4) Retention -- driving towards customer success with everything you do (marketing, sales, product, UX)

5) Expansion -- identifying opportunities to grow your relationship with customers with increased usage or additional products, services, and offerings.

The more you understand these levers and pull them effectively, the more budget you can invest into acquiring customers in the first place.

The more you can profitably spend to acquire a customer, the faster you grow.

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SDR Demos

Somewhere along their journey, companies decide to treat buyers like mice in a maze. Want a Demo? Sure, you just have to:

  1. Fill out a form
  2. Schedule a call with an SDR
  3. Wait
  4. Talk to the SDR -- who won't give you a demo but will ask you all their BANT criteria questions and then book a call for you with an AE
  5. Wait
  6. Talk to an AE -- or just go jump off a cliff
  7. Before you know it, 2-3 weeks have passed and the buyer has lost their urgency / has found someone else who has engaged them on solving their problem faster.

This type of workflow also kills demand gen programs that take a lot of effort to get the right prospect in the door, only to have the buyer end up in the Closed Lost column due to a bad sales process.

Start with the buyer. Remove the hard lines between SDRs and AEs.

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Pricing Impact on Operating Model

Pricing has a significant impact on your operating model. It is also one of the most powerful growth levers available to most businesses (yet also one of the most under-utilized).

Companies are often scared to increase prices for fear of losing loyal customers, lowered satisfaction ratings and being perceived as price-gouging for their products.

Ironically, keeping your prices stagnant is one of the quickest ways to deliver lesser value to your customers.

Lower margins > lower bandwidth to provide value > lower customer experience > lower customer satisfaction

This does not mean increasing your pricing indefinitely. It means finding the right (and fair) scientific price for your product so that you have a better operating model to deliver more value.

Getting to this answer takes work and going through customer data to truly understand what is a fair price for both sides.

At the heart of such a project, a lot of data needs to be analyzed, including:

  • Churn by cohort
  • NPS...
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Scaling Growth Without Process

Scaling growth is a lot like stacking boxes on top of each other. You can safely stack the first few boxes on top of each other as you grow faster.

Over time, however, the entire structure is at risk of collapsing if you don't:

  1. Put the right processes in place
  2. Put the right people in the right seats
  3. Build the right infrastructure to scale faster

Growing faster is the sexy thing to focus on. It's what companies are taught to show off about. YoY growth rates, more funding, more hiring etc.

Not every company needs to "blitzscale", nor can every company do it. This is why you see a lot of companies go on hiring sprees and then eventually needing to lay off people as time goes on.

People lose when companies scale unsustainably. Employees lose. Founders lose. Investors lose. Customers lose.

Growing sustainably over a long period of time, while building the right foundation, is a much better business strategy.

It's also how everyone wins.

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Air Cover

"Our campaigns provide air cover" is one of the most commonly used marketing excuses in the book.

It's also the excuse that sales and the rest of the organization rolls their eyes at, especially in times when targets are being missed.

Air cover is used as a shield by marketing organizations not accountable to revenue. While it is important, it is not the only thing marketing is responsible for.

A marketing function that washes its hands clean of revenue accountability is not a true marketing function. It is closer to a corporate marketing sub-function of a bigger marketing need inside an organization.

Instead, leverage air cover to get your sales team more support when they enter a sales conversation. But also leverage other marketing activities like content, demand gen, social and more to build trust with buyers and generate more sales.

When sales and the rest of the organization notices you taking full accountability of revenue, they also take marketing more seriously.

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Demand Gen Efficiency vs Sales Call

The first sales call can make or break your demand gen efforts.

That's why marketers need to pay attention to how good the sales process is.

  • Did the prospect get called in 10 minutes? 10 hours? 10 days?
  • Did the call break the experience of the buyer in any way?
  • How was the quality of the interaction?
  • Was the sales rep adequately prepared to handle the call?

Good marketers do this work and extend their efforts to fine tune conversions beyond what happens on a webpage.

This means doing things like:

  1. Listening to sales call recordings
  2. Being a part of how sales reps are trained (making sure they are onboarded correctly)
  3. Communicating the importance of logging sales call info into the CRM to sales reps so you can make your campaigns better
  4. Changing broken processes to improve the experience (e.g. why is the prospect called by an SDR who is not allowed to answer basic questions?)

It requires a paradigm shift and putting an end to the marketing vs. sales battle. Marketing is Sales....

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Super Communities

In a lot of companies, getting off the hamster wheel of trade shows is virtually impossible.

So much so that even when trade shows have stopped, the trade show budget has been reallocated to the virtual versions of the same trade shows, which are far less valuable (no relationship building or in-person contact).

Meanwhile, digital marketing budgets don't have nearly as much allocation as required by the market. Paid media is underfunded, content is underfunded, social is underfunded.

Instead, it's time to rethink marketing budget allocation altogether. For example, if you analyze the trade shows you went to in 2019 through to Closed Won impact, you'll find that 20% of the shows brought 80% of the revenue.

Those same companies are ignoring digital channels that can bring in better qualified leads at much higher conversion rates. That is money that has been left on the table for years.

It's time to reallocate that budget with the right digital strategy on the digital channels where...

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Reallocating Trade Show Budget

In a lot of companies, getting off the hamster wheel of trade shows is virtually impossible.

So much so that even when trade shows have stopped, the trade show budget has been reallocated to the virtual versions of the same trade shows, which are far less valuable (no relationship building or in-person contact).

Meanwhile, digital marketing budgets don't have nearly as much allocation as required by the market. Paid media is underfunded, content is underfunded, social is underfunded.

Instead, it's time to rethink marketing budget allocation altogether. For example, if you analyze the trade shows you went to in 2019 through to Closed Won impact, you'll find that 20% of the shows brought 80% of the revenue.

Those same companies are ignoring digital channels that can bring in better qualified leads at much higher conversion rates. That is money that has been left on the table for years.

It's time to reallocate that budget with the right digital strategy on the digital channels where...

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