The SDR/prospecting model isn’t the best way to do business anymore It’s crucial to make content for your audience The evolution of social media has affected modern buyer preferences Consider shifting your SDR model in a two-phase approach
00:00-11:08 | Why the B2B marketing model is broken 11:08-19:24 | The problems with sales development or prospecting 19:24-33:07 | Four main points of Nelson’s book 33:07-46:14 How to transition to a buyer-centric strategy
“That’s what content creators and marketers do, we try to put on a good show—not boring old reruns that nobody watches.” - Nelson Gilliat “Sales development or prospecting is spam. The definition of spam is sending someone unconsented marketing solicitations to their private inbox. It’s basically marketing while selling your soul. That‘s why SDRs hate it and can't wait to escape, and buyers are turning off and tuning out.” - Nelson Gilliat “Prospecting and sales development does generate leads and revenue. But just because a marketing tactic can generate them doesn't mean that it's worthwhile relative to all the other possibilities.” - Nelson Gilliat “Content is basically non-spam marketing. It's a way for marketing to communicate with, attract, educate, and entertain buyers in a non-spam way while developing relationships.” - Nelson Gilliat
Full Transcription:
Kap Chatfield 00:00
Rveal media presents B2B Podcasting. Hey gang, welcome back to B2B Podcasting, the official show to help B2B CEOs... I was like, Wait, who is it for? Let me say it again. CEOs, brand leaders, sales leaders and marketing leaders. All right 321 action. Hey gang. Welcome back to B2B Podcasting, the official show for B2B CEOs, brand leaders, sales leaders and marketing leaders to help them skip ads and be the show. We want to talk about marketing and sales tactics that actually connect with audiences and turn them into customers. And we today we have a guest that's actually going to be the perfect guest to talk about this very topic. His name is Nelson Gileat. And he has written a book called Death of the SDR: Birth of Buyer Centric Revenue. We're gonna get into that specifically, but I'm gonna mine the gold out of him today to talk about specifically why content creators have an advantage today in the B2B marketing world, in the B2B sales cycle. And we'll also try to talk a little bit about how that can apply, this mindset can apply, by using a B2B podcast. So Nelson, thanks so much for joining us on the show today.
Nelson Gilliat 01:25
And thanks, cap. Thanks for having me. I think it's gonna be a great talk.
Kap Chatfield 01:28
Yeah, it's gonna be it's gonna be easy, because this is clearly your lane. One thing that I'm really passionate about, particularly in my line of business, is helping our customers clarify their positioning, clarify a thought leadership point of view. And, golly, I mean, you've done this, you've, you've created a very laser-focused narrative. And it's really, it's the title of your book, you made it really clear for anybody to know what you're about how you see changes in the market. And dare I say that what your book title is, it's a bit controversial. I mean, there's so many businesses that are still creating teams of SDRs, and are still doing the cold call model. But what you're talking about here through your book, which we'll get into shortly, specifically, the four different topics of your book, you're really challenging the status quo. And one thing that you had said to me in our pre-show call was you said that B2B marketing is broken. I'd love for you to break down what you meant by that, and why you felt like this book was necessary.
Nelson Gilliat 02:28
Yeah, sure. And first, I'll just say, you know, I think it's a case in point, it's like, I don't have SDR as a one man band. And, you know, I took a certain position. And I have, you know, I've got a compelling narrative. And I've been able to produce a bit of content and do a bit of social media and go on podcasts, just a few different marketing tactics, no ads, nothing, no, no sales development. And yet, I've been able to get my message across to many people, and build a bit of a movement and got something like 10,000 followers on LinkedIn. And so I think there's just it's what you're helping to achieve by by helping people put on a show. And in a sense, that's what content creators and marketers do, we try to put on a good show, and we don't want to just put on boring old reruns that no one watches, we want to be the latest and greatest Netflix show. But sorry, so the question, can you repeat one more time, I think was, was why
Kap Chatfield 03:23
So you made a comment in our pre-show call. There was really, it seemed like the heart for why this you felt like you needed to write this book, you said, pretty boldly, B2B marketing is broken. And you might have even tried to allude to, like B2B sales is broken, too. So in that, with that, that mindset, it was really what birthed this book, what can you unpack that for us? What did you see was broken in the world of B2B marketing?
Nelson Gilliat 03:48
Yeah, sure. So specifically for B2B marketing, when I saw that was broken, and the fundamental problem that I think is putting a lot of marketers in, in what I call a straitjacket, you know, they're forced to do things they don't want to do and they're prevented from doing things they do want to do. And they're very frustrated, and they're having less productive and fulfilling careers than they can and should...It's fundamentally sales development. It's prospecting. And I see sales development and prospects, you know, whose job is to do basically prospecting full time. I see that as the outdated, worst form of marketing that you can do and because marketing is forced to use basically support, sales development a lot and basically, because of the predictable revenue model, which is the model that most B2B companies run and why challenge it makes sales development and prospecting the core marketing strategy to which most or a lot of marketing resources are put towards. And I think a lot of people are seeing that these problems today and they're trying to address it. I think they're, they're, you know, questioning sales development and how it will evolve or they're fighting against the effects of sales development, upon marketing, whether that's gated content MQLs, lead scoring and lead in 10, manual demo request, scheduling and qualification, you know, turning off buyers with prospecting and damaging your company reputation. But fundamentally, it's the cause that you need to fight against, which is sales development. And so there's been an evolution that's happened in marketing in the internet and social media. And that has affected modern buyer preferences and modern marketing. And yet, we still are operating on this old school form of marketing, this this prospecting. And then on sales development, when we really should be optimizing and leaning into proper proper marketing.
Kap Chatfield 05:53
So what was your experience? Were you an SDR at one point? And did you experience this firsthand? I mean, the bold statement, the death of the SDR, I've talked to so many SDRs that wish they were dead because they hate their jobs so much. So explain to me, maybe a little bit of your background with that. Have you had experience with that?
Nelson Gilliat 06:10
Yeah, I started out in B2B, as most folks do, at least in mar-, you know, at least in sales, and sometimes if they want to eventually progress to marketing, but as an SDR so I was an SDR for a while. And then I was a what is known as a full sales cycle seller. But I think it's a perversion of the term. But it's an SDR and AE combined. And so, I've done a lot of prospecting. And I saw how fruitless and wasteful that was compared to modern marketing. And I was making 80 telemarketing calls a day, I was sending, you know, emails and trying to personalize my emails, do a lot of research, I was doing, you know, direct mail or sending physical mail, I was doing door knocking, I was going around, you know, New York City canvassing, trying to, you know, hit up certain businesses, I was doing whatever I possible to try to generate a meeting for sales, I was bribing people to take lunches with sales. And yeah, even though I, you know, was a good SDR and producing or exceeding my meeting quota, the leads were terrible. Sales, you know, did not want those leads, they wanted to lead to marking the leads that I had, you know, there were people that were less likely to show up to the meeting, less likely to buy or buy as much, you know, they were really just taking information or just getting exploratory information or kicking the tires, just browsing but didn't have really any buying intent. And so that really harmed sales and the relationship between sales development or marketing and sales, you can say that misalignment, just kind of putting garbage through to sales and affecting their win rates and their sales cycles, then you have this bloated sales org, trying to triage all these bad leads from sales development. And so I saw that that was, you know, it was just so fruitless, I was doing so much and getting so little out of it, compared to what the marketing team was doing. And marketing was doing, you know, all these better marketing tactics to woo buyers in the door, who are requesting demos on the website. And these were the hot leads, or the layups that sales wanted. So I was like, why are we optimizing and spending so much resources in sales development, and not in marketing? And this occurred at a big company. And, you know, it's a company called Western Union Business Solutions. And then, you know, at something like 1500 employees globally at the time, and then I went to a five person startup. And when I went to this five person startup, you know, we didn't have sales development, and we didn't have the money to waste on sales development, we had to be very smart with our marketing. And then this startup was also marketing, primarily to marketers. And that's when I really, when I was at this company, I started to shift away from sales and sales development, put on a bit more of a marketing hat, you know, as you you wear a lot of hats in the startup and then got into the world of marketing and learn from a lot of marketers, you know, in the LinkedIn community, and then I was like, whoa, whoa, there's, there's all these better ways to generate and qualify leads for sales than sales development, prospecting, and basically what what prospecting is, or to define that it's a marketing strategy to generate and qualify leads, primarily through telemarketing, email, spam, LinkedIn, spam, physical mail and bribery through gift cards. And the reason why it's spam. In you can use prospecting and sales development and spam synonymously is because the definition of spam is sending someone unconsented marketing solicitations to their private inbox, whether that's their phone, their email inbox, or their physical work or home address, which is why spam if you're if you're an SDR, it sucks because you're, you know, you're spamming people, you know, you try to make the spam less annoying and you know less unpleasant by trying to personalize it maybe using some humor. But fundamentally the nature that it's it's the nature of the marketing communication is spam, which is why no matter what you do as an SDR, you hate it, it sucks, constant rejection, avoidance from annoyed buyers. Spam or prospector sales development is basically marketing while selling your soul. And that is also why buyers take great lengths to avoid it, and block it and filter it out and turn off and it harms your reputation and the brand as a company. And buyers have gotten better at ignoring that and tuning it out, it takes SDRs like over two, three times the amount of attempts just even get in contact with a buyer than it did a couple years ago. And even when they do get in contact. You know, it's they're not getting much value out of that. In fact, it produces a lot of dis-value. And you might ask, "well, prospecting and sales development does generate leads and revenue." Yes, that's true. But just because some a marketing tactic can generate leads and revenue doesn't mean that it's worthwhile, right, worthwhile and does more good than harm relative to all the other marketing possibilities and investments, which in the case of modern marketing is not the case. And so I'll wrap up by saying what prospecting does is it turns off buyers, which marketing is already wooing, and would eventually request a demo, but it turns those buyers off. And then it pushes some buyers prematurely to sales. And these, again, are buyers that are typically, again, they're premature, you know, maybe they were aware of your company because of marketing efforts and whatnot or their peers are talking about it because marketing is influencing their peers or they're just interested in taking a tool or just just whatever browsing, just exploring, this happens a lot. And it's unfortunate because this is information, exploratory information, that a buyer should just be able to get on the website, that marketing should make available for free and upfront and transparently. But oftentimes marketing is forced or or companies because of this Predictable Revenue Model straightjacket are trying to force buyers to this unpleasant and artificial buying experience across SDRs and across sales. Rather than bringing that information at the buyer needs upfront, up and for free and in your content on your website, putting your pricing, your FAQ, how the product works, benefits and features, having giving you giving a buyers the ability to try your product for free, you know, so buyers self-service to the extent possible and desired freemium, free trial, product tour, or a sandbox environment, a demo recording, a Buy Now button. And so yeah, it's a terrible, terrible buying experience for the buyer. And because that misalignment between modern buyer preferences and modern marketing, because a prospecting sales development is why we see that there's that there's, you know, tension and conflict and marketing is really unhappy. And sales development is really unhappy. And sales development is suffering really is suffering, high turnover, low tenure, low productivity, or low performance and low job satisfaction. And so we really need to be rethinking this and change it. And that's why I wrote this book, and outline the way for companies to transition and present a new solution and examples of companies who have transitioned and in case studies and so trying to help people move from A to B, not just casting light on a problem, but helping people adopt the solution.
Kap Chatfield 13:50
So I want to recap what you said, because I think what you're what you're saying is so, it's so transformative. And it's so needed. It's actually very aligned to the premise of the show, as I kicked off the show saying, we want to help basically B2B brands, skip ads and be the show. The difference between what you were experiencing in your organization between the sales development side and the marketing side, was the marketing side was actually providing value through educating about the product, whereas the sales development side was interrupting and was spamming and it was the it was creating the same sort of affinity that an ad would versus how a show would. We talk about how ads repel audiences. They get skipped, muted, bypassed altogether, people pay for premium versions of apps to avoid ads. So you even saying that, like buyers are going through extensive lengths to make sure they don't have to deal with any of that stuff. Or as shows actually, the show mindset, I guess you can say is what draws an audience together. And so what you're talking about is, how can businesses practically change the way that they think about going to market? Because I'm sure if you could, if you, you would probably be able to say this, that the SDR mindset is we want results fast. Let's go knock on doors, let's go pound the phones. Let's get them in the room, and then we can close them. And then it's a shorter transaction time than a long game play of marketing. I mean, let's be honest, people avoid businesses avoid that type of marketing that you're talking about, because it's a long game play. But what you're saying is, when you focus so much on the short term, you actually jeopardize the long term, like pretty pretty significantly, because you're ruining relationships with those buyers, is that essentially what you're saying?
Nelson Gilliat 15:43
Yes, and if the goal of your marketing is to basically generate as many lousy leads at any cost right now, and you don't care about efficiency or effectiveness, you don't care about profitability, ROI. You don't care about turning off your buyers, you don't care about turning or damaging the reputation. You don't care about turning off your talent, you don't care about opportunity costs. If you don't care about the short term, and you don't care about the long term, then prospecting or sales development, or spam, whichever you call it, is, you know, is the way. And so if you look at sales development, you look at prospecting, their goals and metrics and compensation is designed around that. It's your only or primary goal and metric is meetings booked. Just do whatever it takes to get someone to agree to a meeting. Don't care about anything else after that. Don't care about whether they show up to meeting how fast they buy. You know, do they buy at all? Don't care but so you don't care about win rates. You don't care about sales cycle, you don't care about cost per acquisition, you don't care about you know, profit, you don't care about wasting sales' time and resources, chasing bad leads. It's just meetings booked at all costs. And so yeah, you can go generate tons of of, you know, spamming people who were just like, "Okay, fine. Yeah, whatever, I'll just take a an exploratory meeting, why not, maybe I heard some good things from your marketing, or from my peers, who your marketing team is also implementing, but I'm not really going to buy." And so sales basically get stuck holding the bag, marketing suffers, sales development stuff, or has been and so, so again, I was exceeding my meeting quotas, but they weren't turning into, you know, it wasn't profitable, they weren't turning into it was wasting sales' time, they weren't turning to customers. And so, yeah, proper marketing works better. And this is like, works in the short term and the long term, it has compounding yield. So you know, it grows, it grows, it grows, and then it like, really starts to take off. And that's when you build a reputation. And people know you and you've built market share, and you've got customers and customers, brief customers, and there's positive word of mouth, and you're getting better as a marketing engine. And building a company takes time and requires a long term mindset. Building a product takes time and requires a long term mindset. It's no different with marketing, or with sales or any other department, there's a mark, there's an engine that needs to be built. And you get better yield a bit over the long term. It's the same thing with personal investing, right? It's like, you gotta have your stocks and your bonds and your, your, your real estate, and you put your savings in, and it grows, and it grows, and it grows. And so that, but that, but that's the difference between sales development and marketing, whereas marketing should be held accountable to real business metrics, you know, like, profit, revenue, qualified pipeline, or the number of opportunities, or the dollar amount of those opportunities, sales cycle, win rates, cost, present cost per acquisition, all that good stuff. The real business metrics, which the CEO and the board investors should probably care about, as opposed to the vanity metric of meetings booked that don't you know, that waste, all you know, all this money and time and resources. So, that is that is a key problem. And that's the key difference between, a key difference between sales development and marketing.
Kap Chatfield 19:24
I'd love for you to break down practically how to put this into place, and that's what your book does. You have four specific topics that you've kind of broken your book up into, you sliced it up, before you go into any of them in depth, can you list out for us what those four topics are? And then we'll hit each one one by one.
Nelson Gilliat 19:41
Sure. And if you want me to kind of explain or come back to how companies can transition, how they're ready to transition between sales development to marketing, the experiment that I outlined to people sort of a, a compare test and prove and gradual transition approach, we can talk about that. Let's list the four and then talk about the transition into that, be great. Okay, cool. So just sort of broadly speaking, you know, my book, The Death of the SDR and the Birth of Buyer Centric Revenue has four main topics. The first one is sales development versus marketing, or prospecting versus marketing. Or you could say, spam versus proper, modern non-spam marketing. The second topic is the sales assembly line versus full, what I believe is real full sales cycle sales. And what I mean by this is the sales assembly line is the AE/CSM split or the account executive in the customer success manager split. You've got one seller that handles the initial sale, the AE, and you have another seller, the CSM, that handles expansion and retention, and in practice, their further subdivisions. And the full sales cycle, sales model that I advocate for is the AE/CSM combined, no handoffs and no prospecting, you got marketing properly generating leads, the salesperson gets to do the full sales job. And can do some proper marketing if they want, but not prospecting. But there's you know, they own that customer relationship, this one-to-one customer relationship. And those first two topics combined, sales development and the sales assembly line, that is the predictable revenue model, which again, most B2B companies are running on, which is based on aspects of what Salesforce used to do 20 years ago, it was aspects of the marketing and sales. And it was debatable back then how worthwhile it was for them, and what extent that contributed to their growth, or harm their growth. But nonetheless, people just kind of copying that. And so that's, that's why I challenge the big revenue model and create my own buyer centric revenue model. Now, in addition, there's two other topics that I think are secondary problems. And that exacerbate the first two problems, the first two topics of of sales development and the sales assembly line. And that's quota and commission. And so quota is a type of goal and metric. And it's very problematic. And I propose instead, proper sales goals and a suite of holistic metrics that are befitting of a proper sales role of the full sales cycle model. And then commission, I challenge as a bad type of sales compensation. Basically, a commission is a portion of an employee salary that is withheld pending quota attainment, which is typically 50%. So basically, half of your salary's withheld, pending quota. So if you can think of it as a cake analogy, it's half the cake, not icing on the cake, it's half the cake, which you have no idea if when and how much you're going to eat. And there's a whole lot of problems that people often ignore or don't understand or, you know, don't realize about commission. And so but yeah, quota and commission, I think are two very problematic issues. And the combination of these four, prospecting or sales development, the sales assembly line, or buyer handoffs amongst partial sellers, quota as a bad form of a goal and a metric, and commission as a bad form of sales compensation combined have created the straitjacket that B2B marketers and sellers are in that are causing less productive and fulfilling careers and are harming company's growth. It doesn't mean that companies aren't growing at all, it doesn't mean that companies are going bankrupt. But what it does mean is that they don't grow as much as they can and should, that their growth is reduced to cost more. It's slower. It's more difficult. And yeah, people people aren't as happy,
Kap Chatfield 24:00
Man. Gosh. I mean, how many? In your experience, like, would you say the majority of businesses are stuck in this place? Because I can see that being a total recipe for disaster.
Nelson Gilliat 24:12
Yeah, I mean, unfortunately, again, the predictable revenue model is the playbook that most companies are running. Aaron Ross was a sales leader at Salesforce in early 2000s. And again, Salesforce and various other companies at the time, you know, had implemented sales development and the sales assembly line. And Aaron Ross codified that in his book about 10 years later, called Predictable Revenue, which is saying, "Hey, here's some things as part of our marketing sales, some aspects of our market sales at Salesforce that we did that seem to have worked well." And then everyone was like, "Oh, well, we want to be like Mike. We want to be like Salesforce. And so let's just copy that." And so that's a huge I think that's a huge problem and that's why I had to create a new model and created a book around it. It took a book and a model to kind of get us here, it's gonna maybe take a book and a model to get us out. And as far as quota and commission are concerned, you know, there, there are examples of companies that I'm coming across more and more who are who are doing right things, who are doing, you know, the things that I advocate for, to some extent, companies tend to be a bit of a mixture and have elements of the good stuff, elements of bad marketing and sales, elements of good marketing and sales. But, you know, quota and commission have been around for ages. And, yeah, there's a lot of misunderstanding, a lot of things I didn't know, it took me a long, long time of realizing stuff, I played a bit of like a detective for a while where I was like, something seems wrong here. And I had to sort of do a lot of research, a lot of discussing, a lot of interviewing, a lot of thinking to kind of realize what is really going on, to be able to then shine a light on it and then help people understand the problems, understand the solution, and understand how to get from A to B, and how to experiment, how to gradually, you know, take a crawl, walk, run, approach, and prove things with experiments. And transition slowly. And that's the real, that's how people are being able, that's how people are and will make a transition and improve things. And that will gather evidence and more evidence and case studies, just like in a startup, you got to get customers, you got to get case studies, you got to you know, build your company, and you got your early adopters, your late adopters. And things just take a little bit of time, but we're actually making great progress.
Kap Chatfield 26:41
How does content play into that whole transitional thing? As you're taking companies and you're really helping them rethink about how they do business development going to market, how important is content creation in the in that process of transitioning them?
Nelson Gilliat 26:57
Massive, I mean, content is basically non-spam marketing. It's a way for marketing to communicate with buyers in a, in a non-spam way, and attract buyers, to educate buyers, to entertain buyers, to you know, really developing these relationships with them, you're kind of having these conversations with them. And a podcast, for example, is a wonderful way you can have conversations with your buyers, with influencers, with your customers about various things that interest them. And, you know, you learn a lot from that, you develop relationships from that, you produce really interesting conversations that people want to listen to, and you share that on social media and you chop it up, and like you're able to amplify you know, your message and get you get the word out there about you about people. And so I think what's fundamentally key to understanding in the book, you know, in my second chapter, I kind of go through the history of how we got here, the history of sales development and prospecting, and the sales assembly line. And also what has changed in what has changed, in the internet, and social media, and buyer preferences, and modern marketing. And so fundamentally, what happened was just to kind of, I think it's I think it's helpful for people to understand that in the pre-Internet era, marketing didn't have a lot of ways to to woo buyers, to communicate with buyers, and help connect qualified buyers with sales. It didn't have, you know, the modern internet today and social media today and podcast today and mobile phones. And so that's when prospecting came about because marketing had difficulty bringing buyers in the door, sales would go out there and try to sell to people who didn't want their help and didn't request their help, who haven't been properly marketed to. And so you can think of prospecting sales development, as originally as sales, because sales used to do this before its sales development hit the scene, we'll talk about that. But it's sales operating in the absence of marketing. And so, eventually, in the late 90s, and early 2000s, it was so apparent that prospecting was so fruitless, so miserable, it had to be done constantly, in large quantities, and predictably to amount to anything, to any leads, and sellers hated it. They didn't want to do it, they were they want to do their actual sales job, they didn't want to go out and annoy people with spam. And so in the late 90s, early 2000s when sales development hit the scene, they said okay, well we have to kind of specialize you know, take prospecting off of sales's plate, give it to someone else. And prospecting is a marketing activity you know, you it's generating qualifying leads it's not a sales thing, even though sales used to do it. And so to some extent sales still does it part time and aspiring sellers are forced to do it through the SDR role, it's an often-required stepping stone to sales or to marketing, but not necessarily really marketing. There's other entry, proper entry level roles in marketing. And so nowadays, though, what's changed is, you have the maturity of internet, you have social media, you have mobile phones. And marketing has the ability to communicate with buyers such as through content, like a podcast or written content, or video content and distribute that on social media. Social media platforms are where your buyers are hanging out every day, scrolling and learning and connecting with peers. And it's, it's a public platform. And so it's not a private inbox. And so it's not spam, if you go and you put out content there about the things that your buyers are interested in and actually want to consume, and keep coming back to consume and how they become aware of you and how they like you. And then, you know, eventually come when you know, when they're ready and say, "Hey, like, I like what you guys do. I'm interested, let's speak to sales, or let me buy now." And so things like yeah, so what modern marketing tactics so yeah, there's there's content, there's social media, there's events, there's community marketing, there's partner marketing, there's referral marketing, there's, you know, personal networking, so working your network, there's remarketing to prior customers that change their jobs and go from one company to another you have a prior existing relationship with them. There's a million in one you know, marketing tactics that I go through, in my book, proper marketing tactics, non-spam marketing tactics, that are way better than telemarketing and email spam and LinkedIn spam, which are yeah, the tactics for for sales development. And so there's no, there's really, and I think that's why we're seeing it's, you know, if any company analyzes their marketing efforts, and how they generate and qualify leads for sales. And this is something that I recommend to them. If you analyze and compare sales development to marketing, and, you know, look at the lead quality and how that affects sales and the amount of resources you put into sales development versus marketing, you actually see "Whoa, you know, I should be reinvesting resources away from sales development into marketing, because that's what's driving growth, that's really what's driving the company's reputation. That's what's driving compounding yield." And that's what what sales wants. That's, that's where profit is coming from. In fact, sales development is not just suboptimal, it's actually relative to marketing and all that. It's so harmful. I mean, if you just think about spam, it's so harmful, that it causes profit loss, and it diminishes growth. And it counteracts marketing. It crowds out marketing, it preempts marketing, and it handcuffs, marketing, so you're really harming companies are really harming themselves with sales development.
Kap Chatfield 33:07
One thing that stuck out to me about your story, because I couldn't agree more, I'm over here, like fist bumping and amen-ing, and you know, because I'm, I just really believe. I see it myself, I see it as a seller, I see it as a buyer. Like I'm on both sides of the equation a lot. So I totally, I agree with that. But one thing that was interesting about your experience was that from the company that you were a part of, you noticed that marketing was actually doing particularly well, like you noticed that marketing was they were really resonating with the audience and the sales team wasn't. And so there was like this, there was this disconnect, this misalignment really with sales and marketing, right? Like they should be working together. I've heard so many people talk about how businesses need to have marketing and sales aligned. My question to you is like how, like what would be a practical step forward for a business to move in that direction, to not have marketing and sales kind of be pitted against each other, and, and really resent each other because they're not working in the same room? What would be the what would be a practical way for them to move forward so that they both can achieve what they're ultimately after, which is to see the company grow?
Nelson Gilliat 34:21
Yeah, so to address this sort of experiment and transition process to get from A to B in just a second, but just to just to touch on one thing about the misalignment between marketing and sales. Fundamentally, given the current model, you have that is the root source or the predictive revenue model, sales development, the sales assembly line is the root source of misalignment between marketing and sales. Because marketing is forced to generate a high volume of contact information of uninterested buyers, which is what an MQL is, or a marketing qualified lead. It's not really a lead, it's just contact information. Yeah, and then they give that over or sales development, sales development goes out and spams buyers, turns buyers off, pushes some buyers prematurely to sales. So you've got, sales gets low quality leads, gets a higher quantity of lower quality leads and a lower quantity of higher quality leads. And so, you know, basically marketing can celebrate MQLs and getting contact information, sales development can celebrate meetings booked, and then sales get stuck holding the bag. And they're, you know, again, they've got quota and commission and so 50% of their salary is being withheld pending revenue attainment. And so that's why we see it. That's why sales is suffering sales, like sales development suffers high turnover, low tenure, low performance, and low job satisfaction, and a bad reputation amongst sellers and buyers alike. And it's almost accepted as a fact of nature that most sellers miss quota most of the time. And so that's a huge problem. But the way that companies can take practical action, or what I advise people to do with the problem of sales, development versus marketing, is yet they take a compare, test, and proven gradual transition approach. And so I outlined what that looks like in the book. And basically, what you do is you first you compare sales development to marketing. You compare the leads generated from sales development to leads compared for marketing, you look at profit, revenue, win rate, sales cycle, ACV, you look at cost per acquisition, all that good stuff, I outlined the metrics or whole menu of metrics that you can use. And then you kind of can see where you know, what's producing the most yield? Which side of the of your bread is buttered on? And then you also look at things like well, how much resources am I putting into sales development versus marketing? To what extent is marketing being forced to support sales development? Such as with gated content, with MQLs with, you know, lead scoring, which is just prioritizing which MQLs SDR should annoy. And then you have this picture that you can then go to ownership and propose an experiment or two experiments. And the first experiment is to basically automate demo request qualification and scheduling on the website. A lot of companies have done this already. And I provide examples of those companies in the book and the results that they achieved. But you automate that on the website. And then you repurpose those SDRs, ideally, to marketing. But if not, then have them temporarily repurposed to doing more prospecting, you know, spamming, and give them quota and commission relief accordingly, to whatever extent these inbound SDRs, as they're called, that were handling demo requests and scheduling. So they'll be thrilled and so they'll, you know, they're getting paid. They've got that relief. And so that's the first experiment, and you run that for a few sales cycles, and you then look at your metrics, and you realize, "Wow, this is a way better experience for the buyer. They're getting, you know, our costs have dramatically went down, more buyers are actually making it to sales and making it to sales faster." The second experiment is you gradually reduced prospecting in 25% increments. So you reduce whatever the prospecting quota is, whether it was if it was like 10 meetings a month 10 meetings,
Kap Chatfield 38:37
A quarter to quarter transition, or just a month to month transition?
Nelson Gilliat 38:41
This should be a few sales cycles, so that you can track your metrics all the way to the end, your business metrics all the way to end and ensure repeatability and, and success and there's a bit of a learning curve. And so you need time for things to play out a little bit. And so this, you gradually reduce prospecting, in the quota, so reduce your quota a little bit in 25% increments, also in the prospecting activities and telemarketing and email spam, if you're making 100, telemarketing calls, make 75 telemarketing calls. Then repurpose that excess SDR capacity to marketing, to content, to social, to events, to community, to ads, to the website to buy yourself service, whatever. Partner marketing, referral marketing, creative design, million and one things. And STRS will be thrilled and plus you give them quota and commission relief to that extent. And so they get their money, they get to do more fulfilling work, which they're anyways trying to do. SDRs are trying to escape from the role as much as possible and as fast as possible. And they're trying to do proper marketing to some extent, to do proper modern marketing, yet their handcuffed because the sales development role and their quotas, and they're basically being forced to spam they can't really do proper marketing. And so you unlock all their productivity and their creativity. Be and so you've again, run, run that experiment, over a few sales cycles, track those metrics. And then that, you know, depending on how things went, you show ownership and you show what had happened, and you, if it's successful, you double down, maybe you do another 25% and gradually reduce your prospecting, or you just realize, okay, here we go, our money's in marketing, and you kind of start to fully transition and repurpose SDRs, to marketing or to operations or to sales. And you just basically gradually sunsetted sales development by the same time upping your marketing and quality and improving that proving that out. So that's really the way that companies are doing and have done it. So companies like Saleswhale, which, you know, was was sales development lead, basically. And then they realized that it was not working. And they did this analysis and comparison of sales development versus marketing, and then completely sunset sales development and leaned into marketing. And then just took off and, and it was wonderful. And I covered that case study in the book. And then there's a company called Cognizant which I also cover as a case study in the book, which was the same thing, their marketing team, their CMO decided, you know, I don't want marketing basically, being this, like handmade into sales development and being forced to be on this MQL hamster wheel, I want to generate website demo requests. So they compared sales development to marketing, and then repurposed resources into generating website demo requests, as opposed to generating contact information of uninterested buyers. And then it's just taken off, and a lot of their growth and profit is coming from their marketing team, despite having less resources in sales development. And so, yeah, that, that, that's really the way to do it, and how companies can get from A to B,
Kap Chatfield 42:00
I'm going to just, I'm going to leave it here. For anybody who's listening and is wanting to learn more, you've done a tremendous job, Nelson, at taking something that would feel daunting, overwhelming, would take years to accomplish - you've you figured out a process that seems to work. I'm blown away by what you put together. I love that you're looking at very specific case studies of companies that have done this, and you're looking at kind of like a good to great sort of model, right, you're looking at the case studies of what they've done. And you're creating a process that's actually attainable. I love that you're also you're cognizant of, for some companies that would be hesitant to embrace this new way of doing business development. It's not a 90 degree turn, you know, especially for bigger companies, it takes it takes time to turn a big ship. And you've created a sunset method where you're allowing businesses to test and see. And, you know, and not risk too much up front. And so as we close out this episode, Nelson, I just want to encourage those who are who are listening to this, to go and buy your book, they should go check this out, if they're in that place of saying, You know what, we're experiencing tremendous turnover with our SDRs. We're experiencing extremely low company morale, particularly amongst those individuals who are constantly feeling like they have to, they are scrapping up some sort of results to keep their job, and they feel out of control of the future of their own future in the company. If you're in that place, right now, you gotta go check out Nelson's book, Nelson, where can they go find your book?
Nelson Gilliat 43:38
Yeah, you can find it on Amazon. And again, it's The Death of the SDR and the Birth of Buyer Centric Revenue. It's available right now it's an ebook. It was published eight months ago, as a, in that version is the beta or the MVP version. I'll be pushing the real fully-baked product, kind of the full course with the definitive statement of the buyer centric revenue model with all the as much evidence as I have up to date, and I'll be probably pushing that update for free in the next month or so. And in addition to that, I'll be launching a community to bring like-minded folks together who want to discuss experimenting and implement the model. So I've got a lot of people who are you know, are doing this so far and are interested in doing it and I'm gonna bring everyone together in one in one place and share all the data, share best practices, and then eventually get a podcast, and that podcast will be you know, having marketing sales leaders on and talking about this stuff and people asking questions and it's a way again to interact with the audience. So a podcast will be so huge to this, and so stay tuned for that. And you know, look at the example that Kap has you know, I heard about Kap from his podcast and look what Kap and and Rveal Media has been able to achieve through their podcast. This is the stuff that companies should be doing. This is the stuff that marketers desperately want to do but are handcuffed. This is what your buyers want. So it's always a good idea to be buyer centric. If product teams can be more buyer centric to produce a better product. I think marketing and sales teams can be as well if we get rid of these practices.
Kap Chatfield 45:21
I couldn't agree more. Thank you so much for that Nelson. For anybody watching or listening and you're thinking, "I need to adopt this mindset. I want to learn." We're going to take that book Nelson, we're going to put the link for it in the description of this episode, so people can check it out there. We're also gonna put your LinkedIn profile so that you guys can follow him, check out his content. Stay tuned for the podcast, we're gonna hold you to that. Couldn't agree more that a podcast is such a great way. It's why we call our show, B2B Podcasting. It's such a great way to educate the market consistently about your thought leadership point of view, Nelson, it was such a pleasure. Thank you so much for joining us on B2B Podcasting today.
Nelson Gilliat 46:00
Likewise Kap, thanks for having me.
