Accelerating Value
Accelerating Value

Episode · 1 year ago

Chris Walker: The ROI on Creating Customer Delight

ABOUT THIS EPISODE

Chris Walker, CEO at Refine Labs, had a candid conversation with us about why most people have marketing all wrong. Those who view marketers as people who hunt for contact information for sales are living in the late 2000s, while those who view marketers as educators and demand creators.

We also talked about:

- Peer-to-peer learning among CEOs and CFOs

- Executives need to audit the data on which they base decisions

- Why creating delight for customers is a better, yet harder ROI

- The origin of churn in B2B


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Today, every budget approval is an investment deal. If you're a marketer, sales or business leader, you had to promise to deliver value and impact. Writing the wave to get there is hard enough. Finding your way through the storm is even harder. If you're looking for that path forward so that you don't wipe out, you've come to the right place. Let's get into the show and everybody. It's marks to sit accelerating value, the weekly podcasts that has more and more and more of you guys tune and in toilet's see how different people to find value, invest in it, defend it, prove it and otherwise communicated. So these are all very, very different folks from different walks of life, different careers, different positions, different levels of seniority. A lot of them happen to be marketers, but we also talked to CFOs and CEOS and hrrows and people that work for those folks. So today we've got a really cool guest. I'm actually really excited about talking with Chris Because I've been following his stuff on Linkedin for a while and you know my impression of him. This is the first time that we've actually spoken, so this is going to be like ultra candid and real, is that he's very much of a truth teller and he has no problem saying what he really thinks and he's just going to kind of give it to you that way, and I really I appreciate that. I really like that in a person in general, and and I think it's the only way to learn and to to kind of actualize what this podcast is really all about, which is to help you understand how to create. So, Chris, welcome. Mark, really happy to be on the show. I'll drop a note for everyone here on my on my thoughts. I share my thoughts freely, but let's not be confused. They are rooted in data, right, and seeing across hundreds of different software companies throughout the past twenty four months about what's actually going on. And so when I say that this lead gend tactic isn't working, it's because I've done it myself and also looked at the data of hundreds of companies that are trying to do it and see it not working. And so I am I'm spreading the reality of the situation in a way that a lot of people don't want to accept. No, I there's a lot of sacred cows that are being full. I mean two thousand and twenty sort of specialized in that in many ways. One of the things that we see a lot with our customers are prove when they when we talk to them about their results in software, is that if you look at what was working in two thousand and nineteen versus two...

...thousand and twenty, versus the first half of two thousand and twenty one, it is very, very different one to the other, and that if you were if you kind of just tweet to your two thousand and Nineteen Program for two thousand and twenty and maybe you ditched in person events, but otherwise we're in the same playbook. You lost pretty big what are you seeing right now? What how does that Jive or not jive with what you're seeing, and what do you feel like that the biggest box in the yard is that's being bored right now after two thousand and twenty? It's interesting you mentioned two thousand and nineteen because the things that companies were running in two thousand and nineteen had originated in the roots of it, had originated in the late thousand S. that's right, and so like I'm seeing, I'm seeing a divergence of companies, the companies that are challenging the way that they've been trained to do things over the past ten years and moving into a new direction, versus the ones that are continuing to do the same things over and over and not take a lot of scrutiny and the results that they are driving. And so the core difference, in the way that I see it, between that that divergence, is a mindset, not a tactic. It is a it is a mindset of executive team, of a CMO and of the team underneath them about the core purpose of marketing inside of one of these companies and what is their job. And so my belief is that in two thousand and ten, or even earlier before that, the role of marketing was to generate contacts, to collect contact information so that sales could do sales to people that don't want to buy. Right now, that's what a most companies still do when you say marketing, and I believe that the companies that are going to win in the future are companies that change that perception of marketing and create demand in the market by educating and informing people in places that they already are and helping them to conduct their entire buying process on their own, as opposed to trying to collect contact information to do sales. And so I see you've seen. We've seen these success stories play out for a long time. When drift is out there, like drift is a marketing company, not a not a not a SASS company. They sell in a commodity space and did really good marketing, creating demand in the market for what they were selling and they're currently winning in that categoryans and there's plenty of other companies that have had a similar play and I think that just looking at some of the things that have already happened are makes it really obvious and where companies should go in. One of the things that I've done throughout my entire career, but a lot more as of recently, is start to evaluate the things that are happening in direct to consumer BC understand those things because their signals of trends, of people, how people are buying things, how people are researching things and then, importantly, not direct copying them into be to be, but understanding the new wants of what's important and how...

I can translate that from selling sixty dollar shoes two hundred thousand dollar year software, which is typically, like I mentioned, not a direct copy and copy and paste. But there are a lot of learnings there that that we use every day. And you know, one of the things that we see a lot, and I'm particularly sensitive to it given the fact that I spent most of my marketing career in Enterprise Beb is that the big difference between, or a big difference, maybe not big difference, but a big difference between B Toc and be to be is that the buyer in be to be is dealing with a much higher cost and a much higher risk level than most be to see purposes, relatively speaking, right, and so the value of trust and confidence, let's call it brand, as a sort of a shorthand right for those two ideas, is really significant at the bottom of the funnel, much more so than at the top. And the deal acceleration, the the speed with which you kind of are able to move through, particularly that bottom part, which is all due diligence and risk mitigation on the part of the customer, is is really really key as a marketer. How do you do? You see the same way do you do? How do you see it? Yeah, the core difference that I see relative to marketers between B Toc, which is mainly direct to consumer ECOMMERCE, versus be Tob, is that in ecommerce you have direct transaction data about whether or not you're marketing was successful right, and in B tob you have leads, and that is the core difference. And so what we have right now is that we have be to be companies that have copied and pasted Google search strategies, facebook add strategies and linked in add strategies to a a model where the goal is to collect a lead for a certain amount of dollars as if it's revenue, as if it's ECOMMERCE transaction revenue, and it's not. And then the get the gap for enterprise sales of ninety plus day sales. You know it could be thirty, but like extended sales cycles, where from where the lead is to where the revenue happens has a timelag and marketers are not accountable and do not look at that data to understand whether or not it's even being successful from a custom acquisition cost standpoint. I find that to be the core difference because in ecommerce you spend the money and it's very, very clear whether or not your campaign was successful and in B Tob I think it's very misleading the metrics that are used to define success and in advertising, in general marketing today. Yeah, I know, I really agree with that. You know, the the time lag issue is is arguably the issue, totally and and because if you if you have,...

...if you don't have a computed idea on what that is, you'll never find the value out there in the future. Right. And it's the it's the issue and it's the opportunity at the exact same time for people. Right. And so what companies will typically do is they'll put together a spreadsheet and running their lead Gen model and they're put together conversion rate calculations that are not correct, that are overinflated, that don't actually play out in real life, that will assume a specific cost per lead. They will hit that costper lead target and never look at the funnel after that. And that's the thing that I see. It hurts a lot in terms of scaling a company because with the with the incorrect assumptions, you actually spend a lot of money to hit the lead and you don't see the target fall down. And that's like the yeah, I do believe that's the core issue. So what do you you know? Part of this, obviously, is marketing teams kind of getting a new mindset. Right. I think it's executive. Sorry to interrupt you, but I think this is a this is an executive level challenge on a mark on a marketing manager level challenge. Yeah, totally agree. So what do you feel like that the average CEO and see if a should be doing differently with regard to their marketing team? I think that the average CEO and CFO of a enterprise ass company should go and spend time with the cefo in the CEO of a enterprise ass company that does marketing really well and understand the differences. I think that's like the I don't think that you can replicate that in any other way than peer to peer. The core difference is that I think marketing does this over here like the same thing that they were doing with market onimation in two thousand and seven. Versus a company like you. Go Talk to David cancel at drift and go see what the difference is and how they view marketing and how much it became a competitive advantage of them and how much it drove their business and the way that they see it, in the way that they measure it. Those types of things, I think, are are the most valuable. It's the it's the I think general just, and I would say this in the most respectful way possible, just, I think, the general lack of education around how much marketing has changed over the past fifteen or twenty years and how much it influences go to market strategy that a CEO and a CFO really need to understand. Yeah, so one of the things that David did, they're right, was he really set the rules of play right within drift on the right he basically said, hey, this is how we're going to keep score and this is how you win this game as far as the business is concerned. Now you know marketing team, you know how do you want to play this game based on these rules? Do you feel like that? That? I mean it's see, this sort of a rhetorical question, because I think way right you feel like that. That's a key missing ingredient that many mini ceeos and CFOs and other people in the seas we...

...haven't been crystal clear with marketers about this is how you win and lose. I think what executives need to challenge and they should audit where they get their information that enters their organization, that spreads into a strategy, and so I think that if I've asked this question to fifty or more demand marketers and CMOS and gotten these answers marketing agencies, marketing technology vendors, consulting firms that don't execute. I read it on Linkedin or saw it in revenue collective from someone that may or may not understand a nuances of my business. Those are the things were that that's the places where people get information on how to execute strategies today. And if you see, if you've seen the sweeping adoption of account base marketing prescribed by terminus today and the amount of failures that that's causing inside of companies because of the way that it's prescribed, because they took a strategy from a vendor that has a clear point of view on how you want to execute, based on the ability for their platform to do it, and that's how companies are right now operating. And so I think that executives at all levels in the last one they'll put together as ad platforms and I think executive should audit where their information is coming from. That's driving their strategy and think about whether or not there's a better source of information about what to do. I get called els from Google, facebook and linkedin add Reps. we spend probably this point, three to five million dollars a month on ads across those platforms for SASS companies. I get calls from their reps pointing out things that we could be doing better, which are things that I tested five years ago and realize they don't work. And so I just think that people need to be a lot more thoughtful about where they get their information and thinking critically about what to do right. The reason that drift. I will just continue in an example like they didn't execute the playbook that Martech vendors are pushing. They didn't execute the playbook from a content like some content they write on Linkedin. They went out and executed and figured out new things that other people didn't know. And so I think people really need to adopt that mindset of like we need to build internal IP inside of our company. We need to have very strong talent, we need to give them the space to think critically, we need to set up metrics so that they can be successful and give them space to experiment and different things like that, which breeds long term a competitive advantage that's very difficult to replicate for a company. And it starts with the it starts with the mindset and it moves all the way down through the rest of the things that I mentioned. But I just like have seeing that, company over company, how much different in organization is after twelve to twenty four months of proper marketing execution. It's just it's just really hard to beat right now in terms of you're not going to be able to change. You're not going to be able to add ten other features of your product to make it best in class within a certain period of time. You're probably not going to be able to make your else team dramatically better, unless they're already pretty bad right.

And so like marketing is really a place where I think that there's a massive opportunity that more people are picking up on than two thousand and nineteen, but still I think there's a majority of the market has not moved on this where it's been clearly obvious for three to five years that there it needs to be a change here. Yeah, they don't call it the marketing multiplier for nothing. Totally we experienced that at our company right now. So so you're actually you're I'm I have an embarrassment of riches here. All good in terms of the segways that you have presented to me just in this conversation. So one of them I really want to latch onto right, because you're clearly disrupting it in different ways. Is the agency see right, how do you say that? Where do you see the agency world? And in one year, five years and ten years from now, how's it going to be really different? How's it going to be the same? You feel like that? I mean there's there's some pretty strong naysayers out there right now that are basically saying that the way that it is right now is going to be completely gone at some point. Different Future. How do you see it? Were you? What's the role of agencies going for? Yeah, and so, just as a first caveat, I don't even consider ourselves an agency. I consider ourselves a blend, like a blend between an execution arm of an internal team makes mixed with a very strong consulting arm, and so it's a slightly different than an agency. And what the reason that I've built it this way is because I've worked in house that companies like the ones that we do work for, and I designed it around the way that if I was going to be a VP of marketing at or at CMO, at this company, what I would want my partner to operate like in order to drive results from my business. So at the moment I think the agency model should be broken already. Like there's very especially in certain like media specifically, but there's all other places where it's busted to it starts at misaligned interests, and so the reason that the the main reason that I know that is because there's very few agencies that I've ever encountered that spend time inside of a company Crm and are accountable to actually results. They either work on deliverables, they charge by time or they pump out a bunch of leads and report on conversions in Google search and never take accountability at anything further. So that's one thing that's completely broken. The next thing that I think is is, you know, ripe for disruption is that agencies typically build around us a specific service or something like that and then they never adopt so you have, I seeo agencies or demand Gen firms from two thousand and eleven that a Cmo that worked with them at two in two thousand and eleven into one thousand and twenty one ask them for a scope and gets the same scope that they got ten years ago because the company is built a...

...model and is focused on making it more profitable for themselves, not innovating for their customers. And so those are those are two big ones. And then, though, the last one that I think is at the moment agencies are basically just told what to do, and perhaps there's probably places where companies would want to do that right, I think that your your core agency, if you had an agency of record and you went through one of them, what you want from that company is for them to tell you what to do, and the reason that you trust them to tell you what to do is because they execute across the hundred companies like yours and they do the things themselves that they tell you to do. And so it's been very, very fascinating for me and my company as we've continued to grow, the fact how many people come into us and say, like, we've never heard of another market agency before. Your marketing so good, and I'm like don't you think that's the problem? Like the fact that if I'm if a marketing agency can't market themselves, why would? Why would they? You think they'd be good at marketing for you? And so we use we use our own our own channels, my linkedin profile are podcast, the events that I put on our influence or relationships as a test bed to figure out new things that are content our customers should do. And we know them because we've done them ourselves. We know how they work and we know how much impact they drive. And so it's a very interesting model here. Like our company is built on innovation. Are My company is built on being three to five steps ahead of our customers, but we know which steps they should be taking next, and so I don't I would consider ourselves more of like a growth and innovation partner than a marketing agency at the moment. So when you think about this, right, from a kind of a time lag perspective, right, the power of inertia, but that that dissipates over time. Right, and this conversation about agencies has been going on for at least a decade, if not a lot longer than that. How close do you think we are to a tipping point on this and particularly probably anyway, with the bigger firms more than the smaller ones. But you know, I mean that's an artificial distinction. At some level we're do you think we are? I mean, do you think that things are like getting ready to tip for like real or the like? We still have some inertia to cope with. I don't think there's going to be a tip. I think it's going to be a slow transition. We see this happening more in a MIA, but it's happening in the US as well, where companies say we don't work with agencies. So that's the backlash that companies are putting forward right now, which is the wrong backlash for them and their best interest. Great their actual bat they actual backlash should be, we're not going to work with agencies that do these things, and so but I think that...

...over time, and I talked about this myself, and I'm not like it's weird because it is not good for me when I say this, but I'm I do it because my job is to do whatever is in the best interests of my customer. And so I talked about this very, very openly, that companies should desire to do everything in house on their own at some point. I think that that is the way, and so you're doing everything in house on your own, but you insert a partner or multiple partners that provide frameworks, guidance, innovation, different things like that that you might not see because you only have one team, and so I think that there's a different level. I think that companies should aspire to do that because I know how much marketing can drive your business and I know how much having control over that and having the right resources and talent and skills over time is important. Just like in one thousand nine hundred and ninety three, companies had two or three sales reps that drove most of the revenue and they needed them, and I believe that you will have marketers that have the same type of profile now. I think that that's there's a reasonable parallel there. I think that that one solid demand leader can move the needle want a company significantly more than one individual star Rep, and that's just the way that I see it. Yeah, but to get back to your question, I just I feel like I feel like come, but he's need to think more clearly about why these relationships haven't worked and the reason that they haven't worked or some of the things that I mentioned at the beginning where easy signs. If you're like we required in our scope, I want read only access to your sales force, instance, or we are not doing this. You cannot expect me to do a job in drive revenue if I can't see what's happening in the CR. And so if you're, if you're have a partner that doesn't do that, you want to want to rethink whether or not they're the right partner. And then you should look at do they actually execute themselves? They're telling me to do a podcast, that they have a podcast, and so those are a couple things that I would look at totally. I agree with you one hundred percent. Right. It's the it's the litmus test. Right, it's the it's are they eating their own dog food right and and enjoying it right? Are they fattening up as a result? You know, are. I mean that is that's really, really key. You know, one of the things that David and his team, it's a great example that you're that you have come back to several times you're did is that they they redefined their product right as their entire CX, and and part of that was as you alluded to, right there operating in a commoditized space, and so they had to do that. But I think also there's a great lesson there for many companies, and that is the CX is the product out right. So how do you, how do you kind of how do you, how are you thinking about that these days?...

Because, you know, one of the things that's challenging for most marketers is that they don't have control over the product, the agenda, right, all their wealth with is reason some and yeah, sorry to interrupt you. In some industries marketing drives product strategy. Just starting to ye absolutely about it up. Yeah, yeah, I'm sorry. What was your question? Just wanted, I think. So one of the things that we can, we should absolutely say, right, is that those cx. Yet not not every not every market, I mean marketers, are not uniform situations, right. There's all kinds of differences across many different companies. But in in a lot of companies, particularly on the BETB side, right, they they don't have a lot of say over the product strategy and the Road Map. So they have to kind of define product differently, they have to increase the scope of it into cx. Are you seeing is that still something that's being done successfully in a in a kind of not. It's kind of the exception rather than the rule. Or are you seeing more and more and more of that right now? Yeah, so I'll go into different directions for this. The first one, this is a this is an executive level conversation that we're about to have right now. It's that companies cannot, they do not invest appropriately in the customer experience because they spend so much time and effort in money on customer acquisition. And so the first step in this entire thing is fixing customer acquisition, and the way that you fixed customer acquisition is fixed marketing first. Fixed Marketing First. It makes sales easier. You don't need to scale sales the whether you're doing right now. Instead of spending sixty percent of revenue on customer acquisition, you spend thirty five and then you have twenty five percent of your entires company revenue that you can spend on operations, customer success, product development, other operational infrastructure inside of your company, hiring talent, whatever. And that's where I that's how I see companies evolving, companies that can unlock acquisition through a better marketing model can do these things. And so, from a broad, high level CX perspective, I talked to customer success leaders. I know that they get no budget, I know that they're under resource, I know that they don't have enough. Can't can't do the job that they want to do. And so that's that's like a one thing to do. One one example of this is like companies send me emails and say, I got one earlier this week that said we'll give you four hundred dollars to sit on a demo and I ignored it. And and so they're spending four hundred to get someone to sit on a demo and a cold email that was not interested in buying their product. What if they took that four hundred dollars and tried to invest it in surprise, as in delight with their customers or just generally making their customers more successful? The ro I of that would be higher,...

...but it would be more difficult to measure. And so there's just like some like really clear things that just don't feel right to me from a marketer standpoint. If we start to move down, I've been doing this as a marketer for since two thousand and seventeen. The reason that I've been focused on CX as a marketer since two thousand and seventeen is because I was scored on revenue, and so with the seat, the CX was mainly buying experience to me at that point, but also implementation. And so when I was generating leads that we expected to have somewhere between a ninety and a hundred and twenty days sale cycle through our website, in order for me to be accountable to revenue, I needed to look at what the entire experience was from there, the buying experience. How long was it taking us to follow up? Who was following up? What was the conversation? How long did it take for the person to get a demo? Who was involved? What stages are they and where people dropping off? How can we optimize as? How can make it more byer centric, you know what I mean. And so by or buying experiences, I think, a huge potential competitive advantage for companies in a sea of SASS companies that do the exact same predictable revenue bullshit with where you go in and submitted demo, you hear back from an str two days later, you set up a meeting, they don't tell you anything and three weeks passed by before you even talked to an a or see a demo or understand pricing. And any company could go in there and deliver a better experience and when way more deals with a lesser product. I know for sure that I've boughten products that were my second or third choice because the buying experience was easier and I wasn't going to deal with it as an executive to go through someone else's process that was broken. That's a potential opportunity. And then we look at the customer experience side. Marketers can do this, they just don't. They're not incentivized to, they might not think it's their organization doesn't allow them to for whatever reason. But when I was in this in two thousand and seventeen, also focused on buying experience. I would go to implementations. We would do them on site at hospitals. We would roll out fifty units and train the whole hospital and I would go to those things that I would understand how they worked and I would understand how people were doing things and my job as a marketer was to start to build content and information or ongoing basis to facilitate usage. Sometimes that falls into a different, different team inside of certain SASS companies, on a growth team or a a for whatever different reasons. But that was my job. And so my job was distributing clinical do they were using it in the ICU but not in the ear so I need to go and distribute information to the people that work at that hospital about the clinical trial, about how we're significantly better than what they're doing in the are they should consider using it there too, and distribute information about what type of patients to use it on, distribute information about this and so like there's a there's an interesting part of customer experience from a marketing standpoint that I don't think's being tapped into enough right now. And when I create content for my business today, I know that the impact that the content has to someone like you, who we've just speaking with today, who's been consuming the content, versus one of...

...our customers has been with us for twelve months, is pretty much equal. I think both people, I think the impact on both of those people is similar, if not greater on the customer side, to be direct, and those are some ways that I think about how a marketer both at the executive level or at the manager level could think about customer experience. Yeah, you know, I man, I just was totally loving what you were just saying because it's so much about a lot of my own key learnings and say, the last ten years of my career, including proof is that like churn, for example. Turn is the enemy right, in so many ways. It just hammeres your up income, you know, your profitability, it hurts your reputation. Is just bad all the way around, and and it you know, let's use the word sustainability right, it really impairs the sustainability of your business. Churn is a business problem, not a customer success problem. There's one one thing for people to think about, I and then it can come in a lot of different forms. But my belief is that the number one cause of churn is missaligned sales up to incentives or lack of a well defined ICP. The things that actually happened pre pre customer I think, are the number one in factors of churn. We've seen that in our business as well and we've gotten a lot tighter on ICP and our retention rate has gone up. It's like not that complicated. Now you're right, I think so. I think the ICP is really key. I think a lot of there's a lot of forester data actually. That also would totally support your point of view about when there's a gap between what the customer was promised by marketing and sales and what they actually got in terms of their overall experience, as well as things like features and functionality and all that kind of stuff. Right, when there's, the bigger that gap is, the more churn there is. One of the things that we've done is we've just we've never promised more than proved good deliver and our very first employee was a customer, sad you know, CX type person, because delivering that experience, particularly in our business in the analytics space, is so key. Right, even with great software, it doesn't magically happen. If you don't, if you don't really look at it from an overall CX kind of point of view, you're going to your and you're overpromising, you're going to the turn. We've gotten almost no turn in five years. More close to there too. Yeah, very successful from that point of view. Yeah, I think that right now the places that are what I would consider like, quote unquote, secret weapons that companies largely are not using our customer success in marketing. The core reason is that my belief,...

...and this is a belief that is rooted in data, is that word of mouth drives most buying decisions inside of be to be today you just can't attribute it, you don't see because it's happening a slack or a DM or a text message or wherever. You don't attribute in your software, but those were that's how buying decisions are being driven and the way that you create more word of mouth in the market is you deliver an incredible experience and product and outcome for your customer and you create a lot of good information and content that people want to share, which helps people talk about you and gives your customers more opportunities to recommend you. Now I could not have said it better myself. Chris, this has been a really, really terrific conversation. I think you have totally lived up to my expectations based on everything that I've been following for a number of months now, and I really appreciate the pointedness with which you have addressed a lot of these questions around value creation, because we're kind of in a very much of an uncomfortable spot, I think overall, in terms of where we're companies are going next and who's going to lead out, and we're going to see kind of a bifurcation, as you were saying at the top of the interview, between people who are doing the old way and people who are doing it a new way and thinking new thoughts and going where the date is. So I really, I really appreciate it great, great obslation's Ben Pleasure. Thank you very much. If you guys have any questions, my personal experience with Chris is that he is highly responsive, particular on Linkedin, and so if you listen to this podcast and you have questions, I am absolutely certain that he would love to hear from you and if I can help you at all, you only have to ask. Thanks so much. Thanks so much. The sooner you can optimize your marketing spend, the quicker you can start delivering clear, measurable value to Your Business. That's exactly where business GPS from. Proof analytics can help learn more at proof analytics DOT AI. You've been listening to accelerating value, where raw conversations about the journey to business impact help you weather the storm ahead. To make sure you never miss an episode, subscribe to the show in your favorite podcast player. Until next time,.

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