Nelson Gilliat | Author
The model that most modern B2B businesses rely on to generate leads is broken.
That’s the premise behind Nelson Gilliat’s book “Death of the SDR and Birth of Buyer-Centric Revenue.”
In this episode of The Inbound Success Podcast, Nelson explains why marketers need to get off of what he calls the “MQL hamster wheel” and ditch SDRs in favor of creating thought leadership content and investing in organic social.
Check out the full episode to hear more about Nelson’s thesis.
Resources from this episode:
Connect with Nelson on LinkedIn
Get your copy of Death of the SDR, Birth of Buyer-Centric Revenue
Nelson and Kathleen recording this episode
Kathleen (00:02):
Welcome back to the inbound success podcast. I'm your host, Kathleen Booth. And this week, my guest is Nelson Gilliat, who is the author of Death of the SDR and Birth of Buyer-Centric Revenue. Welcome to the podcast Nelson.
Nelson (00:28):
Hey Kathleen. Hey everyone. Great to be here.
Kathleen (00:30):
Great to have you. And for anyone listening disclosure, we're recording at a time and a place when there is gonna be some background noise, that's just the way it goes. So if you hear noises in the background, don't worry about it. That's just folks, folks moving around in the space where we're recording, but Nelson, it's great to have you here and I'm, I'm super intrigued by this book before we get into it. I'd love for you to give some background on yourself and your career and kind of what led you to publish this. And then we can start talking about what it is.
Nelson (01:01):
So I started off in B2B as an SDR at a company called Western union business solutions. It's the B2B arm of Western union. And it was there, it was my first taste <laugh>, you know, of the SDR world of the SDR model. And I saw firsthand how lousy it is for, for companies, for buyers, for marketing, for sales, basically everyone who's involved and especially for SDRs. I hated it everyone else as, as an SDR hated and couldn't wait to escape. And as we know today, SDR is, are really suffering. It's really sad. They're suffering high turnover, low tenure, low productivity, low performance, low job satisfaction. And I think it's, it's a real tragic waste of talent that could otherwise be deployed, you know more productively and, and have more fulfilling careers. But I saw, you know, that the, the, the function of the SDR just isn't isn't for today, isn't jiving with buyers that buyers really got turned off to it.
Nelson (02:01):
And weren't receptive to, and the SDRs weren't producing really anything and sales wasn't about what we were trying to give them and trying to pressure these buyers into meetings that they typically didn't even show up to. And, and weren't of quality. And so these buyers weren't as likely to buy or to buy as much. And there was a lot of friction between SDRs and sales and then between SDRs and, and how much money went into SDR is how like time labor and capital intensive. It, it was, and the people that process the tools relative to the output. And then I saw what demand gen was doing and that producing website demo requests and comparing the website demo requests to the SDR leads. It was night and day. And so I started to, to get like obsessed with trying to figure out how to solve this problem.
Nelson (02:47):
And, and then I began reading all the books and blogs among them, Predictable Revenue, which is like, all of all, everyone was saying, Hey, like Esther is a good, like, this is the way to roll. Like we should all copy some of what Salesforce's marketing did back in the early two thousands. And the S were only part of their marketing. And that's what everyone should do today. And so I thought, okay, so that must be it. So maybe how do I make these tweets? How do I, you know, how can I suggest, you know, this and that? Ultimately I, I found myself moving to a startup, a five person startup. So I went from a big company running the predictive revenue model to a small startup that didn't have the resources to waste on SDR as the particular revenue model. And instead we had, you know, really good LinkedIn ads that drove really awesome demo requests.
Nelson (03:38):
And it was a, a, it was a software, it was a, a startup that was selling MarTech. And so we were also selling into marketing. And so not only did I see this company that like, okay, if you've got really good LinkedIn ads driving, like demo requests of people who really like, you know, wanna speak to you, like that's a totally different thing. And, and that this company I was, you know, with five people, I was, you know, sales, customer success, sales enablement, product marketing, demand gen, content marketing, part, little bit part of life. Right. You're doing everything you grow up super fast. Yeah. and then I saw looking into so many B2B SaaS companies into their marketing teams, into their demand gen and into their SDRs and comparing them and, and seeing how like one is struggling and one is doing crush.
Nelson (04:20):
One is like crushing it. And then even how they used our tool, which was a very simple MarTech tool to generate leads. Like it was demand gen that was crushing it. SDRs that were failing at it. And so I got a sneak peek behind, you know, beneath the seat, you know, beneath the hood. And then at the same time, you know, I was trying to create an ideal model at User Gems for their, for, for, for our marketings sales playbook. And I realized like, whoa, the, the predict revenue model playbook, it just doesn't make sense. And so I started to like, initially the, the book was a, was a playbook for User Gems, which was this, which was this startup I joined. And then I also started to listen to Chris Walker from Refine Labs. You know, B2B demand gen agency.
Nelson (05:03):
And I think Chris is one of the best minds, if not the best mind in demand gen today. And I start to learn more about demand gen. I start to learn what proper modern demand gen is capable of relative to what it's kind of being handcuffed to and where it used to be historically. And I realized whoa, like demand gen can and should replace SDRs if it's given the freedom and resources to do so. And then that was the final piece of the puzzle. And I realized I needed to create I needed to turn this into a book in order, not only to get buy-in at User Gems for the CEO because I think it's like this, it took a book, it took Predictable Revenue, Aaron Ross, a 2011 book to talk about his time in early two thousands in order to basically convince the rest of B2B to copy that. And I think it's going to take a book to unwind that and to help people transition to a different model in a different direction to strive towards something better to the extent that people can. And so that's why I ended up writing this book. Yeah.
Kathleen (06:09):
<Laugh> so let's, let's go back for a second. And obviously you didn't write Predictable Revenue. That was Aaron Ross, and it was about Salesforce's experience. But for those who may not have read it, can you just give a, just a short synopsis of the thesis behind it, because what we're gonna be talking about is really the antithesis.
Nelson (06:26):
Yeah, sure. So Predictable Revenue model is two things, one a marketing thing, and one is sales thing. The marketing thing is SDRs slash you know, prospecting, you know, that's, the job of SDRs is do prospecting full time. And then the second thing is a sales thing, which is the sales assembly line or seller specialization or buyer handoffs among sales. Primarily the AE slash CSM split. So having one seller to handle the initial sale, and then another sale seller to handle the expansion retention in practice, there's further subdivisions. As we all know given that this is a marketing podcast, we can probably leave the, the sales portion out of it, but I would encourage all marketers who are tie themselves to revenue, into conversion rates and sales cycles, and CAC and CAC payback and all that type of stuff. If sales is suffering, you're gonna suffer.
Nelson (07:13):
And it's like a point guard in basketball who gives the balls. The center and center are supposed to dunk it in the opponents, whatever the net, instead, they dunk it in their own net. And so I would say for a lot of people mark and sales are kind of joined at the hip and just to keep that in the back pocket, but to focus now on predictable revenue for SDRs and prospecting it was an aspect where some of what Salesforce did in the early two thousands. And historically it used to be something that sales used to do. Like sales was essentially like field marketers slash sales. So you'd have sellers go door knock to try to drum a business because marketing, like didn't have so much ability as we do now to woo buyers in the door. And so sellers were like field marketers slash sellers, and then digital came into effect, which was telemarketing.
Nelson (08:02):
And then that's how they, they would basically just kind of like, you know, try to drum up, do marketing plus do sales, and then predict revenue comes along and says, Hey, doesn't make sense that sales is doing marketing, let alone the worst kind of marketing, let us create a full-time job for that called the SDR, which is really a marketing function. It's the jobs generate appointments of demand for sales primarily through prospecting, which is code word for this type of marketing. And it primarily involves telemarketing. And then what I consider email spam and LinkedIn spam, the reason being that it's you know, the way that it's being used and the way it's deliberately incentivized to quotas and commissions is that your pitch is, Hey, here's what we are. Here's what we do. Do you wanna speak to sales? And it's very difficult if you're incentivizing people to do that, to get them to, to say anything else. So like some SDR, some of the time might, you know, invite someone to a podcast or, or invite someone to attend an event or something like that, which is appropriate. But they're, they're comped on the opposite. They are pressured into just getting people into sales. And so they're like, they're prohibited from doing any other type of proper good marketing. And so that's where we are today.
Kathleen (09:18):
So I think a lot of the listeners on this podcast will be familiar with, you know, the, the role of the SDR and, and lots of companies probably who that have people who are listening may even have found success with it. Like I know there are companies that are, are using SDRs successfully. So like, are, is what are you suggesting that the SDR model doesn't work or like, can you clarify a little bit on that?
Nelson (09:46):
Sure. if you use the analogy of a horse and buggy versus a car it's like, both will get you from A to B. But it's like, which one are you going to choose? And there's a lot of costs hidden costs and direct costs with SDRs to take into account. And when you realize that the car like marketing, you have to make choices. And if, if the car can get you to where you need to be and the horse and buggy would detract from that and, and, and hamper that then yeah, then you basically need to shift your resources to invest and double down into what is actually much better. And so you know, can SDRs generate leads and can they generate revenue? Yes. But relative to what and at what cost, and is it net negative?
Nelson (10:35):
I believe it is. <Affirmative>. And so what I see today, so just to kind of set the scene a little bit historically it has been the role of marketing slash demand gen which is the unit within marketing responsible for generating leads to generate contact information of uninterested buyers at a high clip. And that's what an MQL is. An MQL is the contact information of an uninterested buyer that is obtained either through gated content or someone attending marketings events or list purchases, content syndication, what have you. And that the whole reason that demand gen marketing is on what's known as this MQL hamster wheel, that so many demand people are lamenting and fighting against, or what is also known as the lead gen model, which is the process of generating MQLs. The whole reason why you have that is so SDRs can use that contact information to annoy buyers with the worst kind of marketing, AKA prospecting, the telemarketing it is and that and the other.
Nelson (11:34):
And so that's where we're at and what happens now, where the state of, okay, that's really not smart. What if we just focus the SDRs? Or what if we just prioritize which uninterested buyers the SDRs should annoy? So this is where lead intent comes in. And this is where lead scoring comes in. So enormous resources and complexity gone into this effort to prioritize these uninterested buyers, oh, this buyer downloaded this piece of content. They attended this type of event. You know, so they're at least aware of us. So it's basically like dimension will warm up these people and then the SDRs will go annoy them the way I analogize says, you go to a bar and you're trying to woo the lady and you, you, you put on the charm and you let her know what you're about and everything like that.
Nelson (12:19):
And she likes you. And then at the end, you're a jerk to her and you annoy her. And then you wonder why you never hear back from her and she stops consuming your content. And she stops coming to your events. It's like, who on this podcast, if you're listening now would still be listening to this amazing podcast. If we then, you know, put you in an SDR cadence and started telemarketing you and this and that and the other which we will not <laugh>. Yeah, we will full disclosure. Yeah. So I think that's what, what happens is now you have like demand gen doing all this stuff and then basically turning people off and, and people away as they're getting further down the funnel, which I think is like, which is awful. I think demand gen should still continue just to do the content, do the social media marketing, do the podcast, do the events, do the ads, do your referral campaigns, do your thought leadership, do the million in one plays that demand gen can and should be doing.
Nelson (13:12):
And then buyers will learn about you. They will become aware of you. They will consider you, they will evaluate you. They will come to your website. They will speak to their peers. They'll self-educate themselves. And on the website, you should be having all the information, a buyer needs, pricing, demo, recording, demo environment, FAQ, whatever, whatnot rather than hiring that behind sales, give that to the buyers. They can decide if they wanna speak to, you know, and if they wanna buy or undertake evaluation. And you know, and, and also demand gen when these buyers do come to the website and they do raise a hand to speak to sales, you can qualify them on the website with a few questions. And then if they're qualified, give them the seller's calendar so they can book a time directly with the seller, boom, you, then don't give them the, a whole ring around the rosy with a manual SDR qualification call and demo scheduling, which from statistics from Chili Piper, which is software to do this you know, they basically see that if you do this manually on the high end basically like, well, basically 70% of buyers are gonna drop off if you do that.
Nelson (14:14):
So these are people who are knocking on the door and they're, and they're saying that like, yeah basically 70% of these buyers will not show up or, or, or, or, or it takes ages and they're less, more likely to lose a deal because then these buyers are gonna go hit up multiple different other companies. You know, and they're just gonna say which one is gonna be the easiest to buy from. So it's like you know, the reason why I call it, the buyer-centric revenue model is because good marketing and good sales conforms to how buyers wanna be marketed and sold to, and who's gonna give them the best buying experience. And so I think that's the biggest competitive differentiator B2B today. It's easier now more than ever to build a software product or no code products or whatever, and to have similar products and have similar pricing. And the real competitive differentiator is who's going to give the best buying experience who's going to deliver the best marketing sales experience.
Kathleen (15:09):
So, so it's, I, I think I'm pretty clear on what you're saying. Doesn't work. I wanna get a little deeper into what does work, because you've talked about how demand gen is really more appropriately suited to kind of using content thought leadership, et cetera, to, to nurture a, a potential buyer until they're really interested. I, I, I liked how you PO it as the difference between an uninterested buyer and an interested buyer. But what, what does that mean? Like, is it just traditional demand gen? Like, what is, what does an effective buyer centric process look like?
Nelson (15:51):
Yeah, sure. So the biocentric revenue model considers a lead to be someone that comes to the website and requests to speak to sales and marketing automatically qualifies them. Everything before that are just uninterested buyers, who doesn't matter if they're checking out your review sites is not checking out your website. Yeah. They're just contacts and look, it's good. You, you, to be that people are, are like picking up what marketing's putting down and coming to the events and stuff, and coming to the website and searching for your brand on Google and things like that. But a lead a lead is someone who comes to you and knocks on the door. And that is what marketing should be a hundred percent focused on. And if you're not focused on that, you're detracting from that. And that's what's happening now. And so, and we know that when these people come and they, and they're knocking on the door, they are more likely to buy, buy faster, to better cost reposition, all this deliver marketing sales efficiency.
Nelson (16:41):
So when you're not doing that stuff, you are detracting from that stuff. You're detracting from revenue, your sales opportunities, your conversion rates and sales cycle. Now how can demand replace SDR? How can they make people aware, make people consider you and, and hit that requested demo button. And it's by educating and entertaining buyers through organic and paid marketing strategies. And it's inclusive of both capturing demand of people, of the very few percentage of people that are in the market. Kind of like know, they have a problem looking for solution shopping, whatnot, searching on Google. But also the vast majority of the market, the 97% of the market that isn't problem where or solution aware and isn't shopping. And so this is the creating the, the demand, the top of the funnel. And so what that looks like today is primarily content marketing and social media.
Nelson (17:41):
And there's a whole bunch of things I'll, I'll kind of go into, but it's like content, whether it's audio, video written that could be podcast that could be events you know, LinkedIn posts articles, whatnot books that you're distributing on social media whether that's organically or through paid. So that's LinkedIn and Twitter and core and YouTube and Reddit and TikTok. You know, that's on, that's on also on your website or to the email list of people who've opted in it's, it's a podcast such as this and or guest podcasting on other people's podcasts. We share the same audience it's doing like co-marketing so inviting, you know, your partners, your channel partners, people who partner with your company your, you know, influencers in your industry who have an audience and have expertise it's inviting your customers, it's inviting your pro you know, to, to, to join you on the podcast, to come to your events, to Hey, weigh in on this article, you're writing, or this book that you're writing things like that, this thought leadership piece, or this survey that you wanna put together with like data or, or industry, whatever benchmarks that you think would be, would be helpful for everyone.
Nelson (18:48):
It's also you doing paid ads. So a lot of people, a lot of buyers are scrolling on their phone, on the couch because they don't wanna talk to their wife and kids. And they're on LinkedIn, they're on Facebook, they're on Instagram, they're on YouTube, they're on, you know, Google. And so you serve up an ad and you tell 'em in the ad, like, you know, some compelling, creative and some message to, to let them know what you're about, or case study this and that and the other. And they, they become aware of you. And that doesn't mean that they'll go and hit the buy now button, but like, that's a touch point. And then you're doing all sorts of events. You're doing, you know, maybe you're guest speaking at events, you're doing a weekly reoccurring event alive Q and a, and maybe you bring in some experts and you're doing fireside and panels and interviews or dinners and parties, you know, maybe you're creating a bit of a community.
Nelson (19:32):
So either you're participating in the existing community, for example, for a lot of markers who are listening to this, you're probably in some sort of community like revenue, collective now, pavilion, or revenue genius, or whatnot, or you create your own community through all your events and content and social, it's a Facebook group or a slack channel or whatever. Or even if it's just on LinkedIn you, you know, where, you know, people are, are following you and commenting on the stuff that you're doing. And also, yeah, when you talk about organic social, like LinkedIn is massive. And so you just, you know, you put out your posts, you make your comments and like, you know, I've got like, I don't know, 8,000 followers. And I haven't, you know, just from doing some posts here and there and comments, and it's like, you know you know, if you just start to do them, share your expertise and share your comments and, and engage people you know, you will attract the right people or referral marketing you know, or refer a friend campaign or ask your customers to refer people.
Nelson (20:26):
That's all something that marketing should do. And I'd also really stress in the website. The website is like your 20 for seven seller. So it's like give buyers all the info that they want upfront and transparently give your pricing at least ballpark, or, you know, a range or pricing builder, or, or starting at X, Y, and Z provide a demo environment or a demo recording the FAQ, the documentation, the technical documentation, everything that they need. And so, you know, when, when buyers do come to your website they they're gonna convert. They're more likely to convert, right? So there's that you could do billboards, you could do sponsorships, you review sites, case studies, customer marketing, whatnot. You, one of the plays I really like, and this was from User Gems, was remarketing to previous buyers and users that change jobs. So all these customers that go from one company to another, that's something that actually demand gen can, can do automatically now you know, at scale all of which, all of these tactics drive word of mouth, they drive referrals, they drive your reputation, they build your that's positive. And so that's the most powerful marketing channel, but you have to do these type of right tactics that build up to it so that you have that flywheel.
Kathleen (21:36):
So I think a lot of what you're talking about with marketing, I, I think that the audience of this podcast would be very bought into because obviously the, the premise of the podcast is inbound marketing. So we're, we're all, we've all drunk. The Kool-Aid of, you know, create content, attract the right buyer. And, and I always say like, the definition of inbound has evolved. It's not just content marketing. It's really anything that naturally attracts the right buyer to you. I'm, I'm going to play devil's advocate and say that I imagine in some people listening to this would say absolutely 100% everything you said about marketing, I agree with, but the pushback is that the whole reason that Aaron Ross's model is called Predictable Revenue is because it's predictable because it's a numbers scheme. Like you, in theory, at least you make X number of SDR calls, and you have some degree of confidence, even if it's a tiny percentage that that's gonna generate X number of qualified leads, which is gonna generate X number of free trials and deals, et cetera.
Kathleen (22:39):
Like you can build a, a predictable funnel around that. Whereas with, with the other marketing strategies, I think the marketers who live, we all believe in it, it's a little less predictable or at least, you know, that's how most of them have experienced it. And so, and, and I think, you know, the, the pushback you would get organizationally is yes, do all of that marketing stuff, but let's also do the SDR stuff because, because it's kind of a, a known quantity, it's kind, we know if we put in X, we're gonna get Y out. And I imagine also some of the pushback is, you know, if marketing isn't delivering enough on a consistent enough basis, the SDR is what fills in the gaps. Right. And so that I just threw a lot at you, but I, I, I, I know that these are the questions that are running through people's heads. And so I'd love to hear what you, how you respond to those. Yeah,
Nelson (23:35):
For sure. And I, I'm gonna say three things, one on the outbound versus inbound distinction, the, the second thing on predictability and the third thing about, well, what if demand, Gen's not producing enough? And the first thing I'll say about the outbound inbound distinction is to throw it out. It's really confusing to people. All of marketing is outbound to drive people inbound. And so even telemarketing email spa and LinkedIn spam, it are outbound marketing activities. And so it's, it, it, it, it is harmful to say, oh, we're just gonna sit on our Hines and then just wait for people to come. And so we're gonna put one blog out there and stuff it with keywords, and then just hope people find out, find it, and, you know, and that's being, and that's being lazy. And then I think that gives the other camp to say, oh, we're, we'll bring the pre we're bringing the proactive ones, and we're going out there to make people aware.
Nelson (24:25):
It's like, no all of marketing is outbound. Just some tactics are really bad and, and should be excluded from your mix. And then the second thing about predictability. So it's predictable to do door knocking, but we don't do it. We know if we probably on a hundred doors maybe one person will answer and, you know, zero revenue will happen and it's predictably inefficient and it's predictably ineffective. And just because something is predictably bad does not mean that we should do it now is good marketing unpredictable. No, not if you do it right. I think that as a marketer you know, what, what your job is, is when you're looking at the funnel and when you're looking at, and, and, and the whole point you do reporting and dashboards and whatever, and you're tracking the metrics. So whether that's like early up the funnel where you're looking at website traffic and branded traffic and direct traffic and you're looking at the conversion rates and how people are performing on page, and then you're looking at your website demo requests, and then you're looking at how that performs to the funnel and how many opportunities you have and what your sales cycle is and what your ICP is.
Nelson (25:33):
And, you know, then you can basically report, Hey, here's the forecast of our pipeline. And that is not, that is easier now, more than ever with all the tools and MarTech and know how, of, how we can report and give that predictability. And all of these, all of these you know, outbound tactics and channels, like, you know, once you start doing them and you start to, like, in over time, you get better at them. And then a as you start to add on more channels, then you'll see that like, no matter what, there will be dips and months, or for various different reasons. But what you're always looking for is just upward trends. And as long as you show the business that, Hey, revenue's going up a number of demo requests are going up, or conversion rates are getting better. Our sales cycles are getting better over time, over time.
Nelson (26:21):
You know, you know, you, you it's like what, imagine if the CEO said, oh, look, look what happened from today. As opposed to yesterday, it's like, it it's been one day and it's like, you need to look at things on a longer, on, on a, on a time horizon. It's, it's weekly, it's monthly, it's quarterly, it's annually to be able to kind of track your results. So it's like, first of all, track the right metrics. Like you're looking at revenue, you're looking at the number of customers, the sales opportunities cost per opportunity, conversion rate, sales cycle, number of website, demo requests, website, traffic, et cetera, et cetera, track that right stuff. And you're tracking it over time. And you're, and it's, you know, a lot of it is not immediate to be able to say like, oh, we did this ad and that ad directly caused this thing.
Nelson (27:05):
There's like a lot of different touchpoints as we know where the buyer's journey is. Like, they're getting hit with all sorts of marketing stuff, and eventually they come in the door and you can kind of like, maybe attribute some of that stuff, but, or get it qualitatively on the website where you say, Hey, how did you hear about us? And then you get it right from the horse's mouth, as opposed to trying to like, predict that to, so you kind of get the first touch attribution that way. And then, you know, maybe HubSpot or visible will tell you last touch attribution, you know you know, what was the last thing they did before they converted whatnot, came through Google, whatever. And so, but when you're showing those reports, you, you, you're basically showing the metrics that matter. And you're giving confidence to the CEO because all the CEO and the board really cares about is that, Hey, revenue's going up.
Nelson (27:45):
Website demo requests are going up. Branded search traffic is going up. Conversion rates are improving. Sales is happy. Like we are generating sufficient, you know, revenue and, and leads for sales. So that's the predictably component. The not producing enough demand for sales. So that's two things. It's either a marketing problem where you need to fix your demand and your marketing to produce sufficient leads for sales and, or you have too much sales head count. And some companies have not realized that today it's companies ought to be marketing led and marketing is responsible for most of the buyer's journey that buyers don't wanna sell her as much and not until much later in the process and who helps them until then in its marketing. And so that, that power has shifted. And so I think that companies who think that they should just hire a whole bunch of sellers first and then figure out marketing later are gonna be in a Herald of whoa.
Nelson (28:41):
And so what you'll have is too little butter over too much bread. And then they'll say, well, we have these unproductive sellers. And half of their compensation is dependent upon buyers purchasing, which is their commission and sellers on the hook for revenue right now, marking unfortunately is not on the hook for revenue. They're on the they're on the hook for contact information of uninterested buyers or MQs. So you have the natural misalignment there. So some more marketing produces junk and sales gets caught holding the bag. So I think you need to fix your marketing, fix your demand gen, and always make sure that and look marketing, precedes sales. So if, if you're not producing enough demand, then you don't need as many sellers to close that demand. And so you need to be very careful in your head count. And you wanna avoid on productive sellers.
Nelson (29:24):
It's, it's not a thing in a company when demand sort of dries up. And you basically say, Hey, we need to either let these sellers go or maybe offer these sellers something else in the company to say like, Hey, look, man, or, or you gal, we just don't have enough demand to go around. Maybe do you wanna join marketing? And I think that, you know, or do you wanna do rev op and try that for a little while? So you don't necessarily let those people go. So yeah, don't put the car before the horse, make sure you've got the, the demand in place. And then you figure out how much sellers you need to convert that demand.
Kathleen (29:57):
So that's interesting. So if I'm hearing you right, it like the, to the issue of kind of let's call it asymmetry between sales and marketing, where if, if sales feels like marketing, isn't producing enough, it's, it's one of two things it's either marketing that isn't performing genuinely, like there's a problem with it, or it's an under-resourced marketing team, or rather an imbalance, or you've over invested in sales and underinvested in marketing. I bet there's a lot of marketers listening going. It's probably number two. <Laugh>.
Nelson (30:29):
Yeah. And also it's like, well, did, did you have realistic goals from the CEO about what marketing ought to be producing in the timeframe it's supposed to be producing it in? And so you know, yeah, the, the best thing for a salesperson's success, the best thing for sales is a really, really good marketing engine behind it that makes sales, you know, really efficient. The worst thing that you could do is if marketing is underperforming and you've got too much sales head count, and I've seen this play out, is that you then have your sellers do prospecting which is pre Predictable Revenue, which was the whole reason Predictable Revenue came around and said, Hey, doesn't make sense that sales should do it. So then it's like, you know, you've got yeah. And so that's not the answer it's like, you don't, that's not the answer. You really need to fix your marketing or fix your sales head count. Yeah.
Kathleen (31:20):
So I, I, I like a lot of what you're saying, and I think it's really interesting. And, and I, and I see it. Do you have any examples of companies that have made this shift and had a lot of success with it? And can you talk a little bit about that?
Nelson (31:34):
Yeah. I can, it, it's hard because no one has made a switch wholly from like, we were on, Hey Nelson, we were on the predictive revenue model. And now we've, we switch the, the biocentric revenue model, which encompasses more than what we've, what we've just talked about, which is primarily SDRs are just marketing focused. There's also a bunch of stuff I talk about with sales, but from my own experience, I was working at a big company that ran the big revenue model, as I mentioned earlier on. And that company struggled and then was sold for a $300 million loss and law much more when it was operating. And, and then when I was at User Gems and we didn't have that, we were five people and we for Xed revenue in a year during COVID we decreased our sales cycles. We, you know we increased our conversion rate from like 80% to 29%.
Nelson (32:21):
We decreased our sales cycle by like 40%. The and the company was able to raise money and then grow really fast with five people. Well, I was a six person. And so, you know, you don't need millions of dollars in VC money and you don't need these massive teams to actually grow properly. So I think that part of the biocentric revenue model's appeal is that companies can grow better. You grow faster, you grow more, you, you, you grow easier with less, at less cost. You don't need. So for founders, you don't need to give up a whole bunch of ownership to your company, become a slave to the VCs. And, and you know, it won't take you 10 to 15 years to grow this company that you can profitably exit. And also for the VCs, you won't be wasting all this money on a really bad model and it's construction and maintenance that you could otherwise be spending productively across your portfolio, investing in more companies.
Nelson (33:14):
But I would also say so. Yeah. So when I was at user jams, I saw the proof from the pudding. Then I went to you know, a company called center base. And I saw there that like the, the diff if you compare again companies, if, if you compare the leads generated from SDRs and the costs that go into SDRs or if you compare your MQ LS or whatever, and you compare that to website demo requests it's night and day, and then you use just little cost analysis and you separate the mixture cuz you really have to separate the mixtures of your marketing. You have to separate your demand gen from your SDRs in order to compare apples to oranges. A lot of companies don't do that. They just mash their marketing efforts together and they don't separate the components.
Nelson (33:56):
If they separate the components, they would realize which side their bread is buttered on and would double down if they properly did an analysis. I help people in the book to understand that how to gradually transition to test basically to test compare and gradually transition away from the predictive revenue model. It's obviously a bit harder for companies who are deeply ingrained in that, to the extent that they've adopted it. And that's, that's, they've got the whole kit and caboodle baked in there and it's calcified. And it'll just be more painful than later on as their com competition you know, changes that and offers a better buying experience, a better marketing sales experience, and then they're forced to change later on instead of being proactive about it. And and so there's that I think any companies, like if you do this test and you look at your own CRM and you do, you know, you look at your MQL, you look at your SDR leads and you compare that again to your, to your website demo request.
Nelson (34:50):
You'll be able to see that. I saw one example recently from Cognism, the CMO Alice post on LinkedIn, like she compared she did this test and she saw that like her MQs are typical par of the course, you know, that they do with the whole SDR thing. They converting at less than 1% you know, 0.2 0.3 0.4 versus the website demo requests, which are, are, are vastly higher than that like 15, 20 X higher than that. And that's like pretty typical across the board. Then you're looking at your improvement and your conversion rates and your sales cycle and your cack and all this type of stuff. And so I would encourage every company to do that, like look at your own company and do that test. And I kinda lay this out in the book. And I think that's the first thing that you do is you gather that data and evidence, and then you put together the business case for the board and everyone, you get all the troops on board.
Nelson (35:44):
And that the, the first thing I would recommend to people once you have that in place the first experiment I would do is to automate the inbound demo request, qualifications, scheduling on the website, repurpose the SDRs to more productive and fulfilling tasks in demand gen and in marketing, they'll be thrilled, give them quarter relief as well. So you pay them their full amount. They'll be, that'll be fantastic. Once you prove that, then reduce their outbound prospecting, prospecting activities by 25% increments again, give them quarter relief repurpose them to help out with other parts of, of demand gen, content, social, this, that, and the other ads, creative, you know, they'll be so happy and you give 'em a quarter of relief there anyways, trying to escape from this stuff. And then you do that in 25% increments, do that over maybe a few sales cycles, whatever. And then you're tracking the metrics over time and then boom, you've basically have sunset it and transitioned your SDR into demand gen or into sales or to revenue operations, whatnot, which they're already trying to do as soon as possible. So just like, that's what I would advise people who are currently in, in, in place a, and they wanna get to place B.
Kathleen (36:50):
So you make it sound really simple. <Laugh> and, but it's obviously it's an intimidating process for a lot of companies. And I think it sounds like up one would be to go and get the book because it, it lays it all out. Right. But like, if somebody's listening to this and be beyond getting the book, if there's one thing you could advise them to do now to try to lay the case for this, remembering that the listener is, is a marketer. And so they're probably gonna have to start by like making the, a case, what is one thing they could do that would help them begin to make the case for this kind of a shift?
Nelson (37:24):
Sure. Yeah. So the book will give you the theory and it'll give you a bunch of examples and history and context, and they'll outline the, the, the CA the four or five steps I outlined to, to, to make this transition. The first thing really, really to do is, again, do that test where you look into the CRM and you separate the bad component of your marketing from the good component. So you separate MQLs and, and the SDR leads versus website demo requests. And you look at revenue and number of customers, number of opportunities and cost for opportunity and sales cycle, conversion rates, cap payback. And then you have the you and evidence in front of you. In addition to that also consider how much resources go into the SDRs to the MQLs. And remember SDRs are time, labor and capital intensive.
Nelson (38:11):
So it typically enormous amount of resources are diverted away from demand gen from producing website into the SDRs. And so you're, there's that then you will also consider how many buyers are turning out off and tuning out. So if you look into the SDR, CRM or, or, you know, and you look at the number of, do not calls, take me off your list and subscribes not interested factor that in. You can even get some qualitative interviews with buyers and just, and just be like, Hey, I, you know, I know SDRs reached out, how was your experience with them? Not very good as we all know even try putting your own CEO into the same SDR sequence, or just like telemarket them and just like, well, how did you like that? <Laugh>
Kathleen (38:54):
And it's like, it's have them mystery shop you.
Nelson (38:56):
Mystery shop and see what it's like and say like, Hey, why don't you go and submit a fake demo request and see how annoying and long it is to like, get the whole SDR runaround or to be on the receiving end of the SDR sequence. It's not good. And so why would you want to then put that on your own bias? And so I think that's kind of like where to start. And then that's where you have the evidence at your own company. And, you know the other thing I'll say is, look, if you can do all this stuff and make the case and your CEO gets it, but doesn't want to change that should give you pause and make you rethink, well, do I want to be fighting this uphill battle or do I wanna be finding a CEO that does get it and where I do have the freedom and resources and the trust to do proper marketing.
Nelson (39:46):
And so I think that's where we see a lot of demand gen markers, particular, very frustrated right now in the straight jacket, handcuffed to SDRs to the lead gen to the MQL hand who are having less productive and fulfilling careers and wanna break out of it, but know that yeah, they're going against the status quo. They're, they're stuck in the Predictable Revenue model playbook, which the CEO thinks that they should be doing and that the board, or thinks that they should be doing, or the VC or the PE firm thinks they should be doing. And so the biocentric revenue model in this and, and or the stuff that Chris Walker and find labs crew is putting down or anyone else who's on this bandwagon, what we're offering people is something against the status quo. It's against tradition. And it it's gonna take time.
Nelson (40:31):
We're, there's early adopters and the early adopters have a massive competitive advantage. Not only an attracting buyers, but it also attracting talent. Like if you wanna attract the best markers in town you know, do you ask them if they wanna be stuck generating contact info of uninterested buyers and doing all sorts of, you know, stuff that they, they don't wanna do and don't have the freedom to do, or offer them the ability to come and do really fun, good creative marketing that they'll love and will attract buyers and talent alike. So, yeah,
Kathleen (41:02):
I love it. Well, I love your passion about this and, and it's great to hear you, like, just get into it. I, I, I can see how much you believe in it. I'm gonna shift gears for a second because I always like to ask my guest two questions at the end, and I wanna hear what you have to say the first that the marketers, I talk to very often say one of their biggest challenges is just like keeping up with all the things that are changing in the world of digital marketing in particular there's platform, changes, technology changes, you know, you name it, there's a lot going on. So how do you personally stay up to date and keep yourself educated? Do you have any particular sources you really rely on?
Nelson (41:39):
Yeah, sure. So one thing I'll, I'll say is despite all the changes, just stick to the basics and like have this right philosophy and mindset and approach to marketing of like being biocentric and focusing on the metrics that at matter and, and the, you know, the audience and the messaging and the positioning and figuring out which channels just like, kind of stick on stick to the basics. You don't need to be a master of like a million channels and a million different tools. Just do a couple of things, really, really well, and a couple of channels really, really well. You don't need to spread yourself thin, like over, like too much butter you know, two little, but over too much bread, just do a couple things really well. The second thing I would say is you know, I'm obviously a big fan of Chris Walker and the find labs crew and the state of demand gen podcast and the demand gen live series where you can get, you know, ask your questions live.
Nelson (42:25):
And I think it's a really good way to kind of stay abreast of like where marketing is going and demand gen is going and you know, a pulse on things and they break down and all sorts of stuff. And if you've got things you're struggling with, you can come on and, and ask your questions. Obviously being in communities where you can ask questions of your peers is great too. And so, like, there are things like you really wanna get answers on in, in your particular situation. So just go on to revenue collective, for example, there's the demand gen or the ask marketing channel, and just like, ask your question. And then you can get input and crowdsource your answers from a whole bunch of different marketers. I'm a big fan of this podcast. Obviously you're listening to it. So you don't, you already know that I've listened to a whole bunch of episodes.
Nelson (43:07):
So I think podcasts like this and like Refine Labs is huge where you can get the expertise and get the thought leadership. I but ultimately it's like, you don't need to and cannot know every single thing, and it's always gonna be changing. I mean, it, and it's, I, I think as a, as a leader, you always wanna stay ahead of the curve a little bit because you're a little bit out of the trenches and you've got people that you typically have in the trenches that you're helping to manage and to help you to be successful or you're outsourcing some of that to, to agencies and stuff. So you just need to know enough at a high level. And typically what good looks like. So you don't need to always know how the sausage is made and this and this and this little itty bitty tool and this and that. The people that you hire and grow and, and support will, will have a really good idea and feedback to you about, Hey, you know, what's happening, what they need and what what's, what, what Olo and stuff like that. So yeah, I wouldn't, I wouldn't get too lost in all the details of the, of the ever changing bit of, of of marketing, especially when you have good fundamentals.
Kathleen (44:06):
Yeah. I think your advice about not trying to be the master of everything is key, and to remember those fundamentals second question, and by the way, I did interview Chris Walker for the podcast. So if you wanna hear about his approach to marketing, dig out that episode, and that's a good one. Second question is this podcast is all about inbound marketing, even though I know you said it's all outbound. So is there a particular company or individual that you think is really setting the standard for what it means to be great at inbound marketing today?
Nelson (44:39):
Ooh. Wow. So what I mean, obviously the Chris Walker, Refine Labs and, and, and that type of stuff. But if you're looking at a B2B company today one company I'm kind of press with is, is Metadata.io. And they basically offer like you know paid ad software. Won't go into too much detail there, but they're out there, they've got a podcast, they're doing great LinkedIn organic and thought leadership and events. Like they did a great event. These thing called demand that I attended. And I think they, they demonstrated what proper demand gen looks like. There was no SDR cadence after they, they had 4,000 attendees and they recorded this event and they repurposed it and they did pre-promotion and all this type of stuff. And they, they, they've built a really, really good reputation for themselves and they're, and they're, and, you know, their their growth is skyrocketed.
Nelson (45:35):
And, and people really enjoy their content and have affinity to them. And the CEO is active as well. And in getting out there the face of the brand, and there's multiple faces of the brand. When I think about them, I'm thinking of a few different people who I recognize the company. So it's more than just the company, it's the people at the company. Yeah. so I think looking to them I think companies to the ex who are trying to be marketing led you know, I, I think it's a misnomer to say product led. It's like, yes, you're trying to get people into the product, but the people who are trying to get those people into the product is marketing <laugh> and then it's marketing is converting. Those people from typically are helping to convert those people into, into pay by making people aware of what the paid option presents and stuff like that.
Nelson (46:16):
And so but I would just say, like, to the extent that companies offer you know, they, they are marketing lead and where they're offering buyers self-service to the extent possible and desired, whether that's a, a free trial free me model the buy now model, or even if there's a sales motion and it's just giving the buyer a really good experience, doing really good marketing to make them aware and then giving 'em all the information they need on the website. It, you know, to extent that companies do that, I think they're, they're gonna be really, really well positioned. And I'm still seeing a lot of companies that are, are, you know, not doing that and are struggling. And their sales cycles are really long and they're not doing too well, and they're burning in cash and things like that. So yeah,
Kathleen (47:05):
<Laugh>, that's awesome. I love, I love some of those examples you gave and, and I like your perspective. So if you're listening, definitely check out the book Nelson, or can somebody get it?
Nelson (47:16):
Yes. So it's available on Amazon right now. You know, again, it's the Death of the SDR and Birth of Buyer-Centric Revenue. If you have Kindle unlimited it's free if you don't and you have the Kindle and your desktop and mobile, it's an incredible $9. So if you have <laugh>, you have the budget left over you know, after the Christmas shopping, I think the kids will love it. It's a great book. <Laugh> but I would say after you read the book and you have questions on it everyone can always message me on LinkedIn Nelson Gilliat, you know, whatever. And just, if you wanna just bounce things off me, things you're chewing on, you have questions because it's a bit like, you know, different than what you used to always feel free to reach out to me. I obviously on LinkedIn, I'm putting out a lot of posts and to kind of break this stuff down into little snippets little more digestible bits. Yeah,
Kathleen (48:06):
<Laugh> awesome. And I'll put links to your LinkedIn into the book in the show notes. So if you're listening and you're interested in either of those head to kathleen-booth.com, that's where the show notes live these days. And if you're listening and you enjoy this episode as always, I would really love it. If you would head to Apple Podcasts and leave the podcast a review cause that's how other people hear about us. And finally, if you know somebody doing amazing inbound marketing work, send me a tweet at @workmommywork, and I'd love to make them my next guest. That's it for this week. Thank you so much for joining me Nelson. This was fun.
Nelson (48:41):
Thanks Kathleen.
