161: From Connection to Conversion: SDRs Navigating Demand Capture and Creation

Episode 161 October 05, 2023 00:29:02
161: From Connection to Conversion: SDRs Navigating Demand Capture and Creation
B2B Revenue Acceleration
161: From Connection to Conversion: SDRs Navigating Demand Capture and Creation

Oct 05 2023 | 00:29:02


Show Notes

Special guest Chris Walker


Have you ever wondered how Sales Development Representatives (SDRs) can harness the full potential of demand capture and creation in today's ever-changing sales landscape?


In the latest episode of B2B Revenue Acceleration, our host, Catarina Hoch (VP of Global Marketing, Operatix) sits down with Chris Walker (CEO, Refine Labs) to discuss the crucial role of SDRs in demand capture and creation strategies.


Catarina and Chris delve into the nuances of demand capture and demand creation, shedding light on their distinctions and interconnectedness. They discuss how SDRs are an integral piece of successful demand generation, turning connections into conversions by utilising outbound activities.


Chris shares his expert advice on how SDRs can efficiently leverage multiple outreach channels, as well as highlighting which channels work best for demand capture versus demand creation. 


With an ever-evolving market landscape, this podcast episode will offer valuable guidance, strategies and actionable tips on adapting SDR-led demand generation strategies to new trends and shifts in buyer behaviour, ensuring sustained growth for businesses.


Stay ahead of the curve and push the boundaries of your demand generation efforts with this podcast episode.

View Full Transcript

Episode Transcript

[00:00:00] Speaker A: You're listening to B Two B, Revenue Acceleration, a podcast dedicated to helping software executives stay on the cutting edge of sales and marketing in their industry. Let's get into the show. [00:00:12] Speaker B: Hi. Welcome to B. Two B. Revenue acceleration. My name is Katerina Ho and I'm here today with Chris Walker. He's the CEO at Refinelance, and it's an absolute pleasure to have you here today, Chris. How are you doing, Kat? [00:00:25] Speaker C: Pumped to be here. Thanks for having me on the show. Looking forward to going in whatever direction you want this time. [00:00:30] Speaker B: All right, so today we're going to be talking about SDRs, navigating, demand capture, and creation. So we want to dive a little bit deeper into the SDR elements. But before we get started, can you just please tell us a little bit more about yourself and your journey at Refined Labs? [00:00:48] Speaker C: Sure. Before I started working and started my company, Refined Labs. I studied electrical computer engineering in college and worked in a lot of different industries outside of Tech and SaaS, like manufacturing and medical device and things like that. And believe that the learnings from those other industries which a lot of people in Tech consider sort of like outdated or behind, I find that there are some things that those companies and industries do that are significantly further ahead than Tech and SaaS. When you start to look at some of the things about how a medical device, company markets and things like that, they are using large scale data to create best practices on how you're supposed to use the tool. And there's data behind it and it's clear and there's statistics. And I think that a lot of marketing technology tools that come out that get wide adoption inside of the B Two B market have actually no proven track record that their product performs better than what the company is doing right now. One thing that I'll bring up in the vein of Strs is like, everyone in theory thinks that if you use Intent data to trigger outbound sales instead of MQLs, that you're going to get more meetings and close more deals and things like that. I've yet to see a single study published with multiple companies doing that that shows that it's actually the case. Right. And almost every company out there is now using Intent data. I'd like to see some more data backed science around whether or not that is effective. I was having a conversation with the CMO, and I have many of them like this, where it's like, yeah, we've been using Intent, but the SDRs aren't adopting it, or we haven't been able to get adoption, or it's a black box, we haven't figured out exactly how to get it to work yet. But those companies have 2500 customers. Right. So there's a bunch of companies out there that haven't really figured out how to use this, but there's widespread adoption across it. And so part of my goal is to bring a lot more science to the revenue generation and revenue team process. How do we use data, how do we look at data in an objective way, how do we look at data across a lot of different companies, not just looking at because salesforce did it and it worked, that it's going to work for everybody. And so that is part of my mission here that very closely fits along with my background. And I see the potential here where we move from a revenue generation process where the strategy is determined based on experience and opinion and move it to a place where it's based on data and science. And companies think that they're moving in that direction right now. But the reality is that I work with a bunch of them and what happens is they have a bunch of data, they don't know how to interpret it. And it always leads back to decisions based on experience and opinion, opinion about the data. So that's something that I'm really passionate about. I see a lot of opportunity here. [00:03:50] Speaker B: Yeah, I love what you're saying because I think buyers are heavily influenced by how vendors position themselves and what the vendors bring out there in terms of the statistics and the data. And I love the fact that you bring a neutral view to it because it's very easy to be influenced by whatever the vendors want to do with how they position the data. So, yeah, I love what you guys are doing there, really kind of leading the way in B, two B tech marketing, right. So coming back to bit of the SDR piece, and I'm sure that everybody that's listening to this podcast already follows your content on LinkedIn, but for those that don't, can you just set the stage a little bit and explain the difference between demand capture and demand creation? We're going to talk a bit more about that, but I'd love to just get the clear difference between demand capture and demand creation. [00:04:41] Speaker C: Yeah. So if you adopt a binary model against your target account list and make a decision based on the data available, is this account in market to buy or is this account not in market to buy? That's the distinction here. And so if they're not in market to buy, they're not demonstrating intent, they're not on your website, they're not consuming your CMO's content on LinkedIn, they're not doing those things. Then you have to approach the strategy for that set of customers in a very different way than the customers that are in Google searching for the category of your product. They're on your pricing page. There are different activities and strategies needed based on that. One binary outcome is the account in market or not in market? Demand capture is when a person and or company are in market to buy, demonstrating clear intent signals that can be measured through first party, second or third party data. And the goal is when they're showing intent to buy your stuff, that you have a meeting with them and try and close them. And for the accounts that are not in market to buy, not showing intent, not on your website, none of those things. The goal is to through content and education and word of mouth dark social. Other means get these companies and executives and influencers educated on the core business problem that you solve. What the metrics look like when you're not solving it and then start to present solutions of ways that companies could solve it and therefore educating a company to not be in market and eventually move in market where they're on your website doing those things. And then you activate your demand capture motions. And so I see that as very distinct things. The challenge in B to B companies is that because of the way that they measure the success of marketing and BDRs, it ends up all being demand capture because people are going to optimize for the way that they're scored. It's like not complicated metrics are going to drive the behavior. And so for all the accounts that aren't in market, 95% to 99% of your target account list is not in market to buy at any one time. But what do they do? They try and run lead gen and Google Ads and other things like that to try and capture intent that doesn't exist when there's no intent to buy. Your sales team is going to have a lot more of a challenge to move those deals forward, to close one, leading to lower sales productivity, higher cost of know, a lot of wasted marketing expense to actually get the leads and run the performance marketing. And so it's not to say that you shouldn't do performance marketing, it's not to say you should not capture demand. It's that we need to have a balanced strategy and we need to have a balanced way to do measurement and Attribution and KPI reporting that supports being able to do both of these motions. [00:07:31] Speaker B: Yeah, and I think you cover that a lot when you talk about the sales velocity formula, right? Where obviously those lower intent lead sources typically convert less pipeline and companies should really look at bucketing them in different ways, right? Do you feel like companies should they just focus on the kind of high intent ones and stop doing what they're doing to generate the low intent ones? Or do you feel like there is still a place for those lead sources that can help with brand awareness, demand creation and things like that? [00:08:06] Speaker C: It's about having an appropriate mix of multiple go to market motions that match different intents of buyers. If you're just sitting back there and running a demand creation motion and hoping everyone like some big company like Snowflake is going to come inbound and buy from you next week, you're out of your mind. You're out of your mind. That's why you have a demand creation motion and then you build multiple demand capture motions and you also have an outbound motion against companies that are like on the border. MQA, I wouldn't call that really that much of a signal, but you're going to have an outbound motion to go after those types of accounts. So I think it's way more about balancing multiple go to market motions together and then the core things that companies will have what we call declared intent on the website, low intent. Lead gen product events outbound. And then if you wanted to have optionally another version of outbound ABM or intent driven outbound and then all of a sudden you have the five or six motions where the intent of the buyer is similar when you capture that intent or demand and therefore the sales velocity metrics will be similar. And it's very consistent across lots of different companies. If you group that type of demand capture motion into those things, that the ones where you know that the buyer has lower intent based on common sense. You also see lower win rates, longer sales cycles, less sales productivity, higher CAC. It's not complicated now potentially, it's not to say that you shouldn't do those necessarily, but it is a signal to say where are we getting the best sales productivity and where are we not? And the challenge that companies have is that they just blend all of their pipeline together. Look at it as active pipeline, even the sales analytics tools do it not recognizing that the way the buyer enters to have the first meeting has a massive impact on whether that buyer is going to become a customer of yours during that sales cycle or not. And it ends up leading to a lot of wasted sales teams effort, talking to people that are not interested in buying right now, trying to convince people to buy, which then just you have compounding issues as you scale and not just sales. [00:10:21] Speaker B: I think marketing as well because so many marketers make decision based on lead volumes and often don't look at the conversion rates. Right? We did analysis a while ago around what were the highest converting lead sources for us and that was massive for us to realize where we should put our money. So yeah, it definitely makes sense. And coming back to the SDR piece then, do you think SDRs should be used for demand capture or demand creation or both or not? [00:10:55] Speaker C: If you want to use quote unquote SDRs for demand creation, you better go get people with different skill sets straight up. To try and ask a person that's out of college, the most junior, least experienced people in the company to go out and try and create demand with a Chief Information Security Officer or a CFO or a VP of Marketing is absolutely ridiculous. And so what are those people best suited for to capture active intent with customers? If you're not going to change the hiring profile and you're not going to change the way that they're measured. They should be purely a demand capture motion. And when you're purely a demand capture motion, you should be evaluated against the spend, against those resources and all the tools and technology that go with it, against how much pipeline is being created, how much qualified pipeline. It's not complicated. And so that's the way that I think, logically, we should look at a BDR function today. Now, do I think that's the way that companies should do it? Overall, yes. I think companies overscale this team. And a lot of companies have slowly moved it back to a level where some companies used to plan to have a one to one SDR to Ae ratio, and now they have a four to one, four AES per one SDR, which means that and they're getting better results with way more efficient, way less resources. And so I just think companies overstaff that team because of the predictable revenue model. If we just make 300 calls and get two meetings a day and we have that many, and they just build that model and when you look at it blended, you can justify it. When you look at it broken out and you just look at the outbound channel against the outbound spend, and then you're like, oh shit, we have way overhired here. But just because of the blended view and the way companies look at analytics, sometimes they don't see these patterns. [00:12:44] Speaker B: And I guess it also comes back a bit to the Attribution, right? Because it's super easy to attribute the lead to a BDR and it's often not that easy to attribute to marketing. Which actually leads me to my next question. So on your most recent video, you talk about this old model of an assembly line lead generation system, right, where marketing creates the leads, SDR follow up, and then sales are responsible for closing the deal. And you were saying this model is outdated and it's all about working as an all bound motion where integrated revenue teams build a process and strategy around the customers buying processes rather than the company internal departments. And this concept makes a lot of sense, but I feel like maybe companies struggle a little bit to make that switch. And I would love to hear from you. How does that model look like from a more tactical perspective and how can you actually bring this concept to life? [00:13:43] Speaker C: First off, why do companies struggle to switch? Because the entire ecosystem of B, two B marketing, the professional services of firms and agencies, the technology vendors, the venture capitalists, the analyst firms, everyone in this space is pushing the outdated demand waterfall model on two companies. That's how they do planning, that's how they set goals, et cetera, et cetera. So the ecosystem is built around it. And even if you change one of those things, you change your agency or you change a couple of things, it's actually really hard to break out of it because everything is built around the assumption that this is how we generate revenue through an assembly line. Through an assembly line where marketing delivers something, SDRs chase around those signals or contacts or accounts and try to get meetings. And then sales tries to close whatever meetings that we have. And then the way the budget gets evaluated that way, the way the tech tools are installed to see if things are working or what's going or built based on that. And the reality is that if you actually look, you need to accomplish three things to get a net new customer. You have to create demand with the account, you have to capture the intent into sales conversations. If you're assuming you're enterprise, which is mainly what I'm talking about here, and then you have to convert that demand into a customer. Now, if you look at exactly how marketing is practiced today, marketing should be impacting all of those areas. Most companies are not creating demand very effectively, but they're paying analyst firms, they're spending money on PR. You could argue that some of the big national trade show booths are to create demand and so they're doing stuff there. They spend a bunch of money on performance marketing to capture leads on Google Ads and different things like that. They have their website which captures demand events that are based on getting leads for sales meetings. And then they also a good team is going to run pipeline, acceleration formulas, a lot of field marketing stuff. How are we going to move active pipeline to closed one? And so you can see how a good team will actually move in an integrated motion. Now, should the BDRs also be doing that? Should the salespeople be creating demand by using customer success stories or insights they're getting from their best customers onto LinkedIn or hosting a podcast around it? Probably. And so you can see that it's becoming an integrated motion where it doesn't really matter how the buyer gets to you in order to determine just looking at sourced is not a great way to determine what's working and what's not. And so I think that there's just a lot to be done in terms of the analytics and the technology to support this new motion. Companies are buying ABM software and I've yet to talk to a bunch of companies that are like, we're buying this and if you rip six cents out next week, I couldn't live without it. I haven't heard a single CMO say that there's still a lot of work to be done. Obviously companies should be moving to an account based model. A lot of companies want to move to an all bound model because they see the flaws with the department level stuff. But there's no underlying system to say this is how we're going to measure it, this is where we're going to track opportunities. This is what we're going to look at in salesforce data. Here are the core KPIs we're going to report on. Here's how we're going to think about attribution across these three different dimensions of generating revenue. And I don't have all the answers, but I'm aware that I'm informing people that the direction that companies are moving is leading to roadblocks. They're running into issues. And so even without having the answers, it's good to know as a CMO from me, hey, I've worked with 20 CMOS, 19 of them did this and they all ran into this specific pattern issue, organizational change. Couldn't figure out what was working or what's not, couldn't figure out how to deploy the budget, wasted a bunch of money, whatever the issue was. You should know that pattern because if you try this, it's likely that you're going to get a similar outcome. And so that's what I'm trying to communicate here. While I continue to work through live solutions with companies, I'm not over here theorizing. I work with 1000 person, 100 million arr companies and solve these problems for them. And as I solve them, I communicate back to the market the way that we solved it. And so I think that also makes me unique. I think that's why a lot of people resonate with my content, because I'm not gartner out here like an analyst saying, hey, you should do this. Meanwhile, in the background, the vendor they're promoting paid them $2 million that year to talk about it. I'm not doing that shit. I'm actually in there solving the problem with customers repeatedly over time and then communicating the solutions. And that's all I've done for the past four or five years. And that's what I intend to continue to do. So that's why I think the frameworks and the insights are so clean. [00:18:43] Speaker B: Yeah. And I guess it's just very relatable, isn't it? Because often what we hear out in the market is all of those theories. But when you actually come to executing it and looking at what other companies have seen success in, there is a lot of working through it and figuring it out until you actually get kind of a formula that works and then it works for some and it doesn't work for others. So it's very on a case by case scenario. So another question I wanted to ask you is in terms of coming back to the SDR piece, where do you see the future of SDRs? What do you think is going to happen to the SDR function? Where do they have their place? And with that whole motion of there is always a debate whether SDR should report into marketing or sales. But obviously, once this all becomes one motion where everybody works towards the same sort of objective, where do you feel like Se should fit in there, or is it not clear yet? [00:19:46] Speaker C: Yeah, to be clear, I'm not necessarily promoting the idea that we should be one revenue team that rolls up to a Chief Revenue Officer. I'm actually not saying that. I'm saying that we need go to market analytics and metrics that look at the entire system together, not at the department level. We can still have a CMO and a Chief Revenue Officer, and then the Rev Ops person could be independent reporting up or with one of those two leaders. It's not about the structure, it's about the analytics and the metrics and the attribution that prevent the move to making the shift to an all bound model. When we think about the SDR future, this is not a new thought for me. I've talked about this for two or three years, since the first season of Demand Gen Live in 2021. I don't think the question is whether SDR should report to sales or marketing, although there are pros and cons and I have opinions on either side. I think the real question is what should this function be doing? And based on what their goal is, what is the goal of the function? How does that drive the skills and experience of the person that we're going to hire, which is then going to drive how we're going to measure and evaluate their success? And to be direct, since the Predictable Revenue book was published in 2011, BDR metrics and activities have not changed almost at all how they like. Sure, they have an outreach tool that they didn't have in 2011. Sure, there's intent data now. And it's not just MQLs, it's all optimizing the same old model where we get signals and we call people that most likely don't want to buy right now. And so if you look into the future, I actually think that there is a place to have a BDR function as it stands today, inside of a company to capture demand based on intent. But I think the team should be way smaller now. If you think and this isn't a VDR function, but you could think about it as business development, and if you think about it as business development, how are we going to develop business with million dollar accounts over the next three years? The person that you hire would be way different. And who knows whether you'd actually hire them? Or like I would argue that if a big martech vendor like Demandbase or Clearbit or another one like, like really wanted to develop net new business, they would have more success forming a partnership with me than hiring seven BDRs. And so I think that you have Evangelism and you have that type dark social work and content and things like that, which some companies do and some companies don't. But the frame is all they need to be our employee. And I think when you start to look out into partnerships and key opinion leaders, aka. Influencers and people like that, you may actually have a lot more success to the objective of business development than you do having a bunch of 23 year olds cold call people all day and all that it roots back to is, what does the customer need? What is the customer trying to accomplish? How do we help them accomplish those steps efficiently, credibly in a trustworthy and a way that's respectful to them? It's really not that complicated. You can ask your customers, you can get that information qualitative or quantitative. You can bring it back to HQ, you can look at it. And I'm positive that based on that data, if you looked at it and you drew up a new strategy, it would be dramatically different than the one you operate today. [00:23:37] Speaker B: Because, yeah, I guess it's almost like having influencer marketing as part of your demand creation motion. Right. Because there is a lot that goes into educating the market. And obviously, if it's me saying SDRs are great, go and hire an outsource SDR agency. Or if it's you saying that there is a complete difference in credibility about information, right, yeah. But then obviously these things have to be genuine. You see a lot of stories out. [00:24:07] Speaker C: There as well in 2017, and I was actually doing this as early as 2014 in a different company. Believe it or not, in the medical device industry, they call it a key opinion leader, a key physician, medical director, whoever your key contact is that speaks at the conferences, that publishes the clinical research, that has a ton of followers on Twitter, YouTube, or Facebook, that when they say something about how to use clinical practice. A hundred people do it, a hundred other hospitals adopt it. And what we did, what I did back then, figure out who those people are, build relationships with them, get them your technology as soon as possible. Help them give for free. By the way, under the Sunshine Act, it's like allowed, but for free. Help them implement it. Help get people on site being successful. And then all of a sudden, when they're at the next conference and they're in the Q and A session and people ask to compare one vendor versus us, their answer is different than what it was before. And 150 people and the doctors that drive clinical decisions are in that hearing. That person that they trust say that. And then you look at what we do, and those people are developing new use cases. They're doing clinical studies with actual patients, bringing data about does using this in this way deliver the right outcomes or not? They're doing all of these different research and then driving what a bunch of other people are doing. Not based on the company's opinion, based on their own usage of the product. And then when you look at the Martech and sales tech industry, nobody's doing this, not a single company. A lot of Martech vendors are out there trying to squeeze me for two K a month to use their product. And I'm like it's worth $20,000 a month just for me to use your product. [00:26:02] Speaker B: It's almost building advocacy at scale in a way. Right. Because obviously, if you become an advocate to the solution, it's almost like the scale that you can bring that. But what's the set of clients? [00:26:16] Speaker C: What are they trying to do? When they think about influencer marketing, it's not that it's not key opinion leader marketing. It's paying Dave Gerhardt a post about know job posting or their new I just it feels very. [00:26:35] Speaker B: Yeah. Yeah. Because I guess it kind of brings back the whole question about credit ability. Right. Because with analyst firms, for example, everybody knows that they get a lot of money for talking about the product. So I guess the market just needs to be careful about not falling into that trap of influencers, becoming the next generation of analysts. [00:26:58] Speaker C: I think that there are places to listen to analyst firms like the quadrant that they build about which products. It makes sense to have Gartner tell you how to run your go to market strategy, though, makes no. They have there's all this research and frameworks in their back end that have never been implemented in real life that come directly from the vendors that are paying them money that they build together to push the message into the market. You cannot use these tools anymore. Maybe when it was serious decisions and Topo and those ones that were on the ground doing stuff, but now they've been rolled up, they've been bought by big, massive, publicly traded companies and are not in the work anymore. So I think, just to be clear, I think there are ways to use analyst firms, but there are ways not to use them, too. And I just am highlighting the places where I think that their advice is not helping companies. [00:28:02] Speaker B: Interesting. Thank you so much, Chris. That was super mean. I love your very honest opinions. Yeah. Super useful and insightful. Just to finish off the podcast, then, if anybody wants to connect with you, learn more about what you guys do and how you can support them, what's the best way to get in touch and find your work? [00:28:25] Speaker C: Hey, everyone. If you want to check out more content like this, feel free to subscribe to the B Two B revenue vitals podcast on Apple, Spotify, other platforms, and then, depending on what you thought about this episode, things that you like, things you didn't like, questions? Feel free to shoot me a DM on LinkedIn and connect with me. It's chris Walker. One seven one. [00:28:43] Speaker B: Brilliant. All right, Chris. Thank you so much for your time. Have a good rest of your day. [00:28:47] Speaker C: Have a great rest of your day. [00:28:50] Speaker A: You've been listening to b two B. Revenue acceleration. To ensure that you never miss an episode, subscribe to the show in your favorite podcast player. Thank you so much for listening. Until next time.

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