[00:00:00] Rosalyn Santa Elena: Welcome to the Revenue Engine Podcast. I'm your host, Rosalyn Santa Elena, and I am thrilled to bring you the most inspirational stories from revenue, generators, innovators, and disruptors revenue leaders in sales, in marketing, and of course, in operations. Together, we will unpack everything that optimizes and powers the revenue engine. Are you ready? Let's get to it.
Most B2B companies follow a standard motion of marketing, lead demand, generation sales development reps, handling outbound prospecting and sales reps on a quota and commission. But could this structure be outdated?
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In this episode of the Revenue Engine Podcast, I'm joined by Nelson Gilliat who is the creator of the buyer centric revenue model. Nelson is also the author of a book based upon this framework called the Death of the SDR: Birth of Buyer Centric Revenue, which we discuss in detail in this episode.
So take a listen, as it will challenge many of your thoughts on how sales should be managed and how it may or may not impact the buyer's experience.
So super happy to be here today with Nelson Gilliat, the creator of the buyer centric revenue model, a new B2B marketing and sales playbook which challenges what he considers to be the outdated and harmful predictable revenue model.
Nelson is also the author of a book based upon this framework called theDeath of the SDR: Birth of Buyer Centric Revenue, which will, we will discuss in detail a little later in this episode.
Currently Nelson is the demand generation manager at Brantr, a B2B demand gen agency. So welcome Nelson and thank you so much for joining me, I'm super excited to unpack your story.
[00:02:56] Nelson Gilliat: Likewise. Thanks, Roslyn. Thrilled to be here. Hey everyone. I think it's going to be a great chat and looking forward to that.
[00:03:02] Rosalyn Santa Elena: Awesome. So, let's just go ahead and dive right in. Let's talk a little bit about your career journey, you know, some of your experience prior to your book. Been in many different roles across marketing and sales. So maybe, can you tell us a little bit about some of your backstory, some of your experience kind of prior to.
[00:03:20] Nelson Gilliat: Yeah, sure. So, you know, like many people in B2B, I've had a very weird you know, journey kind of bounced all around.
You know, so I've been in B2B for about six or seven years across marketing and sales worn a bunch of different hats officially. And as we know, oftentimes unofficially, despite your title, you're doing a lot of other things, especially at small companies. So, you know, I've been in SDR. I've been an account executive, I've been an account executive slash CSM.
So both combined, I've done sales, enablement, product marketing, content, marketing, social media, marketing demand, gen. You know, I've worked at a very big company. I've worked at a very, very tiny startup. I've worked at a scale-up and now I'm at a demand gen agency. So you know, if there was a job I've done it.
[00:04:08] Rosalyn Santa Elena: Wow. That's amazing. That's a very, very broad experience. It sounds like you would definitely have done at all.
[00:04:14] Nelson Gilliat: Oh yeah. And now adding to the mix an author of a controversial book and you know, so, you know yeah. It's been, it's been a great journey.
[00:04:23] Rosalyn Santa Elena: That's awesome. So, so when we connected, you said you talked a little bit about your book and you talked about how you wrote the book to really liberate marketing and sales from the harmful and outdated, predictable revenue.
One. So what led you sort of to this new perspective? Like, was there some kind of, you know, aha moment or maybe some kind of epiphany that you had?
[00:04:46] Nelson Gilliat: Yeah, sure. And I, I think a lot of folks who were probably listening to this podcast can identify with this. Revenue leaders who are looking to, you know, try to be the best at their game and try to figure out what's the best or the ideal playbook to kind of run that their company, especially a RevOps person.
Who's typically looking at the whole system soup to nuts, trying to look at efficiencies. And so when I was, when I started at this very big company you know, as an SDR and then eventually as an AE I saw at the time, I didn't realize. What the cause was. But I saw how inefficient and ineffective the predictable revenue model was.
And again, I didn't know the pre revenue model at the time, but I just, I just saw that the company had such problems when it came to marketing and sales. And I saw how, you know, ineffective our SDR org was how ineffective prospect. Was how buyers didn't like it that the leads that came from it, weren't very good.
And at least relative to website demo requests that were generated by marketing. And so sales wasn't really a fan of the SDR leads. Also not up dealing with SDRs and that, you know, the STRs themselves, didn't like being STRs. As we know me included, and I saw what that kind of did to talent and what it kind of did to myself.
And then I saw. You know, problems in the, in the sales assembly line or the seller specialization between, you know, the AED and CSM split and how really the best sellers were ones that were trying to be an ag slash CSM combined, and also how much better that was for buyers and how complex sales organizations can get at a company when you have all these subdivisions.
And then I also saw or experienced what it was like to deal with quotas and commissions and how harmful they were. So as I was looking at the landscape and looking at prospecting and looking at the sales assembly line, looking at quotas and commissions, I realized that there were, these were. These are really problematic.
And I was trying to figure out how to fix it. You know, what the CA where the causes of these problems were. So I, so, you know, I started to just spend a lot of time reading the blogs and on LinkedIn reading books, trying to figure out the best practices. And that's when I read predictable revenue by Aaron Ross and then understood that that was the model that B2B companies are running on to a sizeable extent.
And then. At that point, I transitioned to a very small, tiny five person startup, where I had the, basically the chance to build something new from the ground up, as opposed to trying to like, fix all the problems at a big company. And at the small company, we didn't have SDRs and we didn't have the sales assembly line and everything was sort of new.
And I had to sort of figure things out from scratch and not just. Commonly held notions because other people did it. Right. And so since we were so small, I got to do, you know, see everything, do a lot of things, see how the sausage gets made. And particularly I got exposed more to the power of marketing, specifically the power of demand gen.
And I've realized that in the. That demand gen today is sort of the key driver. And I think in revenue, in helping buyers become aware, convert and whatnot, whereas it used to be sales back in the day. And I saw that at this tiny company where we had like a, a really good demand gen and we were producing really quality leads that.
What that could look like for the growth of a company and how that company was able to grow really fast in a year during COVID with basically six people raise a series, a get a whole bunch of customers. And I was like, wow, this, this has got, you know, this there's a, and so basically at the time I was trying to create.
A playbook, like a new model. I was trying to figure out, okay, what's the, what's the ideal marketing sales model, which we're all trying to figure out. What's the best recipe, right? For, for growth. And I, what started as a playbook for this company, I realized it actually needs to be made into a book because of how broken the existing model is, how it's handicapping or putting a lot of marketers and sellers in a straight shot.
Which I think causes them to have less productive and fulfilling careers. And then also hampers the growth of companies that companies grow. You know, their growth is negatively effective and that's, it's less, if it's harder, it takes longer. It's more costly. They founders have to give up more ownership in order to raise money.
In order that they can then waste that money. And VCs are wasting a lot of money, I think on this outdated model that they could otherwise deplore more, deploy more productively across their portfolio and get better returns. But and so it was at the small company where that things kind of opened up.
And in addition to that, and I'll end with this at the small company, we were selling marketing software and we were. Selling to both SDRs and to demand gen not really. At the time when we started, when I started it, wasn't really clear. We were thinking who does STRs is demand. Gen is a, both. And I got to see in various different B2B saskatoons.
How SDRs versus demand gen would deploy and use our marketing software and who was successful and who wasn't. And I just got to see it basically inside a lot of you know, companies, SDR models versus demand gen. And then I became very involved in learning more about demand gen, which, which at the time, I didn't really know much of, I thought demand gen was job was basically just to give SDRs contact information and that.
I got, I started listening to refine labs and Chris Walker's podcast, the state of demand gen and attend their demand gen live you know, series. And the more and more I start to learn about demand gen, I realized that, you know, there's, there's. A new, there's a new, I think they're there. Vanguard demand gen is going to lead the vanguard of change within, within B2B market sales.
Because fundamentally I think that companies nowadays are need to be in Cambian, should be marketing led as opposed to sales lead in terms of trying to move buyers in the door and helping them to purchase just given changes in buyer preferences and what technology can do. And so. Once I saw that. I said, whoa I need to, I, you know, I need to sort of sit down and think about all this stuff of stuff and try to sort out, okay.
So what are the big problems would be marketing sales today? What causes them? What's a little bit of the history behind them. What should the new model be? How can folks get and why, and how can folks get from a to B? So how can they either transition from, from the particular revenue model and some other bits and pieces that.
There's some other things that I think aside from predict revenue model that we should move away from. And then ultimately to, to, to, to adopting this new model that I propose called the buyer centric revenue model. So I think You know, ultimately at the end of the day, we're running on a lot of B2B companies are running to a sizeable extent on a model from 20 years ago.
And I think it's, it's probably time that we sort of reconsider that. Yeah.
[00:12:01] Rosalyn Santa Elena: Thank you for sharing that, all of that that's credible background and just kind of an understanding of how, how it helped evolve your thinking and how you developed this. You know what we're calling the buyer centric revenue model.
So I think you've talked a lot about, you know, the predictable revenue model, why, you know, it's become outdated. And why it's probably, you know, may not be the right approach for B2B companies really to drive that growth that everybody is after. So let's talk a little bit more about the buyer centric revenue model, right?
How has this model, you know, really different. The predictable revenue model that you've described and sort of traditional model, like what are some of the key, I guess, key differences, you know, key differentiators or maybe the key components?
[00:12:45] Nelson Gilliat: Yeah, sure. And so just to clarify what, what for a lot of people who may not be as familiar with the predict revenue model the predictive revenue model is based off of the book by Aaron Ross in 2011, based on his time at Salesforce and the early two thousands.
And the predictable revenue model calls for two things. One is a marketing thing. The other is a sales thing. The marketing thing is prospecting to be done. Full-time by STRs instead of by sales. Okay. The second thing is the sales assembly line or seller specialization or buyer handoffs amongst the sales org.
In theory it was the AAE CSM split. The account executive and customer success manager split, but in practice that includes a lot of other subdivisions. And that is the essence of the predictable revenue model and what I'm challenging. In addition to that, there's two other things that I think are problematic and, and, and should be, should be.
Change. And, and, and it's aside from predict revenue, monuments, quotas, and commissions. And we can talk about that when we talk about what the buyer centric revenue model is instead. But just so people understand the predictable revenue model is why you know, we really have SDRs today across the board or sales development representatives.
And it's why marketers and specifically demand generation marketers or. Forced to basically generate a high volume of contact information of essentially uninterested buyers. And that's what a QL really is. And marketers are, are capturing that information through gated content or list purchases or purchasing on zoom info or.
When buyers come to events and they're giving that contact information to SDRs to again, do this prospecting, which again, I consider it to be marketing and actually I considered it to be the worst kind of marketing. And it entails essentially three things. It's telemarketing, which is the primary thing that they do.
And then. What I consider email spam and LinkedIn spam. I'm essentially asking. And I use it in a negative connotation. I know. But it's essentially asking buyers, Hey, here's who we are. Here's we work with, you have 10, 15 minutes to speak to sales. That's the essence of that outreach and is what you see the vast majority of the time because they are incentivized to do that.
Through quotas and commissions and they're being essentially pressured to, you know, generate as many meetings for sales or appointments for sales as they can. And so, you know what, so that's, that's basically prospecting that some people think about it as a sales thing. I, I think that's. A mistake.
I think people ought to properly consider this a marketing thing, even though they called a sales development representative. I think it's very misleading. It's really a marketing role to generate demand for sales. And I see that there's, there's a lot of issues there with prospecting and that compared to demand gen it's night and day, and then.
We'll talk about what I think, you know, we'll come back to that when we talk about the buyer centric revenue model, but I see prospecting as the, as the first issue. And then the second issue with the, with the predict road models, that sales assembly line, where you essentially have an army of stunted sellers that can only help the buyer with one aspect of the sales process, whether that's the initial sale or how to do the demo or how, or you know, how to.
You know, upgrade or how to purchase other products or how to renew. And that's why we see a very bloated sales organization like a sales engineers to do the demo and you know, an upsell seller across sell seller renewal seller. And it makes for a very interesting time to be in revenue operations, because you've got so many different departments, you've got marketing and you've got SDRs, and then you've got all these different subdivisions within sales.
And so if you think of all the different people, processes, tools, and et cetera, it's like crazy. And so that's in essence what the predict revenue model is. And again, the STRs such as, so people understand what was an aspect of what Salesforce is marketing was 20 years ago. And that's what we're, that's what we're basically all running on.
We're, we're running on essentially SDRs, which is an aspect of what Salesforce was doing, plus the sales assembly line. And so I think people just need to kind of keep that in mind that that was 20 years ago and that's, that's what we're still sort of running with more or less. So. That's the predictable revenue model.
Maybe pause there and throw it back to you before going on to the, what the buyer centric revenue model is just to see if there's anything maybe to clarify, there are any questions you had, or maybe the audience has before we move on.
[00:17:25] Rosalyn Santa Elena: No, no, this was great. I think that's really great to just kind of outline exactly sort of the key components of the predictable revenue model and you know, the fact that, you know, something that was written, you know, quite some time ago and we're still, you know, obviously I'm sure it's evolved and been tweaked and changed, but it's still foundationally still in practice. Right. And most companies. So maybe let's shift gears and talk more about the buyer centric revenue model.
[00:17:52] Nelson Gilliat: Yeah. So the buyer centric revenue model in a nutshell, Jettisons prospecting in favor of proper marketing, namely demand gen that in companies demand gen is the part of marketing that should be focused. 100% on buyer friendly marketing. That drives website demo request. That a lead is someone that a bar that comes to the website, marketing automatically qualifies them on the website and connects them to sales.
And that's what a lead is. And everything else before that his not a lead they're the people who are maybe picking up on what marketing is putting down, but they're not interested. To engage with sales. And then the second part is abandoning seller specialization or the sales assembly line in favor of a one-to-one buyer and seller relationship where a seller owns the customer relationship and the entire sales process.
So that includes the initial sale, they expansion and renewal. So sellers have a portfolio of customers that they look after. They're responsible for that. Again, those, those essentially. Bits the initial sale expansion and renewal, of course they can bring in other people within the organization acting kind of like a pro project manager.
As in when buyers need, let's say specific help, such as technical expertise for implementation or training or whatever, but the seller fundamentally owns that relationship does not hand off that relationship to another seller and that seller to another seller, the other aspect of the buyer centric revenue model, which has nothing to do with the predictive revenue model.
Okay. But it's still a very big problem is commissions. And so I recommend eliminating commissions in favor of a full salary and bonus or full of OTE salary and bonus. Whereas the model we have nowadays for sellers is half commission, half seller. I say for. Salary plus bonus. And I'd make the case that commissions are really unfair, undesirable, unpredictable bad for buyers, bad for sellers, bad for companies.
And there's a lot of misunderstanding about commission. And I think it's one of the things that holds a lot of sellers back. It holds the sales profession back. And yeah, we we'd really be better off trying to elevate that the profession by getting rid of that. And then the last thing that I recommend eliminating is quotas in favor of annual goals.
So getting rid of these short term quotas that are obviously tied to commissions in favor of proper annual goals, like any other department within B2B, you know, like marketing. And where revenue attainment is one of many sales performance metrics. And it's not the only one to evaluate the efficacy of a seller.
That there's a lot of other things to look at, such as conversion rates and sales cycle and turn, and you know how you're doing on expansion, how you're doing on retention. What's the feedback from customers on, you know, their experience with you. What's your. Knowledge and expertise like what's your teamwork like and professionalism, like things like that, that a, a manager or a sales leader should know about their people.
Because it's very misleading just to look at just pure revenue attainment. The reason being that revenue is sizably outside of the seller's control that a seller can only influence a very small part of the buyer's decision to purchase, which we know is increasingly not up to sales buyers, do a lot of their.
You know, purchasing decision outside of sales, on their own, thanks to marketing's help and help from their peers and on the internet. And so, and a seller can do everything right, but it's still up to the buyer to buy it. You can't force the buyer to buy and also seller can do everything wrong. And the buyer may still buy because they want the product and the marketing is not very good.
So that's why at the same company. And I think this is a very important point to stress. So I'll just mention this last thing, which is why at the same company. You can have a seller to sellers. One's a lousy seller. One's a really good seller, but the lousy seller has more quota attainment or revenue attainment because maybe he had.
Luckier leads from marketing of buyers that we're going to buy despite the sellers efficacy. And in any case that the last thing about quotas that I think is problematic. The last aspect of it is that the quote attainment is publicly displayed relative to your peers or to your teammates. So, like, I think that's, that's pretty bad.
It's, it's toxic. Let's you know, imagine that in any other department where you're just pitting people against one another and showing, you know, I think it's, anyway, I think people's performance, a seller's performance is a private matter between the manager and the seller. And, and yeah. And so the last thing, one of the things I want to say about quotas.
When I say, like, give her the short-term quote is in favor of annual goals. You know, you have like an annual revenue goal. And then of course, like any other department, you break that up into quarterly and monthly to track your progress, but it's not like that's tied to your compensation or basically half of your compensation.
I think the way to think about commissions folks, it's essentially, you know, again that the commission models, 50% salary, 50% commission, more or less. So think of commission as like half your salary pending. The buyer's decision to purchase, which again, the size of outside of your control. So if you use a cake analogy, the commission model to compensate sellers, it's essentially.
The cake is half your, you know, is your salary. And half the cake is your commission, which you have no idea if when and how much you'll get, whereas this full salary and, and bonus model, it's you get the full cake, you get the full salary and the icing on top. That's your bonus. And so I just wanted to stress that last one a bit, but that's an essence the, the buyer centric revenue model.
[00:23:24] Rosalyn Santa Elena: Got it. Got it. Yeah. At first, when you were talking about getting rid of quotas, I was going to ask that question and then you kind of said that you would still have an annual target. You'd probably still have it broken out into quarters. You'd still have monthly, you'd be tracking progress, ground those goals, but it sounds like not necessarily tying your commission just to.
[00:23:45] Nelson Gilliat: One metric. Yes. That's it. That's exactly right. So you'd still have, you know, goals like any other department. But the key thing is that's, it's severed from your competency that will separate from commissions in particular. And I see both quotas and commissions. If you look at them and the true nature of them, it's not to benefit the seller, certainly doesn't benefit the buyer.
And it doesn't benefit actually the company, when you in a lot of ways Because it's a lose lose for the buyer and the seller. And the seller really gets gets harmed by that because the whole purpose of those two things is to pressure sellers, to pressure buyers. And that is not a recipe for growth or for sellers wellbeing by basically using kind of a false carrot.
And the stick is what those things are. And it's one of the reasons why sales is, you know, those are two reasons why I think again, sales is denigrated and, and held back from modernizing and why a lot of people are put off to sales and why a lot of sellers, as we know today whether. I would say quotas and commissions, which are used in the SDRs, which is a marketing role and which are used in sales.
You can kind of also see that, you know, there's a correlation of both of those departments struggling with high turnover, low tenure, low performance. And low job satisfaction. It's you know, and so I think we should just really take note about that, that like anyone who's not in a quote unquote quote or caring or commission role, be very thankful that you're not, and that you have a proper form of compensation.
And when you go and work for someone else at a B2B company that you you've got a full salary and a full bonus, and that it's not at all desirable to have commissions.
[00:25:23] Rosalyn Santa Elena: It's a super, super interesting perspective, especially for someone like me, who's run sales compensation for so many years. And what do you say, I guess, you know, I guess the question on that is just around, you know, what has been sort of the feedback that you've received from sellers?
Because a lot of times people you know, of course not all sellers but some people go into sales because they like that sort of that competition or the fact that, you know, in an ideal world, the harder they work, the more money they make. Right. I think that's the perspective of that. And I think you've described some of the issues with that model.
But what do you say to sellers or do sellers ever respond to you about, you know, thinking, you know, that they actually like to be on a variable compensation plan where they feel like they have some control or ownership over how much money they can make.
[00:26:15] Nelson Gilliat: And so what I would say is I think a lot of sellers.
Unsuspecting, let's say about commissions and don't understand the true harmful nature about commissions. And so when they do get into sales, which has never, the initial reason why people go into sales has never, oh, I love commissions. It's more so I'm in sales and then therefore, oh, now I've learned about commissions.
Oh. And I've been taught that they're supposed to be a good thing for me and that the better the seller or whatever, the more commissions you'll make. You know, sellers should desire commissions or, you know and not a full salary and bonus. So I think there's a lot of kind of unlearning that needs to happen.
And what I spend in my, I spend a decent amount of time in my book and from my own personal experience. And from speaking to many sellers, I have been, you know, have seen the harm of commissions one's properly understood. And I understand that relative to a full salary bonus is super, super undesirable and have seen so much problems with commissions and it's fundamental because the nature of, you know, that's just the nature of commissions and they're really bad.
It doesn't, you know, it's not. You know, the point isn't that some sellers, some of the time make a lot of money in commissions. It's just like some people, some of the time who played a lot of make money, but that doesn't mean that you should play lottery or speculate in the stock market as a, as a smart financial move.
And so when you think about commissions again, it's basically half of yourselves. Pending an outcome, which you have no con sizably no control over that. You have no idea if when and how much of it you're going to get, it's essentially no pun intended, unpredictable revenue and unpredictable budgeting and cashflow.
I think companies know this when they have variable payroll and you know, this as someone who's tried to forecast and predict sales commissions and all that type of stuff. But sellers also know this that they have no idea basically how much money they're gonna make this year, other than their salary.
And so when they're trying to budget and you know, and forecast for longterm profitability, it's very difficult. And, and so there's that, there's the fact that also, you know, with commissions. And one thing I emphasize to people is that a dollar of salary and bonus is far superior to a dollar of commission.
So it's not like you're comparing apples to apples. Like just like, let me tally up. And what's the final number it's like, you need to factor in all the hidden factors and costs. And so when you think about commissions and you think about that unpredictability and it's largely outside of your control and not knowing if and when and how much you'll get.
Plus you consider all the other things about commissions, like all the claw backs and accelerators, accelerators, all those little nuances that are really hard to understand and typically change every year. And the fact that your commissions will reset when your quarter resets or that you know They're taxed higher and make it harder to get a loan.
Things like that when you kind of factor that all in. And also by the way, we all know that sellers, but it's like 60% of sellers. I think it is our missing your quota attainment so that, you know, also your, your commissions are basically tied to a stretch goal. Which is often very unrealistic and kind of aspirational, and you're kind of on the hook for that.
And so I think when you kind of factor a lot of that in, you were like, whoa, whoa, whoa. Actually that that's, it that's really not good. Imagine if I just had a proper full salary and bonus, and then I can actually focus on helping my customers and helping my teammates as opposed to fretting over my paycheck.
But quotas. Commissions are deliberately designed to get sellers to fret. And there's an aspect. Also, I think that there's managers with sales managers and sales leaders. Are afraid that in the absence of such a false carrot and stick they'd have to actually properly manage their sellers. And so they they're like, oh no, I don't have this false care and stick anymore.
How am I going to ever lead and properly manage sellers and measure their performance? Show them that alternative in the book of what they can do instead.
[00:30:09] Rosalyn Santa Elena: Got it. Got it. Yeah. I think we could probably do a whole session on just this piece of this piece of the model. It's super interesting to me, especially, you know, obviously.
Yeah, the end of the year, we're all kind of doing comp planning right now. So it's definitely something that's top of mind and very interesting. But let's, let's move on a little bit more. So let's talk about you know, for companies that, you know, might be interested in shifting right to this different model, you know, what is some of the things that they should be considering and, you know, thinking about to make sure, you know, it's really.
You know if it's right for them and is it the right time?
[00:30:43] Nelson Gilliat: Yeah. And so one thing I'll say is it's always right for you, and it's always the right time, regardless of how big your company is or what growth stage you are, because the fundamental principle is just do good marketing and sales. Your buyer likes and doesn't know your buyer.
And that is good and that is more enjoyable for marketing sales to do. And so it's good for your internal talent and therefore it's this it's a win for buyers. And why I call my, my model, the buyer centric revenue models, because in order for marketing sales to be successful, they need to kind of conform to the buyers, not try to force the buyer and jam them through what you know, allows the experience and that.
It's all about creating the best buying experience and that's where companies are going to different, especially SAS companies where, you know, it's easier than ever to spin up a product and products have similar features and similar pricing. So in order to really differentiate yourself in the market, it's all about marketing sales.
Similarly, if you go to a bar and there's a whole bunch of good-looking guys, the best way that you're going to win over the girl is if you've got a good personality and you've got a good character. And so you have to, you have to stand out, you have to be better than your competition through marketing and sales.
And so what I would say to folks is that the early adopters have a competitive advantage, right? I'm almost giving you the startup spiel that like, Hey, here's something better than what's the status quo and what the dinosaur incumbent is. And so, you know, That the early adopters have a major leg up when they're offering their buyers a better marketing experience in the offing, their marketing sales talent, more productive and fulfilling careers.
And so the other thing I will say is that companies will eventually have to change. The only question is when, and for how long they'll continue to get into their own, get in their own way until then. And the, the other thing I'll say is that once, or to the extent that you adopt the predict revenue model and you've got SDRs and you've got the sales assembly line, plus, you know, aside from the preferred model, you've got quotas and commissions, all types of the harder it is to change.
Right. And you become almost calcified in that old model. And so the more mature companies that and to the extent they run that model, Have a significant disadvantage unwinding it, even though I offer people a transition, gradual transition game plan. So I think for startups and for younger companies who are more nimble and haven't, you know, adopted the predicted revenue model as much have a massive competitive advantage against their bigger companies.
And so but I think no matter what. Companies who are running the predictive revenue model to the extent they run it it's to the detriment and that they grow, despite it that they're, that they're marketers market that their sellers sell that their buyers buy despite the predictable revenue model and despite quotas and commissions, because you know, they've got, they've got other good elements going on in their company, you know, Basically aspects of the buyer centric, revenue model or good marketing or good sales, and they've got a good product and the buyers will put up with.
Crummy lousy experience in order to purchase that product. In addition, there's also other factors that can mitigate or reduce some of the harm of the particular revenue models, such as the demand for your product or the competition for your product, product market fit, you know, the pricing of your products and how much VC financing that you've got that you can afford to sort of waste on the aspects of the potential revenue model.
And so. That's what I would say. It's like when you, and I think maybe we'll take the conversation here next is, well, what can you do to kind of get from a to B if you're running the predict predictor or you're doing these things today and you want to be the early adopters, you want to be the ones that offer your buyers and offer your, your internal talent better so that you grow better.
You grow more, you grow faster, you grow easier. You know, less costly, you don't need as much financing and stuff, stuff like that. And also if you're, you know, a revenue operations folk, you, you can sleep better at night, you know? Then, then yeah. Happy to kind of walk through very high level what that transition looks like.
[00:34:55] Rosalyn Santa Elena: Yeah, definitely. So, you know, if an organization says, okay, yeah, this is the right model for me. This is the right time. Like, how would they even, you know, move towards that model? Like what would be those kinds of first steps? Like what needs to happen first and what needs to happen next?
[00:35:10] Nelson Gilliat: Yes, for sure. So the first thing that I would say to peoples, to gradually sunset prospecting in favor of demand gen. So gradually transition your SDRs into demand gen or other parts of marketing. I see prospecting as the most harmful thing or the most harmful aspect of the particular revenue model. And I'll just say briefly about prospecting, is that look like, again, prospecting the telemarketing sort of the email messages and LinkedIn messages, which many people probably listening to this have received or have done themselves and have seen what the results are.
I mean, look, buyers hate prospecting. It's why prospecting produces a lot of low quality leads that result in basically wasting sales time in low conversion rates and high cost per acquisition and longer sales cycles and longer cost per acquisition. And. You know, I think we all know that STRs themselves hate prospecting sales, to the extent they do it, hate prospecting, which is, you know, why you see high turnover, low tenure, low performance, and low job satisfaction.
So you know, I'm also offering and hope that people give SDRs more productive and fulfilling careers that we don't waste that amazing talent. And in such a role that there's way better entry level roles across marketing operations, or sales that the, these, these talented folks can. Can you just be more productive and and not have to needlessly suffer.
And so I think that there's a talent market that will develop where you can pick up basically STRs trading on a discount who want those more productive, fulfilling careers, and companies can come and soup them up. And that's what I really hope happens. Now so I recommend sunsetting prospecting.
That should be your first thing in favor of demand gen. And if you have typically companies have a mixture of both, they have both SDRs and demand gen and to a large extent, demand gen is having to support the STRs again with contact information and whatnot for them to do their thing. The first step, if you're a company and you've got both is to separate the mixture to separate your SDRs.
From your demand gen and compare the two. So look into your CRM and compare to leads, generated from prospecting. Versus the leads generated from demand gen, which I considered to be website demo requests. And then if you look at revenue and the number of customers and the number of sales opportunities and the cost per opportunities and sales cycle and conversion rates and cost per acquisition and cost per acquisition, payback period you'll see which produces the better leads, which produces better revenue and which produces marketing and sales efficiency.
And then I think it'd become clear that. You're going to want to double down on demand gen. Especially when you consider how time capital and labor and labor intensive STRs are, how much resources go into STRs that you could otherwise be deploying into demand gen and then liberate demand gen from the SDR models from having to be on that MQL hamster wheel.
And which is why I think the Vanguard of change will happen with demand gen, given that they're the ones who are uniquely positioned to basically displace SDRs. And be responsible for generating demand for sales. And then if you also consider the fact that when a buyer does come and want to speak to sales, that they could just go on the website and request a demo and that they're, they can answer a few qualification questions there and then be able to book a demo, right.
From a sellers calendar, right on the website. And then you don't need an SDR to basically. You know, manually qualifying schedule demos that can just happen automatically in the website. And then when the seller speaks to them, you know, they'll do their discovery and their demo and things like that.
And so you kind of realize, and a lot of companies are doing that already today. And so that basically phases out the, the SDR and demand gen becomes solely responsible or Martian becomes solely responsible for generating. Yeah, demand for sales. And then, so that's, that's on the that's on the SDR side.
And so I kind of, when I break it down in the book, I, you know, break it down to a few steps and help people say, Hey, this is going to be. Process here's an experiment and I kind of, you know, break it down so that at your own company, you can gather the evidence and you can kind of do it in a gradual step-by-step type of thing where you essentially gradually sunset SDRs into other parts of marketing, particularly demand gen.
So what that would essentially look like is you know basically on the, if they're doing inbound, like whatever, if they're doing the manual website qualification and demo scheduling you automate that and then you repurpose them to do other parts of marketing and demand, gen content, social product, marketing, whatnot.
And then at that time also give them a quarter relief. In other words, you give them. They're full compensation. You give them their full, you know, so there'll be thrilled with that and there'll be thrilled to do other good parts of marketing, you know, and other more enjoyable parts of demand gen, which they're anyways trying to do.
And that's the first thing. And then the second thing, once you've kind of taken off that off the STRs plate is to gradually reduce their prospecting outreach in 25% increments. And. With that excess capacity, again, repurpose them to other parts of marketing adjust or give them a relief to as necessary.
And then do that over a few sales cycles. And again, 25% increment at a 25% increment. And again, that means that you're reducing the harm of prospecting. You're increasing the benefit of demand gen and reallocate those reasons. And making the SDRs happy, making buyers happy, making marketing, happy, making sales happy.
And then that's how essentially you, you sunset STRs and you keep that good talent and you redeploy that talent to more productive use and okay. And so that's the, the aspect of prospecting maybe before going on to the sales assembly line and, and quarters and commissions, which is quicker. I just, that made me pause there because I know that was a lot and flip it back to you.
[00:41:12] Rosalyn Santa Elena: Yeah. Yeah, definitely. I think that's our, you know, really great kind of starting steps because I think anyone who's might be listening will obviously want to pick up your book. Learn more of the details to understand if it's, you know, right. For their business. And then, you know, I'm sure in your book, you probably dive into more of the transition steps and some of those other areas.
So let's let's move on a little bit more about, you know, I think let's talk a little bit more about the revenue sort, the revenue engine, you know, this podcast, right. And what we always ask our guests, you know, because I hope that our audience can really learn how to accelerate, right. Revenue, growth and power, that revenue engine.
So I think, you know, you've obviously gone through quite a bit of that, just with know a completely different framework, really, and model of how. How you move from prospecting to more demand gen be more buyer led right. More of the marketing lead versus sales lead. But are there, like, if you were to kind of boil it down to, you know, the top, I don't know, two or three things that you think all revenue leaders should be thinking about today, right?
To really drive revenue growth, what are those things? And maybe that's probably come from your model as well, but what are those things?
[00:42:22] Nelson Gilliat: Yeah. You know, I guess to toot my own horn or whatnot is like fundamentally the model dictates the people process technology dictates the strategy, the tactics, the tools and everything's where everything is downstream from the model, which is why when I was trying to figure out what the heck is going on in B2B marketing and sales and what these, all these problems are.
It led me to the big revenue model and then it also led me to quotas and. As being very problematic. And so I would say you have to rethink this, this model. You have to rethink these fundamental aspects of marketing and sales that are these practices and, and consider or experiment and say, Hey, maybe we should do something else and try that.
And so that's, that's the first thing because that will really move the needle. That's the real fundamental change as opposed to various bandaids. And I will say. You know, for a lot of revenue ops or listen to this, I think one of the symptoms of what the pit road model and of quotas and commissions is that again, You've got a very messy and bloated and underperforming marketing and sales org.
That's an very unnecessarily complex. And so it makes it more difficult for companies to manage that. And so that makes the life of a revenue ops professionals, I think significantly harder and more difficult. And it doesn't have to be, and they can focus on, on other stuff. And so I would say that's one.
The second thing is yes. Companies, these days are marketing led and can, and should be marketing led and stop trying to be sales led that the buyer, and basically fundamentally that's again being buyer centric, it's, it's trying to conform to how buyers want to be marketed and sold to based on modern technology in their modern preferences.
So if we don't do that, we're going to just give them a lousy experience. Going to annoy buyers and that's going to cost us and that's going to harm their purchasing. And that's, and so and their loyalty and their advocacy and you know, and so I think recognizing that shift and, and changing your company and, and realize that.
Get marketing, right. Get that great engine and then, you know, and get marketing pre-seed sales chronologically. So rather than if you're a young company and trying to grow your company by hiring 10 sellers and having them do digital door knocking, which is what telemarketing is, like have proper demand gen get your PR marketing sorted out first and then hire sellers to convert that demand.
The last thing that I'll say You know, I think if we look at the state of marketing and sales and we recognize that, yeah, there's a lot of issues within marketing sales that is causing us to have less productive and fulfilling careers. And we're seeing high turnover, low tender, low performance, low job satisfaction.
Let's try and do something about that instead of just complaining about it. Or trying to address the, the symptoms at the margins, stuff like that. Let's try some fundamental change. And that's why I say let's liberate marketing and sales from this straight Jack of the particular revenue model and from the straitjacket of commissions and quotas, we've got a really great opportunity here guys, to, to really change and elevate both of our professions.
Particularly sales, I think you know, demand gen is obviously frustrated and, and, and there that's undergoing. Drive and change, but I think sales in particular, if you look at the fact that it's sales who gets well, at least aspiring sellers that get hurt with prospecting and having to do that. So if you do want to get into sales today, you have to do prospecting.
And then when you're in sales, you have the sales assembly line. And so you're a stunted seller and all that stuff. And you're denied the ability to build relationships and to build, you know, the whole reason you go into sales and stuff like that. The efficacy of, of helping customers and your customers grow and whatnot.
Plus quotas and commissions, it's like, oh my God, sales really sucks. And which is one of the reasons why I got out of sales. One of the reasons, and I decided you know, marketing is way better. There was all the reasons why I wanted to go into marketing and that, but I think it's like for any sales people who are listening to this and feel what I feel and see what I see and you know, then.
That much try and make some change happen here. And, and that's sort of my message.
[00:46:18] Rosalyn Santa Elena: Got it. Got it. Well, thank you so much. I think I took a lot more time than expected from you, so I appreciate you staying on and just sharing so much information. I think I think it's it's an incredible sort of perspective and learning right from all of the work that you've done and all of the different roles that you've you know, all the different hats, I guess, that you've worn in different roles that you've fulfilled.
Where can, I guess folks find your book, Amazon?
[00:46:44] Nelson Gilliat: That's right. So my book, Death of the SDR: Birth of Buyer Centric Revenue is available on Amazon. And it's available on Amazon Kindle, or if you have the Kindle app on your desktop or mobile then yeah, you can borrow it. I think it's something like it's free if you have Kindle unlimited or it's 10 bucks if you don't.
In the future, I hope to have an audio book and as well as a paperback, and then you can find me on LinkedIn Nelson Gilliat. I've put out a lot of posts and a lot of comments trying to help bring clarity to these ideas and maybe some more digestible bits and examples.
And so I encourage people to, to grab a copy of the book. And then if you want to if you have questions feel free to reach out to me and I'm happy to discuss and answer any questions you have or things that you're chewing on. Or if you have any feedback, I'd love to hear that. If you are supportive of these ideas I would caution people about publicly speaking out about them because you could potentially rock the boat at your company.
And so just take that into account. You know, when people ask me, Hey, how can I support this? I just say, be cognizant of that. It is affected me professionally. And so. At some, at some points in my career. And so fortunately not anymore. But I would say, you know, you can share the book with other people on LinkedIn and say, Hey, this is interesting.
What do you guys think or share that in pavilion or revenue collective? And any optionals or communities of form, you know, spread it through word of mouth is what I would is what I would do if you support this stuff. Cause some of this, again, could rock the boat if you try to drive change. And so I, I, I don't want to dissuade people, but I just wanted to give people a bit of disclaimer that, you know, there's, there's a cost against.
Against the grain or to the status quo is any startup or knows or any entrepreneur knows. So, so just dive in or have your eyes open when you do, when you talk about this type of stuff.
[00:48:28] Rosalyn Santa Elena: Yeah, that's great. Well, thank you so much for joining me. Nelson, you know, pleasure to chat with you. Learn more about the revenue model. And I just want to thank you again for your time. Super grateful.
[00:48:39] Nelson Gilliat: Likewise. Thanks Roslyn. Thanks everyone.