What is the best way to align sales and marketing for revenue growth? Today’s guest has answers. Darrell Amy is the author of the book The Revenue Growth Engine: How to Align Sales and Marketing to Accelerate Growth. Listen in to hear what Darrell has to say about the importance of processes, the power of interest, and the messaging of sales and marketing alignment.
Episode Highlights:
- What got Darrell interested in writing a book
- The alignment between marking and sales and revenue growth
- The revenue growth engine processes
- The core numbers a business needs to know
- The power of interest
- The messaging of marketing and sales alignment
- How to get a focused message in a large company
- The step by step process outlined in Darrell’s book
- The tools available on Darrell’s website
Resources:
Text “revenue” to 21000
Transcript
Marylou: Everybody, it’s Marylou Tyler here. Today’s guest is Darrell Amy. He’s the author of a book that was released in June 2020 called The Revenue Growth Engine. The tagline which really got my attention was, How to Align Sales and Marketing to Accelerate Growth. Darrell, welcome to the podcast. I have so many questions.
Darrell: Well Marylou, this is going to be a blast. Thank you so much for having me in today.
Marylou: I love your book because if you look at the table of contents, the first thing is how does the revenue growth engine work? But I would like to kind of go up from that and ask you what your experiences were, or continue to be, in the alignment of sales and marketing, that got you fired up to write a book like this?
Darrell: Actually there’s always a story and it started at a conference. I was invited to a conference and it was all about growth. It was a group of medium-sized technology companies that have gathered together to talk about ideas to grow. I remember when I walked in the room, in the front of the room were the marketing people. I love marketing people. I’ve been involved in marketing since I started a digital marketing agency in 2004. I’ve had the opportunity to work with companies all over North America, Australia, and some of Europe since 2004.
Helping them execute digital marketing strategies, websites, search engines, inbound marketing, and et cetera. The digital marketing people were all on the front row, and they were excited, ready to go, and right behind them were the sales leaders. I started selling 27 years ago. Straight out of university, I took a job in technology sales. Sale rep, sales manager, ran a branch. In 2004, I also started a sales training company and I’ve been involved doing sales development with organizations, including developing training for some Fortune 500 companies.
I’ve been involved like one foot in the sales world, one foot in the marketing world. I’m watching the marketing people, I can see the sales managers. You know who they are because they’re on their phones and the little thought bubbles over their head are, we can be out selling something, why are we in this conference? There were several executives and business owners on the back wall of the room. I can see it like it was yesterday. They were standing there with their cups of coffee and you could see the thought bubbles over their head going, man, why can’t we just get along.
The light bulb came on for me as I was preparing for that conference. I realized you know what, it’s not about marketing. As exciting as all the new things in marketing are right now, all the incredible tools and shiny objects, it’s not about marketing. It’s also not about sales. As much as I believe in sales and as much as I love sales development, sales process, all of that, the reality is it’s actually about growing revenue. When we look at it through the perspective of growing revenue, I discovered that things started coming into much more clarity for me and also for the organizations I get to work with.
Marylou: Okay. Let’s continue down that thread then. Growing revenue obviously involves product share growth for the existing base, expanding, having more loyalty, having more renewals if you’re in a subscription or SaaS type business. It also could involve the net new world, net new logos, new money centers, however you define that. What’s that conversation now from a revenue perspective that makes this alignment more palatable, more natural, more willing parties on both sides to come together. What have you discovered is the magic sauce there to get the conversation going and continued between the two organizations to make this work?
Darrell: That’s a fantastic question. I think there’s 2-3 areas that are really critical that I’ve seen when it comes to aligning marketing and sales to drive growth. The first is what you talked about, and that is to realize that we’re here to drive revenue. There’s only two ways to grow revenue if you boil it all down to its most basic level. It’s just what you said, we either get net new clients, we go out and we land new deals. Or, we cross sell more to our current client base.
What I found Marylou as I talked with organizations across multiple industries in different parts of the country over and over again, I’m discovering that companies are usually either really good at one or the other. They’re really good at driving net new or they’re really good at cross selling more to their current client base. Where I get excited is with some simple math. You begin to realize, if I’m only good at driving net new, I’m going to have linear growth. It’s going to be a straight line growth. There’s nothing wrong with linear growth, but if I can do net new and cross sell at the same time, I can really begin to accelerate growth and realize some exponential results.
A lot of the organizations that I’m talking with right now obviously as we’re recording this at the end of 2020, there are quite a few organizations that have taken a bit of a revenue hit this year. That’s an understatement. They need to find ways to accelerate in the new year to make sure they’re able to recover growth and get back on the trajectory. I think the best way to do that is to look at your business in terms of what are the sales and marketing processes we have in place for net new and what are the processes that we have in place for cross sell. Usually companies are good at one or the other. Find the one that you’re not good at and begin to put processes in place to ensure that you’re driving both at the same time.
Marylou: One of the scary things always in certain industries about net new is the concept of a finite audience. Meaning, there’s a total addressable market which is one number, and then there are the actual people who you conserve via your product or service. I call it the total serviceable market. It’s a subset of the TAM, the Total Addressable Market. I think one of the scary things about net new is people don’t necessarily know how to plan out a finite audience or a sampling to be able to start doing what they need to do on a consistent basis to generate revenue in those quadrants.
I had one client who is 95% of the base so that would be product share oriented, and then 5% was net new. They have a ubiquitous market but they were kind of stuck and stymied because they also were selling through resellers primarily and just started thinking about this whole concept of direct sales to build market share. I think that they didn’t know if they were good or not at that net new stuff because they had been using a third party channel to do the work for them.
Darrell: Interesting. One of the things that we talk a lot about in the revenue growth engine, I’m a firm believer in processes. The challenge in a lot of organizations that I see is you go into—I spent my career in sales selling workflow automation and business process improvement software. When I look at business, I think about the process.
Marylou: Amen, amen.
Darrell: You go in finance, you have processes for accounts receivable, accounts payable. HR has onboarding processes. Shipping and receiving better have processes, but you go in most marketing or sales departments and what I see is more like the Wild West. You kind of hear the eagle flying overhead, the tumbleweed blows through, there’s a couple gunslinger sales reps leaning up against the doors to the saloon.
In marketing it’s like just run some campaigns or go do an event. In sales, we’re not much better sometimes. The sales leader goes just make some more calls, go sell something. The reality is if we want to be consistent in how we’re executing for both net new and cross sell, we need to make sure we have processes in place. Usually what I tell organizations if I go to an organization for example and they’ve got a great net new business development thing going on, I’ll recommend that they focus on putting some processes in cross sell.
I remember being down in West Palm Beach. It was a technology company, we were doing a revenue growth plan for the company. We had the business owner in the room, the VP of sales, the marketing director, a couple other folks in the room. We’re getting ready to start this whole planning thing to get them going to grow their business. Like all good workshops, I’m standing at the front of the room, I’ve got my marker out, I’m ready to write on the whiteboard. Let’s go around the room. What are your goals? The business owner says, we need to grow more net new business. Everyone goes, yeah. That’s a fantastic start. I write net new business on the board. I said what’s your goal? He says, well we have a goal it’s modest, but we want to grow 10% year over year. I write down 10%. Then I asked, what did you do last year?
Now, I’m kind of bracing myself for them to say, we did -7% or we did 3.2%. The business owner looks back at me and goes, we did 9.8%. I started laughing and I said, congratulations. We could round that up. You hit your goal. Why are we here? Then I asked about their new business initiative. They had invested hundreds of thousands of dollars in people, partnerships, training for this new services offering that was a great fit for their ideal clients and I said, how’s this new business going? I already knew the answer. That’s when everybody looked down at the table and the owner was like, it’s a dismal failure.
That’s when we realized, what we need to do here is we need to put some processes in place for them to manage their client base. It’s simple things. The marketing team got to work. They said, let’s put together a client loyalty program. Let’s get a client communication process put in place. They’ve all been overlooked in the goal of driving net new business. With the client loyalty program in place, it gave the sales team the excuse to begin doing what they needed to be doing all along which was quarterly business reviews with their clients. They said, I want to come talk to you about this new loyalty program. One of the benefits of their platinum program was that their ideal clients got a quarterly business review.
They got that cadence of conversation going and being in touch with the business goals inside their ideal clients. Guess what happened? They started cross selling this new service to their client base and now they’re on track. They’re still growing 10% year over year in net new and they’re growing their revenue per client by cross selling. Now the company’s on a great trajectory of growth. Sometimes, I guess the moral of that story is the area where you need to grow may be a little bit different than what you instinctively think it is.
Marylou: Right. If you start writing those numbers down like in your book, you talked about doubling your revenue in less than three years. When you first think about it, you read that phrase, that sentence and you’re like, how does that work? How do I do that? You show such simple and beautiful math on how to get there, and it’s not this crazy formula. It’s simple math.
Darrell: I think there’s two core numbers the business needs to know. By the way, these are really helpful if you’re trying to set goals for the new year. Especially at the end of this somewhat tumultuous year, whether you took a big dip in revenue or whether you were signed with Plexiglas and personal protective equipment and you had a massive spike in revenue. The question is, how are you going to set realistic goals for the new year?
The two metrics around net new and cross sell are really simple. The first metric you need to know is how many customers do we have. That’s a simple number. How many active customers do we have? It’s a little different for every business model, but once you determine that number, there’s your line in the sand. The second number is what’s your revenue per customer, which is just a factor of taking that total revenue and dividing it by the total number of customers you have.
Now you’ve got two numbers to work with. You say, let’s see, we have 1000 customers and our revenue per customer is $10,000 per year. If we have the right sales and marketing processes in place, how many new customers could we add? Could we go from 1000 to 1100 or 1200. If we have the right cross sell sales and marketing processes in place, what can we do to grow that revenue per customer from $10,000 on average to say $12,000?
We add those two numbers together. Marginal growth, just modest growth of, you can play with this on the spreadsheet. I’ll give the link to you in just a second, but if you grow 12% in net new and 12% in revenue per customer cross sell, you can double your revenue in about 36 months.
In fact listeners, if you want access to a simple spreadsheet to start playing with those growth goal numbers, just text the word REVENUE to 21000 and that gets you access to our tool kit. To me, this is why I get so passionate about this right now Marylou, companies have got to grow. I think when you look at the growth goals, if you’re trying to do it all in net new or trying to hit all of that aggressive growth goal and cross sell, it feels overwhelming because it is. But if you can show modest growth in both of those areas simultaneously, you actually can really achieve something phenomenal and exponential results.
Marylou: Yeah, I think to your point about the revenue per client, if you’re not in a SaaS company and you’re not on those monthly recurring revenue and you want to be able to think about how do I do that? I remember one of my mentors J. Abraham used to say, there are three ways to grow a business. New clients which is the net new. There is an increase in your average deal size. When you do sell a client, bundle a few things in or try to get a more increased cost like you’re saying. And the other one is, buy more frequently.
For those of you who are not in the SaaS world, there are some ways that you can get to that number that Darrell’s talking about, not just one time pricing, but frequency over time as well can also get you there. That opened up my creativity when I heard that, because that gave me two avenues for the existing base. If I wasn’t in a SaaS world, or if I didn’t sell professional services, tech services or whatever it is, then I thought wow, this is super doable. I love the idea of the 12%, 36 months, compounding. I love it.
Darrell: There you go. It’s the power of interest. I am a huge J. Abraham fan. I think one of the great places to go to get ideas is his book. I think it’s now 20 years old, How to Get Everything You Can out Of All You’ve Got. One of the things I really enjoy about this, and I think this is something we can all learn from J. Abraham and I’m a firm believer in is, whatever industry you’re in, if you’re in SaaS, or if you’re in financial services, or whatever industry you’re in, it’s always a good idea to pick your head up and look around outside your industry for ideas. Earlier I shared that technology company in South Florida. They looked up outside their industry and realized my American Express card has a loyalty program.
Marylou: Wow.
Darrell: Back when I used to travel, I really liked my American Express card because I can go into the airport, I get all kinds of different perks, they have a special little area for their cardholders in the airport. I feel really special. It’s going to take a lot to get me to change. We started looking at loyalty programs like American Express, or the airline loyalty programs, credit card programs, or even your local sandwich shop and we said, what could we bundle together for our platinum level ideal clients to help them really appreciate it?
The funny thing about that, Marylou, is we had that conversation. I’ve had this with a bunch of companies now because it’s such a great idea to do a loyalty program. You realize you’re already doing all kinds of really special things for your ideal clients, why not just tell them about it. Put it together in a program. You’re already giving them white glove service and all of that.
Marylou: Communicate that in and be excited about it, share that information. The biggest thing that my audience hopefully by now since I’ve been lecturing them since 2016 with this podcast, one of the things that I really want people to recognize is that we have a variety of ways to add value in our conversations. We will never bother people as long as our minds and our mindset knows in our heart of hearts that we’re here to serve and that what we have to say to them will add value.
I think that the loyalty programs really bring that out, because if you do your homework and you do talk to people to gather information and intel as to what they enjoy, what their experiences have been, I think you talked about this in your book when you’re talking about how to build an inventory of all of this. It’s really about a day in the life of your client. Understanding at a deep and meaningful level how they utilize your product, why they love it, what they’d like to see improved. Just really listen with those two ears of yours and understand that anything that they tell you is a win because—why they want to continue to do business with you. If there are some things that are not as pleasant, then you got them on the table. You can deal with them.
Darrell: I think you’re bringing up for what I think is another key area of marketing and sales alignment which is around the message. So often, companies aren’t aligned between marketing and sales. I was talking to an account executive for a bank in southern California recently and he was laughing about this. He said Darrell, I went to meet with one of our largest clients and he pulls out a piece of collateral that got mailed to him by our marketing department about a program I’ve never heard of before.
It really helps for sales and marketing to work on the message together. It helps when we remember what people are actually buying. I firmly believe that nobody buys the product you’re selling. They actually buy the outcomes that product or service delivers. We know that, but we miss it so much in both our sales and marketing messaging. In addition to J. Abraham, another one of my all time favorite thought leaders and gurus in marketing is Theodore Levitt.
Theodore Levitt, father of modern marketing, Harvard Business School, walks into his class, and on the first day of marketing class 101, holds up an electric drill bit and says, nobody has ever bought one of these. All they bought was the hole. It’s so funny because Seth Godin would go on to say, they didn’t actually buy the hole, they bought the ability to drill a hole so they can hang the plaque on the wall and make their significant other happy or look good.
Marylou: Or hang their coat up.
Darrell: Yeah, whatever it is, they weren’t buying the drill bit, they were buying the ability to whatever outcome that delivers. One of the things we have to remember especially right now is, the outcomes that your clients expect or need probably have shifted in the crisis we’ve had this last year, and it will shift again. Right after the Covid crisis happened in the technology world, Gartner which is one of the main research companies, went out and started asking executives what they wanted or what their needs were.
Basically, they were asking what outcomes do you want. It shifted. Obviously, maybe in the previous year where they would have said we want more productivity, we want to scale our companies, we want to drive growth and all of that. After the crisis started, it was what you’d expect. We want resiliency, redundancy. We want the ability to do remote working.
Here’s the challenge, if you have a sales playbook, a talk track from last year, 2019, and this goes to our marketing friends as well. If you have email sequences put together for 2019 when you send something out that says, in this season of explosive growth, dot, dot, dot. People are going to go, what? Instead, we got to rework our message.
I think it goes back to what you’re talking about which is, get sales and marketing together. Get on a Zoom call with your best clients and ask them, what challenges are you facing in your business right now? What are your goals for the new year? What do you see on the horizon? Listen closely, because in that conversation are going to be the outcomes that your clients expect. That’s what you need to lead every prospecting call with, every prospecting email with, every client quarterly business review conversation with. It’s those outcomes, and those types of questions, because that’s what’s going to get through the filter, and get the attention that we so desperately crave in sales people.
I think the outcomes are going to shift in the new year as well whenever the new normal happens. I don’t know when that’s going to be or what that’s going to look like. The important thing is going to be, when things do shift, that we go out and we ask those questions again. What outcomes do you want, and what are your business goals, and challenges? So that we can drive sales conversations and marketing messaging around stuff that’s relevant. I think that’s a good thing for sales and marketing teams to work on together.
Marylou: You bring up a good point, and I’m sitting here putting myself in the shoes of listeners that are maybe working at a larger company, where sometimes the chain of command of actually sitting down face to face, belly to belly with marketing is a very difficult task because there are 35 people in marketing or 100 people in marketing.
Darrell: That’s right, across 18 offices.
Marylou: Do you have some suggestions if we really get this focused message as you call it in your book—what are some tricks here? I know for small companies, I’m working with a $40 million company right now. I have everybody’s cell phone numbers, so we can just talk. As you get up into the $300 million plus, billion dollar plus company, do you find it a challenge or do you have some tricks of the trade that you can share with us about trying this dialogue going?
Darrell: It’s a great question and I rolled out a sales training program in 2018 for a $9 billion company and I used to work for a $43 billion company in sales. Obviously, in a $43 billion company, you’re not going to get the voice of marketing. You might eventually, maybe, but you got to get results today. What I do like about being a sales professional is you’ve got the opportunity to drive whatever conversation you want to drive. You don’t have to wait for marketing. Marketing will put together their brochures and websites and whatever they do. It may all be product focused and that’s fine. It is what it is. You can’t wait for that to change.
I think as sales professionals, I challenge you to have those conversations with your best clients, take them out to lunch. Take them out for a virtual cup of coffee and just say, I’m really curious what’s going on in your business today? Don’t sell, just listen and ask. Don’t just ask questions, in fact, don’t ask questions about your narrow product area. Ask questions about their business at large. I firmly believe that if you’re going to sell something to somebody, especially if it’s in a B2B space where there’s multiple decision makers, you better have your recommendation connected to at least one of their top three business goals or challenges.
Otherwise, you just are going to get put on the backburner of nice ideas we’ll get around to someday. How do you find out what those top three goals are and challenges? You listen. This is where your current clients are an incredible resource especially right now in this changing market. Listen closely to what they say and they will give you the keys and even the very words and phrases to use to be able to grow your business with a message that actually resonates.
Once you start crushing sales records, maybe someday they’ll send a marketing person out to ride with you and you can get some alignments.
Marylou: Right. You do talk about, in the second part of your book, for those of you who are like this is sounding great. What do I do? How do I do this? My people are always about what’s the process? How are we going to do this? I know that you have this thing that you developed called the outcomes inventory. I think you called it a list, I’m forgetting. There’s a step by step in the book of how to go about this, correct?
Darrell: There is. The idea of the outcomes inventory came from sales people. We have a product inventory, right?
Marylou: Right.
Darrell: A price book. Here are all the products that we have. If you go back to Theodore Levitt, The Drill Bit, people don’t buy products, they buy outcomes. I think every sales person in addition to having a product inventory should have a list of all the outcomes they can deliver. I was actually talking about this this morning on Revenue Growth Live. Revenue Growth Live is our live cast on Tuesdays and Thursdays on LinkedIn. In the book we talk about four categories of outcomes in the B2B space. There’s financial outcomes and risk outcomes.
Financial ones are obvious, how do we help you raise revenue and decrease expenses. Risk, how do we help you decrease risk. This is an area that a lot of sales professionals haven’t necessarily given a lot of thought to unless you’re in the insurance business, but reducing the risk is a huge opportunity. Our good friend, Jay Abraham, has a lot to say about that, risk reversal. Financial outcomes, risk outcomes, organizational outcomes, how are you going to help the organization and people be better? Last but not least are the personal outcomes. There’s a book that I’m looking forward to reviewing. I love the title of it. It’s B2B, it’s P2P. Business to business is person to person.
We all know this in sales that people buy from people and every decision maker or an influencer on that buying team—and Brent Adamson just recently chimed in on a podcast I was in. I was asking what’s the number now? He said it’s up to 12 decision makers and influencers on the average B2B buying decision. Of course, being the co-author of The Challenger Sale and The Challenger Customer, the reality is we also have to understand the outcomes that each of the decision makers and influencers want in the deal. I think we should create an inventory of all that. Here is an inventory of all the outcomes we can deliver.
That way as we are creating sales messaging, whether it’s prospecting, or whether we’re writing an email, whatever we’re doing, proposals, another area. Let’s make the messaging always lead with outcomes. Always lead with outcomes, and then marketing can play from the same outcomes inventory, and just maybe, the company’s marketing will say the same thing that the sales people are saying. Right there’s the dream. Really, we kind of chuckle about that but we live in a post trust world.
The number one thing a sales professional needs is trust, yet trust is at an all-time low. Not just with the sales profession, but just in general. The fake news world we live in, the trust is just really at an all-time low. It’s very important we build trust. We get through that filter by talking about outcomes. We build trust as we demonstrate that we’ve been able to deliver those outcomes. The flip side of that is if I hear one thing out of the sales reps mouth and then I go to the website and I hear something different from the website, I just took a big dent in trust. I really eroded trust. We kind of chuckle a lot of times in the business world about marketing and sales need to get along and say the same thing. You know what? You really do.
You really do need to be saying the same thing. Otherwise, that buyer talks to the sales rep then hits Google, hits your website and goes that’s not what the rep said and they’re on to the next thing.
Marylou: It introduces friction. It’s just one more reason why they don’t have to engage with you further, which is so disappointing to say the least.
Darrell: For all the work we put in, it introduces friction. It’s so sad.
Marylou: It is. People, the book is called The Revenue Growth Engine: How to Align Sales and Marketing to Accelerate Growth. You mentioned that, I think it’s embedded and sprinkled in the book, the key to some tools, do you want to go ahead and talk about what tools are available for folks?
Darrell: We’ve got a growing toolkit on the website. Once again, I think I mentioned earlier you can text the word revenue to 21000 and that will get you a link straight to our website. In fact right now, and this is brand new, you’ll be the first to know about it here on the podcast. You can actually get a free copy of Revenue Growth Engine if you’ll be kind enough to pay for shipping. We’ll send you one. I want to get this out to companies. I passionately believe that right now, 2021 is a make or break year for a lot of sales teams and a lot of companies.
We had a rough year this year, we got to bring it next year. I want to help with that. In the tool kit, we’ve got our revenue growth planner. We’re putting the outcomes inventory worksheet. There’s an ideal client worksheet going on there. We’re continually adding to that. Just stop by, revenue to 21000 gets you the link. You can get to revenuegrowthengine.net. Get a copy of the book and get the tools. My goal is I’m passionate about helping great companies grow.
This season that we’re in right now, I didn’t plan on launching a revenue growth book in the middle of the pandemic. Nobody planned on doing anything in the middle of a pandemic. I’m realizing now as we look back over this year and we look forward into the next year that—I’m not saying growth was easy before all of this started but as we look back, it sure seems like it was a whole lot easier than it is right now. All that means to me is we’ve got to be strategic.
In the sales world, there’s that mantra, just go make more calls. I get that. I started in a hardcore field sales and I get that. Activity is critical. The way we go about doing it, the processes that are behind it, the message that’s behind it, working on not just quantity but also quality is something that is really critical right now as we move into the new year and work to accelerate our growth
Marylou: It’s definitely one of the mantra’s quality and multiplying your results for me. That’s always big. You’d take that same hour and work on 2x, 3x, 5x, 10x your results. If you focus on the quality of your sales conversations and you really understand the channels with which these folks are now communicating, they’re still out there communicating, it just may not be the normal channels that you are used to pre-Covid but I think there’s a lot of opportunity out there for people in certain fields. This is a time if things are slow, like you said, to really focus on the sales conversations, how to have better ones, more meaningful ones, more actionable ones.
In your book, you also talk about not only do we have the outcome inventory list, but we have the proof and specificity points of how to get these people to logically bridge from what they want to it’s here. By the way, there’s a new normal even above that that you may not have thought of yet that other clients, colleagues of yours are already enjoying by partnering with us. I think that list is the Bible for me and that’s what I like to do. I think of it in rows and columns. I love the word inventory because people get inventory. You understand what that means.
I think that absorbing this book, now we’re entering the holiday season, it’s 2020 right now and it’s a great time to get these books and start hunkering down and planning, and getting all that part done and see how you want to navigate through a book like this. It would just be perfect timing to do that. Thank you so much for your time today. We had a great conversation. I will make sure every bit of link is on your page so that people can get a hold of you as they need to. Again, I very much appreciate your time on the podcast today.
Darrell: Thanks for having me. Marylou, I appreciate all that you’re doing here. It’s just fantastic.
Marylou: Wonderful take care now.
Darrell: Bye.