Starting off our show today Doug and Jess talk about the Monday between the weekend and 4th of July as being a liminal day. Doug also has a new group of hats he’s been rotating through recently, and the show wouldn’t be a show without Doug getting into baseball. Though his salty days are behind him, he thinks using his coaching signs will solve everything.
Today is not an entire episode of Doug and his baseball signs. This episode Doug and Jess talk through the RevOps role and growth strategy. What they get into in this episode is the core of what it means for RevOps to be strategic.
Doug’s Thesis: Whether companies are referring to what they’re doing as RevOps or not.
Tactical RevOps has taken hold and it’s enabled companies to get better at what they’re doing. As a result, they’re getting weaker. Those companies that are at the leading edge of this phenomenon are the ones that are taking it on the chin the hardest. The proof: the environment that they’re finding themselves in today.
What is strategy?
Strategy is different from planning. Strategy is different from strategic planning. Doug has found himself replacing the word with plan and far more often than not, plan is actually the right word.
RevOps is not responsible for strategy. They should be playing an active role in the development of strategy, but their real role is bridging from strategy to execution and back. They are the translator to strategy into the actions and execution of an organization.
The most useful definition of strategy comes from Richard Rumelt: a diagnosis of the problem, which is also a diagnosis of the opportunity. Problem and opportunity are two sides of the same coin.
Michael Porter has said: strategy is the ongoing process of making trade offs, making the trade offs required to successfully deliver on your value proposition.
That’s what makes strategy different from a plan; it’s flexible and provides a guiding policy so that different people in different places with different viewpoints can align relatively to the same endpoint.
Strategy is a hypothesis. It’s a diagnosis; it’s not definitive. Strategy is about playing to win. Which means you have to define your game to manage the trade-offs that come with it.
Where do we play? Where do we win?
This could be geographic, it could be verticals, it could be horizontals. There’s an element of, what’s the game that we’re going to play? What’s the game that we’re the best at?
Who and where plays a big part, too. Who do you want to be a hero to? RevOps job is to make sure that these elements are clearly articulated so they can translate, bridge, and manage them.
Other questions you need to think about:
- What’s the economics?
- What are your go-to-market economics?
- What’s your go-to-market motion?
- What’s the methodology?
Once you have a policy and strategy outlined/your hypothesis outlined, what are the things that you need to take into account?
This depends on how well your strategy is articulated. Your guiding policy drives a set of initiatives, so when that isn’t clear, you don’t know where to start.
RevOps’ job is to provide the context the insights and the data necessary for different groups to do what they need to do. Their job is to point out the indicators of a change that needs to be made or if somethings working or not working.
Let’s talk about intent dynamics.
3-7% oh of your market is actively buying. They’re actively looking for whatever it is you may be selling. In that 3-7% the larger the purchase the higher the risk and the more consideration is involved. If you get into that 7% when it’s highly commoditized almost commodities 5-15% are in a pretty consideration process. They’re looking at things they’re considering whether or not it’s something they want to take action on. About half of those between 40-65% will ultimately enter an active buying stage. 30-50% or not thinking about it one way or the other. That doesn’t mean they’re happy, it doesn't mean that things are good, it just means that it’s not on their radar right now. It might get brought up from time to time but it’s a latent issue. It’s nowhere near explicit. Another 30-40% think that they’re happy with their current situation. They’re satisfied. That doesn’t mean they should be satisfied or that they’re always going to be satisfied. Realize that 3-7% means were more likely than not meeting your preconceived notion of what’s necessary.
Intent is pretty structural. Intent doesn’t change. What’s one of the best ways to get intent? Short term tactics. Doug continues to see from data in research that he’s done that 40-60% of the money that gets raised by startups goes to Facebook and Google for ads. What is that getting? You’re looking for your high intent audience. It starts off looking really good and your numbers start getting really good but suddenly you can’t grow. Your cost of growth shoots up. Your messaging is off. The reason is you have over optimized for that 3-7%. That 3-7% is so miserable. They’re high engagement. They’re highly active in multiple places. Unless you’re selling straight commodities or something that’s a highly structural the cause of that 3-7% occur far earlier. As long as you don’t screw it up that’s who you’re built for. If you’ve hit product market fit there are people that are going to buy from you. There are also people who won’t buy from you. They are the riskiest part of the market because they show pretty easily. It’s actually easier for you to identify who is not going to buy from you.
What are the other dangers as you build out strategy?
If you have a good market, as you generate more awareness and more engagement, your high intent yield decreases. You think your market is growing, but it’s not really growing because you’re adding a higher level of intent and a higher percentage of low intent.
The biggest danger is when you get to a cultural lockdown. That’s really hard to break. Efficiency becomes the framework and metrics in measurement. It’s not always about efficiency and many companies are getting lost because they don’t know how to win in a game that’s not about efficiency.
Demand capture is where you generate revenue, but you need to balance demand capture with demand creation. You can’t create intent. You can create demand. How? Creating demand is educational. Demand creation is about seeding your market, cultivating your market, and triggering your market. Demand creation is about what you do with low intent audiences.
What do you need to get it right?
There are 3 things:
- What’s your go-to-market strategy?
- What are your economics?
- What’s your model?
- RevOps is getting better from a tactical standpoint, but getting weaker from a strategic standpoint.
- The more content that comes out, the more we’re needing to be wary of over-optimization for that 3-7%.
- Make sure you’re paying attention to the market and take advantage where you can.
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