gtmPRO
Mid-Year Reboot: From Struggles To Success
What if missing your first-half revenue targets didn't spell disaster but an opportunity for strategic recalibration?
Join us as we dissect the complex revenue challenges faced by B2B Lower Middle Market SaaS companies during the chaotic mid-year period. We tackle everything from soaring costs and pricing pressures to extended sales cycles and internal bureaucracy. Yet, amidst these struggles, we offer actionable strategies to transform anxiety into a sustainable success model, priming you for a robust 2025.
What if missing your first-half revenue targets didn't spell disaster but an opportunity for strategic recalibration?
Join us as we dissect the complex revenue challenges faced by B2B Lower Middle Market SaaS companies during the chaotic mid-year period. We tackle everything from soaring costs and pricing pressures to extended sales cycles and internal bureaucracy. Yet, amidst these struggles, we offer actionable strategies to transform anxiety into a sustainable success model, priming you for a robust 2025.
Welcome to the GTM Pro Podcast, your essential audio resource for mastering go-to-market discussions in the boardroom. Here we share insights for revenue leaders at B2B software and services companies, especially those with less than $50 million in revenue. Why? Because the challenges faced by companies of this size are unique. They are too big to be small and too small to be big. This dynamic pushes revenue leaders into executive leadership without a lot of help or support. We are here to provide that support.
Gary:Your journey to boardroom excellence starts now. Now, this week, we are going to cover. We're halfway, we're actually more than halfway. We're here in mid-July 2024. And we are many assessing as we sit here in midsummer, and it's already a chaotic schedule with vacations and people trying to squeeze things in, and we're looking at kids going back to school shortly and the normal chaos of summer. But we're also faced with what do we do about the second half of 2024, looking back at the first half of 2024.
Gary:So let's just talk a little bit about what people are feeling right now. Well, we know, for the most part, there are very, with a very rare exception, people have missed their targets in the first half of the year and there is, if not increasing already high levels of anxiety about the ability to meet targets in the second half of the year. This concept of we'll make it up in the second half of the year. We have experienced we've seen increase in paid costs to try to drive traffic or anything more paid perspective, with declines in throughput and especially, and ultimately, in generating pipeline. We've seen a ton of pricing pressure because in almost every situation there are a lot of competitors or alternatives in a particular category and so everybody's trying to grow and inevitably the outcome is pricing pressure. I also think we've talked a little bit about this in the past is that because there is so much pressure on top line growth new logo growth we're seeing some of the larger former partners in our spaces actually become competitors and for them, the ability to acquire or build or launch complementary products to that core system is found money. It's additional growth for them and they have an opportunity to price it extremely aggressively.
Gary:Now it may not be as robust, it may not provide all the features, but for a lot of organizations it time when the CFO is making the one on the decision and not the end users of the product A, it's good enough, and so I think that's also creating a lot of pricing pressure, and then we see an increase, basically huge risk aversion. Anybody who is in market, they do not want to make a mistake and so it's dragging out sales cycles. It's increased requests for trials. It's longer and longer, more people in the buying decision, even for relatively low dollar products. We're seeing rounds after round of demo requests and additional information requests as they cycle through their process. So you know, this is the environment in which we live today and I guess the big question is do we see it being any different in the second half of the year? I would say no.
Andy:No reason to. I'll just add one more line item to that list, which is we just heard yesterday line item to that list, which is we just heard yesterday specific figure, which is a 20% increase in RFPs versus a year ago. So literally the way people are acquiring new products is becoming more bureaucratic and risk averse and know budgets. If they aren't frozen around new products, it's becoming harder to acquire them. So the internal bureaucracy at companies has increased.
Gary:So just adds, throw another thing on the pile yeah, that's a great point, andy, because it goes to the.
Gary:We can have a champion who's completely aligned with what we offer and the value that we provide, that we can bring to the organization, but they themselves are, I won't say a victim, but responsible to a stakeholder or part of a process that is much more risk averse, much more rigorous and that creates a challenge. And in some cases, as champions, they know that going in, it's just easier to do nothing, and so that's the environment that we sit in right now. So, all right, enough doom and gloom. What do we do about it? And I think, as we said, there's nothing on the horizon that says that that's suddenly going to turn around and and, quite frankly, probably bleed into early 25 as well, and so we would. We're going to talk about how we think, about what we can do in the second half of the year, because we still have targets, we still need to go towards that, but in a way that actually begins to set us up for the ability to deal with this environment into 2025. And so let's break that down a little bit.
Tiana:Yeah, we can all expect companies to just forget about what they're doing right now to plan for 2025, but we definitely have to do something that supports both targets and what we have to do to be ready for next year but, at the same time, hit what we plan for this year because, as Gary likes to say, next year's target is this year's base. Well, the other way around, sorry this year's target is next year's baseline.
Gary:Yes, exactly. So if we, as I also like to say, if we pull a rabbit out of the hat to hit our targets this year, this acts of heroism. Then now, next year, that becomes the baseline and we haven't built anything that's sustainable or repeatable, and so now we need two rabbits, and that's just. We would love to see people avoid that. So let's start with where we would start, here today. I think it's very helpful for organizations to pause just a second and look back at well, how did we get here? What do we now know about that worldview and those set of assumptions? That is different and it may not give you the ability to change a plan, although I think most organizations, because of the need to drive to some form of profitability or cash flow break even, are being very about those re-forecasts and targets. So we may have a budget out there, but nobody wants to run at the budget and miss and spend the money that we were spending and end up with a big cashflow hole. So this is a perfect time to reassess those assumptions.
Andy:Well, it's about inputs, right, it's about operational metrics. So the operational metrics be get the financial metrics, which be get the investor metrics, and we won't get into all of that. But I think what's really important is two levels set on. Ideally, you created the budget around operational metrics. Now it's not always a build up and a bottoms-up approach to that, but at least found it in some reality when that was built to your point. And I think what's really important there is to understand, on those operating metrics perspectives, what has changed, what has changed right versus what that assumption was to your point at the time. And then, probably more importantly, is there reason to believe factually whether that is a temporary or a permanent difference, or you know a different way of thinking about it? Is it something we can affect?
Andy:Is it something we can actually do something about.
Gary:Yeah, I think also Andy, you point this out and we were talking earlier is, in addition to metrics is also whom we thought our ICP was and what their dynamics were at the time and what their dynamics were at the time. It doesn't necessarily mean that our ICP has changed, but we went in with a set of assumptions about what they were going to do for their business, what their priorities were, and we should take a hard look at that, and one great way to do that is to just look back at all the deals throughout the course of the year and look at a cursory closed one loss analysis. Like which company types, which situations did we find where we won and what were the situations where we found with the where we lost? How much of that do we believe was due to process and how much of that is actually now revealing companies that are now in market where that problem is more pervasive versus those that aren't, and in many cases actually Kyle Norton pointed this out, which I thought was really interesting is in a previous life, from where he is today as a chief revenue officer and owner is that they found that a very high proportion of current closed one deals actually had one or several previous closed loss deals. So it's part of this process where you're teaching them and they come in and they come out based on the priorities of the firm, and so there's a lot that we can learn through that process to understand. Ok, that's the most real time evidence that we have of where perspective on the market In terms of so, as we think about ICP, it's not just firmographic data, but also understanding the people that are involved and also the champions, as well as the buyer process, so that we can consider okay, that's going to begin to inform.
Gary:Then, what is it we need to be able to provide these sets of buyers in order to? We just talked about a desire to de-risk a purchase process. There may be somebody who comes into the process, but now they have to kind of drag their organization along and convince them that this is something that we need to do. Or even if the budget is already allocated, or maybe the desire is to replace an existing tool if there isn't a massive cost savings, in some cases, companies are choosing to just go with the status quo for now, because the teams are now leaner than ever and there's so little slack in the system to go through a process of changing out tool sets, and so understanding those pieces now informs us on well, what do we need to do and provide an information in order to de-risk this for them? What questions are they now going to have that, frankly, didn't exist even six, six, nine months ago, because they themselves have lived through a very difficult first half of 2024?
Tiana:yeah I feel, like andy's gonna help me out on this one, but like there's, there has to be a way to make our solution get be easy to change to, because it happens in real life. You don't change to something unless, if, especially because you're thinking about risk, right, and you have a lot of responsibility in this and, as Gary said, imagine convincing your whole company that we need to change to the solution and for them to the solution not to be effective for your company. I feel like that's something that we are all the time worried about. So how do we make ourselves easy to translate to, easy to just shift to?
Andy:Yeah, I think it's really really important before getting into doing any of those things is to make sure everyone's on the same page.
Andy:So this is going back to the internal marketing and just making sure, first of all, you have the ear of the company and that you're you know what you're proposing here, and I think we're kind of getting a little bit into the longer term approach to some of this. I think, Gary, you mentioned the near term, like let's figure out what's working, let's figure out what we can do from adjacent past closed loss deals and so on, for example, and with all of that, with all of that, it's really key to make sure everyone sees what's going on. It's going back a little bit to the metrics to say, yep, we all see these problems, we see these problems with the inputs, and that we're all on the same page in terms of what we can and should do about it, both near term and longer term. I think the internal marketing side can't be emphasized enough, because we hear all the time with marketers well, the company doesn't understand what I do. We've talked about this a number of times. They see me as a vending machine for leads, and so when that machine starts breaking down and you aren't producing MQLs for the sales team down and you aren't producing MQLs for the sales team, people start, you know, bickering and you know that's not productive and certainly isn't a way to get consensus on.
Andy:You know where are we, what's not working, what can we do about it? What reasons do we have to believe that that's going to improve things um, near term and longer term? So I think I think that's that's really key here. And then, specifically, I I think that is also very important is to understand what. Where are those green shoots scary to the point you mentioned of we've all the close one deals we've had they've shifted a little bit from kind of the meat and the core that we would have said a year ago. Is that something we you know? Is that a permanent shift? Is that a direction things are heading? It's really good to dissect that and, honestly, if things are you know I hate to put it this way because everybody's always busy, but if things are slow, on one hand, that's your opportunity and it really should be a wake-up call to go ahead and do that analysis, to say, you know, have things shifted?
Gary:Yeah, I'm a huge fan of doing the analysis right Because we need to be going for them. So, andy, you brought up the very valid point of being tactical about it. I think that analysis also helps us understand. First of all, looking at it. We talk about metrics. The metrics have to be at the operational level and they have to be cohorted, time-based, because if we just, if we largely just take time period metrics what happened in X month we're not aligned because the thing, the deals that close in the deals that closed in June, were the result of what happened, maybe a little bit in June, but probably in May and in April and in March. And so if we're only looking at what happened in the month of June, we don't have the full picture and we have to do that work. Sometimes that's not easy on the basis of your data, but it's critically, critically important.
Tiana:Something that's also important over there. I'm sorry to interrupt but, it's definitely something that Andy and I were talking before even the podcast started is for the unified commercial engine to share those metrics, because if not, you're just putting them against each other. Because some are providing, for example, marketing is just providing leads just to hit a target, and then those leads are poor quality leads and sales cannot even close those sales. And then marketing goes oh, you can't close sales and sales goals, that you provide terrible leads, so what am I supposed to?
Gary:do. That's a good example, because the point of the analysis is not to show that somebody else is the problem. It's to figure out how we, what we do about it. Right, right, so, and that also then gives us the ability to determine what is and is not working. And it sounds so simple, but if you find something that hasn't worked yet, stop doing it.
Gary:There is so much that we do because it's like, well, it's part of my plan, it's part of my goal, and this is the process. And if I'm not doing this, what else am I doing? So that, just the look, every team is lean, every team marketing sales, especially in the lower middle market product Everybody has. Not only are they trying to do their day job, but they're also trying to figure out, in this shifting market, what to do. And so there's very little room for white space. And so when we have our team doing things because, frankly, motion feels good but it doesn't deliver progress, we actually are hurting ourselves because we're not providing the white space necessary to figure out what does work. So stop doing the things that don't work. And the only way you can do that is to do the analysis on a cohort basis.
Tiana:And there definitely has to be constant communication about it because if not, people just feel like they have done so much for nothing and that honestly takes a hit on anyone working anywhere. If you feel like there has been months of you doing the same thing because you were told to and then it gets to a point where none of it worked and you're just throwing it away and starting something new, that won't happen if everyone realizes that what we're doing is not working, because we're constantly talking about it and we're constantly understanding which are the points that aren't just making things work in different departments of the company.
Tiana:but if we don't talk about it, is everybody's just like pretending like they don't know yeah and that's something they do know, but they just don't want to talk about it because they're afraid of it and and I think that's the you know the honesty, being intellectually honest with this, right again, it's not.
Gary:We're not here to interrogate or looking to place blame. We're trying to understand, as a company, what's going on and what do we do about it. And you brought up a really good point, which is the other thing that we have seen. In fact, just yesterday, I had this conversation with the CEO that was talking about some frustration around the lack of progress on some demand gen efforts, and I responded and said well, the challenge for this demand gen person is that every they are one cog in a system that is demand generation and they are on an island. They don't have the content, they don't have the data, they don't have the tools. There are other people that need to be involved in activating it. They might need some help from product. So I think the other piece of as we think about what to do about it next is, as as that and this is the hardest thing of all as a CEO, we need to actually probably roll up our sleeves a little bit and work with the team on some of these GTM initiatives, because they aren't the issues or the challenges aren't department specific. A opportunity, lack of opportunities challenge which every company listening to this is probably having right now. And if you're not, congratulations, you're in the rarity, take a moment to pat yourself on the back. But the magic is in the integration and coordination of efforts and making sure that this lean team is working on something. So, as we think about a demand gen effort, it is yes, the demand gen person needs to be part of it.
Gary:About a demand gen effort, it is yes, the demand gen person needs to be part of it. But what information, what content are they providing? What's actually of value to the audience? Do we actually know that? Depending upon how new they are to the organization, they may not know that. So why don't we pull in people that do know that and figure it out together? We're going to get there a lot faster.
Gary:What about on the data side? How are we going to activate? What data do we have to activate? What do we need? Where are we going to get it? What system is it going to go into? How are we going to activate it? How are we going to measure it?
Gary:Well, that might be a demand gen person, but it's probably going to be sales ops, marketing ops, rev ops, whatever you call them, they need to be involved. Sales if it's that effort, well what is the handle? What is the experience that we provide so that it is seamless into the sale? Are they prepared for it? Do they know? Do they have feedback on what that might look like? So why do we spend all this time with each individual department saying you got to go figure it out, when the reality is it's a system and we need all the participants in the system to come together to figure out that it's the highest priority. That's that's they start. Tiana to your point about how we think, about how this all works together, and that's a challenge because, again, everybody's running hard, running fast. How do we pull everybody together?
Andy:well, when things are rough, you we call it flailing and that's a really. And that's the hamster wheel in a sense too, where you see it a lot where we got to do something and then it gets into random acts of marketing. It gets into we're just going to do stuff because it's progress and it's motion. Actually, it's motion not progress. And you know, it seems like we're taking action on, you know, closing this gap and so on. We're trying to pull a rabbit out of a hat and that that's. That's really tough, because then you know again, everybody's not on the same page, everybody's not looking at things the same way. You get a bunch of things spun up. You probably are spending money on, you're certainly spending some time on unknown productivity from it. You don't know what it's driving, nobody's measuring it and it's just people doing a bunch of stuff and that really it's tempting right to start doing tactical, random acts, but that's oftentimes counterproductive, yeah, and yes, and that's exactly what we're trying to prevent.
Gary:Right is we have to balance this need, the very real need for immediate action, and quick results. But part of quick results can be. We learned very quickly that this didn't work, and so we stopped doing it and moved on to something else. Like you cannot, don't sit in a laboratory and create this most elegant system. Get it out into the world and refine it as you go.
Tiana:And it's yeah, that's that assumes that you.
Gary:That's why it's so important to have the team together as we think about what's going to prevent us from being successful. What is our hypothesis and what one of the biggest hypotheses of all is? Well, we're pretty confident we can get the data. We're pretty confident we can send the email. We're pretty confident we can measure it. We're pretty confident it can actually be deliverable and in the inbox. But how confident are we in what we say will actually resonate at that time with the recipient? That is always the biggest unknown, and so the more that we can put a system in place to test that. Whether it's an ad, an outbound email, a social post, whatever it is, that's always the long pull, yeah 100 and it's tough right, because on the, you know all else equal.
Andy:It's a lot of effort to get something put together to to test. You created a pilot. That's what you're doing right, and it's easier to perpetuate that than to start over and build another pilot, but it's still by perpetuating that, it is still reducing your bandwidth and so therefore, in this environment, if you have run afoul of the notion of random acts of marketing as an example, and you are doing that the best pilot project I just opened up an article on CIOcom and, yes, that's IT strategy, but it's the principles exactly the same, and the title of the article is the best pilot project might be the one you kill.
Gary:Oh, I've got an oldie but goodie that talks about dead snakes. I'll have to put that in the show notes. But to your point, Andy, I think the beauty of this is the hard part of pulling the team together to build the pilot is that the core elements of the pilot, actually most likely the core hypothesis that we have most likely, doesn't really change that much. It's some of the specifics, it's how we do it, when we do it, what we say, and that's what we need to iterate on, versus counter that with or contrast that with the random acts of whatever marketing sales. What have you? It's really easy to get into. Oh well, we want to generate pipelines. So we pulled this list of um uh organizations who we believe are using this partner and we're going to start emailing them.
Andy:Right and right, say what, say what and where do they go? What end, what's? What's their experience? And yeah, it is oftentimes. That is oftentimes the other pitfall of the near term Random Acts initiative is it's all it's like. It's like just the kind of the upfront piece of it. We're going to target these people because we've seen them before. They seem to have an interest in our product, so we're going to target them Now what?
Gary:Yeah, right, and that's so. I'm going to bring up something that this is. I'm going to give Emily Kramer credit on this. She has her DAC framework G-A-C-C. We have modified that's very marketing oriented and we have modified it to be GTM oriented. But love the approach and that is as we have this group together. The first thing we're thinking is what is our goal? What is the metric? What is the objective here? What is the metric that we seek to move and you know, more pipeline revenue close. Whatever is not the goal, that is the result.
Gary:That happens if you do everything else right.
Andy:So you're trying to move an or a couple inputs.
Gary:We have a hypothesis that this group has this set of problems and that if we can put these things in front of them, that we can increase engagement and drive whatever Right. That's the goal. So the first is then the audience. Who is the audience that we seek to reach here? And we need to be relatively specific. It can't be people who want to buy our product. It has to be, because the message needs to be so specific. We need to be very specific about the audience that we seek to reach.
Gary:Then there is, once we've reached that audience, what is the experience that we want to provide them? And it could be all the way from the tip of the spear. What is the sets of messages that they're going to receive, and over what medium are they going to receive them? And what is the integration of those messages? Is it an email? Is it a call? Is it a social message? Is it an invite to a webinar? Whatever it is? And then, when they come in and they actually take action on that first message, what is the whole experience through, where we can plumb this together and you know what we can leverage existing assets? Well, we're going to start here. Great, we know that we want to improve this experience, but we got to start there.
Gary:Then there's then there's distribution like how are we going to get this core thing, this core experience, out into the world? And we may start with one channel and then add a second or experiment with a third. But what does that look like then? How are we going to measure it? Like, what is the data and measurement required? How do we activate it? Who's going to measure it? What is the data and measurement required? How do we activate it? Who's going to do the work? What's the process If we go in with that mindset? Now, tiana, to your point, everybody understands their role in that system, in that thing, and how it all works together, versus having somebody come away and create a campaign and then sales, as an example, is sitting there waiting for the results of the campaign and nobody understands what we're trying to do and how it all fits together.
Andy:Yeah, I mean, and you just articulated. So we we talked a bit about the near term and then the the inputs to the longer term. So you just articulated how to set yourself up for the longer term. And it's not this big upheaval because none of us have time to figure out. You know, a transformational go-to-market project. It's stepwise to market project. It's stepwise.
Andy:It's take each bit as you can to understand. You know, has your ideal customer shifted? To understand how those you know the ways to speak to them about the things that matter to them has shifted, or getting better at that Interviewing customers right, I mean, there's no other way around that. But what we're talking about here is that's where you have to get to. So where's the best starting point, which is what we think is where you know why the inputs are the way they are, where you know you have confidence in people are buying from us in this situation because of this, because of who they are, what their situation is, what their problem is, and then build from there. Yeah, which is it can't be substituted, it requires research.
Gary:And that's a great point too, is it that discipline sets you up well for as we think now about 2025, and it could very well be that what we do right now in 24, that that alone done better, faster, more pervasively isn't going to be the thing that actually drives us in 25. But it begins to help us lay the foundation for that to tackle much more difficult things like pricing and packaging. We may very well be, because of the change in the market, be hurting ourselves significantly because of the way that we have priced and packaged our product, and so now how do we start thinking about how we might change that in 25? And if we go in with that mindset that we can begin to explore that in 24, we're not going to change that overnight. That is especially with companies that have a legacy portfolio. Pricing changes and packaging changes are not for the faint of heart, but they can be a massive unlock in terms of even relatively modest changes in how we package, in terms of the ability to bring down, de-risk the entry point and expand the expansion opportunities, which guess what becomes a product strategy discussion as well. So those two are joined at the hip.
Gary:As an example, another is what we can understand as the kind of call it horizon two, which would be 25, the the kind of call it Horizon 2, which would be 25, thinking about the things that we need to begin to do today that are going to compound and begin to bear fruit in 25. And a lot of that is around awareness and creating, you know, being a go to place for information and starting to think about how we laid the seeds to that. If we don't do that work in 24, it's going to take six to nine months to pay off, whether you start today or you start in 25. So if you wait until you're ready for that or you have time and energy for that, then you will have made your plan in 24 and you will have built it on sand in 25 because we didn't do the work ahead. So that's this balancing act that we really need to consider right.
Gary:If we spend all of our time and effort just trying to hit the 24 plan, then we have set ourselves up for a very difficult 25. Now sometimes, hey, we're in the middle of a capital raise and we've got to do everything we can to make the number because we're expecting that to close in November. There's some very practical realities that cause you to do that. We get that, but know that that comes at a cost if you're not planning ahead for 25. Okay, what else did we miss, andy?
Andy:I know there's a lot of other stuff here, but I mean we could go on a number of different tangents about a number of subtopics, right, but I think that's exactly it. We're not. You know there's no silver bullet in terms of like you can do this stuff now and it's going to help you in 24. And then you know, plus doing the strategic things that are going to build a better foundation for 25. There's no silver bullet to all of that.
Andy:But what we did want to emphasize is it's been tough lately and we know people are struggling with trying to fill pipeline gaps this year second half. We need to circle the wagons and so hopefully we painted a few tips on how to approach that. It's not fl know, not flailing, not random max, but like thoughtful, thoughtful ways of hopefully you know consolidating that um nearer term and then but meanwhile and it goes hand in hand with that you know not failing, not spinning your wheels and just trying to shoot in anything that moves, by its very nature as being more strategic, that that will help you in 25. If you are getting better insights on your target customers and what makes them tick, it will help you nearer term and there may be some near term opportunities with that, but it absolutely will help you longer.
Gary:Yeah, there's. If there's one, if there is one silver bullet, it is just that it is having an always on multi departmental discussion conversation with your customers. With your customers, and not through the lens of how can I better sell to you or what pain points can I listen to to help position a certain marketing campaign or phrase or whatever, but genuinely seeking to understand what's going on in their business as it relates to the problems that we help solve and the all the dynamics associated with what's, what's concerning them, what's keeping them from making progress. In many cases, it has nothing to do with the product, it's. It's just not a priority in the firm right now. For these five reasons, and in order for me to elevate it with things that are completely outside of my purview, if we don't understand that, then we're pushing water uphill, and so it's that level of insight, deep familiarity with the customer which requires a really good ICP definition. So it's that work, that you don't have to grind everything to a halt and do all that research. It can be ongoing and evolutionary rather than revolutionary. There's your one silver bullet tip for the week, all right? Well, we'll.
Gary:We're looking forward to summarizing this in the upcoming GTM pro short. You can find those at gtmproco. Jump on there and subscribe and also send us a note. Hello at gtmproco. Jump on there and subscribe and also send us a note. Hello at GTMProco. If you want to go into more detail, share your experience and if you've got anything that you want to see us cover as it relates to really, how do we adapt to the second half of 2024 and set ourselves up for 2025. Until then, thanks for listening and we'll see you next week. Bye, thank you for tuning in to GTM Pro, where you become the pro. We're here to foster your growth as a revenue leader, offering the insights you need to thrive. For further guidance, visit gtmproco and continue your path to becoming board ready with us. Share this journey, subscribe, engage and elevate your go-to-market skills. Until next time, go, be a pro.