Hey, Toni from Growblocks here! Welcome to another Revenue Letter!
This weekly email is my way to share knowledge and build a community of people who love to learn more about growing revenue in a data-driven and scientific way.
Anything in particular you want to hear my thoughts on? Drop me an email, and I might use it in my next article.
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Another year is wrapping up for the Revenue Formula podcast. And what a year it’s been.
Including a 678% growth on Spotify.
(BTW: If you are one of our new subscribers this year, stay tuned to the end of the article today. We’re giving away some merch this week ;) )
We’ve had some pretty fantastic guests.
And with that, some amazing takeaways.
We’re going to have a special 2023 wrap-up episode soon, so look out for that.
But before then, I wanted to share my 5 favorite takeaways from episodes this year.
Recurring revenue is the result of recurring impact
This is one of Jacco van der Kooij’s all-time favorite points.
What always struck me is that it’s so hyper-obvious.
But so powerful nonetheless.
In essence, everyone in the GTM is constantly thinking about ARR.
It’s what you’re quota’s about. It’s what you tell investors etc.
What Jacco’s talking about here is that he’s trying to shift our mindsets from this 100% money measurement.
The money is actually just an outcome for someone paying their bill, for using whatever you’ve produced, again and again and again.
On the GTM side, we often forget about that.
And yes, that has to do with product and service.
But it also has to do with what kind of customers do you want to acquire? (Both in terms of Sales and Marketing)
And really shifting away from the left of the bowtie, to the right of the bowtie…
All in order to create that recurring revenue.
And when you look at growth in leading SaaS businesses, once you pass 10-20 Million ARR, your retention ARR will be much bigger than newbiz.
So, constantly serving that recurring impact makes a huge difference to your business.
Oftentimes the growth goals of companies drive the wrong behaviors
I love the analogy in this episode by Chris Walker.
What I like to say in a lot of cases, it’s not that the model is wrong. The goals are wrong.
Basically, it means: You’re at 10M, and you want to get to 30M, but the model just doesn’t get you there.
Whatever you’re doing now is not going to get you there.
And as much as someone would love to go in the spreadsheet and play with ACVs, that’s like trying to change the laws of physics.
You can try it on paper, but it’s not going to work in the real world.
So, instead of tweaking the model and trying to find numbers you can improve, we basically need to be honest with ourselves.
And the only way to get there is to figure out new goals, or drastic changes to get to target.
Pricing changes work a scary amount of the time
Imagine you had a play that worked 80% of the time. You would be crazy not to consider it, right?
Well, according to
, pricing changes might just be that play.I’ve sat with the pricing change question a lot.
Should we do it? Should we not?
Should it be only on the newbiz side? Or should it be included in with current renewals?
There are a million things to consider before pulling that lever.
And it’s driven by a lot of FUD (Fear, uncertainty and doubt).
But it’s a lever nonetheless.
In this episode, Kyle really gave us a great viewpoint on pricing.
It’s also one of those plays that you only hear about the negative instances of.
But the reality is, it actually works a lot more often that it doesn’t. You just don’t hear much about the successes in the paper.
A lot of your vendors are probably doing it as you read this. I’ve personally done it successfully before.
And if you’re not willing to entertain the idea, then you’re missing out on a potential growth play.
Decreasing quotas in a bad economy doesn’t really make sense
Chris Orlob is right on the money with this take.
It doesn’t always make sense to decrease quotas because the market is bad.
Now if you’re a sales leader, it’s a hard message to bring back to your team.
But to Orlob’s point, this needs to be fair in good times and bad.
And if we’re in a great time and sales are soaring, your AEs won’t think it’s fair to increase their quotas all of a sudden.
If you’re not hitting your numbers, your crazy marketing ideas won’t save you
Another sobering point this year, courtesy of Udi Ledergor.
When Udi was the CMO at Gong, they always had a small part of their budget set aside for his crazy ideas.
People are still talking about Gong advertising at the Superbowl.
But the fact is, you shouldn’t even think about running any of those plays if you’re not hitting your targets today.
I think a lot of people look at Gong and say, oh they’re successful because of the Superbowl.
But the truth is, they’ve been hitting their marketing and sales targets consistently for years.
They earned the Superbowl.
It’s easy to look from it on the outside and see all the shiny things a company is doing.
But what you rarely see? The boring stuff they’ve been doing for years that works.
Now to the good stuff!
For the first 5 listeners who leave a review on the show and send me a screenshot, I’ll send you some free Revenue Formula merch.
(Yes, we’ve actually created merch for the show, and it’s awesome!)
P.S. As I was putting this list together, I had a bunch of great episodes I had to leave out. But if you’re new to the podcast and want to know where to start, check out our honorable mentions below.