How Companies Can Eliminate Bloat and Improve CaC (with Chris Walker)
Conventional go-to-market strategies are no longer cutting it.
We're joined by Chris Walker, Executive Chairman at Refine Labs, a company that helps high-growth B2B companies accelerate revenue growth and improve marketing ROI. With his extensive experience as a founder, CEO, and advisor across multiple ventures, Chris offers a fresh perspective on transforming go-to-market strategies to thrive in the current economic climate.
Rethinking the Go-to-Market Financial Model for Efficiency
Chris argues that the traditional approach of allocating a set percentage of revenue to sales and marketing is inherently flawed. Instead, he advocates for a radical shift in focus towards optimizing the customer acquisition cost payback period.
This transformational mindset forces companies to scrutinize and streamline their go-to-market processes, roles, and metrics for maximum efficiency.
"We need to be transformational. I think that's coming soon. You can see there's companies that are going out of business left and right right now, can't raise money, shutting down operations, laying off their whole staff, no severances because they don't have any money. The financial pressures will drive people to think, 'okay, the incremental is done, we need to be transformational.'"
Scrutinizing Inefficient Go-to-Market Activities
One area ripe for optimization is the over-reliance on Google Ads, which Chris often recommends cutting by 60-80%, or even eliminating entirely.
He also questions the necessity of maintaining dual product-led growth and sales motions, as well as specialized sales roles like SDRs, which have shown diminishing returns in recent years.
"Companies overspend on Google ads. We'll typically recommend somewhere between a 60 and 80% cut to Google ad spend, and sometimes we'll recommend a 100% cut... And a lot of companies [are] questioning their SDR function overall. I've been questioning the SDR function since 2017 because, believe it or not, the data was just as bad in 2017; just no one had the pressure to look at it, and nobody cared."
These GTM strategies used to be highly effective, but as it goes in life, things change. And no, these once lauded channels are costing companies more money than they're giving back.
Leveraging AI to Automate Low-Value Tasks
Chris advocates for leveraging AI to automate low-value tasks, freeing up resources for more strategic initiatives. This approach not only reduces "GTM Bloat" (the accumulation of inefficiencies in go-to-market teams) but also accelerates "GTM Velocity" (the result of using AI to streamline processes).
"Another thing is companies having to make choices around, 'do we really need a PLG offer? Did we just do it because it seemed hot and cool, and our investors thought it would be nice, or our CEO thought it would be cool?' Because inside the data for many, I don't see it making sense."
A PLG-led strategy is another trend that might not be cutting it anymore. With AI, you can find better avenues for reaching new propsects (both inbound and outbound).
Building a Strong Data Foundation
Before embracing "GTM AI" (go-to-market AI), Chris emphasizes the importance of establishing a robust data foundation with the right KPIs and guardrails. This data-driven approach ensures that AI tools optimize for the right outcomes, rather than just incrementally improving flawed metrics.
"Before we think about anything related to AI and marketing, we need to completely rethink the data and the KPIs that we measure and the guardrails that we use. Because right now, there's AI out there that'll run Facebook ads for you and optimize against cost per lead and get you a lead at whatever cost that you want. But that doesn't equal revenue; it doesn't equal efficiency for your go-to-market; it doesn't equal efficiency for your sales team. It needs to be optimized around the right things."
How to Implement This Advice
Go-to-market professionals can start by conducting a thorough audit of their current processes, roles, and metrics. Identify areas of inefficiency and consider eliminating or automating activities that don't contribute to revenue generation or customer acquisition cost optimization.
Invest in building a robust data foundation that aligns with your desired outcomes. This may involve implementing new tracking systems, defining new KPIs, and establishing clear guardrails for decision-making.
Once you have a solid data foundation, explore AI tools like Demand GPT, which leverages the collective knowledge of demand generation experts to provide proven best practices tailored to your specific needs.
By implementing these strategies, go-to-market professionals can expect to see significant improvements in customer acquisition cost efficiency, reduced "GTM Bloat," and accelerated "GTM Velocity."
Embracing Transformational Go-to-Market Strategies for B2B SaaS
Unfortunately, incremental improvements are no longer enough. Chris Walker's insights challenge us to rethink our go-to-market strategies from the ground up, embracing a transformational mindset that prioritizes efficiency, data-driven decision-making, and the strategic use of AI to automate low-value tasks.
By focusing on optimizing customer acquisition cost payback periods, scrutinizing inefficient activities, and building a strong data foundation, B2B SaaS companies can position themselves for success in the current economic climate and beyond.
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