Creating Operational Scale to Drive Revenue with FunnelCake's Marko Savic
Creating Operational Scale to Drive Revenue with FunnelCake's Marko Savic
Sean Lane: Hey, everyone, Sean here. Before we get into today's episode, quick announcement: We are hiring on the Ops Team at Drift. If you like this show or you like the types of challenges we talk about on this show, I'd love to chat with you. Marketing ops, sales ops, customer success ops, we're hiring for all of them, and we're really growing the team here at Drift, so come and join us. You can email me directly, slane @ drift. com. Or you can go to drift. com/ jobs to learn more. Okay, on with the show. Welcome to another episode of Operations, the show where we look under the hood of companies in hypergrowth. My name is Sean Lane. For nearly every episode of the show so far, we've been talking to operators inside of hypergrowth companies, learning from their mistakes, form their successes. One thing we haven't covered yet, though, is the concept that as so many sales and marketing software tools have flooded the market, there has also been this surge in the last couple of years of tools aimed specifically at operations folks. Today, I wanted to explore not so much one of those products, but the story of how one of them came to be, it's origin story of a founder who saw a problem over and over again and just decided to do something about it. Our guest today is Marko Savic, the founder and CEO of FunnelCake, a tool that helps you drive efficiency and accelerate revenue throughout your entire funnel, particularly with things like lead response management and pipeline inspection. Marko has this unique perspective. He's building a product that's meant to help ops teams and go- to- market teams grow and be better as they go through hypergrowth, all while in the midst of trying to grow and build his own company himself. Through all of that, he's developed this particular point of view that we're going to explore. He has this firm belief that creating operational scale can be just as much of a revenue driver as your marketing budget. One of the things that confused me when I first started talking to Marko was if you look him up on LinkedIn, his job immediately prior to starting FunnelCake wasn't some go- to- market or operational executive role. He was a creative director, so before anything else, I needed him to connect the dots for me from a career as a creative director to founder.
Marko Savic: Yeah. I have a bit of a different career path than what you typically expect to see for a founder. I went to school for traditional graph design, like editorial prints interactive design, and after that I worked at a B2B agency for four years as the creative director and there was really trying to do marketing operations and messaging for B2B organizations. After that, I went to work in- house at a B2B SaaS company, and that's where I really got to be more ingrained in the operations role. It was at a creative director title, but as a startup you kind of get to do a little bit of everything. I worked on pricing, demand generation, sales and marketing operations, product design, sales engineering, so I just kind of touched a little bit of every part of that company. In that role, that's where I really saw a lot of these challenges between the marketing and sales handoff or really understanding the full funnel. That really led to the creation of FunnelCake.
Sean Lane: Interesting, and so what were you seeing in both your company or in the market where you were like, " Hey, this is an opportunity for me to create something?
Marko Savic: One of the main challenges we ha was sales followup on leads and having a high- quality process for that. There at the time, there were sales- gated trial requests where you will come to the website, request a trial. A sales rep would have to review it, approve it, and get back to you within 48 hours of whether you qualified for a trial. The lead volume was pretty low. We were getting two to three leads a week, and the response time was really terrible and the pickup rate was really bad. Less than half of leads were actually getting contacted by the sales team and the half that were getting contacted, only half of those would actually engage. We ended up creating an entirely self- service trial model, which was a big operational effort across marketing, sales, product to really change the way that we brought new trials into the organization. I ended up getting us to 10 or 20 signups a day and really changed the entire way that we reported on leads, looked at the demand waterfall and what was actually qualified in the funnel. Changed the whole operating structure of the business just by changing the way we handled leads.
Sean Lane: Stop me if you've heard this one before. Marko was experiencing firsthand the disconnect born out of the gap between a marketing team and their sales counterparts. Like many of you listening may have had to do a time again, he had to try to bridge that divide. He told me about the pain points he felt in doing this work, the organizational folklore that came with it. If you pay close attention, you can see the seeds being planted for the company he would go on to found.
Marko Savic: A lot of it was looking at, where do leads come from? How do they convert into revenue? How do you move people from this idea of organizational folklore where sales are saying they created a lead and all of marketing's leads are terrible? Where marketing is saying that all of the leads they gave sales, no one's actually talking to them. You can keep having that debate, having that debate, but without facts and data, it's really hard to understand what the core problems are and then change the business to solve the problems. What I ended up doing was digging into Salesforce and our marketing automation platform for two months to look at every single lead and deal and where they came from and what we did with them. That was just a massive undertaking to try to connect the dots between the data sources. The end result we got from that was really great. We knew our full sales cycle length. We knew how many campaign touchpoints we needed to create a deal. We needed how lead response times and pickup rates affect our ability to generate revenue, but it took two months to do in a quarter, so unless this is one person full time, there's no way to get this data on a daily basis to change how your team functions and to keep them accountable to these metrics. By then, it's too late, and so you end up with these dashboards that show you where all of the problems are, but no ability to actually fix them. There's a huge disconnect between the vision we have of what dashboards are supposed to do, which are they give us transparency and accountability into the business, and what actually happens. The executive team asks for them. They get built with the metrics that are easy to put together inside the CRM, and they kind of highlight comparisons or problems if you have the insights for it, but there's this huge gap for your team to go and take action off of it. If you want your sales managers to use this for coaching, do your sales managers know how to generate insights and do analysis on top of these dashboards? Are they looking at them on a regular basis? If you go one level further, are your sales reps looking at them? They know everybody makes dashboards for their sales reps, but I don't know a sales rep who actually looks at a dashboard, and so there's this huge disconnect in identifying the problems in the business and solving the problems in the business that people are trying to do with dashboards that aren't really working.
Sean Lane: You ever see one of those puzzles in a magazine where there are two pictures next to one another and they look seemingly identical? Your job as a part of the puzzle is to identify the four things that are different between the first picture and the second. That's what I feel like sometimes looking at a same dashboard over and over again. What Marko's saying is that feeling's pretty normal. There's a gap between why we think we build dashboards and reports and what we actually get out of them. What's the use that we're actually getting? Let's jump ahead a little bit. Marko went on to found FunnelCake in 2015. Something we've talked about on this show before is that there's this void when it comes to really useful content for ops folks. In addition to building their product, one thing that FunnelCake aimed to do is fill that void. They produce really well- researched long- form content. The first exposure I ever had to FunnelCake was a few years ago through one of these pieces of content when they release something called the Revenue Operations Framework. It was for me the first time I had ever seen the idea of a centralized ops team that spanned the entire customer journey so clearly articulated and crystallized. It caught my attention and not just because it was useful content, but also because I could identify with the problems that the framework set out to solve.
Marko Savic: The process for producing the framework, that came from interviewing over a hundred different companies to see, " What are your operational challenges? How do you align your teams?" Also from doing consulting work inside of a variety of different B2B SaaS organizations to really see, " Where are all of these handoffs breaking?"` What I found is most of the issues happen in the handoffs, so whether that's from marketing to the SDR team, SDR to the AE, or AE to CSM, and all the way back to marketing again. That's where all of these challenges are happening, so the idea with RevOps is you have a team that looks across the business, that looks across these handoffs and can help you create operational efficiencies or these larger changes and programs in the business that if you're working just from one silo, that marketing can't fix this or sales can't fix this on their own. It really gives you that firepower in the organization to do broader, higher impact changes.
Sean Lane: Yeah, and I think probably that's what I saw in previous gigs, and I think a lot of people who are listening to this would say the same thing, that you see these different silos popping up where, honestly, it makes total sense. The people inside of those silos have their particular function in mind, the best interest of that function in mind. If you work in marketing, I would want you to have marketing's best interest in mind, but the way of looking at that data or the way of looking at that process from a marketing perspective might not necessarily be the best way to look at it from the business. I think that's kind of where RevOps could come in as a value- add.
Marko Savic: Yeah, it gets to the incentives to each of the teams, even getting down to how they're comped. A really interesting story for one of our customers is looking at how SDR teams are comped and measured in terms of performance. Typically for an SDR team, you're going to see they have an activity metric, because that's an easy way to see like, " Are they in and engaged every day?" You have an SAL metric because that's as far as their handoff goes in the sales cycle. That's where their responsibility ends, and sales accepted lead, so whenever they hand it off to the account exec. That's what they're comped on. They're comped on, " Did you meet your activity numbers? Did you get a certain number of sales- accepted leads to the wrap?" A lot of the time, there isn't that step further, which is, " Did those sales- accepted leads convert into revenue?" We dug into this with one of our clients. We saw that they had a couple of standout SDRs from a compensation metrics point of view. They were crushing it from activities. They were hitting their SALs every week, but none of their SALs actually converted to closed one deals. When we looked at in in the reverse order, which SDRs had the highest amount of closed one deals, and looked at their activities, we saw that they had a lower amount of SALs, a lower amount of activities, but those activities were tailored to each of the people they were reaching out to and they were more diligent. They had a higher level of qualification on the SALs that they passed over.
Sean Lane: Sure. It's almost like a quality metric, right?
Marko Savic: Yeah, so if you're looking at it as, " Well, we're going to measure activities, we're going to measure SALs because they're easy and because that's where their responsibility ends," that's fair, but it doesn't necessarily connect you to revenue.
Sean Lane: Right, and if you don't care, the analogy I use is like you've got this problem or this objective right in front of your face and the impulse is to swat that away. Then, by swatting that away, what I think RevOps then does within the absence of RevOps you wouldn't have is, " Okay, what's the ripple effect of that thing you just swatted away?" Just putting in the activity or just booking the meeting just for the sake of doing it without having honestly any like stake in the quality or output of what you're doing, that to me is where the disconnects begin.
Marko Savic: Yeah, and that's kind of like the age- old marketing sales handoff problem, so when we're talking about marketing qualified leads or MQLs, that where marketing is saying, " Hey, I met my MQL number. Sales, it's up to you to do everything else." That's when you get into a lot of these big debates and that's why everyone's talking about attribution or moving to an ABM model to try to have accountability, but that's not really getting at the core of the issue. One of the really interesting things we've seen in the data is that the pickup rate for MQLs in most organizations is really low. It's like 10 to 20% of leads that have an MQL date actually have at least one touchpoint by the lead owner since that MQL date, which is dramatically low. Or, you go and you look at a bulk ad of trade show crosstalk leads. One of our enterprise clients had 500 leads added from a trade show. They probably spent$250, 000 on that show. Every single lead was disqualified without a touchpoint by the sales rep.
Sean Lane: Quick aside here. When Marko talks about pickup rate, he's talking about the percentage of leads delivered by marketing that ultimately get touched by sales, so 10 to 20% pickup rate is really bad and a terrible way to take advantage of your marketing team's hard work. All right, back to Marko. One of the advantages of being in Marko's shoes as he has been building a tool and a company like FunnelCake, is he gets exposure to so many data points from so many companies. He sees what companies do well and not so well, but ultimately, he has taken this very specific point of view about centralizing an ops function. You may already have this at your company and you're nodding along, or you might be skeptical, which is totally fair as well. I was curious how Marko, who talks about this all of the time, makes his pitch for something that he and his product are evangelizing to the market.
Marko Savic: I think you go at it from, what's the benefit you're going to get from the business? Or how much money you're leaving on the table. Let's say you have a four- stage conversion funnel. If you improve that by 2% at each stage, that's 24% more revenue that you're going to bring in the door with the same effort going in, so would you rather spend an extra 25% on your demand gen budget? Or would you rather focus internally on enablement? On process efficiency? On using your CRM correctly? On making sure you have accountability through your hand- off stages? There's a lot of room for creating this operational scale and repeatability in your process. That matters a lot more than, " Hey, let's go throw money and leads at the problem." You should throw money and leads at the problem, but you're going to get more out of that money and those leads if you have a better way of understanding how they're moving through your whole system.
Sean Lane: Other than just, " Oh, this just isn't the way we do it here," what other objections do people give you for why not to move to a model like this?
Marko Savic: A lot of them are the organizational culture is resistant to change, so you can have a lot of organizations where the sales reps are hesitant to log data in the CRM, to use opportunity stages correctly. You run into a lot of technical issues like the Salesforce data model can be pretty challenging. Do you use leads and contacts? Just contacts or just opportunities? How do you turn it from an operational process idea like a demand waterfall into tactical statuses and stages in Salesforce in a way that you can report on them? There is subject matter expertise. How do you get someone who knows marketing and sales and success and can kind of translate across those different teams at a business level, at an operational level? That's really hard to find and I think it's a skill that we need to start developing in the tech community.
Sean Lane: Before we go, at the end of each show we're going to ask each guest the same lightning round of questions. Ready? Here we go. Best book you've read in the last six months?
Marko Savic: Oh, God. I haven't been reading lately. This is like a trick question. Okay, the best book I've read in the last six months is actually a book on growing garlic where it's this farmer... He was actually in a Netflix documentary and he has this very poetic way about talking about life on the farm, and it's eerily similar to your life as a startup founder. It's about like all of these romantic things about hard work and nerdery. It's a really good read, whether you're interested in growing garlic or not.
Sean Lane: Oh, that's awesome. Do you remember the name of it?
Marko Savic: It's called A Garlic Testament.
Sean Lane: A Garlic Testament, all right. We've got to add it to the list. All right, what's your favorite part about working with ops people?
Marko Savic: I like that ops people are giant nerds, so you get on like a prospect call even with a VP of marketing or a CRO, and they are right away talking about the nuance of how they use Salesforce, the way they do reporting. They know it would be like 18 different ways you can calculate a metric. That part's super fun to me.
Sean Lane: I love that. How about the least favorite part about working with ops?
Marko Savic: They are giant nerds who know a lot crosstalk-
Sean Lane: I feel like I teed that one up for you there. I was going to do it for you, but I was waiting to see if you went there because literally that's part of the challenge, right? You can slice and dice this all day long. I have no problems saying this on a recorded thing. My VP of sales two days ago told me that he had too many dashboards, and then last night he told me that the dashboard that he got sent was the perfect thing. It's like it's an endless balance.
Marko Savic: Yeah, it's a really interesting challenge, but another benefit of that is everyone's really willing to learn, but also to share their own experience and their own knowledge. Oh, what I found really fun is connecting different customers and prospects together. When they have a very similar challenge, how do we measure SDR ramp time? It's like, " Oh, well, this person over here has a similar sales cycle. They just figured it out." That stuff is really fun.
Sean Lane: Awesome. Well, you'll have to connect me with some of those people to get them on the show.
Marko Savic: For sure.
Sean Lane: All right, someone who impacted you getting the job you have today?
Marko Savic: Jacqui Murphy. She is one of our very first customers. She's the VP of Marketing at Auvik Networks. They like to joke that she's saved the company like five times. There's those people in your network who open new doors for you and create new connections and they like belief in you endlessly. She's one of those people for me. You should definitely
Sean Lane: Love that crosstalk-
Marko Savic: ...reach out to her on the show.
Sean Lane: I absolutely will. How about one piece of advice for people who want to have your job someday?
Marko Savic: It's a lot harder than you expect it to be, and I'd say it's more challenging on the emotional side than the actual work or problem- solving side. That's both managing yourself and managing your team and managing your customers. I think once you figure that out, everything becomes a lot easier.
Sean Lane: Thank you so much to Marko for joining us on this week's episode. By the way, if you caught that at the end, Marko said that we should chat with Jacqui Murphy, and if you go back to episode four of this podcast, we did. Jacqui's the CMO of Auvik Networks and she schooled me on a whole bunch of stuff about demand generation, running a BDR team, and marketing ops. Go back, listen to episode four if you haven't already with Jacqui. Also, if you like what you've heard today, I've got some good news for you. Remember that long- form content I told you that FunnelCake likes to produce? Well, we at Drift like it as well, so we decided to partner with them on one that we produced together recently called The Measurable Lead Model. Basically, this is a long document that takes you through all of the different nuances of measuring everything from lead all the way through to revenue. If you can't understand the components of your lead management, there's no way to improve that efficiency, so we spent a ton of time going into the nitty- gritty details. Go ahead, check that out. Also, as if that weren't enough, you can find some additional content that we did directly with Marko. It's exclusive, it's free, and it's all on Drift Insider. If you haven't heard of Drift Insider before, it's a free resource that we built out at Drift with tons of video, content, learnings from some really, really smart people in sales, marketing, operations, all over the place, drift. com/ insider. You can find some additional videos that we did with Marko on there. That's it, I promise. If you enjoyed the show, leave us a six- star review on Apple Podcasts. That's going to do it for me. See you next time.