Revenue Alignment: How to Pull Marketing, Sales, Customer Success Together with Divvy’s CRO

Morning, everybody. Excited to talk about this today because it's something that I feel deeply. I've learned a lot of things, mostly from epic screw-ups. So I tell people all the time, like, I feel like I've got a multi-billion-dollar education. So excited to talk a little bit about revenue teams. How do we grow? How do we scale? And more importantly, how do we align all of the different disciplines within a go-to-market engine. I told the team when I was coming out here, I said, well, wish me luck. You know, I'm off to Saastr to take credit for all of your hard work. So important to state upfront that we've had some success. We've done some things that I think are really, really cool. And don't ever get confused. It has very little to do with me and everything to do with the people that we put on the team. From marketing to sales, implementation, success, support, and revenue operations, I think we built an A+ team. And so everything we're going to talk about is sort of the cumulative efforts and learnings of those folks, and excited to highlight them a little bit. Real quick on the personal side, same way I feel like we built an A-team at Divi, I feel like I'm in the process of building an A+ team in my personal life. So this is my wife. You can tell she's A+ because of that little knee bend that makes me look taller than I actually am. And taking one for the team there. And then I have a 3-month-old that just joined the squad. Just a quick how we got here. So I grew up in a very small town in northern Nevada called Winnemucca. If you've ever been there, you for sure wondered if people actually lived there. But I ended up in a restaurant as a busboy when I was 14, and kind of, I learned a lot from this lady on the far left. Her name's Ashley. She was the entrepreneur. She started it. It was multi-location. She had MS. Just a total, total rock star. Anyway, she, She was great to me and gave me more responsibilities. Eventually, one of those responsibilities was like the hiring and the scheduling and some of those kinds of things. And we would have busy seasons and we would have slow seasons. During the slow seasons, I would have to reduce hours or let people go until we got busy again. And I hated it. It was heartbreaking to walk up to somebody and have to give that kind of news. So without really knowing what I was doing, I started, I started doing demand gen stuff. This was, you know, 2008, and I didn't know what I was doing, but I started generating demand, started doing social media marketing, started like building up our website presence. And anyway, we were successful enough that we could smooth over the slow times, and I loved that. And I decided that that was a lot more exciting than, than working in the restaurant. So we started, we started the SMS marketing agency. And we did that same thing for all kinds of different brick-and-mortar businesses, real estate brokerages, health clinics, and other restaurant groups. I got it in my head that the major leagues were venture-backed startups. And so I reached out to a number of them, ended up working at a company called Jive. And we're going to talk a little bit about that experience, but it was awesome. It was crucial to my learning, my development. Came in on the marketing side of the house there, got the sales experience as well. And when we sold that business, we sold it to LogMeIn, the GoToMeeting, GoToWebinar folks that I've seen around here. We sold it to them. And was kind of wondering what was next. Got reached out to by the founder of Divi. And we started talking about what Divi could be, what go-to-market could look like. And we had this vision of unifying, a revenue team. Having it feel less like siloed separate entities, having it feel more like a team. And that was pretty exciting to me. And so came on board with Divi, that was almost 5 years ago now. And about a year ago we sold Divi for $2.5 billion to Build.com. And that's been an amazing journey as well to see and be a part of such a high-performing public company. I know Jason speaks very highly, highly of them, and rightfully so. It also comes with the benefit of giving disclaimers that everything I show, that the data is anonymized, the numbers are anonymized, but you can start to see some frameworks. So that's a little bit about how we got here today. Going back to my time at Jive, it was incredibly frustrating to me how much time we spent fighting each other as a revenue team, right? Marketing blaming sales, sales blaming marketing, implementation blaming sales. It was absurd because I just thought if we could simply capture the lost time that we had fighting each other, arguing over whose data was right, like it was mind-boggling. It got so bad at one point that we were literally sitting down saying, okay, we have to either fire marketing or we have to fire sales. That's how bad it was. And we had kind of a crazy idea. And we said, well, let's just bring them, bring them on one team. Let's just bring them in. And so we actually brought the sales team like into the marketing team. And it was amazing. Okay, now they were one team. There wasn't, you weren't finger-pointing, you were just pointing right back at yourself. And almost instantly, we started to see improvements. We started to see people talk about the issues more openly, talk about their own insecurities and what they were working on and what wasn't working, all that good stuff. But that was pretty impactful for me and has impacted how I've thought about go-to-market and revenue teams really ever since. There's this idea called swing. I don't know if we've got anybody in the crowd here who knows crew at all, but crew is a sport, or rowing. There's this idea of swing. You think about making sure that everyone's paddles, everyone's oars are hitting the water at the same time, that you're rowing in the same direction with the same amount of force. In crew, If you don't have swing, your boat's going to tip over. Somebody decides, well, I'm not going to paddle for this race. Somebody decides, well, I want to go a little slower. I want to go a little faster. Or they're out of sync really in any way. You don't finish the race. And I've started to use that as an analogy for what we do as a go-to-market engine. Because if all different disciplines aren't in swing, you're going to pay the price. And it's going to slow down your growth and could be more detrimental than that. We're going to watch one of the best little videos here. Actually, it might not work. But there's this story of the 2019 Washington Huskies women's rowing team. And I love it. They started from behind. And eventually, they had to get in like kind of the best swing of their career in a come-from-behind victory, won the national championship. And I've used that as kind of a rallying cry for our teams internally. Well, this is the definition of swing as it relates to crew. It's when 8 people are rowing in such perfect unison that no action is out of sync with any of the others. Like, and I can tell you that when you have those moments as a go-to-market leader, they're magical. And it's something that you should try to work on pretty consistently, but we're gonna use this analogy of swing. This is an example of a very early scorecard that I sent to my boss, founder and CEO of Divi. And you can kind of see how I broke it down, right? I start with marketing. I tell them what's going on. Our primary responsibility is demand generation. I even put like, you know, we were fortunate and we were doing some stuff that was working well. We had a single day with over 700 demo requests. So that was the thing that I was highlighting. We were talking about, we were in a good spot from a demand gen perspective. Then going down to sales. How are we doing? How much is closed? How much credit's getting approved? Some things that are unique to our business. And then talking about a metric that's, you know, near and dear to our heart, which is spend, TPV, or usage, 'cause Divvy's free and always has been. The thing that I want to highlight with this is I didn't just include marketing, 'cause we crushed it in that week. Didn't just include customer success. You have to understand how all the different oars are hitting the water, and you have to see if one of them isn't working well. So this was an update where things were firing on all cylinders, you know, woo-hoo. But the more impactful updates were the ones where 2 of the 4 were doing okay, but 1 wasn't. Or sometimes they're, you know, 1 was doing okay, and the other 3 weren't. But making sure that you're constantly holding yourself accountable to the swing and how well the engine is working across the whole thing. Because you won't be able to get far and you won't be able to go fast if you're not. Swing has some pretty awesome benefits. These are— I went back into the archives. This is from when we were very first starting out at Divi. And this was the experience of like a sales rep who was talking, and he didn't know exactly what he was saying, but he was saying like, I've never experienced something like this. Marketing cares about what matters to me, and it's making my job a lot easier and a lot more fun, and thank you. And these are pretty common comments once you can get all of these different disciplines rowing in the same direction and on the same page. There's a couple key principles. First one, the table stakes is you have to create the right structure. If you start out with the wrong structure, nothing else is going to matter. OK? The second one is to make sure that everybody owns a number. OK? We call that a quota, whatever you want to call it. Make sure that everybody understands what their primary responsibility is at the end of the day. Then once you have that set up, you make sure to measure. And compensate things not just where they typically are, but one step deeper in the funnel. And we'll show an example of that. And then the fourth, and this one is, it sounds simple, but it's pretty profound, is making sure that the North Star is crystal clear. Because if you want a revenue team instead of a marketing team and a sales team and a customer success team, then you need everybody within that group needs to know what the one thing that matters most is, and it'll impact how they prioritize, how they make decisions, and all of the above. So we're going to talk about these key principles, the right structure. And I feel, I feel strongly about this because I've seen it work well. But it starts with having one owner, and that person has the responsibility for the entire funnel. Marketing, sales, implementation, customer success, customer support, and revenue operations. That's how it works, because it forces an umbrella within which finger-pointing does you no good. If I would have been pissed off at sales for not closing the marketing leads, or I would have been pissed off at customer success for having churn issues, I simply would have been getting angry at myself. There was no one to blame. And that's how a right structure starts. That's how it begins. And that mindset will flow to every single person on that team. I'm not exaggerating when I say over 5 years, we've done a lot of growing. On our last earnings call, it was stated that Divi's at the $300 million run rate type numbers. We went from zero to that in, you know, 4.5 years or whatever it was. We had plenty of problems, trust me. But never one single time did I or our CEO or anybody else have to arbitrate a fight between marketing or sales or sales and implementation. Never one single time. And it's because we set up the right structure and had a culture that flowed from that. So that's the first thing. When you have that structure, you still have to make sure people know the very, like the closest thing to them in terms of their responsibilities, right? So marketing, what is it? Okay, well, we have a self-serve business that we have to support, and we have different channels that we have to make sure that sales is getting the prescribed amount of inbound and all that good stuff. Sales, okay, it's new, new business, your quota carrying, and how do we organize that between, inside, outside, channel, all that good stuff. But making sure that this is explicit. This is a revenue team. So you have to know which part of the relay race you're holding the baton and which part you're passing off. It's important to have that kind of clarity. When you talk about measuring things one step deeper in the funnel, it looks like this. Okay, you obviously— marketing is the tip of the spear and they have the pipeline target, but don't just measure marketers on that. And by the way, the best marketers don't want to be measured just on that. Measure them also on new business, on what closes. That is one step deeper in the funnel than a lot of people like to go. Why? Well, because technically it's outside of marketing's control. You've, you've made a handoff. What does that do? Forces some pretty real conversations to happen between those folks, because now their goals are completely aligned. There is no, well, I did my job and you didn't do yours. It's the same job that they're working on together. Same thing with sales. How often do we get in trouble when, you know, there's an implementation or a customer success team that's complaining because sales has oversold, so they're not able to successfully implement or do those kinds of things. So how do you fix it? Well, you have a new business target, obviously, but then you also measure things like usage and margin. And what does that do? Well, that forces the sales reps to think in a different way and to have the same unified goal with their handoff partner in implementation, right? Same thing with customer success. So whatever your funnel looks like, measuring, compensating, one step deeper in the funnel is an incredibly powerful way to go about it. The other thing that's a big deal is everybody has to understand everybody else's goals at all times. Because if you're one team, then I care about how demand gen's going. I care about how our— NRR is coming in for the month or the quarter. This is a pretty crude early edition of how we did that. We would meet on a weekly basis, and then the last week of every month, we would meet on a daily basis, and we would go through these numbers. What it is is basically, where are you at right now? Where are you going to be by the end of the month? And what's your confidence on getting to our quota? On a scale of 1 to 10. And when somebody would have a lower confidence score, we would jump in and help. So you'd have a marketer who's talking to a sales leader saying, hey, what do we need to do? How could we get this done? What do we need to push through? How can I reprioritize the different tools that I have at my disposal to help you hit your goal? Because at the end of the day, when you're a revenue team, Nobody got the job done if we didn't hit our collective North Star. That's just how it works. And so this is something that became very ingrained in our culture. It looks more sophisticated now. You know, it's a little bit less of, of me scrawling on a whiteboard, but it's the same idea. I can go in, everybody across the revenue team can go in and understand how each part of the race is being ran. And are we doing well? Are we succeeding? To explain this a little bit, this basically is a matrix that takes into account the inputs and the outputs. So if your inputs are there and your outputs are not, that's a coaching thing. That's a leadership thing. If your inputs aren't there but your outputs are, your results are, then, you know, you're probably on a path that looks a little bit less sustainable. But the idea that everybody across all parts of our business knows and understands how things are going, and therefore can be agile, and shift, and help, and we can get ahead of problems instead of getting behind them, has been a powerful thing for us as we've tried to grow rather quickly. Getting to everybody owning a number, everybody understanding a number. Big fan of Mr. Munger, and he talks a lot about incentives, but this quote I found to be true. "Well, I think I've been in the top 5% of my age cohort all my life in understanding the power of incentives, and all my life I've underestimated it." can definitely attest to this, because almost every time we've had a problem that we have to dive into, it ends up being that people or teams are doing what we incentivize them to do, but didn't realize that's what we were incentivizing. So we screwed up when we were working on the structure. So making sure that you understand the direction and the incentives that you are providing. And that doesn't always mean like a comp plan. That's the, that's the easy one to diagnose. It doesn't always mean that. A lot of times it means the, the different things that you, that you praise or that you care about or that you seem to be prioritizing, right? So everyone historically at Divi has owned a number. If you were spending money to generate demand, well, we knew what that number was. We knew you were supposed to return for every dollar that you spent, and that was crystal clear. And we broke it out by the various channels. So if you had the social budget, if you had the performance budget, if you, you know, whatever you had, if you had the campaign's budget, you owned a number and you were accountable to that. And we talked about that on a weekly basis in a lot of detail. Interesting to point out that in my experience, Marketing's one of the tougher ones here, because it has some elements that are softer, that are harder to measure, but the thing that has always sort of amazed me is the best marketers love this. When I start talking about this in an interview process, the good ones, their eyes light up, because it's like, "Oh, finally, somebody's gonna start to measure the things that really matter, and I'm gonna get seen for who I am and for what I do." And the other thing I noticed interviewing marketers is when I would talk about this and I was talking to the not great marketers, oh, they were scared and they hated it and they thought it was the stupidest thing in the entire world and I was an idiot. And, you know, they were right about the idiot part, but not for this particular reason. And that was fascinating to me because you're getting to the crux of what actually matters. When you go to sales, this one's easy, right? We've lived in this world where we understand the numbers. But I think the part that people forget a lot is how do we get to that number, and did we do our job in terms of how we've modeled this thing? How much of your demand gen is coming in the way that we said, and all that good stuff. Implementation. This is fascinating for me. Again, we had some unique learnings at Divvy because it's 100% revenue is driven from usage. There's no contracts, there's no fees, there's nothing. So really, we don't make money until you start to get implemented. And so having an implementation team where we were very focused on a revenue number has become a big superpower for us. It's forced us to align ourselves with the customer in a very unique way. I need to talk to you to understand how to get you to start using Divi. Divi has to start making your life better in order for you to start using it. Otherwise, you didn't get anything out of it, and we didn't get anything out of it. And that idea of owning that number, forcing that alignment with that customer, it's been a superpower for us. We had a lot of bank partners over the years, and one time, one of them came in and was chatting and just said, how do you get people to use Divi that fast? How do you get people up and spending on the platform and on the corporate cards that fast. And I talked to him about this, the fact that our implementation team owns a quota, owns a number that forces them to become best friends with those customers and to drive for value very, very quickly. And then customer success, it's a similar thing. I think that if you're not careful, this is another one where you can sort of allow things to just go in sort of an unpurposeful direction. What is the NRR that you're shooting for? What is it? How do you get that number to a team and then to a rep and make sure that month over month, you want to, you know, NRR have like best-in-class NRR like Snowflake? You have to be very purposeful about how you're growing your customer base. Not just gonna happen on accident. You have to understand that and have a quota and a number and a clarity that drives that. These are some sort of examples of our comp plans because I told you we measure and compensate one step deeper in the funnel. So again, these are some dummy examples, but you look at, we have like a new business portion of a number and then a portion that's determined based on how well that customer is performing during their implementation phase. That's how sales comp works for us. Same thing when you start to look at customer success implementation, so on. North Star. This is, like I said, this is one that, yeah, everyone kind of rolls their eyes at, like, yeah, of course. But this is so underutilized, and it's so powerful. For us, we all, we created a North Star within the revenue org, and then we actually took it outside of the revenue org and made sure that everyone in the entire company could see it all the time. It was the slide we started every single company meeting with for years, was how's usage? How's usage? Are people, are we doing better? Are we doing worse? What's our target? How are we doing? And it was the thing that drove our conversations. And this is, you know, again, dummy data, but you get what this looks like and how powerful it is when everybody is looking at the exact same thing over and over and over again. So when I have a choice to make, I automatically anchor higher on the thing that aligns better to my North Star. That drives more impact to that North Star because I understand what is most important to the organization. And I've found that a lot of times if you just go and ask people within a company, they don't actually know what's most important to your organization. Sometimes, sometimes they get it wrong, which is even worse. Make this crystal clear and shout it from the rooftops. Every dashboard, every TV, every company meeting have that North Star. So to recap this a little bit, the right structure starts with having, starts with having one owner and creating that revenue team. Then you have to, you have to make it so everybody knows and understands their number and gets why it plays into the larger company vision and mission, which is hopefully why they signed up to work with you. Then You have to understand what one step deeper looks like. One step out of your control, because then I force you to work with and collaborate with the people who are down funnel from you. And then the fourth, which is what we just talked about. Please, please, please have, have the North Star, have it be very, very clear what whatever that is for your business. There's some interesting side effects that I've observed over the years. I talked about the first one, which is that A-players love this. They buy into this kind of a system. It's going to allow them to work better with their colleagues. It's going to remove internal friction because nothing, nothing frustrates A-players more than internal friction that slows them down from slaying that giant or taking that hill or doing whatever it is that the business actually wants to do. This system will attract and retain the A-players because of that reduction in internal friction. The second one is everybody gets pumped up with a common goal, especially when you're hitting it, right? And you're going out and you're beating and raising on a monthly and a quarterly basis, and they can see and feel the tangible impact that they're making to the business. This system allows you to see and fix mistakes before they get huge. So I told you the story about Jive, where we're sitting in a room saying, well, do we fire marketing or do we fire sales? It's gotten way, way out of control. This kind of a system allows you to see problems as they arise and to work on them before it's something that could really, really hurt you. That's why those scorecards and the different systems you have in place are so important. And then the fourth is that this allows you to grow faster and out-execute people. We live in a world where you launch a new feature, you go into a new market, anything like that, and it's not— It's not rocket science. Somebody else is going to come along and build that. They're going to add that on eventually. They'll be at parity. Your strength is in your execution. And execution is about how fast can you do it and how well can you do it. It's speed and quality. And in this kind of a system, you're able to do both of those things at a much higher level because while somebody else is playing police between marketing and sales, for example, You're out figuring out how to grow faster. And those are some of the, some of the awesome consequences that we've seen from this type of an operating model and having one unified revenue team.