Meet Host, Mary Grothe
Mary Grothe is a former #1 MidMarket B2B Sales Rep who after selling millions and breaking multiple records, formed House of Revenue®, a Denver-based firm of fractional Revenue Leaders who currently lead the marketing, sales, customer success, and RevOps departments for 10 companies nationwide. In the past year, they've helped multiple 2nd stage growth companies between $5M - $20M, on average, double their MRR within 10 months, resulting in an average ROI of 1,454% and an average annual revenue growth eclipsing $3.2 million.
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Mary Grothe: Hey everyone, this is Mary Grothe — Founder and CEO — and you're listening to the Revenue Radio® podcast brought to you by House of Revenue®. Each week, we'll talk about common revenue challenges and how to get past them, share real-world experiences, and get a glimpse into my life as a CEO scaling my own business. If you're a struggling entrepreneur, or just an entrepreneur looking to be inspired, this podcast is for you. I'll give you honest, unfiltered, and practical insights into growing your business and getting past your revenue plateau.
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Coming off the heels of talking about building your 2022 sales playbook, we are going to deep dive into go-to-market and brand strategy today. I had inspiration for this for a couple of reasons. Our team at House of Revenue® has launched a new deliverable with our client engagements. It's called the Go-To-Market Toolkit. That was inspiration number one.
Inspiration number two: I was digging into a few episodes of Shark Tank, mindless TV. I don't watch a lot of TV. I enjoyed watching a few episodes and hearing how these smaller startups were going to market. I loved engaging in the backstory - The reason why, the problem they had identified to solve in the market, the competitive landscape, how they launched, the challenges they ran into, how they've iterated, built on top of that. Then, ultimately, what is their ask, and where do they want to go? I love the format of that show.
I also enjoy listening to the Sharks talk about how they want to make an investment and debate. If not, the reason is to share some kind of surface level. It's still very good feedback on what they believe the company's viability is. If you listen to the feedback, the one consistent component is rooted in customer need, and meeting customer needs better than the competition, better than what else is out there. They steer away from investing in a saturated company in a competitive landscape. Saturated, it just looks like another company that we're all familiar with.
I want to start by talking about go-to-market and brand strategy. They're different, but they're highly related to go-to-market strategy. For me, the way that I look at how we enter the market makes some noise that results in an emotional connection with your prospective buyer and yields conversions and sales. A lot of companies miss out on qualifying the actual market need. You go through phases.
When you enter into a go-to-market strategy, you start with the identified problem. You make an assumption on you who you think the buyer is. But until you get product-market fit, you don't know who the buyer is. You have to explore. You have to try selling to a bunch of different people to see where the use case truly lands. You have to create that customer feedback loop.
Out of the gate, when you're talking about go-to-market strategy, you need to focus on answering this question: Are you rooted in customer needs? Can you meet that customer's need? Start from there. The winning, fast scaling, fast-growing startups solve problems that other people or companies can't. So let that sit with you for a second. Truly, when you look at your product or service, is it rooted in customer need. If it's not, what is it rooted in? Without it being rooted in customer need, you may say, "Well, is it a need or is that a want?"
You look at a high-end premium cost car or handbag, a yacht, or high-end living. You look at things that may be more rooted in customers' wants. But if you dissect that customer, sure, is it a need or a want? At a certain level of sophistication of a buyer, they will view that as a need. They need it for status. They need it for speed. They need it because they won't be taken seriously in how they live their lives without it. They need it because they succumb to the pressures of how they are quote-unquote supposed to live their lives, where they're supposed to be. They need it to fill in the blank, whatever reason.
When you analyze and look at the customer, you can determine if this is rooted in customer need? Or is this just some idea that we came up with that we thought was a good idea that we think people should want? Again, I'm going to pause on that. Is it really something people need and want, or is it just an idea you have that you think people will really like and want to spend money on? That is where most startups fail: lack of capital, bad decision-making, founders arguing with each other, and bad hiring strategies.
There are a lot of reasons that startups will fail. My intuition is that the top reason is there just simply isn't a market need whether you think there is one or not. I will give you a little bit of a story about the go-to-market strategy and how we've evolved at House of Revenue®. We used to be called Sales BQ, so walk along this path with me.
When I started Sales BQ, I was a former salesperson. I love the sales profession. I had worked with sales trainers, coaches, and a plethora of sales training. I read sales books. The conclusion that I drew from that experience as a salesperson was that there was a gap in the market. When did the good reps become the best reps for people aspiring to be a number one salesperson? There was so much foundational and excellent sales training on the market and sales training programs. Very foundational, methodical, but what I felt was missing was the good salespeople. Would they take that training and be bored? Where do they go to become elite?
A lot of the playbooks, methodologies, and training that we did as a company early on, or to build the highest performing sales departments, not build a sales department foundation. That was part of it because we had to do that. How can we take it to the ultra, highest performing level? Four years ago, many of our early team members, early days of Sales BQ, were former top reps. I mean, these were some of the best salespeople I've ever worked with. We were adding in this element of that top-tier performance.
If you think about it, when you're a salesperson selling for a larger company, and you want to become great, it's pretty common. You go shadow the number one rep. You go spend time with the people at the very top, so you can model and figure out how they show up, how they do work, and how they do so well. So my focal point for Sales BQ initially was to not have a standalone training offering or standalone consulting. I wanted to offer this trifecta with training, consulting, and recruiting so that we could really help build these high-performing sales departments for small business owners. That was the differentiation.
People would say, well, are you sales trainers? "Well, partly." Are you a sales consultant? "Well, partly." You guys should staff people. Are you a sales recruiter? "Well, partly." There's this trifecta. So out of the gate, my hypothesis was you couldn't solve the problem of building a high-performing sales department if you just trained people. You train them and then put them back into their crappy environment where they can't succeed. We needed the consulting part because the consulting part was where we were building the playbook and the infrastructure and changing the environment.
The salespeople would remove all that manual work, duplication, insanity, poorly constructed comp plans, inability to understand how to succeed, lack of performance, and accountability. The tech stack has lacked significant automation and visibility into data. It was just entering data to enter data. So we solved so many problems for our clients early on. That focal point, though, had to shift. Any great go-to-market strategy must shift. This is where a lot of companies reach a revenue plateau.
Sales BQ did a great job, scaling year one was 446,000 in revenue, year two was 1.5 million in revenue. We were doing something right. But in the middle of year two, we had a wake-up call. We started to accumulate enough data to look at our clients' performance. We stacked them against each other to see how each sales department we built for our clients was performing. And guess what? There was an obvious difference in performance with our clients that had a great brand and a good marketing engine on their own. Inbound marketing was an absolute game-changer for the clients who had it versus those who didn't.
A lot of the companies, our clients, who did not have that had some old school thinking at the sea level. Well, that's what we pay a salesperson for. What is their base salary go towards? They should be hunting and building their own database and like her, okay, and manually sending every email and like come on, people. What about the fact that the buyer has changed, and the buyer wants to take themselves on average 80% of the way before they ever talk to sales. What are you doing to attract that type of buyer who's using Google, searching, trying to educate themselves, and looking for an answer to their problems? You're not catering to that.
We had to make a change because if we continued to only do sales training, sales consulting, and recruiting for salespeople, guess what, our market, the serviceable market of our total addressable market that we could go after was going to keep shrinking and shrinking and shrinking. And guess what? It was going to become more expensive to win customers. It would be in a much more competitive state. My close rate would go down. I'd probably need to hire a sales team because I wouldn't have enough time with the number of hours needed to sell. Do you see where I'm going with this?
The go-to-market strategy is all about being rooted in customers' needs and meeting our customers' needs to scale, which they needed to grow. At the end of 2017, when this company was founded, the answer that we had for that was to build a high-performing sales department by the middle of 2019. Market data has changed, so what are you doing? Are you still showing up to the market with the same go-to-market strategy you had two years ago, five years ago, ten years ago, or twenty years ago? Has your buyer changed? Are you rooted in customer need and meeting that customer need?
If you're not, or if the competition has leapfrogged you, it's not good. You need to figure out how you can iterate, evolve, and solve problems other people can't. A lot of companies come to House of Revenue™ when they hit a revenue plateau. In fact, that's who we prefer to work with. They're past startup phase, but they're what we call a second stage scale. They've done what they needed to do to get to their first 123, maybe four or 5 million, and then they're stuck. And they just seem to be doing that same revenue year over year. They're like, “ah, how do we breakthrough? How do we get to the next level?”
The first exercise we do, I don't care how mature the company is, is a go-to-market audit - research, competitive analysis, digging into the technology, the product or the service, data, people process, extensive audit, all revenue departments, auditing customers, auditing, competition, secret shopping, understanding what is in the market, and we come back with a gap alignment. Then this go-to-market Toolkit, which is going to say, regardless of how you've been going to market in the past, this is how you need to go to market now.
You should be present on the language you're using, the types of sales roles you need, the type of marketing tactics and channels you need. This is where it transforms into brand strategy, which I'll get there in a second. It doesn't matter how long you've been in the business. It doesn't matter if you've been in business for six months. You're still in that Product Message Fit not yet in Product Market Fit product message, as you've identified a need in the market.
You're in a hypothesis stage, you audited, you did some research, you came to a conclusion, now you're building it, and you're testing it. You're testing it, and for the next six to 18 months, you're going to get some data, and then that data is going to tell you a story, but you can't just rest on that data. You have to do another market analysis because the buyers going to change, the market’s going, to change. So you do that, again, you take your data, market data, and form a new conclusion.
Then, you have to be agile enough to shift your products and services. It's mind-numbing, and it's so difficult to believe that you could continue to do the same thing you've always done in a different market, with a different buyer, and get a different result. It doesn't work that way. It doesn't work that way. You have to iterate. Even some of those long-standing industries like CPA accounting payroll, that's the industry that I came from, it has to evolve.
Now that I'm a small business employer with 20 plus employees, I went from selling payroll for eight years to being a customer and experiencing those pains, problems, and challenges that I used to sell solutions for. I'll tell you how I sold a lot of those pains, problems, and challenges in the past. You can't continue to sell the same way. Because what I'm experiencing now is different if I was still selling payroll and HR services. I would definitely need a different value prop than what I had.
My last year selling payroll was 2017. Four years ago, I'd have to have a very different playbook right now, a very different talk track for the different types of buyers. Queue, last week's episode 2022 sales playbook. All right, there's your go-to-market strategy. I gave you a ton of nuggets there, and what you have to evaluate.
I want you to win. I want your company to grow. I want you to do it in the least inexpensive way possible. The way to do it is to sell what people want. They want to solve their problems. They want you to solve them in a way that other people can't so that they feel confident about their purchase with you. Your customer experience has to be pristine. You gotta love these people, serve them and be good to them. You have to acknowledge the emotional lifecycle they're going to have that ties in with their customer lifecycle.
If you want an advocate, a customer for life, and referrals from that customer, you have to create a winning experience for them, while they are part of your company as a customer. Also, like okay, let's just segment or not a segment but transition to brand strategy. We've talked about go-to-market strategy related to your brand strategy. Your brand strategy is the execution of that beautiful brand that you created. So components of a brand will be the aesthetic element, the messaging element, and just understanding how to communicate to your audience.
The brand is the customer's experience when they interact with your company. They should have a quick emotional reaction. If you have a strong brand strategy, a good emotional reaction would be great, where they immediately align. And it's okay if your brand isn't for everyone. In fact, when you get a niche, that's when you can really unlock some growth potential. So figure out who that buyer is. We talked about this in last week's episode, building your 2022 Sales Playbook. Get hyper-focused on who the buyer is, how they speak, the tone, the word choice.
Understand their day in life, their pains, problems, challenges, and how your product or service can make their lives better. How can you solve problems for them that your competition can't? Remember, sometimes your competition is how they do things internally, by themselves manually. Sometimes it's not a side-by-side competitor. It's just how they're doing. It might be very manual right now. So understanding that in your brand strategy and the execution component, your brand should inject some sort of emotional passion, excitement, and alignment in this feeling of "I absolutely love this brand."
Think about a brand that you love. What's a brand that you love that you just feel like they get you, that they're for you. You wear their products proudly. You tell people about the products that you use or buy. If it's a service, you talk about the experience of how they made you feel when you were using the service. That's where your focus should be as far as your brand strategy is concerned. How do you make that come to life? Well, it requires your brand to work through execution on marketing, sales, and customer success.
If you want to eliminate friction and frustration from the customer journey, you also have to have your brand strategy execute into your revenue operations or rebab strategy, which is heavily focused on your tech stack and operational processes. From the first touchpoint with your brand, all the way through the sales funnel and CS funnel, retention, advocacy, or offboarding. You have to look at that technology layer and remove the friction. You have to look at the different roles and people inside your company to remove the friction from the buyer.
People spend money. I talked about that also last week, if you missed it as a buyer. Do you know the buying experience of your own company? Try it. Do you know the competitive landscape of your own company and upcoming competitors? Research them. Figure out what they're doing great. Consistently every year, you should be evaluating your go-to-market strategy.
If you have a really big shift, look what happened with COVID in restaurants. Do you think restaurants shifted their go-to-market strategy? Yeah, offering alcohol to go, launching online ordering and delivery services, converting parking lots and streets into outdoor seating. Investing in those Eskimo-looking tents to offer more outdoor seating, investing in safety protocols, cleaning, and air ventilation. They got creative, very creative. Many of them did first survival, and they adjusted the go-to-market strategy. You have to revisit and look at how you're going to mark it. You should do it every year.
When you're in the growth phase, you should be looking at it quarter over quarter over quarter. If you wait, you just missed out on so much, especially when you're early stage and smaller. Your agility is key. You can pivot and change so fast, fail fast. How's the revenue?
We launched a brand last year, another division of our company. We launched it, and we closed it down within a quarter. After 90 days of it being live in the market, our data was not where we wanted it to be. We launched a new division. We launched a new division rather than dragging it along and dragging out the good brand name that we have and reputation with House of Revenue®, we launched a new division. It was like a startup inside of a more mature company. We followed the process, and you know what, not every idea is going to be perfect. This one didn't take off, and the data in 90 days did not indicate it would take off easily. We were going to have to invest significant money into it and rework quite a bit. We just decided that at our current size and stage, we're not going to do it. We're just going to stick with what we know, where we excel, and where we have the highest success rate. After 90 days, we closed it down. Are you willing to make those big and quick decisions?
If you want to succeed as an organization, especially with the shift in the buyer, revisit your go-to-market strategy. Follow everything that we covered today. I know you're going to scale.
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Thanks for listening to today's episode. If you're interested in being on our show or want to learn more about how we can help you scale your company, connect with us at houseofrevenue.com or with me Mary Grothe spelled G-R-O-T-H-E on LinkedIn, Twitter, or Instagram.
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