Does your company suffer from GTM bloat?
Why your budgets eventually shrink and you're unable to do the fun stuff
GTM bloat is when you have too many overlapping tools in your tech stack and too many people in your org. As a company grows you are tempted to add more staff and more tools because you are moving so fast and focused on short term goals and long term growth. But if not done correctly you wind up with GTM bloat which not only impacts your ROI in GTM, but impacts your overall financials and can lead to business failure.
How can you avoid GTM bloat?
It should all start with RevOps. RevOps’ responsibility is to ensure that you're maximizing every dollar spent, which includes your tech stack. Start with your “must have” tools such as CRM or CDP, marketing automation, video conferencing, document signing. You need these tools to run your business. Next look at tools that drive efficiencies, such as a scheduler for social media or blog, triggered or automated email generation, intent data, reverse IP/firmographic lookup. These tools save team members time.
Beyond your tech stack, look at operationalizing your workflows. The larger a company gets, the more complicated and slower workflows become. Start by defining the questions you need to answer for the business, such as, who are your competitors, why did we win, why did we lose, etc. Then make those mandatory fields on every sales opportunity or account record in your CRM so you can run reports off of it later. Remember, RevOps is your friend.
How do you know if you have GTM bloat?
How many employees do you have? Each employee should generate around $100,000 in revenue or more. So for a $10M revenue company, they should have no more than 100 employees.
In terms of your tech stack, there are no benchmarks for this because most benchmarks out there tally sales and marketing spend together plus it includes people as well as software and it doesn’t usually include Customer Success which is a key part of GTM strategy.
In my experience for B2B SaaS companies, as a general rule of thumb you should aim between .005 to .0075% of your revenue to go toward GTM (sales, marketing, customer success) software costs. So if you’re a $50M revenue company, then roughly $250,000-$375,000 in annual software costs should be the aim. However, different types of companies (PLG vs SLG vs PLG & SLG) have different needs, so if you’re a PLG company then you might not need so many tools. If you’re a B2B SLG (sales led) and have an ABM program, then you might need more.
What about program spend?
There are many, many benchmark reports out there already (HubSpot blog, HowToSaaS,Insight Partners, that tell you where you should be for which size company. But again, it’s just a guide. You should always analyze what’s best for your business needs.
When I’ve had to measure utilization of headcount, I’d often have to submit a matrix like this to Finance.
When you look at the above chart, while every person is being utilized 100%, not every channel has enough resources. Events, Social, PR/AR are under utilized and need resources. Whereas we seem to have some bloat in Content. Could any of the folks contributing to content forego those contributions and focus on one of the areas that are in need of resources? Maybe, maybe not, but again, it comes down to what’s right for your business.
p.s. if you didn’t catch my guest appearance on GOATS of Growth podcast with Jay Webb, check it out here.