Unified Revenue View Part 4: Scope Decision

[00:02] **Introduction** Chris Carolan: Good afternoon, good evening, LinkedIn friends, Value First Nation. Welcome to another episode of Value First Data here with AC and Klemen and Art four of our Trek through the Unified Revenue View. How's it going this week?

[00:27] **AC's Morning** Klemen Hrovat: Looking good. Casey Hawkins: Good. Um, I spent the morning outside. This is my first call, indoor call. As you know, Chris. Chris Carolan: Nancy, fresh, fresh brain. Casey Hawkins: Yeah. No, I feel like, I feel like it gave me a new vigor for life, you know. Chris Carolan: All right. You might need it for this part of the conversation. Um because we are talking about deciding on the scope of, um, your unified revenue view.

[01:14] **Unified Revenue Prerequisites** Chris Carolan: And uh so we're still before you build. Uh, we talked about prerequisites. Uh all the processes that are usually not talked about or owned in in HubSpot, um, like invoicing and order fulfillment and uh recurring revenue and all these back office things that uh play a big part in the unified revenue view. Uh then we asked uh four questions during the current state audit. Uh, how do you forecast? Uh, how do you know, uh, when a customer is at risk of churning? What happens between deal closed and customer successful and how do you identify expansion opportunities? Um, that was a great conversation last week.

[02:03] **Scope Decisions** Chris Carolan: Uh, and then here we are with scope decision. Uh, lo and behold, your business model determines which objects matter most and which workflows are critical. So we're going to help you select the model that best matches your revenue patterns to focus your implementation. Um, do you to uh, I forget to this part. Uh it it often comes up. I think related to, you know, winning by designs framework of the revenue modeling and all these different layers, right? At some point you need to understand how your business works, how revenue flows. Um, do you guys run into that as far as like people understanding what it is and and why it's important? Casey Hawkins: It's interesting because I feel like this, in our, was it the first session where I called out that marketing was not listed? Did you fix that first? Chris Carolan: I don't think I have. No, I apologize. Casey Hawkins: We usually check in on whether or not Chris, let's ask me to do a lot of things. So every time that he doesn't do something that I asked Chris to do, it gives me a little bit of a like sigh of relief that, um. Chris Carolan: That's a true story. Casey Hawkins: But it's what's interesting as we've gone through this is there's been a couple of times where you've asked me a question and I will tell people that I, most of my work is at the intersection of marketing and sales. But some of this is often on the further side of sales. Not that it should be, is what I'll say, but it tends to live buried farther from sales and away from marketing in a way that I think of like one or two situations, but not, not a ton of um instances. And that just keeps making my, my brain be like, but why? Which is maybe why we're talking about this, because a unified view would be helpful. Chris Carolan: That is exactly why we're talking about this. Klemen Hrovat: I am, yeah, closer to where Casey is. Not so often we're involved with in those discussions where it's really knowing sinking. But I just had a chat on Friday with a potential customer where we started talking about AI enablement for the whole marketing and sales team. But then in the last five minutes of the call they said, oh as no, we're just in touch, our leadership would way sooner approve a scoping project for the integration with Quickbooks. Because we don't have revenue data, so they cannot do forecasting from hubspot. Can you also do that? So, we'll get in more of those discussions definitely. Um.

[06:11] **Deduplication & Logging** Chris Carolan: Yeah. Klemen Hrovat: I mean the the farther we get is what is a customer? And then deduplication and and and all that, less about real you know, revenue data. Um, but from my perspective, I think the goal should be that, you know, rev all the revenue is somehow logged in hubspot. Otherwise, you know, you're looking at false data or incomplete data and then you're you'll be data driven without data. Chris Carolan: Yeah, and like so the reason that Klemen and Casey, uh, are where they are. Um, and I need to start sharing this episode like far and wide. Uh, a recent episode on the GTM Live podcast. Um, why it's time to bury the MQL with John Miller, the Marketto co-founder who helped popularize it. If we could have everybody listen to this episode, like man, maybe 25% of our job would be done here. Uh because this is how everything gets siloed, like leaders come in and they think, you know, it's MQLs, it's leads, it's pipeline. And when you hear John Miller talk about why he leaned in so hard in the early days and it had everything to do with brand and nothing to do with like actual marketing performance. It's crazy to think about how this stuff just got ingrained in the system. To the point where he left to a different company, uh, demand base and it and none of that stuff worked. Um and bring it up because a big part of the um, you know, serious demand waterfall from 2006 was that it ended at closed one. Like it just ended. So when we say like we're talking about all these revenue processes, talking about integrations with Quickbooks, right? That's not in this CRM land and marketing and sales, especially marketing platforms, you haven't been focused on that. You haven't been able to touch it sometimes and you haven't asked to touch it because you're focused on leads and conversion, MQLs, SQLs, all that stuff. And somehow attaching dollar amounts to it and just, you know, doing whatever you can to do attribution and all these things without the full picture, right? And now that we can get that full picture because HubSpot does have all these commerce objects and like it's clear commerce hub, the knowledge of its existence and the expertise to like implement it properly is sorely lacking like in this ecosystem. Um, so we have to start with basics like this, talking people through their business model so that they can understand, no, you can't do, there's very little chance that you can create a unified revenue view with deals only. Right? Um so that's like, you know, the steps that we first went over and we think about the chasm between like sales and customer success, right? All of this should add up to like, don't be surprised, uh, maybe give yourself permission to be in the same spot that everybody else is. But, uh, let's work, you know, work on this problem and help people get to these unified views.

[10:42] **Data Model Impacts** Chris Carolan: Um so we're going to just highlight some of these, I think. And just to put in perspective the reason we're calling these out is because it impacts the data model that underlies the unified views, right? And so there's a few different ways to slice it. We got core B2B models with SAS, uh, professional services, transactional B2B, enterprise sales, industry specific, manufacturing, field service, healthcare, education, financial services, and then, you know, hybrid patterns, which is often the challenge and the opportunity if you're doing multi hub in in hubspot. And my example from when I was working on the inside was manufacturing. Like there's always whenever it comes to growth, there's always like a a rock solid revenue channel that got the company where where they're going. And then they see opportunity usually in a different revenue channel or a different market. And they think they can just do the same things that they were doing over there, over here now. And it almost never works because we do things like, okay, we sell business to business here, everybody's ordering on online now. So we can just pick up e-commerce and go B to C and have the same sales motion and use the same sales team and things like that, right? Casey Hawkins: Mhm. Chris Carolan: All of that stuff is supported by these data models. So if you can't get to here, that you're going to have such a hard time like getting to these unified revenue views. Chris Carolan: Yeah. Chris Carolan: Which one would you guys like to highlight? Casey Hawkins: Like to have? Chris Carolan: Like to go over. Okay. Or have, either one. We could, we could make this like a, um, I, I prefer long sales cycles and complex stakeholders. That's my. Chris Carolan: Okay, so I heard SAS and I heard Enterprise sales. Casey Hawkins: I'm more joking. Let's do SAS. Klemen Hrovat: I mean I'm interested in SAS because of a challenge I keep having in my mind where you know, close one is where someone starts the subscription. And you have, you know, monthly subscription, you have no term. So then how do you manage all that? If nothing else it would be, you know, our thought process will be useful for my learning process. Just thinking through, uh, I can tell you how I'm managing in our hubspot. I'm not sure if that's the right way, but uh, you know, this is the best I could come up with so far for for the complexity of that. But uh, yeah, definitely curious where we land. Chris Carolan: Well, since you picked that one, uh, we can make it quick. Uh thankfully HubSpot is coming out with a contract object. Um that's going to make SAS and design like specifically for SAS, annoyingly so. Uh that the key to all this is kind of managing and measuring revenue on the same plane. Like the same rules across objects and, you know, as soon as the definitions changed based on where it is in the journey and who's in charge of it and who's gold like buy it, like you start to get disconnect dysfunction like all over the organization and that's where they're like, all right, keep hubspot or sales force over there. We've got our accounting system that has the real data in it. And we'll work from there, we'll download a bunch of stuff, we'll make slides, make spreadsheets and that'll be the source. Because that's the one that has to be right for the books and all that and you sales and marketing people can go fight over attribution. Um now that we're going to have the contract object that I need to another thing I need to update here, Casey. Um it's about picking like one, you know, how can you pick an object that supports, you know, recurring revenue, renewal cycles, usage based expense and all the goals that everybody has. Um, through one lens, right? Because even as we've had commerce hub show up, it's been challenging and next to impossible without custom objects and, you know, some hubspot wizardry to report on revenue across deals, subscriptions, invoices, orders, like in one place, right? Casey Hawkins: Hmm. Chris Carolan: Um, so I am curious to hear uh, how you guys solve it, Klemen. Klemen Hrovat: With a lot of manual and back tracking of data. In a way, you know, where I mean, it's a combination. But for the subscription part of the business where you where I don't know for how long the subscription will be active. I might put it for 12 months term. And if that stops sooner than that, I would go back and you know, update that term so that the the line items and and the terms of those line items on a deal would match. And then the the revenue on closed one deals are matching the actual numbers realized at the end. There are probably better ways, but with the size of the team and then you know the the numbers we have, this is still manageable. Chris Carolan: Yeah. That's the part not really taken into account here as like size of the organization and volume. But at the end of the day, really, you know, shouldn't probably, uh, you just can get away with lots of creative ways when you're, when you're small. Klemen Hrovat: But my goal is to have, you know, revenue aligned with what I see in hubspot. This is the primary goal. These two numbers should match. Um, so you've mentioned these two numbers revenue and hubspot. Where's the other revenue? Klemen Hrovat: Stripe. Chris Carolan: Stripe. Okay. Chris Carolan: Yeah, they need to reconcile. That's for sure. Yeah. So enterprise sales, Casey, what you got there? Casey Hawkins: I was joking. Chris Carolan: Okay, you get another, you get another try then. Casey Hawkins: Professional services. Chris Carolan: There you go. Casey Hawkins: I hate a long sales cycle and complex stakeholders. Well, who likes that? I'm sure there's someone. Chris Carolan: Enterprise sales. That's who. Casey Hawkins: Um. So is the question how do I set up professional services? Chris Carolan: What are we highlighting? I guess, uh, why is it important to pick like challenges you've run into? Casey Hawkins: Um, the challenges, importance. Wow. Um, so one of the things that I think is challenging about professional services is let's call it the flexibility in what delivery looks like. Um so a SAS subscription is more straightforward. You pay for access to this thing, you get this thing. Um, professional services, a hubspot audit can mean a lot of different things. I have, I have personally sold $500 hubspot audits and I have sold $5,000 hubspot audits. Um, so I think from my perspective, there's some challenges in reconciling uh deliverables and revenue. Um, and then also worth I think noting that like some of the cost metrics. I think this is maybe utilization is a lot harder to capture and track. Chris Carolan: Agreed. Uh, so what we've seen, usually these organizations like that focus on this part. Um, like in order to scale and grow, like at the whole billable hours model, making sure everything ties to utilization of the resources and um all the flexibility kind of really honestly gets pulled out, everything gets based on hours and we lose most value based pricing, you know, capabilities. Um which turns it into kind of the third one, which is, you know, how many onboardings can we do and how fast can we do them and and makes everything transactional because then it's easier to to measure and create the unified view. Um but where this gets interesting, like project-based delivery, milestone billing and utilization, right is here in professional services. Uh fulfillment tracking and maintenance contracts in manufacturing can be looked at almost the exact same way, right? So I would bet like 80 plus percent of work probably will land in this hybrid hybrid patterns hybrid patterns case. Um but when you were when you're doing the lead gen thing, uh Klemen, you were, you were uh pay per result, right? Klemen Hrovat: Yeah. Chris Carolan: How did, uh, how did you help companies confirm results? Uh, because I would imagine they would need some kind of unified revenue view to understand lead to dollars. Klemen Hrovat: We should have done it better. This is the most honest answer I can give you. Uh, what what I mean by that? Uh, we never touched their CRMs. We took over all the work until scheduling a call, a discovery call with them, booked that call on their calendar. And how they, you know, manage that in their CRM attributed. I think they were kind of you know labeling the source being us as a as a you know, service. Because we we were then asking for reports, how many of those are closing? So they had, you know, that that tracking system, but we never directly touched their CRMs because of just, you know, ease of access and and and you know, we didn't need any approvals or anything. We're just delivering the results. Uh, but we were having review calls with them to go through, you know, calls, we booked for them and ask them for each of them where it stands, how was it to help them understand, you know, that ROI if you will on on the service we provided and and what they paid for. Um but we didn't have hard data. Chris Carolan: I was going to say data didn't have it. Klemen Hrovat: I mean, they didn't have it. I was getting always those questions. But because of we've been know in in in in Farmer life science space, people are hesitant to give access to their CRMs because of all the NDAs and and what not. So it was when I on a sales call when I got that question, when I explained, hey, we're we're never asking access to it to your to their and and the same to your CRM. It was, you know, a feature not a bug of the service. Uh, so we kept it that way. Um, so looking from the unified revenue and in in unified custom view and all that, we shouldn't could have done it better, but within the the game we were playing and within the market we were in, uh, it was more of a feature than a bug. Chris Carolan: Yeah. And again, like it's so pervasive as far as like the industry and everybody thinking marketing and sales is like that's how we grow. Um, even if you're still doing programs like that, one of the key factors of the unified revenue view is to be able to see like this. So if you were investing in the service that Klemen was providing and even though he was saying, um, or it's often focused on just getting the meeting, right? Because you've decided as an org that like getting the meeting or the demo is a very important milestone and when you get that, you know, your pipeline builds. You can now show like very easily like if the vendor is doing their due diligence, like, yeah, this many meetings like led to this many, this many dollars, right? Um, so it's like the ROI really, the ROI goals that many um visibility goals, I'll say that many organizations have of understanding dollar in versus dollar out like is what we're trying to accomplish here. And in most systems on the CRM side you can't see it because it's buried in deals and you lose just all the visibility related to resources required to win. And you know, what happens after? We're working with a client right now um that they the sales works to get the contract. They get paid on revenue generation of the client. And there's a whole onboarding process, a whole like success motion that has to happen to where no revenue is had until like months down the line. Right? And that team has brought, they were working on customer custom objects like bringing that whole onboarding process into hubspot. But when you say like let's grow revenue and we want to focus on more contracts but you don't know which contracts are leading to revenue after sale, like you're blind, right? Um and that's forcing teams like that to have multiple systems, have more meetings, have more exports, right? And um ultimately build their unified revenue views, you know, whenever they have those meetings. Klemen Hrovat: And I think the the trap or the the root cause partially is also related to the the MQL thing we started off today. Those MQLs and SQLs and and in in in deals has, you know, the end goal having a closed one. I think in a way was caused by a proxy of which team is responsible for which result, which can be measured. Not understanding what that is and and what the business goal is. For the marketing team, the easiest is just you know be measured on the number of MQLs. Not bothering what happens with them. Uh and and then you, you know, find a proxy, okay, we need 200 MQLs per month because you know, we know that the funnel then, you know, what happens. But um I think that's changing with with many organizations. Um, which part? This review those KPIs and and responsibilities because it's becoming more fuzzy of who's doing what. Marketing and sales are you know, more and more interchangeable. Which means, you know, it's hard to just be measured by those false and and and fuzzy numbers. And with that you you immediately get the conversations of business processes and, you know, what we are now talking, what what should be the real revenue numbers, where those should be stored and then how we can, you know, track the success of any of the activities and then how to do attribution. Chris Carolan: Right. And as uh, says your friendly weekly reminder. Um, of like the impact of this. Right? And my personal example, one of many, um, working for a manufacturer like uh also selling into Pharma, like you were Klemen. Um, you know, it's not hard to make strategy, to create strategy and say, here's the top 10 Pharma companies in the world. And here's where all their locations are. And here is the strategy like and we know that if we get the meeting, like you really can standardize and and show up in the right way to make it look like this, right? On the demand waterfall side. But uh in 2021, we did a a brand new digital event like marketing and sales working together the right way. And then you get um somebody like Pfizer ready to sign, like ready to place the order, right? And then the factory says we can't deliver by the end of the year. And you lose the deal. Like totally, like this is the whole campaign of the whole company, the strategy, let's go win in Pharma. Let's try to get in this place we haven't been in 13 years. And then we get in there, do all the work, right? Because we have no like and then when you go to these strategy sessions, right? Then it's like, how are we going to manage data in the CRM and how are we going to improve these metrics when we go down this funnel? And then the whole map ends at closed one. And something that was very much after closed one, got in the way and that's why we break down these stages like value creator adoption, like, did you deliver it? Like can it be delivered? Right? So that's why this is so, you know, detrimental when the whole life cycle gets in the way, you know, of the of the purchase here. Casey Hawkins: Mhm. Are are there is there any situation where it is just like a straight path like that? Like I, I can't think of I can I don't know if I can think of anything that I just buy like one time and never again. I mean, maybe you like I had a conversation the last call I was on before this call, um we're moving from another they're moving into sales hub from a different from pipe drive specifically for anyone that cares. Um and we're rebuilding some of their reports at this point and we were building their waterfall report um from pipe drive into hubspot. Um, but if you don't know, hubspot doesn't quite have a waterfall quite like like it doesn't look like this. There's no report in hubspot that quite looks like this. Um so we were showing some options and he was like, this is so dumb, like why? I just want to water like I just I just want the funnel. Um and my colleague who was on the call with was like, well, that's because hubspot doesn't really believe in the funnel, they believe in the flywheel, which Chris you're laughing because it's aspirationally. Um, but it did just like having that conversation and then coming here. Yeah. I don't know if there's anything where it's like I'm only going to buy this I only have one relationship with this company ever and then it just ends. Chris Carolan: It's getting rarer and rarer. Yeah. I think. Um and again, the reason that we're doing this like all of the issues that everybody's been dealing with. Right? No visibility because of like we're using the waterfall and we're using, you know, this these built in metrics where we don't know our business process. We just do it the way that Hubspot or salesforce or anybody out of the box. Let's use one deal deal pipeline because that's how you're supposed to do it, right? Like that causes all these all these things, right? All of the friction that we know, yeah, when you try to solve these specific things like the handoff problem, you're automatically pitting sales versus service and success. Or marketing versus sales. When sales is saying, yeah, linear it's not linear process. Like of course we we might need to skip a stage or go back stages and marketers like, well, that's going to mess up our metrics. It's like, so let's build a bunch of damn workflows that make sure no matter what sales does, it always goes through these stages even though the buyer doesn't go through those stages. Casey Hawkins: Please don't diminish my life's work, Chris, publicly. Chris Carolan: Uh, that's what you signed up for here, Casey, I'm sorry. Um that is my favorite and least favorite example of Revops just missing the point. Right? Um and I get why you get there because you have expectations put on you from leadership. We need these KPIs, we need to understand the flow from MQL to SQL. How long it takes, right? And then the out of the box reports require each stage to exist, or it screws everything up. But then it doesn't match how how the buyer buys, it doesn't match how the sales team sells. Everybody in that equation knows it including marketing and Revops and they just try to get it done. And yeah, you might show some numbers or some reports, but everybody's behind the scenes, you know, not trusting any of that. Klemen Hrovat: But we made a plan last year based on those numbers. How do we compare it if we change it? Chris Carolan: Oh, by exporting everything from every system and putting together slides and then you know, feeling good about ourselves. Klemen Hrovat: Okay, problem solved, we're done. Chris Carolan: Yep. Um. Klemen Hrovat: Yeah, I I I think those conversations we're having are super important for for that exact reason. Um Now things can be done better. Chris Carolan: Yeah. Klemen Hrovat: Because you know, I I now start laughing at you know questions, hey, you know, can you help us identify which accounts have the highest upsell cross-sell opportunity? And yes, but you know, you need you need to structure what it means and and and who the reason and and you know, how your process works. Then you can, you know, build that uh with how you've been managing your processes and your CRM system, whatever you have up until now. If that doesn't support you have a quick look at that, then you need to solve the foundation first before we can talk if if these are those five or those are five. Chris Carolan: Yeah. And and that's why we're here. Like we're choosing to simplify in a different spot than usual. Like instead of just, hey, let's just do stuff in contacts, companies and deals, and we'll have properties because it's easy to associate three objects and we don't want to worry about, you know, this more complexity, feels complex. Why am I having to put data over here and click over there. Like first of all, it's never been easier to do that and then not impact and actually create a better user experience in hubspot. Because we can show associated data very easily in a contact record or a company record or a deal record. Right? But only if there's data in these other places to to show and show in context, right? And when you can simplify here and understand that most organizations are going to be here in the hybrid patterns, like every layer, as simple as the layer itself gets, adds a layer of complexity. And when you're spending your meetings arguing over what constitutes MQL and SAL and SQL, you have no chance on getting to an understanding that's going to create a unified view. Right? Um so trying to simplify the language so that we can embrace the reality of we have hybrid hybrid patterns. We've got multiple revenue opportunities, which is what's driving all this, right? It's like, man, we should be selling contracts too. Like that's how this other company does it and they made a bunch of money and it's so great margins, right? But everything we've done is built to win the deal and then move on and get more new business after that, right? Not like if we sell a contract at the beginning, great. But after that, you know, that's not, that's not my jurisdiction, right? Um. Klemen Hrovat: Did we get to where we wanted to today? Chris Carolan: If we have to document uh your business model. Chris Carolan: Yes. Um and again, this is probably a classic case as classic as it can be, only a few years old AI. Just give all your deals to AI, right? Give all your payments like invoices. It'll tell you which business model you have and it might surprise you, right? And then from there, you can take the this playbook and just start to run down. Like, okay, do I care about this or do I care about this or do it or both, right? And just put yourself in a better place to to have the conversations you need to have and um and get it documented, create common language so that teams can start working towards you know, the same same goals. Uh so which one are we picking? We're picking product and service. That's what we're picking. Thank you. Yeah. So next week because we we've picked our uh our scope and we did all the homework to to get ready. We're going to go into uh some object setup inside of hubspot. So I'll look forward to doing that. Chris Carolan: Yeah. Chris Carolan: Man, Casey. Casey Hawkins: Can't wait. Interest object. Your favorite. I don't know. That's actually, I don't know if there's a lot of Chris Carolyn favorite objects. Chris Carolan: I mean, if this one hits, this solves the problem. Like if this one replaces leads like it should. Here's a little teaser. Every interest record tracks authentic engagement patterns that reveal readiness, not lead qualification or extraction. Uh, because Unified revenue views, they need that front end. That's why Hubspot's so important. That's why you can't like get rid of these mark marketing stuff. That's why everybody else wants and know it and wants those numbers to go up, but they have no idea how it connects. Because there's no connection, there's no visibility. Meanwhile, hubspot's just giving you such a wealth of data uh and intense signals and all the engagement and behavior information. Today's update, like automatic tracking of website clicks. Man, right? Oh, but if you don't connect it to your revenue data. Yeah, you guys, you guys know it what happens. I think. So yeah, I am excited for that. Casey Hawkins: I need to get up to date. I I skipped the morning show. I skipped both morning shows and I missed so much, I think. Chris Carolan: Yep. Uh. So, with that, uh, I look forward to digging into this with you guys next week. Klemen Hrovat: See you next week. Chris Carolan: Have a great day everybody. Klemen Hrovat: Great care.