How To Create a Predictable Revenue Machine with Aviv Canaani, CRO & CMO of Datarails | Ep. 404

0:01Welcome to the Marketing Millennials, the no BS marketing podcast. I'm Daniel Murray. And join me for unfiltered conversations with the brains behind marketing's coolest companies. The one request I tell our guests, stories or it didn't happen. Get ready to turn the f*** up. We are back with another episode of the Market Millennials. I am here with my former rival, Aviv. I'm kidding. We used to work at like competing companies, but now he's the CRO, CMO of Data Rails. And we're going to talk how to build a predictable revenue engine because he's been doing that at multiple of his roles. But I'll let Aviv give his background, how he got into marketing, how he's grown in his career, and then we'll get into the podcast.

0:56But welcome to the podcast, Aviv. Awesome. Great to be here. Thanks, Daniel. I'll let you start off. How did you get into marketing and in the revenue go-to-market space? Yeah, it's been a while. I've been in marketing for many years now. I actually started in politics being a director of communications for a politician and been working in different tech companies ever since. After being at IBM for many years, I actually moved to the startup world. And at my previous startup, the one you mentioned, the one that we were competing against, like I worked for a small startup called the Workies that was competing against the mighty service titan and was an amazing ride over there.

1:39I've worked there for a couple of years in the field service management space. And then about four years ago, four and a half years ago now, I was approached by the co-founder of Data Rails. I looked him up. He seemed like an interesting guy. Already built a billion-dollar startup, which is WalkMe, that got sold to SAP. So I decided to move to Data Rails. And the growth ever since was amazing. Yeah. Yeah, I mean, it looks like it's growing like a weed from the outside perspective. So that's amazing. And you seem to be doing this a lot in your career. But I want to ask you, a lot of people say the phrase predictable revenue engine, but a lot of teams aren't actually building a predictable revenue engine.

2:24So what's your equation you start with when you are given a revenue target? Yeah. So I started by the background, continuing with my story to explain how we got into that kind of equation. So when I joined the company, it was really very early phase. It's a few people, a couple of million in ARR. And they told me to try to build marketing. It was just outbound back then. And I started building some paid media efforts, some brand efforts. And with time, we started to understand how this machine is operating. So moving forward, you know, a few years later, I was able to build like a system where I can know the target the CEO or CFO gives me in terms of how much revenue we need to generate.

3:12And I can go back in a waterfall model and say, okay, this is the marketing budget I need. This is how many meetings we're going to generate, how many opportunities are going to come in and how much revenue eventually is going to come in based on that. And that's one of the reasons where, what is it, like two and a half years ago, they also asked me to take over sales just because everything was so inbound led. And the salespeople, the way we build this machine, weren't even prospecting. We just fill their calendars with meetings. And their goal was what? Close them and make them deals. Okay. So let's reverse engineer the process now.

3:49Because that's a good background of you get a revenue number and now you have to like reverse engineer to get exactly the opportunities, exactly book meetings, exactly lead target. But if I say I gave you the same, a$20 million ARR goal, what are the first five numbers you need before you even think about starting running a strategy or campaign? All right. So what I'll need to know is, first of all, the cost per meeting. So I know it based after doing it for many years in my industry, I know how much budget I need to spend in paid media activities in order to generate that. It's important to mention we're selling to CFOs.

4:32I didn't mention my work for Data Rails. We sell to the office of the CFO and SMB and mid-market, like an FP &A solution. So with time, I was able to understand the cost per meeting, of course, the more we scale, the more the cost goes. So I need to know the customer meeting. Based on that, I know how much meetings I can generate. Then I know the conversion rate from meeting to opportunity, which means from the meeting that the account executive took, what's the percentage rate that they will make an opportunity and work that deal? And then the conversion rate from opportunity to closed one. In addition to all that, like I mentioned, we are building this whole machine based on it.

5:10So I also hire account executives based on how many meetings we have. So for example, if I have 2 ,000 meetings a quarter, if that's my target in order to reach the revenue target, I know and I want to create, for example, 100 meetings per rep. So I need like 20 reps. So based on that, it's not only on what we do in marketing, but also how we hire our account executives. And is it when you're calculating, let's say, the close rate back to the opportunity, is it blended along like ramping reps and regular reps? Or is it a ramping rep close rate, a regular close rate? Or is there also different close rates per like different sections?

5:55Like, you know, because you had to like work backwards from that number to see you get the opportunity. Yeah, you're right. Like I kind of simplified it, but we also have like different tier systems for the leads. That's also a big change we did a few years ago. It's not about fairness. We want the best leads to go to the best reps. And also, you know, they have different quotas. So, of course, like we have different conversion rates per tier level and per the account executive. And also per geo. We work in North America and in EMEA. So, you know, we know the different numbers for each one of these.

6:26When you go into these orgs, where do you think most teams mess up the equation? Where does the miss usually come from? Yeah, I think a lot of companies, when they want to generate more revenue, so they just hire more AEs and say, okay, this is a quota for AEs, and we'll just hire more AEs and we'll get there. But another thing about the pipeline, and again, I could speak based on my experience in the SMB mid-market space. I know it might be different in an enterprise. I believe that account executives are best utilized if they don't need to prospect themselves. I'd rather generate the pipeline for them.

6:58I think prospecting today is very difficult, especially if you want to do it cold outbound. So I think in other companies, they would just hire the AEs without thinking first about the pipeline. I would not hire more AEs until I know I have the correct pipeline to support them. And also different than other companies, I do not want my AEs to prospect at all. I don't think it's like a vanity cool metric, you know, for them to mention and just show their sales prowess by, you know, being able to cold outbound. Like it's, I'm thinking about more like the Henry Ford factory, like every part of the machine needs to do their role.

7:38Marketing SDRs need to generate the meetings and the sales team needs to know how to close them. So also, I want to work backwards from the meeting book target to getting the lead. So how are you, like what channel, what's the media mix look like when you're looking at that? Are you putting a lot on meta at Google or is it event budget? Like how are you separating that media mix up top? Yeah, so I'll tell you like one works for us. A big part of it is especially digital. So I think a lot of people would assume that because we're selling to CFOs, we're just focusing on Google and on LinkedIn. But you'd be surprised to hear about almost a third of our spend is also on Facebook, which means Facebook and Instagram.

8:32We have ads that work there that are funny and engaging and different. People might be surprised, but CFOs also have a sense of humor. And you want to engage with them. You want to do something, you know, cool and interesting and where they are. And a lot of them are still in Facebook or Instagram. We even have like different campaigns in TikTok. And we saw deals coming in from TikTok. Again, not something obvious you would think would happen with CFOs. And that's, you know, our main channels. Of course, we do like a few other smaller ones. But yeah, that's like the expertise that we built in Habs.

9:07You probably have like the bread and butter channels, like Meta is bringing a third of the budget and stuff like that. So when deciding this go to TikTok or something like that, do you care about like the blended CAC number you're trying to hit or like is there a certain CAC number per channel that you're trying to hit as well? Yeah, I think it's like whatever works. So you see things are changing quarter to quarter. So we have an amazing user acquisition team. So in one quarter, they might increase Facebook ads or meta ads or then decrease Google or the next word could be something different.

9:41But yeah, it all comes down to, especially like the head of the user acquisition team, they have to think about the cost of acquisition. As you mentioned, and see how many meetings they can generate with their budget and try to maximize it. Of course, there's a nuance here in terms of the quality of the lead. Like I mentioned, the tier one versus the tier two and so forth. But usually their targets are based on meetings and opportunities. And for that tier one, tier two, is it based on form field fill out? Is there like an AI grading system? Is it an intent system? What is the system built to get the tier?

10:17It's a good question. So when we started, it was very basic based on company size or revenue or title. But now we're embedding AI more. And we're even researching the different leads coming in and giving them a different tier. We even create more tiers based on it. So there's so much you can do with AI now. And it's really helping us. And now we're learning about these new tiers and the conversion rates, like we mentioned before, and how they're impacting. but yeah it's an exciting times i know this is a question you probably are getting a lot internally but also like the question that the market wants to know too but two this is a two kind of fold credit how are besides lead scoring how are you embedding ai into the workflow to help let's say strs marketing sales and the secondary question is are you looking into like geo aeo How are you deciding what to spend to get to be seen on these LLMs and things like that?

11:25Yeah. So to start with your first question, so based on the fields people are updating, we can have AI learn with time what's better and what's worse and also enrich it with things they can find online. and we even use for example with ai a spam filter um to make sure you know we don't go out of spam meetings that fill the calendars of the account executives i'll give you an example let's say like you sign up and it says like i don't know like daniel.am is at you know a company uh it double checks i can linkedin if there is a daniel you know i'm working at that company and it's like and it creates this kind of ranking system to see what makes sense what doesn't even like when the SDRs go on calls, for example, we have them qualify meetings and decide that tier system, but also we have AI double-check that.

12:16And sometimes if the AI says something different than the SDRs, so the SDR manager looks at it and decides what is the right ranking and something you need to update the SDRs or something, maybe the AI got wrong. So in every part of the process, we're using AI to some degree. And I think we only got started. I think there's so many possibilities in how to scale it and make this whole machine more efficient. And if you go back to what we mentioned before, it's like you asked me about the numbers. I just want to improve the cost per meeting, conversion rate for meeting to opportunity. Like every 1 % here, 2 % there can make a really huge difference in our profitability.

12:58And to your question about like GEOs, of course, like it's a major shift we did in the last year. and focusing much more on geo than just rather seo uh of course you know we're still doing both and yeah a lot of there's a lot of different tactics that you know we're trying to employ to get there and a lot of different testing that we're doing to see what people are getting and within their geo results like i can even share like an anecdote like the biggest deal we had last year huge enterprise deal i looked it up and i wanted to see like how you know the attribution. So one of the questions we asked in our forum is, how did you hear about us?

13:35It's open forum questions, not like a dropdown. So the person wrote chat GPT. Now it's a CFO of a multi-billion dollar company. So, you know, you never know. I mean, we, before we got on this podcast, we, we talked about you had to close down your claw tabs and stuff like that. So all, all executives are probably using it to do some sort of research, some sort of playing around, some sort of data ingestion. So they're using it to make their lives easier and catch their mistakes too that they're probably making. So it makes sense, especially because ChatGBD is pretty good at like logical things, which like CFOs have to be very logical.

14:19Like you can't mess up numbers when it comes to the CFO. Exactly, exactly. It's like everyone is using it. Like we said before, it's like about social media, like everyone's using it. Same thing with AI. Like I think everyone's experimenting now with like Claude and ChatGPT and people want to figure it out. One thing I have to you, I think one of the hardest things is coming into business and then like doing very well the first year and predicting the next year. So how, like, what is the forecasting process you have to make sure that you get that meeting book number right? You get the split between like, I need to, obviously you need to get the certain amount of right ramp reps, right reps at the right time to hit like those numbers.

15:01And then also the split between STR and marketing generated, like how do you work back from a year that you did well? Yeah, exactly. It's like, I think it's not obvious. Like it seems like, you know, I wish the life was that easy. I said, you put it in an Excel spreadsheet that like everything works out. So you have to update it like every quarter and make some assumptions. But if you like, you know, three other quarters last year, we had an amazing year. Like I was right within like a 5 % margin, like in each one quarter, The only quarter that we actually exceeded expectation by 30 % is because we introduced a new model of a multi-product solution and new pricing that really made a difference.

15:39And I couldn't have expected that. So I think it's like, you know, you want to see the results. You want to reiterate. You want to talk with the team. But, you know, I wish it was like exact science, but it isn't. But I think, you know, like you trust your judgment, judgment of other people on the team. but eventually it's important to mention when you speak with a CEO or CFO or especially like the board that's what they're expecting of you as like a marketing leader especially like a CRO they just like they don't care about the details for them it's like okay this is the target how much you're going to spend and you know build something that actually is going to work they don't care if I spend everything in Google ads or Facebook or you know whatever but they want to have something someone they can trust that would come to them and say, I have a plan.

16:28This is how we get there. As opposed to someone that just says, I have no idea. We'll just try crazy stuff. Yeah. A lot of marketers make the mistake and start saying, yeah, we had a split of this and this. And they're just trying to say, hey, are you hitting the numbers or not? I don't care how you hit the numbers. Are you getting your meeting books target? Are you spending the right amount to get there? Is your cat going up or down? Is it efficient or not? Are you profitable or not? the questions they're asking. They're not asking in the weeds. Your job is to get in the weeds and ask those questions to your team.

17:05The board doesn't care and the leadership doesn't care. Exactly. Yeah, I might be like a bit biased, you know, especially as like a marketer that became a CRO or a CRO in general. But I always found it weird going to like a management meeting and I can tell the CEO, oh, I hit my target. I generate X amount of meetings or pipeline. And then the VP CL says, oh, I missed my target. It just doesn't make sense. So when you think about it from the CEO perspective, now he has one person to work with that is both in charge of the revenue growth, but also on the cost of acquisition. So it's one person to talk to as opposed to trying to figure out a debate of who's right, who's wrong, if we missed the target and so forth.

17:48So I get biased, but that's my opinion. We did this at Service Titan, but I know I want to ask the question how you're winning at the CFO. So like you talked a little bit that you're 130, about the 130 revenues coming from or pipeline driven is coming from Meta. I don't know how much is coming from TikTok, but what does that process look like to generate creative? And what does it look like marketing on Facebook versus like marketing on more of like a profession network like LinkedIn? Like what type of creative are you creating? Because obviously CFOs are people and they have a life and they're on Facebook and they're on Instagram and they're scrolling and they're doing those things.

18:32So what does that look like to win on those platforms and B2B? Yeah, so I think you need to throw out everything you heard about B2B before and just understand you have to be creative and different. And that's what we're trying, especially I think as a startup, you have to take big risks. It's the difference if you're marketing and you work for Apple or Samsung or you're working for a small startup. When you're working for a small startup, no one cares about you. You're going to launch a new product, no one's going to stand in line to buy it. So you have to interrupt people where they are. And let's say they're on Instagram.

19:04They're scrolling through their feed. They're seeing some stuff their friends might be posting or comedians or politicians or other things that they like. you need to have an amazing ad in order for someone to stop, especially a CFO. So we have an amazing in-house team we created. Most of them actually came from B2C, where we are generating dozens of creatives, sometimes even like 100 every month. And we're just feeding it to the algorithm and trying to see what sticks and what works. We're working with content providers. Sometimes we're filming stuff ourselves in the office. Once in a while, we also do a small production.

19:48We're just testing everything and you never know what's going to work. Sometimes there's something you create in an hour. Maybe the cost was 50 bucks. It's going to work for you better than something you produce for$40 ,000. But for us, we don't care about what's going to work or what's right. It's just like we want to find something that works. and we're going to put all of our budget there behind that. Hearing the amount of creative you're producing sounds very B2C, obviously, because my wife's in e-commerce and they pump out creative crazy. That's their goal is more and more creative because creative is like the new targeting.

20:25It's the new testing ground. It's the new, especially when you have higher volume like an SMB versus enterprise, it might not work. But when you have high volume, you get that audience fatigue and audience when you have the same creative over and over being seen. So you need to get out of that audience fatigue loop. If you buy putting new, you could repeat winners. You can keep the winners on, but you need that loop. And that sounds very B2C. B2B needs to learn a lot from how e-commerce runs meta. Exactly. And I think it's like people are forgetting how much other impact it can have. For example, even our Outbound team still have Outbound, performs well like, but you can see that like I listened to some of the calls that led to deals in Outbound and you can hear like our Outbound is, they are talking with someone and they're like, hey, I'm calling here from DataRail.

21:22And then you can hear the prospect say, oh, I've been seeing your ads all the time. I love that. That must feel good as a marketing team, like to hear that. Exactly. like you're building your brand and the way I see it, it's important to mention that the CRO, especially coming from marketing, I'm fine giving a few different teams credit. It can be both outbound and marketing. It can be partnership as well. It's not that we need to make a decision on like only one source that led to it. In this case, both outbound and marketing, you know, get the credit. And, you know, that's how you build, I think, an efficient machine.

21:53Like you want everyone to work together with the aligned and winning together. also i think you said you do things that are pretty creative and funny and humorous people also i think a lot of people forget or marketers forget that in b2b that you're competing next to an ad that is for their their deodorant their a handbag you're not competing against other b2b companies when you're you're on you are doing that as well but you're competing with everyday products that these people are buying. So you have to do something to stand out. You can't just be better than B2B. You also have to be better than the e-commerce ads out there to stand out.

22:35Exactly. Exactly. You're competing with everything. I'll give you three different examples of stuff we did in marketing just this past year. Why don't we introduce the new mascot? So we have a mascot, which is a panda. If you think about it, we sell to FP &A, so it's FPanda. so we we have like a panda as our main mascot and he appears in our ads and content super geeky making excel jokes and stuff like that the second thing is like we sponsored the excel world cup in vegas and we had like many participants actually wear like data rail shirts even one of the people we sponsored that let's call the athletes that we sponsored actually won the competition so we got a lot of coverage you know based on that and even like talking about the most, the place that you might think is the less, the least B2B focused.

23:23We did like this Sora video where you have Bob Ross, the famous painter from the past, actually uses paintbrush on Excel and talking, talk about it with Sora, like eight second clip. We posted it on TikTok of all places. We had more than one, sorry, 3 million impressions, thousands of likes, hundreds of comments. We even got comments from the official Microsoft account. So yeah, some fun stuff. Yeah, I think, I mean, it comes down to what you say too, is you deeply are knowing what CFOs are in Excel all day. So you need to be where Excel is. You need it. You can poke jokes of like number jokes and Bob Ross jokes and all this stuff of same, like every industry, if you could find those little pain points and poke to the pain points of those people, you can get a good reaction.

24:21And the goal of content usually in my eyes is to get it shared in the org, get a screenshot, get it in that Slack channel. So if you create something great like that Bob Ross XL, I bet it was shared in multiple channels where finance teams, FB &A teams are looking, laughing, and they're like, oh, Data Rails did this funny, they have a humor, they're not just like this boring B2B company that I'm going to work with. Exactly. And I think it also makes a differentiation even during the sales process. You want to be a brand that's likable and personal. Once you have this kind of character and people feel like they know you, I think it's going to be also easier to make a decision to buy from you.

25:09It's not this random brand that cold called me and I never heard about them at all. How much of the budget percentage-wise do you put into testing new bets versus tried and true channels? Obviously, the Excel tournament might have not did something, but it did something great and probably drove some good pipeline. But what are those big bet budget look like versus tried and true budget look like? Yeah, so it's like 5 % to 10 % of the budget. So I mentioned like we had some success like in TikTok, but we tried other things that didn't work. We tried Spotify. We tried Reddit. You know, Twitter, X, no, how is it called?

25:53But like we're trying things like all the time. And like I want to encourage my marketing team to experiment and try new things. You want to also work, I think, as a market environment that encourages you to take big risks. And it's completely fine if it failed. because that's the only way you'll be able to grow and discover new things is if you take these bold bets rather than just do whatever is obvious and keep going at it even if it stops working. You don't want to be that marketing team who knows they're not going to get fired because they bought IBM back in the day. They just do the safe thing because it's logical.

26:35And a lot of logic keeps people's jobs for a little bit, but it doesn't help them scale. The logical answer is to buy this tool or do this thing. But sometimes you need to, like it might not be logical to spend that much on meta and B2B. But do the not logical thing. Try it if it works. Keep going. And take those bets, like you said. Yeah, it's like you have to take those big bets. Because exactly like you mentioned, you can play it safe. so maybe you'll survive a few more quarters but at the end of the day you're going to lose your job because you aren't going to make remarkable marketing, you aren't going to build a great pipeline so you'd rather take those big risks and try to do something amazing first of all it's more fun but also I think it's better also for your career and you see some of the best even B2B companies out there had amazing marketing over the years and if someone is listening to this podcast and saying oh but I can't do it because my CEO won't allow it.

27:36So quit. There are more companies out there. Exactly. You don't have to stay at the same company and not every CEO is going to get marketing and that's okay. And you want to be in a place where the CEO and founders get marketing and know it works and supports marketing as a revenue driving, not a cost center in the business. Exactly. I think it's so important for you to frame that that way, that it's like a profit center, that it's not like you're spending money and maybe one day it's going to help build the brand. You want to show immediate results. And I can share that when I started, in my second week of the job, I wanted to do a funny meme on LinkedIn.

28:18I took the inspiration from, you know, what Gohan was doing on LinkedIn. So I did this meme and after a few weeks and the CEO came to me, said they had a board meeting and one of the board members was asking, why are you doing these ridiculous things? you know, like you're selling to CFOs or serious people. And I told the CEO, trust me, it's going to work with time. And luckily for me, he trusted me. And with time, we were able to do more and more better creative with more creative people than myself, you know, on the team doing amazing things there on LinkedIn and other channels. But you have to have the CEO trust you and be willing to take risks.