The Long View

The New Revenue Playbook

Connecting Systems & Functions to Drive Growth

The rules of growth have changed. CMOs used to be brand-building pros, and now they are analytics specialists. Sales and marketing used to be separate teams; now they need to be wholly intertwined. Data was an afterthought, but now it is an expectation for GTM teams. 

There is no better guide through this new normal than Stephen Diorio. Stephen is the managing director of the Revenue Enablement Institute and has worked with the go-to-market teams at over 100 organizations like American Express, DuPont, IBM, and Intuit. 

In this interview, Tidemark investor Blake Brown talks with Stephen about:

  • How technology is changing the economics, compensation, and structure of a go-to- market organization
  • Revenue enablement infrastructure that connects people and technology
  • The role of the CEO and the interdependencies between sales, marketing, and revenue-facing functions
  • Growth in context of a recession 

We hope you enjoy it! 


Blake Brown: I'm excited to be talking to Stephen Diorio, the managing director of the Revenue Enablement Institute and a senior fellow at the Wharton Customer Analytics Initiative. Stephen is a widely published analyst at Forbes and has authored several books on all things sales, marketing and revenue operations—including his newest book, Revenue Operations: A New Way to Align Sales and Marketing, Monetize Data, and Ignite Growth.

Thanks for joining me today, Stephen. It would be great to hear how you got started in the field.

Stephen Diorio: I grew up as an engineer with General Electric, applying systems thinking and continuous process improvement to production and the supply chain. When I moved to corporate marketing, I took that same systems-thinking approach to the demand chain. The demand chain starts in the factory and ends with the customer. Systematizing it has been a bit of a ground war for the last 40 years. What's exciting with this revolution in data and analytics is that there are now the tools to optimize both supply and demand chains. 

Blake: I know you’ve been a prolific writer on these topics. Why write another book?

Stephen: I wrote this book to address CEOs and boards. What we've learned is that commercial transformation has to come from the board because it requires long term thinking, as well as a significant amount of change management. The team that connects the most dots is going to win, and there’s only one person who sees all of those dots—sales, marketing, service, and all the revenue-facing functions. That person is the CEO. 

We've also hit an inflection point where selling has become really data-driven, digital, and capital-intensive. Every other complex system has people, processes, and technology—it’s time for the demand chain to have an operating system, a systems approach for growth. That's the thinking behind this book.

The History & Evolution of Revenue Enablement

Blake: Let’s start with a little context. How has revenue enablement evolved over the last 40 years?

Stephen:  If you go all the way back to the 1980s (when you might have seen me sporting a John McEnroe perm), it was the era of “Mad Men.” A time when chief marketing officers (CMOs) were focused on brand and awareness, driven primarily by media and promotion (the green and orange bars). 

The movement to performance and digital has been widely discussed, but nonetheless it’s been a profound change—just look at the shift from paid media (green bar) and promotion and sponsorships (orange bar) to owned digital channels (red bar) and technology (blue bar) above. Paid channels are things like television; owned channels are your website, your mobile apps, and your call centers. Infrastructure is what supports your digital channels—the contactless selling, marketing automation, and email. 

The CMO is no longer a comms role, but an analytics one. A CMO owns the content assets, the data assets, and your infrastructure. It’s a major transition, but I think we've hit a tipping point. 

Blake: We all have seen, over the past couple of years in particular, how important that red bar of owned digital channels has become. If you think about the consumer businesses that previously had the physical channel of a brick and mortar storefront—that went away for a couple of years. Digital channels are the new storefronts, and the primary way for companies to build their brand and merchandise their products. 

Forces Driving the Evolution of the Commercial Model

Blake: You talk a lot about analytics and technology infrastructure underpinning the entire demand chain. What does that entail? 

Stephen: We call it our “commercial model,” which is really just your sales and marketing strategy, but it includes the people, process, and technology of growth. 

I'll quote David Reebstein, who in my mind is the preeminent marketing professor at Wharton. He says, 

“We've done a disservice. We teach product management in one class. We'll teach branding in another class. We basically don't teach sales except at a few colleges. We teach finance at other organizations. We teach analytics and computer science classes. Like every other complex problem in the world—medicine, supply chain—the right answer to growing a business is interdisciplinary.”

The big change is that every c-level executive—a chief marketing officer, a CEO—needs to be driven by financial accountability. To support this, there’s a revolution in analytics underway: there are massive new data sets coming out of conversational intelligence, call centers, digital, first-party, and third-party. Those data sets can learn and do amazing things like attribution and targeting in the short term, but they also could actually help reallocate resources, develop propensity-to-buy models, and develop products and personalization. I think the top driver of value creation is going to be advanced analytics and growth. Most current leadership doesn't have the math or technical skills to even fathom that. That's a big opportunity.


I believe that in the coming years, the average sales rep or customer-facing employee is going to be armed with $10,000 of tech. Virtual selling has become a huge enabler to sales teams, which has opened up a whole new world of productivity, enablement, and selling. And that $10,000 figure is low compared to a truck driver, fast food restaurant worker, factory worker, or a warehouse worker at Amazon. 

The locus of selling is also shifting. Recurring business models are the rage. 51% of boards are asking their management teams to tease out recurring revenue streams and subscriptions from their business. That’s great, but service reps are now at the heart of revenue generation, yet are often completely removed from the commission structure or measurement system that motivates them to do what we call account expansion.

Blake: I really love the way you view revenue operations as interdisciplinary and underpinned by analytics and technology.

You mentioned virtual selling, which is a relatively new topic that seemed to get a lot of traction in the pandemic. What impact has that had on the commercial model and the use of enabling technologies over the last four years?

Stephen: If you looked at the average rep and the overhead necessary to support them, a shocking amount of that overhead was office real estate, calling people up, travel (in orange in the chart above), and MDF funds, which are basically dinners or whatever on the road. A shockingly small percentage of that cost was training and technology, which are the things that really drive scale and consistency.

That’s changed in the last few years. The pandemic blew up the notion that face-to-face selling was essential to building relationships, and in its place, a “4D” selling model has emerged. 4D means distributed, diverse, digital, and data-driven. This introduces the notion of a virtual account executive (AE). A virtual AE operates at different cadence, uses different touchpoints, and is more reliant on content. The expectation of follow up is immediate—you can't get on a plane and say, “I'll get back to you in a day.” The skills and technology are different, and the information they need to be successful is dramatically different. You're seeing the role of training and technology growing. 

CFOs are starting to realize that as soon as they can unwind these real estate leases and redeploy selling models, there is a lot of money that they can free up. Organizations are asking themselves, “Between real estate, labor, and automation /software costs, where am I going to get the maximum return on investment? Where am I going to get the most growth?” It’s all about driving efficient growth, not reducing costs. Growth creates more shareholder value than any other cost initiative.

Blake: The world has returned to some semblance of normal after the craziness of the last few years. What's the status quo for selling today?

Stephen: I think that's a great question. Again, it’s all return on investment—what is the optimal mix of market development funds, travel, real estate, training, and technology that will maximize the effectiveness of customer-facing employees and the overall selling systems? Post-Covid, I believe that portfolio mix is likely going to change dramatically, like we are starting to see above. 

How Growth Leaders Can Generate Value Through Scalable, Profitable and Consistent Growth

Blake: Let's talk about what's coming next. From your perspective, how can growth leaders and operations teams support value generation and consistent growth in a scalable and profitable way?

Stephen: The vocabulary that we use to describe growth has become obsolete. Sales and marketing are ethereal concepts that are no longer relevant. Where does marketing end? Where does sales begin? What is the role of service? Other innovations are sort of moot points. In our book we took a step back and built a periodic table of the elements that drive growth. We call it the revenue operating system.

A Gartner magic quadrant, a marketing budget, or a CMO role do not describe what has to happen to drive consistent, scalable growth, but I can build an equation or formula that does describe it. On the left, with some of the easier things, this equation looks more like H2O. On the right, the equation gets more like a complex hydrocarbon. In general, in the book, we break these things down into what we call “smart actions.” Smart actions 1) use the assets you have, 2) are financially viable, 3) have a low threshold for change, and 4) are building blocks to something bigger and better. Those are the four criteria that we're pushing on organizations, because people need to connect the dots across commercial systems to make them run better. 

If you really want to get nerdy, there are seven dials that the CMO can pull. They include, for example, salesforce size, assignments, go-to-market, or compensation. We need to be turning those dials to reflect a digital-agile model, not the field-based model of the past. By turning those dials, we've seen people double speed, visibility, and productivity. We call that commercial architecture. Somebody's got to sit on top, think about those dials, and use algorithms to do it.

Simplifying the selling workflow: Sales technology flat-out doesn't work because it makes life more complicated for the seller. It's great for managers, and it looks good, but if sellers don't adopt it, it doesn’t work—and if it's not making their life easier, then they're not going to adopt it. There's a big push to smooth out the speed bumps and bring Apple-like capabilities that make sales easier, because the track record of adoption for CRM and most sales enablement is pretty poor. 

Shrinking the bullseye: There is so much waste. There's this notion of a long tail in sales; any sales leader will tell you, “We chase too many customers and we chase the wrong customers.” You cannot shrink the bullseye, particularly in a world of cross sell and expansion. Data is proven to A) size opportunities and B) calculate propensity to buy and match them up with sales people. There's a huge, no brainer, 80-20 opportunity in that. 

Reconfiguring the commercial technology portfolio: The average organization has 30 tools (probably way more if you look at sales, marketing, and information services together), which are bought in an incoherent manner. I ask, who curates the technology portfolio? Who owns the customer data within that? And the answer is dozens of people. There is no way to leverage perhaps your biggest commercial assets—the commercial, digital selling infrastructure, and the data it throws off—without having a much more coherent, top-down, financially valid view of that. That's what the revenue operating system's about. 

Cross functional processes: The way that we recruit, ramp, train, and retain reps is cross-functional. There are huge opportunities to streamline that. 

Consolidating operations that support the revenue cycle: I'm typically going to cross five organizations with five different systems as I go on the customer journey. That's a recipe for disaster. You see it in terms of leakage and bad customer experience. Consolidation is happening and is yielding a rev ops superstar. 

Automating planning processes: Turn those dials automatically. Use gaming, like Saber, to try different scenarios, or to play out a scenario 15 quarters in advance. That's possible today, but people are still doing it on spreadsheets and fighting in boardrooms.

Enabling account management at scale: It's pretty easy to throw millions of dollars of love at one account. How do you do that affordably and consistently across thousands of accounts? That's a great challenge. We cover this in our book, but if you ask what growth leaders are going to do? That gives you a pretty good sense. You've got to connect some dots; you've got to combine people, processes, and technology. 

When I show this chart to really good rev ops teams and sales leaders, this maps to a lot of the projects and programs they already have on the drawing board. If you're an investor, you should be weighing your investment strategy, your innovation strategy, and your value proposition against these concepts, because this is what will create value. 

How Capital Investments in Channel, Data and Technology Infrastructure Will Change

Blake: How do you expect capital investments in go-to-market operations to change over the coming years? From your perspective, where will go-to-market teams be investing across channels, data, and technology infrastructure?

Stephen: When you play this out, the way we buy technology and the way technology is sold has done us a disservice. It's important to take a step back and look at the elements of growth as a system.

At the highest level there are growth assets, which we've talked about. One the left are the things that enable my channels, my customer-facing marketing technology, and my revenue or sales enablement technology—the content, the CRM, the training, and all of that first-party data that they create. 

In the middle is how we’re using insights to grow. There's this notion of revenue intelligence—using data to run the machine better. What are my biggest opportunities? How are my sellers performing? Tell me about account health and lifetime value, and give me a reliable forecast that's going to show revenue recognition. This intelligence has to go to the front lines. What's really interesting is this notion of a hub—call it a customer data platform, or a data mart, but it’s sucking in those insights from the left and deploying them north, south, east, west. 

Resource optimization is a huge opportunity. If you turn those dials on territories, quotas, engagement models, and priorities, you can create enormous value. Part of the biggest value is in pricing, and the ability to enhance revenue through margin expansion. Getting the highest price through personalization and delivering value is largely untapped right now. The art of it is to connect the dots in ways that drive those outcomes: simplifying selling, improving margin, putting intelligence in the hands of your sales people, and training and ramping the sales team better and faster. That chart is really just combinations of different ingredients for the formula.

Platforms Support the Next-Generation Revenue Operating System

Blake: What are some of the platforms that are going to support the next-generation revenue operating system?

Stephen: Let's talk about some of the big areas that we're going to see converge. Go up to the upper left hand corner; it's called revenue enablement. Digital asset management is where your content lives—call it sales enablement. Learning management is where your training content lives. That content gets delivered through CRM, where your opportunities live. There are all sorts of sales automation platforms: the categories in this space are sales enablement, sales engagement with biases towards automation, and sales readiness with biases towards training. They run on the same data, they go through CRM, and they use the same content. Why they are separate systems and why they support siloed objectives, I have no idea. The content you use in sales to pursue opportunities is the same content you should be training against, and the same content that should be served in an automated fashion.

We're seeing massive consolidation in this sales enablement, engagement, and readiness space. Some of the big names include companies like HighSpot, who are combining readiness, or learning and training, with digital asset management. They're very friendly to CRM because they realize you don't need 50 panes of glass; you just need one. They're automating and streamlining the workflow. Another example in that area would be Outreach, who's trying to do the same sort of thing. The list goes on and on and on. Some organizations have a really great silo value proposition, and they need to open up to make sure they can connect the dots. 

Blake: The key takeaway that I get from all this is, gone are the days that we have a million point solutions that can't talk to each other. True competitive value for a company can be driven by making sure all the data and systems are connected.

Stephen: I'll build on that. We rank a hundred technologies that enable this every six months. Most of them are privately held. The sum value of those companies is over a trillion dollars. There is no way that established software markets can justify those valuations—the reason those companies are worth a trillion dollars is because they are unlocking value from the data and assets inside of their organization. 

The whole economics of software has moved from efficiency, effectiveness, time, and motion, to unlocking value from data. The customer data inside American Airlines is worth more than the entire company, including the planes. Unlocking the value there has enormous potential. That's what this picture is all about.

How Will Go-To-Market Strategies Change in a Recessionary Environment?

Blake: In a perfect world, you check off all these boxes, and you'd have all the systems in the world to support them. But we might be heading into a downturn, and you're already starting to see folks tighten their belts across the board. What happens to go-to-market strategies in a recession?

Stephen: I was fortunate enough to work with professors Ragu Iyengar, David Reibstein, and others at Wharton, to look at the history of market investment during recessions. 

I think my first watchword is, don't waste a crisis. We surveyed hundreds of CMOs—who are the allocators of capital here—and asked them how things change in a recession. Obviously, programs and budgets are going to be cut, and new things are going to stop. But their point of view was, “We're not where we need to be. Let's use this crisis as an opportunity to completely redefine the customer experience in digital and virtual channels.” Farsighted growth leaders are going to use the recession to do that.

If you have cash, there is no better time to invest in growth and innovation than during a recession. At the Revenue Enablement Institute we published a report called “Markets in Motion.” Every recession, people who invest in launch products and double down on marketing budgets pick up share. That's not possible for a lot of organizations but [if you can do it,] it's a great time to double down.

There's this concept of a response curve. If your competitors are contracting and there are no messages in the market, your advertising budget works twice as hard. Practically 90% of firms are going to cut. Cutting intelligently, and balancing the short term versus the long term, is critical. You cannot give up on CapEx. You cannot stop feeding the machine, particularly in a recurring revenue model. Let's look at zero-based budgeting—maybe you can drop some budgets that aren't working, but you should take a long view and rebalance.

What I'm hearing from growth leaders is that everybody wants to double down on cost-to-sell and productivity improvement in a recession. That only makes a stronger case to stick with technologies that are genuinely creating scalability. More for less: if I'm going to have fewer people covering the same market, then initiatives that connect the dots across your technology portfolio in ways that genuinely create multiplier effects—that's where you should be thinking. I don't wish a recession on anyone, and I know the pain of the cash, but if you can rise above to any degree it's an opportunity to really gain share and move on your competitors

Blake: I love a lot of the points you made there. I think the key takeaway is efficiency, the beauty of connecting the dots, and having the right technology stack in place so you can do more with less headcount. Which goes back to the whole reason for having the operating system.

I really appreciate all your thoughts and wisdom here today; it was a great conversation. For those of you that would like to learn more, I invite you to buy a copy of Stephen's book—we’ll provide a link at the bottom of this post

Stephen: Thanks so much. I hope I provided a lens for people to think more intelligently about allocating their precious capital.

If you are interested in learning more from Stephen, you can purchase his new book, Revenue Operations: A New Way to Align Sales & Marketing, Monetize Data, and Ignite Growth, here

Blake Brown

Investor, Tidemark

Stephen Diorio

Managing Director, The Revenue Enablement Institute

September 2022

The information presented in this post is for illustrative purposes only and is not an offer to sell or the solicitation of an offer to purchase an interest in any private fund managed or sponsored by Tidemark or any of the securities of any company discussed. Tidemark portfolio companies identified above are not necessarily representative of all Tidemark investments, and no assumption should be made that the investments identified were or will be profitable. For additional important disclaimers regarding this post, please see “ Purpose of the Site; Not Investment Advice; No Recommendations” and “Regulatory Disclosures” in the Terms of Use for Tidemark’s website, available at Terms of Use (

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