Understanding the basics

We now understand the problems, but before we can cover the solutions, it’s important to establish a foundational understanding of how we’ll discuss the various tools in a RevTech stack. We’ll cover these in considerably more detail as we progress.

Core Tools of a Mature RevTech Stack

Most mature stacks include three core tools: the CRM, the CDP, and the Warehouse. Here’s a quick overview of each:

• CDP (Customer Data Platform): A CDP unifies customer data from multiple sources to create a single, comprehensive view of each customer. Unlike CRMs, which are focused on managing interactions, CDPs focus on consolidating user data for advanced analytics and personalized engagement. Historically, these were the centerpiece of a MarTech Stack, but they are becoming much more relevant to RevTech in recent years.
• CRM (Customer Relationship Management): A CRM is a tool designed to manage customer interactions, track leads, and store contact details. It acts as the central hub for sales and marketing teams to manage the sales pipeline, track deal progress, and maintain customer relationships.
• Warehouse: A data warehouse is a central repository where structured data is stored for reporting and analysis. It enables teams to aggregate, process, and query large volumes of data efficiently, often serving as the backbone for analytics and business intelligence tools.

Capabilities in the Stack

Beyond these core tools, most stacks also include capabilities—functional components that operate on top of or alongside the core tools. These include tools or features for analytics, email marketing, and more.

• Capabilities Defined: Capabilities are specific functionalities that enable you to:
  • Generate Leads: Examples include marketing automation, advertising platforms, and website forms.
  • Close/Upsell/Renew Leads: Examples include tools for contract management, quote generation, and customer success automation.
  • Report on Deal Flow: Examples include analytics platforms, dashboards, and attribution modeling tools.

Sometimes, these capabilities are built into core tools (e.g., CRMs that include email marketing functionality). Other times, teams may opt for specialized tools (e.g., a dedicated email marketing platform).

Some tools offer multiple capabilities across the funnel, which brings clear benefits like lower cost, reduced complexity, and fewer integrations. However, this can make it harder to replace the tool if needed and to maintain data hygiene, especially when the tool operates across multiple stages of the funnel.

Reimagining RevTech Diagrams

Traditional RevTech diagrams can often look chaotic. For example:

While this provides a lot of detail, it can be difficult to know where to start, and how these tools align to the sales process.

To bring clarity, we’ll organize these diagrams differently:

• First, we’ll categorize the tools based on the capabilities they provide, assigning them to their respective stages in the funnel. If a tool supports multiple capabilities, it will appear in multiple capability boxes to reflect its various functions.
• We’re also aligning core tools to three primary categories. Typically, the CDP is focused on MarTech and lead generation, the CRM is used for closing and renewing leads, and the warehouse serves as a data repository. While this structure doesn’t apply to every stack—as we’ll explore in the program—it generally aligns well with the core functions of RevTech.

This structure will help you better understand how tools and capabilities interact.

For example, let’s take that complicated stack above, in our format it would look like this:

We can now see where the funnel starts and ends, and how each tool is being used to help the GTM team succeed!

The Connective Tissue: Federation

One critical aspect of any RevTech stack is federation—the connective tissue that enables tools to share data.

• Federation Defined: Federation refers to the methods and systems used to connect different tools in your stack, enabling data to flow seamlessly between them.

While not crucial to master at this stage, understanding federation is important because it impacts:

• Your ability to iterate and customize your stack.
• Your ability to diagnose problems quickly.

The ease of swapping tools when necessary.

Methods of Federation

Federation is achieved through various methods, ranging in complexity:

1. Easiest: Built-In Integrations Using APIs [<>]Many tools provide pre-built integrations, allowing them to "talk" to one another out of the box.
2. Moderate: ETLs and Reverse ETLs (rETLs) [ETL & rETL]
   • ETL (Extract, Transform, Load): A process where data is extracted from one system, transformed into a compatible format, and loaded into another system. Think of this as a tool that takes information from your capabilities, and puts it neatly into your warehouse.
   • rETL (Reverse ETL): The process of syncing warehouse data back into operational tools like CRMs or marketing platforms. Think of this as pulling information from the warehouse and putting it into capabilities.
3. Advanced: Webhooks [WH]Webhooks are automated messages sent from one tool to another based on events. They require setup but allow for near-real-time updates between systems.
4. Hardest: Manual Code Using APIs [API or Code]When tools don’t have pre-built integrations, custom code can be written to connect unlinked APIs. While flexible, this method requires significant resources and ongoing maintenance.

In our diagrams, we’ll include simple versions to show how data moves back and forth, but variations may highlight different aspects, such as connection types or the direction of data flow. While we’ve outlined connection types earlier, let’s take a moment to discuss data flow directions.

RevTech and MarTech experts often use the terms downstream and upstream to describe data movement, which influenced the way we modeled our stacks.

• Downstream refers to data moving down the funnel. For example, data flowing from an ad network into a CDP, and then into a CRM, is a downstream flow—it’s information moving towards a close.
• Upstream, often overlooked, is about sending insights back to the top of the funnel. We’ll explore why this is important throughout the program, but a common example is targeting or retargeting. For instance, sending purchase data back to ad networks helps train them to find lookalike audiences.
• Cross-Stream/Single-Use refers to data shared for a specific purpose without further movement. For example, sending meeting details from the CRM to Zoom and back is a cross-stream operation. The data doesn’t flow beyond Zoom, making it a single-use federation.

This framework helps clarify the movement and purpose of data across different tools and stages in the funnel.

Visual Representation of Federation

In our diagrams, the federation will be represented by arrows connecting tools. Annotations on the arrows can indicate the connection’s complexity or nature, while arrow colors may represent the direction of data flow—though these details are optional. As a RevTech expert, you’ll benefit from understanding this level of detail, but it may not be suitable for every audience.

As we wrap this section, you should now have a solid understanding of:

• The core tools (CRM, CDP, Warehouse).
• The role of capabilities in enabling lead generation, deal closure, and reporting.
• The importance of federation and its impact on your RevTech stack.

Stay tuned—we’ll go into much more detail in the upcoming lessons!