The Marketing Leader Crap-Shoot

Hire the Right Type of VP Marketing — Or You’ll Just End Up With a Bunch of Blue Pens with Your Logo On Them

I read a post by Jason Lemkin that really hit home ( And it hit home not because I have seen what he discusses happen way too many times, but because I am transitioning into a marketing leadership role. I got my marketing experience from not only growing a company from 2 people into a nice little company over a 10-year period of time, but that company just happened to be one of the very first marketing automation companies. I spent 10 years teaching Marketers Marketing Automation and how to use it for their business. It was an extremely valuable experience, and after having taken on leadership roles spanning Sales, Customer Success, Business Development & even Product - here I go !! So, thank you Jason for writing what I know to be true. You saved me a lot of typing.

Apologies to all those to whom this is already well known.  But, I know many of you have never hired a head of marketing before.  And as soon as you get your MSP (Minimum Sellable Product) out the door, and you’ve got your first 10 customers under your belt — you’re probably going to want to hire a VP or Head of Marketing to help you get more leads in, manage the process, and help get the word out.

All good stuff.

Let me just give you one tip.  There are basically 2 types of SaaS and business web marketers.  And if you hire the wrong type — the more common type — then instead of more customers, you may end up with just a bunch of Blue Pens with your logo on them.

Why’s that?

Well, for SaaS companies, marketing broadly speaking breaks into two species — Corporate Marketing and Demand Generation.  Traditionally, with the larger software companies, and before the rise of the Internet as a true lead generation engine for B2B sales — Corporate Marketing Was King.  And demand generation were the junior guys and gals in the backroom.

And because of this, you’re going to find the Web Leaders all spit out a ton of Corporate Marketers.  At the end of the day, Corporate Marketing is all about protecting and reinforcing the brand once you are Way Past Scale.  Corporate Marketing at Google, at Adobe, at Salesforce isn’t about getting the brand out there. Everyone that might buy has already heard of the brand, for the most part.  Corporate Marketing is all about reinforcing positive images on the brand and product before a buying decision (to accelerate it and increase the odds of closing), and post-buying, so that you’ll buy more.

You’ll buy billboards and ultimately TV ads:

Screen Shot 2013-02-04 at 3.45.07 PM

And maybe lots of blue logo pens.

Because once you have a brand, even just a mini-brand — this works.  It’s just that brand marketing is very expensive in the early days — and frustratingly, generates zero leads.  So it seems to have zero ROI.  I can pretty much guarantee you the billboard above generated $0 in direct revenue for us.  It’s worth it though, because EchoSign and the web services group are past $50m in ARR.  Which means there’s a real brand to manage.  Not an epic one yet, but a real one.  And then you really do want to invest a lot in the brand.  And as your revenues grow, it gets cheaper, because it’s a smaller and smaller % of your overall revenue.  Eventually, you can buy billboards.  And then eventually, maybe even TV if you want.  And this stuff, later, becomes great.  It reinforces your brand in the mind of the buyer, and when they are ready to buy … they’ll already know who you are, and hopefully, have some positive pre-conceptions.

Once you have a dominant brand, leads just follow here from the brand, because the brand creates so many leads and customers all on its own.  For example, the Adobe Digital Media division does > $3 billion in revenue a year, and pretty much everyone knows about Photoshop, Acrobat, and the rest of the core products.  The real art becomes getting people to buy more, and have the most positive relationship with the brand possible when they are considering buying.

>> So at this scale, “demand generation” really is seen as a second tier job, in some cases at least.  The demand already is there, for the most part, and maintaining top-of-mindedness is a top priority.

Thus, the tech leaders are full of senior, smart Corporate Marketing folks.  Protecting and reinforcing the brand, and doing a great job of it.  Which is exactly the wrong hire for you.  And these same tech leaders are often bereft of senior lead generation candidates for you to poach from.

Let’s contrast that to what SaaS start-ups care about: managing and creating leads.  Let’s look at this nice chart from Marketo (a leader in SaaS marketing demand generation software) below … because that’s what you want to hire:

Screen Shot 2013-02-04 at 3.40.39 PM

In particular, you want someone who is a pro at everything to the right of the dashed line.  Someone that really understands how to do lead nurturing, web demand generation programs, and work at the hip of your sales team to generate a steady, growing stream of leads each and every month.  And that’s not Corporate Marketing.

In the Fortune 500, sometimes Demand Gen folks are second-class citizens.  But in the growing SaaS company, these folks are the Lords of Marketing.  And the Great demand gen marketers can, until you’re ready, hack the stuff at the left.  They may not be as into the squishy parts of marketing.  Demand Gen folks are all about the numbers.  Spend $Y, create Z leads, that should be worth 5 x $Y in revenue.  So sometimes, their blue pens are not as pretty.

But Demand Gen folks can hack Corporate Marketing.  Corporate Marketing cannot hack Demand Gen. Ever.  It’s hopeless, in fact.

Here’s my only point.  I know so many SaaS start-ups that go to hire a head of marketing.  And they hire someone with a seemingly strong resume, from a strong tech leader.  And they hire someone who is really Corporate Marketing.

That hire fails.  And leaves you with nothing to remember him/her but some nice blue pens with your logo on them.

If you haven’t done it before, hold out for the unicorn.  In SaaS, find someone who lives, breathes, loves, and understands Demand Generation marketing.

Glenn Gary, Glenn Ross? Wake up Dinosaur !

"Your sales numbers are down - you need to make more calls!"  Ever heard that one before.  That is the mantra from a manager that does not know what to do to fix a problem.  Back in the old days (like 15 years ago) this was the way you sold.  You sold this way not because it was efficient, but because there were not many options.  I know from experience.  I even remember at one of my jobs as a headhunter, my manager would make me every Monday cut employment ads out of the newspaper, paste them on a larger piece of paper, and turn them in as the new leads I was going to hunt that week.  From there I had to cold call them on the phone, and at a minimum visit 50% of the companies in person, unannounced.  Furthermore, I had to produce a business card showing that I went and did not go to the golf course or the bar with my buddies.  Guess what my results were?  Let me just say that if you throw enough crap on the wall something will stick but by no means was this scalable or efficient - it was done out of necessity.  Unfortunately, there are a lot of managers out there, some who have done sales before, and some who have been on sales calls and had sales meetings so they think they have done sales.  Unfortunately many of them have not had an "in the trench" job like this for any period of time.  I call them Glenn Gary managers.  Have no idea what I am talking about?  Go watch the movie Glenn Gary, Glenn Ross.  It's a classic.... A classically wrong way to sell or to tell people how to sell - at least in this day an age.  Wake up dinosaurs - or get out of the way.

I realize this post is just a rant and not a solution, but I needed to rant today.

Optimizing your Customer Acquisition Funnel

And yet another winning blog post by David Skok.  This one is about optimizing your customer acquisition funnel:

Acquiring customers in the B2B world involves using a variety of marketing and sales steps with the goal of converting prospective customers into paying customers. The process is often thought of as a funnel (see diagram above) where you pour in suspects at the top, and various steps in the process, some percentage of prospects successfully convert to the next stage, making the funnel narrower as the process evolves.

No matter how large or successful your business is, you will have at least one place that is a blockage point in your customer acquisition funnel. This is the point where the conversion rates from one stage to the next are not satisfactory, or the point where you have a scaling problem, (i.e. you cannot profitably increase the number of people coming out of that part of the funnel because you have maxed out the capability of one marketing or sales technique). If you solve that blockage point, usually it will cause another to appear somewhere else in the funnel.  Read the rest here:

Manage Customer Success to Reduce Churn

One of the people I follow, David Skok, recently posted an extremely thorough overview of Customer Success Management and customer churn.  I wanted to share that here:

The health of a SaaS business is directly tied to its ability to retain its customers and prevent churn. To do this, they have to ensure that their customers are happy. That means making sure they get the promised business benefits they signed up for. This blog post discusses how to measure customer happiness, and how to actively manage your business to achieve it. It also looks at the newly emerging Customer Success function.

Read the rest here:

Why Sales People shouldn’t Prospect

I have long been a believer that cold-calling is an outdated approach still clung to by dinosaurs from the Glenn Garry Glenn Ross days.  I am speaking from experience as I have done it all.  I sold door to door when I was 17 & 18, I was selling before PC's were at every desk, and I was also selling as "ASP" (Application Service Provider) became SaaS (Software-as-a-Service) and now cloud (yes, dreamy I know).  Times have changed.  There was a time when I got my leads form the phone book and the news paper.  I actually had to go into the newspaper to find leads, cut them out, glue them onto a piece of paper that I would turn into my manager, and this would be my prospecting list for the week.  I would then have to go out and not cold call but cold drop-in to businesses and collect business cards to prove I was working and not golfing.  There are so many flaws there that is another post by itself.

Times have changed people.  The BUYER owns the sales process now and NOT the seller.  This is why inbound marketing is a focus of many of the fastest growing companies.  The best example I can give is the car buying experience.  Think about it ... when you go to buy a car now you likely know what car you want, what color you want, what options you want, what warranty you want, how much the dealer paid, how much others have paid, taken a virtual test drive, and more .....  BEFORE YOU EVER WALK ON TO A LOT AND A SALES REP EVEN KNOWS YOU ARE A BUYER.  Other buying decisions are the same - whether B2C or B2B.  Think of the last time you bought something, whether software or my own person recent purchase - a kegerator.  I got on my laptop and started pounding on Google.

You now need to fill the top of the funnel by ensuring that you can be found by the people who are looking for what you sell, and then ensuring you have the right content when they find you.

Learn how to adapt or go the way of the dinosaur.

One of my favorite bloggers (and a VC) recently put out this interview.  Check it out.

Demand Generation VS. Lead Management

Demand generation and lead management are two terms that companies should be fairly familiar with, but it turns out there is quite a bit of confusion around the two. Some companies believe they are the same thing, while others know the difference between the two, but are unsure which to invest in.

Lauren Carlson, an analyst who reviews marketing automation solutions at Software Advice, tipped me off to a two-part whiteboard session with Carlos Hidalgo, CEO of Annuitas Group and Executive Director of the Marketing Automation Institute. In part one, Hidalgo defines both terms and explains how companies should view them not as separate entities, but a dual proposition. Demand generation and lead management actually work together to create a more effective customer engagement strategy.

In part 2, Carlos discusses how marketing automation technology is not the complete answer to all your demand generation and lead management needs. Rather, it provides a critical piece of your demand generation strategy and lead management process.

Data and social media investment central to marketing strategy, programs

Keeping pace with the ever-changing dynamics of the online marketing space is no easy task. New technologies and tactics seem to crop up daily and evolve so rapidly that marketers often have difficulty deciding where to focus their efforts.

Findings from IBM showed that in the next three to five years, 82% of CMOs surveyed worldwide will increase their technology investment in social media, and 81% plan to focus on customer analytics and customer relationship management (CRM) solutions, two technologies designed to help them address the impending issues and concerns surrounding the growing amount of available marketing and customer data.

Marketers are using customer data to help them better reach unique segments of their customer and prospect audiences. In fact, 61% of CMOs said they used customer data for segmentation and targeting, highlighting the desire to better understand and message their current and potential clients.

IBM’s research complements July 2011 data from ClickSquared and The Relevancy Group that found 35% of US marketers were most interested in improving data-centric segmentation and targeting practices. Learning how to integrate and leverage social data was another top priority for 30% of marketers.

The ability to target and segment customers using CRM tools and customer analytics highlights a larger strategic desire to improve customer loyalty and advocacy shared by two-thirds (67%) of the CMOs in the IBM study.

In addition, 56% of respondents looked to leverage social media as a key engagement channel for customers and prospects, and the same percentage of CMOs also hoped to manage these customers through the use of integrated software suites, which could include tools like CRM or marketing-automation software.

The emphasis placed on social media strategy and customer analytics and data management largely reflect marketing aspects CMOs felt they had most room to improve: 71% felt unprepared to leverage the large amounts of data that continue to flood the online marketing space and 68% marked social media for improvement.

Sources:  IBM Study & eMarketer