Lead Generation Programs – Practical Strategies for B2B Technology Companies

Investing Strategically for Marketing Performance in 2021

In 2021 as we return to a new normal, how do we strategically invest to maximize pipeline creation and close?

Challenge: In 2021 as we return to a new normal, how do we strategically invest to maximize pipeline creation and close?

With vaccine shots going into arms around the world, we can see a return to ‘normal’ in the coming months and years ahead. But what will this new normal look like and how do we prepare best for it? Many trends were accelerated with the pandemic: work-from-home and online shopping to name a few. But I believe the buyer’s journey has also changed fundamentally which, in turn, requires us to change how we prioritize our investments.

For many years, we have talked about the customer journey – and even recognized that 70% of this journey happens before a prospect ever engages with our brand. So we responded by creating early, mid and late stage content to make relevant offers building awareness and engagement.

However, in the years before the pandemic, consumer application technologies have increased expectations of the buying process. With a few clicks on your phone, you can get a ride (Uber/Lyft), get food delivered (Postmates/Grubhub), transfer money (Venmo/Paypal), buy groceries (instacart/Amazon Fresh), and more. The most precious thing our prospects have is their time — and they have less of this than ever as their job responsibilities have expanded. And the pandemic has only accelerated both their expectations with these services and the demands on their time (going from Zoom meeting to meeting).

This is the new normal environment that will be slowly returning over the coming year. So how do we meet these new demands from our prospects? I believe there are four key areas for investment in 2021: Deep and Relevant Content, Smart Sales Outreach, Multiple Product Demo Options, Improved Product Experience.

Deep and Relevant Content:

As B2B marketers, we know that we need early, mid and late stage content: infographics, explainer videos, blogs, case studies, whitepapers, eBooks, analyst reports, ROI calculators, and more. All too often, this content is written by marketing people who don’t live the experience of the prospect – whether they be a security engineer, data analyst, software engineer, CFO, supply chain director, etc.

What our prospects really need is useful content that teaches them something and not a 10 page graphical eBook that barely scratches the surface of the topic at hand. Imagine content that actually educates them about the challenges they face with relevant information. This could take the form of code snippet samples, security breach mitigation recommendations, tips and tricks for handling month-end close, excel pivot recommendations to cleanse data, etc…

We expect the prospect to ‘tune-in’ to our channel of communication — but why would they do so unless there is something in it for them? I realize that this advice might mean making their life easier with their current solution — but it builds awareness and trust of our brand. Isn’t that what we wanted after all? Certainly it’s OK to insert content that shows the benefit of our solution, but if we only insert promotional content — we should only expect engagement at the very end of the buyer’s journey when they are really considering alternatives. Therefore we need to invest in deeply relevant content that builds engagement earlier with our prospects.

The challenge here is to create more deeply meaningful content which likely requires our internal subject matter experts to write or create content. Therein lies the challenge. We can’t have people who are removed from our prospect experience to write insightful and enlightening content. They can assist our subject matter experts (likely who are not writers) but the source material must come from a subject matter expert. Getting these SME’s to create this deeply relevant content should be part of your 2021 plan.

Smart Sales Outreach:

Who likes getting an unsolicited call? Anyone? These calls are an interruption of your day — and we must remember this as we make our outbound call plans. To make matters worse, often B2B BDRs are calling on sophisticated prospects with little more than scripts, qualifying questions and a request to set up an appointment. No wonder we get a bad reputation here.

Imagine if the callers were more deeply educated on the buyer persona, the challenges and the solutions faced by their prospects. If they can ask smart questions, provide relevant information and actually help the prospect in some way, the call becomes actually more interesting. As a demand marketer receiving unsolicited calls, when a BDR called me with an understanding of the challenges I face, asked smart questions, listened and offered relevant solutions, then I would gladly set an appointment. But they only had 30 seconds to earn my trust and two minutes to prove they could help me. If they just wanted to set an appointment – b’ bye.

This takes ongoing training to raise the level of our BDRs or AE’s to make smart calls. This is a significant investment in training by internal subject matter experts and the creation of supporting materials for the BDRs. We can hire BDRs for critical communication skills and process, but we need to enrich them with the detailed knowledge that will be useful to our prospects. [As a side note, some organizations actually hire target personas to become BDRs or AE’s – preferring to then train them on sales and communication skills.] So investing in your BDR skills to truly understand the challenges and issues faced by your prospects should be a key investment area for 2021.

Multiple Product Demo Options:

Full disclosure – I am a fan of product led growth. If we claim our product is better than the prospect’s status quo — let’s show them directly. Now some products lend themselves more easily to a freemium experience than others. For larger, integrated solutions requiring significant deployment services, it may be impossible to provide freemium or similar experience. However, there are many different options to consider because customers expect the ability to explore on their own – especially if they are not ready to speak to a sales person.

I advocate creating a number of different experiences to drive early engagement with your product:

Recorded product demonstrations
Turning ‘features’ of a solution platform into freemium products of their own
Screenshot demo as step-by-step, guided tour
Short-lived, virtual instance of your fully deployed product for exploration
Customer webinar recording of their deployment and benefits
Weekly live demo webinar one-to-many

Most products have different use cases which then would require different versions of these product experiences above. Well, that is the hard work that needs to be done in 2021. Identify these use cases and the best options to display this to your prospects and get to work on creating this extremely helpful content. No doubt it will take time from systems engineers and product marketing, but the resulting assets can be used repeatedly at various stages of the customer journey.

I encourage you to be creative in thinking about how you can create various types of product experiences. Prospects today want the ability to explore on their own and ‘see’ your product in action. The real challenge is for us to consider how we create these compelling experiences as part of the revised journey. These experiences need to create a ‘goose-bump moment’ — that moment where the prospect clearly sees how your product fixes their challenges. If you can deliver this — you will drive further consideration and likely some direct engagement with sales. Invest in 2021 in creating new and compelling product experiences appropriate for various stages of your customer journey.

Improved Product Experience:

The product engagements defined above assume that the prospect’s product experience is compelling. Sometimes we need to look critically at our own solution, compare it to alternatives and be honest with our assessment. I recommend you go through the complete onboarding and usage process to really understand what your prospects will see as they become customers or as they trial your product. You do not want to accelerate prospect engagement with your product if this demonstrates that your solution is non-intuitive, clunky, hard to use, etc…

So, spending time to identify and improve the product experience is worthy of marketing effort. If these experiences are not compelling, I would rather take marketing headcount and/or funds to accelerate remediating these issues. It may be time to slow down demand generation to fund key improvements before stepping on the accelerator. So my recommendation for 2021 here is to have an honest assessment of the product relative to both the prospects current solutions and to your competitors.

So There you have it — four strategic recommendations for guiding 2021 investments that will take advantage of the new normal. Give your prospects more of what they want as part of their buying journey. These tips should help your content, communications and engagement have greater impact — all while helping you scale.

Lesson: With prospect demands to get relevant information when and how they want it, in 2021 you can provide: Deep and Relevant Content, Smart Sales Outreach, Multiple Product Demo Options, and Improved Product Experience.

Churn Avoidance and Customer Programs

Challenge: The Hard Dollar ROI for Customer Programs

Certainly in the early stages of growth for SaaS companies, acquiring new customers is the primary focus. However, a hidden value remains with your existing customers. ‘Land and Expand’ growth models fuel growth rates of the most successful B2B SaaS companies. But there is a hidden gem lurking within your customer base – churn avoidance.

As we know, long term success is based on a negative net churn rate — which shows that the amount of revenue from existing customers grew, even with some customer revenue that churned. Here is a simple example. Lets say a company has a negative net churn rate of 115%. At face value, this could mean that some customers expanded their revenues by 30% but another 15% of customer revenue was lost due to churn — leaving the total negative net churn rate of 115%. While a very simple analysis, this shows the ‘tax’ that churn places on growth – namely 15%. Improving net retention improves company valuation in two ways – both in growth rate and net retention which are often multiplied to calculate company valuation.

So it’s clear that if a company avoided churn, the growth rate would be higher. But how much can or should a company invest in churn avoidance? Well, here is some simple math. If a growing company has 100 customers with a $40K ARR, they might experience a total customer churn of 10% of accounts annually (10 accounts churn completely for $400K in total ARR churn). If 25% of this churn was avoidable through interventions, this would save $100K ARR annually. If we think of investments with a 1 year payback or CAC, then we would be willing to spend another $100K on annual programs to avoid this unnecessary churn. Voila – budget for the programs! And these programs might help promote customer expand plays — so you could see a return even greater than just churn avoidance.

OK – so it’s clear that companies should invest in resources to avoid unnecessary churn. But where to place these investments? According to Carl Gold, Chief Data Scientist with Zuora, programs addressing customer churn fall into four categories:

Customer Marketing
Product Enhancement
Customer Success
Pricing & Packaging

More specifically, from my experience there are a number of more specific programs you might consider in each of these areas (there are likely many more):

Customer Data Analytics — Identify and measure key predictors of customer success and churn
Customer Conference — Great way to provide training and share success stories
Customer Workshops — Training for existing and new users
Product Features — Accelerate development of key features to prevent churn
Customer Success People & Tools – More resources for front line CSRs
Customer Community – Create a place for customers to answer questions and share success
Product Value Packaging – enrich value for customers most like to churn

Every company will have a unique product and market situation to guide their customer program investment decisions. This analysis is merely to draw awareness to the ROI of these programs, as I believe they are under-invested in the majority of companies. Strategically selecting customer program investments can improve your growth rates by both reducing churn and increasing expansion rates.

Many of these programs require tight integration between marketing, sales, product and customer success. Creating cross-functional teams to identify, select and run these programs is likely the hardest part of the process. But for those companies who embed these programs from the start, they can increase growth rates and company valuation.

Lesson: Identifying and remediating avoidable churn can pay significant dividends in terms of company growth rates but requires careful cross-functional planning.

B2B SaaS Marketing in a Time of COVID

Challenge: With our new ‘COVID normal,’ how do we deliver against our increasing pipeline requirements?

[First, let me say that my heart goes out to all those impacted by the COVID pandemic. It impacts everyone in different ways – and to some whose lives have been tragically disrupted.]

OK – the pandemic has been with us for seven plus months. We have executed our initial fire-drill response programs to show our customers and prospects that ‘we are in this with you.’ We have adjusted our team operations to work remotely and be sensitive to the varying needs of our team members. We now have back to back Zoom calls that suck up all the time ‘gained’ from no commute. And we have even figured out how to manage our hair with little or no external help. Yes – we are now operating at our ‘new normal.’

But more importantly, we changed our marketing go-to-market. Let’s summarize these top level changes:

Shifted from in-person events to online events
Re-allocated funds to digital marketing
Optimized our landing pages for conversion
Improved our nurture programs

OK – now what? Quarterly revenue targets are increasing for sales and therefore so are our targets for marketing sourced pipeline. Unfortunately, reaching buyers on the phone is more difficult than ever because no one is in the office, which also makes mailing packages and ABM programs more difficult. So where do we turn next? How do we convert more MQL into Opportunities?

Before making recommendations, let’s first recognize that our prospects are facing the same issues we’re facing, namely:

A tsunami of Zoom calls
Stress about COVID
Stress with increased family responsibilities
Feeling isolated

My recommendation – let’s make their life easier. I know this might be radical, but what if we:

Provide truly helpful content that helps them do their jobs
Educate them about things they don’t know that will actually help them
Make it easy for them to learn about how our products and services work
Simplify the process to successfully trial our product

Now more than ever our prospects need us to make their lives easier and we can do so by making the process of engaging with us simpler and more satisfying. Let’s give them what they crave most: a bit of time back in their day with informative and easy to consume content. And most importantly, a great experience to trial our product and see for themselves how their life improves with our company’s product.

Lesson: Focusing on our customer’s needs is more important now than ever in every step of the buyer’s journey.

Three Factors that Jeopardize Outbound Program Results

Challenge: Identifying Personas Within Buying Centers is Difficult

I had a brainstorm last week that I believe will lead to more productive outbound programs by identifying a problem inherent in many Account Based Marketing (ABM) programs. In sum, we need to improve how we develop our target buyers at the early stage of program launch. Since this is a new insight for me, this post focuses more on diagnosing he problem rather than recommending solutions. Have you found a better way? Love to hear your thoughts.

We must address several layers of issues to accurately target prospects in a scalable way providing the foundation for outbound/ABM programs. These layers act like concentric circles to get to the ideal program target list. Here are a set of three ‘formulas’ or reasons that describe the top three challenges:

Because:

ABM ≠ Buying Center

AND

Buying Center ≠ Persona

AND

Contacts ≠ Updated

Therefore

ABM ≠ $ROI Potential$

Let me explain.

First, we all love Account Based Marketing and understand that greater customization and effort focused on a limited set of accounts who represent your ideal customer will deliver higher conversion rates. However, when targeting enterprise accounts, there are different buying centers. More specifically, your offering may address the needs of and be purchased by multiple departments, so targeting a ‘company’ does not sufficiently address the buying center because there are actually multiple buying centers. For example, if you sell to developers, your target account many have many different groups of developers who will make different purchase decisions. And this raises further questions. Do these different departments (buying centers) have the same needs, pain points and interests? Do your value proposition, primary contacts and other key elements change across every buying center? If so, then many ABM programs may be missing the mark by not tailoring to a specific buying center within a target account. Factor #1: ABM ≠ Buying Center.

As we dig further into our outbound programs, the buyers are often not in the same department. The personas leading the purchase may be part of one department but in most cases there are personas from different departments involved in the buying decision. To accurately target an ‘Buying Center’, your programs need to consider all of the different contacts associated with the buying center (the collective group of people responsible for making the purchase decision). In many outbound/ABM programs, contacts are selected because they fit key personas but their position in the organization may not be identified in terms of how they fit within the buying center. Factor #2: Buying Center ≠ Persona.

Finally, the targets of our programs often shift jobs — up to 20% of contact details may change every year. While many organizations have deployed CRM account alignment solutions (DiscoverOrg, DataFox, D&B, …), few automatically update contact information. As contact take on new roles/responsibilities and as contacts change jobs, is your database staying current? Likely not. (Personal note — I would love to a cloud solution that automatically updated contact details as they change) Factor #3: frequently Contacts ≠ Updated.

While ABM provides a mechanism for better account and contact selection for outbound programs, there remains a huge gap between this method and how internal enterprise B2B purchase decisions are made. Therefore, your ABM may be delivering less revenue than it could if the programs were more carefully targeted. Clearly there are major gaps in our ability to map organizational buying decisions to a level where our systems can help us execute these programs at scale. That’s the bad news — but realizing this gap is the first step to designing better processes.

If we, as a marketing department, take our ABM efforts to the next level with tailored targeting processes, we will be more closely aligned with the actual purchase process. For now this starts with a careful examination of the purchase process, personas, target accounts and more, in order to develop a strategy with available tools. As we identify target accounts, we must identify all of the personas across the organization associated with the buying decision to increase success rates. We will need to lean harder on our tech stack providers to give us greater insights into these areas for better and easier segmentation at scale. In the end, this will be an optimization of outbound programs to have more precision and greater results.

Lesson: If we take the time to identify and target all of the contacts associated with organization buying centers, our outbound campaigns will be more productive and drive greater revenue.

Eliminating Leads: Migrating CRM to Support Account Based Marketing

Orchestration

Here is a recent presentation I gave at the OpStars event alongside Dreamforce. It describes the motivation behind eliminating the Lead object in CRM to support ABM and gives the experience of one startup making the transition.

Moving to Account Based Marketing – OpStars Event Presentation

The Road to ABM: Baby Steps Not Leaps

Challenge: To Cutover Hard or Migrate Gradually – that is the Question.

During a recent conversation about migrating from traditional inbound marketing to Account Based Marketing (ABM), a colleague noted that the optimal method was a hard cutover but that this would put a serious hole in his pipeline. He reasoned that this would entail a complete shift in targeting, team capabilities, tools, programs and more. Given that there is a certain sales cycle associated with driving Leads and Opportunities in this fashion, he believed this would blow a hole in the pipeline for six to twelve months due to the product sales cycle. This colleague is super smart leader with deep demand gen experience. However, I disagree agree with this assessment and I have yet to see this method in practice so I thought I would share my thoughts with my network for feedback.

My experience for over 20 years has been as a content and funnel marketer building programs to scale inbound leads and automate qualification into the sales funnel (see my recent blog on ‘continuous pipeline’). The concept of ABM is compelling, with benefits including increased focus, activity orchestration and higher conversion rates due to customized messaging targeting specific accounts and personas. Since I have also seen funnel conversion rates drop over the last five to ten years, ABM is a natural solution. However, in my experience at several different companies, the migration to ABM was a gradual process, not a hard cutover.

At one company where the focus was to drive end user trials in a land-and-expand model, we developed a target Account list based on the past customer lifetime value (LTV) selecting a prospect list most likely not only to land but also to expand. These prospects were run through a series of phone, email and postal outreach programs. The results were quickly positive resulting in significant pipeline in just two to three months. Gradually we added additional components including digital marketing and more fully integrated our online and field events to better address all stages of the customer journey. The result was positive pipeline impact in just a few months all while we continued most of our inbound marketing programs.

At another company with a SaaS based enterprise software application, the goal was to add-in a focused outbound ABM program to the existing inbound programs. We started by identifying the use cases where we had high win rates and successful deployments. We then selected accounts based on size, industry, technologies deployed and other key criteria as a target list from which the sales reps selected the specific accounts based on their past experience. The marketing team then built out contacts lists using agreed upon personas, designed email and phone outreach programs and rolled out the new systems and processes to the reps. In just two to three months we drove over $500K in new pipeline – again while we continued all the inbound programs. Going forward the plan is to add-in both digital marketing and events.

In neither case did we stop our inbound funnel, rather we designed the new programs to work with existing programs while we developed outbound ABM muscle. We made sure that there was capacity within the lead qualification teams to run the outbound ABM programs while still qualifying inbound leads. Also in both cases we started with simple email and phone campaigns and later moved to a more fully orchestrated ABM program. Some might not consider these programs “true ABM” but rather a targeted sales play — but I believe that’s just semantics. The bottom line is that my job is to drive pipeline and deals and these methods have been successful.

My experience has been mostly positive gradually migrating to ABM. How about you?

Lesson: I believe that the adage ‘moderation in all things’ applies to ABM migration. What have you seen?

Account Based Marketing Migration Plan

Here are the presentation slides from a DemandBase seminar I gave in January of 2016 describing a planned migration to ABM. I believe the structure and approach has stood the test of time and is still relevant today. Does this look like your ABM approach?

Account Based Marketing Migration Plan

Continuous Pipeline: from Inbound to ABM Outbound

Challenge: As Pipeline Demands Increase Year over Year, How Does Marketing Keep Up?

For early stage startups, building demand generation functions often takes a common path. The first marketing employees purchase and deploy CRM and marketing automation systems while they build out inbound programs such as events, webinars, roadshows, paid search, nurture programs and dashboards to track progress and ensure optimization. The early years are typically a success as marketing supports sales with an increasing pipeline by selecting the easiest and highest yielding programs. However, over the next few years, pipeline demands increase at a faster rate than budget or headcount allows, putting pressure on marketing for more pipeline with fewer resources. At some point, these (mostly) inbound programs experience diminishing marginal returns – with lower conversion rates or higher costs. Suddenly the marketing team goes from ‘heroes’ to ‘zeroes’.

I have been on this journey more than a few times. How does the demand generation manager/leader continue to deliver over time with increasingly difficult targets? Generally, I have seen marketing groups enrich pipeline in two major waves. The first wave is to expand marketing programs to include customer advocacy, upsell/cross-sell, new market segments/applications/use-cases, etc. Each of these can be very effective and support more pipeline creation within cost targets. But with the ongoing march to profitability, marketing departments need even more pipeline growth at even lower cost.

The second wave of additional marketing programs involve going back to a time when there was little or no marketing and just a few reps using the phone and personal email to drive opportunities. But what’s different at this point is doing this at scale to support the business with orchestrated and targeted outbound efforts. Marketing can create a continuous account based marketing program acquiring ideal customer profile Accounts and Contacts and placing them into scripted sales plays to drive sales outbound efforts efficiently. Each week select number of accounts per rep that fit the ideal account profile and have target personas added to outbound cadences with optimized content and offers supporting the customer journey. Sales is likely already running email/phone programs anyway – why not make their efforts part of a defined and continuously optimized marketing-driven process to drive net new opportunities.

Because marketing is creating a structured process, the messaging and team activity can be measured and optimized. These programs can test and optimize messaging, CTA, # contacts, types of outreach, etc… This requires marketing to take a leadership role in ongoing ABM review and to communicate these results across both sales and marketing teams. Creating standard processes, funnel definitions, SLA’s and more will enable simple dashboards to provide transparency and insight into ABM program productivity. The team can also evaluate the vendors and tools used in the program – in some cases testing these as well.

Is your sales team still doing individual outreach? Are you leaving outbound programs up to your reps using their own emails or call guides? This does not scale and certainly is difficult to optimize. With a standardized process, then the management team can review and improve performance. Most importantly, as inbound programs that meet target ROI criteria become harder to find, this structured and coordinated outbound program can help fill the gap and support overall revenue targets. This ongoing dialogue between marketing and sales also makes the increasing targets a joint challenge to solve. (OK so we might not all be holding hands and singing kumbaya quite yet…).

Lesson: When looking to cost-effectively increase your pipeline, ensure marketing and sales are collaborating closely on inbound and outbound efforts to optimize content, flows and success.

NOTE – special thanks to Chris Newton for term Continuous Pipeline.

Managing Leads as Contacts: A Marketing CRM Use Case Enhancing Account Based Selling

structured

Challenge: With Sales Increasingly Adopting Account Based Sales, How Do Marketing Systems Support the Effort?

I recently asked a simple question on LinkedIn:

Anyone know of an organization that has eliminated Lead management in Salesforce.com and moved to prospecting solely using Contacts/Accounts? Love to chat with them about their experience.

I was quite surprised to see a resulting 23 comments and over 10K views. Clearly this struck a nerve. Full disclosure: I am currently working with a client to migrate the management of prospects as Contacts rather than Leads.

In most B2B environments, sales reps have long thought about their efforts on an account basis. In fact, this recognition has driven the rise of Account Based Marketing to better support their efforts. Even when selling solutions with smaller ASPs (lets say ~$5-10K annually), reps map out their target account with key target personas. Further they use an array of modern account prospecting tools brought in by Sales Operations to support their outbound activities – tools like Tout, Yesware, Outreach.io, LeadSpace and LinkedIn Sales Navigator, to name just a few. This complexity combined with the marketing team’s involvement in attempting to manage the customer journey at the Account level caused me to rethink CRM structure.

Certainly there is a data sync between CRM and these sales outreach tools, but it is far from perfect in creating a complete view of a given account. As new Leads enter CRM from a variety of sources, how does a rep maintain that complete view of their target prospect or customer? As more tools are added, reps find it increasingly challenging to view Account details – such as people, relationship, and activity – in both CRM and prospecting tools. Just a few short years ago, CRM was the central database as well as the destination for prospecting. That is no longer the case.

Back in the day, marketers used the CRM Lead object for qualification and nurturing until they were ‘sales ready.’ Best practices were for marketers to nurture Leads with content relevant to their sales stage (still a great guiding principle). However, because there is a visibility and reporting gulf between the Lead and Contact objects, this makes rep outbound efforts much more challenging. There are some newer solutions to help both Marketing and Sales ‘see’ an Account view of all Leads and Contacts like Engagio, LeanData and ZenIQ. Mapping or matching Leads to Accounts is nice – IF the reps lived in SFDC – but as noted above, this is becoming less common with new prospecting tools.

With a more complex martech infrastructure and with reps ‘living’ in systems other than the primary CRM, how can Marketing best support these efforts with CRM structure?

I now believe that most sales organizations with heavy outbound prospecting in third party tools would benefit by managing Leads as Contacts. Both marketing and sales teams will enjoy improved Account visibility. Making an effort to map key personas within the account, to convert matched Leads to these Accounts and to update the Account information will prepare marketing to best support sales in their outreach efforts. However, making this move requires a close look at several things, including: lead to account matching, Lead/Contact enrichment, management of Leads that don’t match to Accounts, Account statuses and progression, funnel stages for both Leads and Contacts, MQL processes, Lead/Contact scoring and Lead Development Rep process to submit opportunities — to name a few. As we progress through the customer journey, there will likely be other benefits like improved Contact and Account scoring, better Opportunity management, improved customer lifecycle marketing, etc.

I believe the modern marketing and sales tech stack has matured to a point where managing prospecting efforts in a more structured, account-based way will make sense for many more organizations today, even with lower ASPs. There are certainly many details to consider because this represents a fundamental shift and will require a new set of best practices that will be different for each organization. Additionally, for companies migrating a mature CRM instance, it will take careful thought and deployment.

Lesson: Marketing can better support sales and the account buying journey with an Accounted-based process for managing Leads as Contacts – and this may fit many B2B sales organizations.

Define Your Sales Motion First Before Applying Demand Generation

Challenge: When to Invest in Demand Generation?

Demand generation is a perennially ‘hot topic’ because every organization needs to ensure a consistent flow of prospects ongoing to ensure it can meet its sales objectives. Take the recent focus on Account Based Marketing as refinement of programs, processes, systems and data to orchestrate and optimize demand generation results. Every emerging organization must have a clear customer acquisition strategy – or at least a plan to get to one. These involve go to market channels/programs, MarTech stack, programs and ultimately the expected cost of customer acquisition. Since all early stage companies need to quickly scale sales, isn’t investing early in demand generation the sure fire way to do this?

All too often, companies are pouring money into the demand generation programs and systems without a clear understanding of the customer journey. Demand generation is a set of tools and processes designed to support successful customer acquisition, onboarding through to customer success and advocacy. Without clearly understanding both the buyer persona and their journey, marketing cannot hope to make this process faster and more reliable.

This thought was raised in a recent article posted by a CEO entitled “How I Burned 10 Million Dollars So You Don’t Have To”. In the article, Matt Munson notes:

“We went ALL IN on an inside sales driven model. For good reason. With solid proof. But we nearly broke the company. We certainly caused incredible heartache for dozens of people.

I wish we’d tested earlier. More thoughtfully.

I regret not staying smaller for longer. Living off $3M to find product-market fit, with a real, scalable acquisition channel. And keeping the other $5M in the bank for scaling powder.”

Matt’s quote is spot on. It is so clear that we need to get this right. Every discretionary dollar is precious – and we can’t start data gathering and testing early enough. Moreover, before we spend anything, we need to clearly understand where in the customer journey this program or tool will have impact and how we will measure its effectiveness.

The best early stage companies I have seen most recently focus solely on sales in the early stages before engaging marketing to help scale. Even later, with a defined sales process, these early investments need to be scoped and measured appropriately. Over the past several years, I have been continually surprised with results and had to make significant resource allocation changes. Matt’s advice is true for us all. First identify the buyers and their process from awareness to engagement to purchase and to ongoing success. Set in place expectations for your programs – in cost, conversion rate, timing and more. Doing this on a shoestring marketing and sales budget is the right place to start and forms the basis of ongoing testing and optimization.

Investing in demand generation people, systems and processes too early can easily drive interest and engagement that does not result in revenue. The result is a recipe to burn cash and miss key milestones.

Lesson: Understand your sales motion first and only then scale demand generation with a measurement and test plan in place.