Category: Uncategorized

Can Early Stage B2B SaaS Companies use ChatGPT to Run Demand Gen?

With all the hype on ChatGPT many people are worried that their jobs could be replaced by AI. I have been managing demand generation programs and teams for a long time – so I wondered: could it replace me? It is true that demand generation professionals are still in high demand, so it could be that ChatGPT fills in the gap when companies are unable to find/hire the right demand gen pro. Let’s put it to the test!

With all the hype on ChatGPT many people are worried that their jobs could be replaced by AI. I have been managing demand generation programs and teams for a long time – so I wondered: could it replace me? It is true that demand generation professionals are still in high demand, so it could be that ChatGPT fills in the gap when companies are unable to find/hire the right demand gen pro. Let’s put it to the test!

Here is the scenario I imagined. We have a series B funded startup that is starting to see early signs of product-market fit and they want to start testing a variety of demand generation programs. Could this company have someone on their leadership team, guided by ChatGPT, to build out a set of programs and measure the results. 

Here are the questions and answers from ChatGPT. I then assigned a grade along with a brief reasoning for my assessment. See if you agree.

Question: By percentage, how should a series B, B2B SaaS company with an average selling price of $40,000 allocate its demand generation budget across program channels in under 100 words?

There is no one-size-fits-all answer to how a B2B SaaS company should allocate its demand generation budget across program channels, as it can vary based on various factors such as the target audience, competition, and the company’s specific goals. However, as a general guideline, the company could consider allocating the budget based on a mix of channels that have proven to be effective in generating leads and conversions, such as digital advertising (25-35%), content marketing (20-30%), email marketing (10-20%), social media marketing (10-15%), events/webinars (10-15%), and other channels as appropriate. The specific allocation percentages will depend on the company’s unique situation and testing the mix to find out what works best.

ChatGPT

GRADE: B Without knowing more, I would generally assign 25%-35% to events and webinars as these have frequently been solid pipeline generators for me in the past. Otherwise, the ratios were pretty in line. 

Question: How should a series B, B2B SaaS company set up CRM and marketing automation systems to track the effectiveness of demand generation programs in under 100 words? 

To track the effectiveness of demand generation programs, a Series B B2B SaaS company should set up a CRM and marketing automation system that allows for easy tracking and analysis of key metrics, such as lead source, lead status, conversion rates, and revenue attribution. The CRM should be integrated with the company’s marketing automation platform to enable lead scoring, lead nurturing, and targeted campaigns based on user behavior. Regular reporting and analysis of these metrics will provide insights into the effectiveness of demand generation programs, allowing for optimization and improvement over time.

ChatGPT

GRADE: C I would have hoped for more detail on using SFDC campaigns and look at key metrics like click rates, conversion rates, cost per lead and cost per opportunity. 

Question: How should a series B, B2B SaaS company set up its initial LinkedIn and Google AdWords programs in under 100 words?

For LinkedIn, start by defining your target audience and creating a company page with a clear value proposition. Use sponsored content to promote your brand and thought leadership content to generate interest. For AdWords, choose keywords relevant to your target audience and create targeted ads with clear messaging and calls-to-action. Use conversion tracking to measure performance and adjust bids and targeting as needed.

ChatGPT

GRADE: NA I fault the question here. I should have asked for more specifics to define the audience, select the assets to offer and align the content along the value chain from ad thru to conversion.

Question: What type of events should a series B, B2B SaaS company consider to most cost effectively drive new pipeline in under 100 words?

A series B, B2B SaaS company should consider attending industry conferences, hosting webinars, and participating in targeted account-based marketing campaigns to cost-effectively drive new pipeline. These events allow for networking and exposure to potential customers, while also providing opportunities to showcase the company’s expertise and offerings. Additionally, leveraging social media and digital advertising can help reach a wider audience and generate interest in the company’s products or services.

ChatGPT

GRADE: C The answer lists some of the types of events but misses field marketing events completely. While social media can be a key part of event strategy, it does not tie this tactic in well. And it misses the cost per lead of various categories completely.

OVERALL ASSESSMENT: ChatGPT can provide a quick primer on key areas for those not steeped in demand generation but it is not a solid replacement for a demand gen professional. If I allowed for longer answers with more focused questions, the results likely would have been better. But, that depends on the user knowing the right questions to ask. So I am not worried about being replaced by ChatGPT today. However, the technology is going to only get better – so it’s only a matter of time!

Churn Avoidance and Customer Programs

How you can justify investments in customer programs.

Challenge: Justify Investments in 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.

What’s in a Name?: Demand Orchestration vs. Demand Generation

Does the term ‘Demand Generation’ really reflect what we do?

DemandOrchestrationChallenge: Does ‘Demand Generation’ Reflect What We Do?

Over the past 10+ years, my functional marketing role has been called ‘demand generation,’ and certainly in the tech community, this term helps quickly communicate where we fit within the marketing org.  However, recently I was speaking with a prospect the other day about a project, describing my typical engagements, how I work with clients, etc. When I was summarizing the typical activities, I found myself describing what I do as ‘demand orchestration’.

Let’s look at the functional areas managed by the “demand generation” leader:

  • Marketing KPI’s, Dashboards and Attribution
  • Customer Persona and Lifecycle Definition
  • Lead Flows and Processes
  • Marketing-Sales Interface and Handoff
  • Marketing Campaigns, Programs and Themes
  • Third Party Demand Programs
  • Webinars, Field Events & Tradeshows
  • Paid and Organic Search
  • Website Design and Conversion Rates
  • Martech Stack and Team Enablement
  • Lead Nurturing and Qualification
  • Lead Engagement, SLA and Qualification
  • Lead Development Rep Training and Playbooks
  • Account Based Marketing
  • ….and so on…

However, as a demand team leader the most important responsibilities are actually more like this:

  1. Align with Sales on Business Plan Targets & Splits w/ Marketing
  2. Build Forward Looking Demand Model for Opportunity and Lead/Account Targets
  3. Create KPI’s, Dashboards and Measurement Processes
  4. Design Bottom Up Demand Plan Across Various Channels
  5. Build Out Demand Team and Assign Functional Areas
  6. Create Planning Process Leading to Program Execution
  7. Track and Optimize Programs Ongoing
  8. Ongoing optimization of people, process, programs and systems: weekly, monthly, quarterly and annually

So what struck me at that moment in our conversation was that demand gen leadership is really about orchestration. The areas that most frequently rise to the top of my attention are:

  • Do we have the right mix of programs to address top, middle and bottom of funnel?
  • Do we have the right skill sets on our team?
  • Are we optimally executing against our plan?
  • Are there opportunities to optimize demand funnel volumes and conversion rates?
  • What is our prospect/account user experience and how can we improve?
  • How are we assisting with customer lifetime value in retention rates, upsell, and cross sell?

These activities essentially have to do with orchestrating people, process and systems to accelerate growth, therefore the role is more accurately described as orchestration. In my experience, I contribute most to an organization in the orchestration of these resources to ensure the team meets and exceeds pipeline and won business targets.

Should we call the function Demand Orchestration? Does that more accurately describe what we demand leaders do?  Does it even matter what we are called? What probably matters most is that demand generation leaders focus on the people, process and systems to optimize performance and growth. Let me know your thoughts.

Lesson: As demand generation leaders, our focus is to orchestrate people, process, programs, and systems to optimize revenue generation that meets or exceeds business goals

 

 

 

 

 

Revenue Attribution Maturity Assessment: The Journey to Reporting Nirvana

MarketingDashboardChallenge: Accurately Reporting Marketing Contribution Without Over-Investing Time and Budget

For many years marketing teams have aimed to identify their contributions to their companies’ success. Over the last five years, there have been significant advances in the tools available as well as the business processes by which data can be managed to support greater insights and gain competitive advantage. In fact, marketing groups today are frequently responsible for driving a specific percentage of company revenue so identifying revenue sourced by Sales or Marketing is critically important to measuring business performance.

But measuring marketing contribution is time, resource, and budget hungry. So how much should you invest? What tools will contribute to success given the maturity of your organization? In working with many different organizations, I have noticed common themes on the road to attribution maturity. Knowing where you are on this maturity timeline will help you plan for what may come next for your organization. While every company is unique, I believe there are common attribution lifecycle stages – and companies move through them as they need greater detail and insight.

So check out where you in attribution maturity so you can balance investment against the value of increasing visibility.

Stage 1 – Early Startup

  • Definition: Sales and Marketing have agreed upon revenue contribution percentages
  • Typical Revenue: $0-$500K ARR
  • Sales-Marketing Alignment: Handshake agreement on total new account revenue sourced by Marketing vs. Sales
  • CRM Deployment: Early deployment often still optimizing data and reporting process/structure
  • CRM Usage: Consistent campaign association is not yet defined for Leads, Contacts and Opportunities; Marketing automation may not be integrated with CRM
  • Attribution Process: Manual monthly or quarterly update of opportunities as Marketing vs. Sales sourced
  • Primary Challenges: Manual update of opportunities becomes overly time consuming

Stage 2 – Maturing Startup

  • Definition: CRM deployed with basic campaign attribution reporting
  • Revenue: $500K ARR – $5M ARR
  • Sales-Marketing Alignment: Attribution to Marketing or Sales identified and defined by first or last touch for new business; starting discussion on up-sell and cross-sell attribution
  • CRM Deployment: CRM standard utilization enforced, Sales forecast process optimization ongoing, Marketing automation integrated
  • CRM Usage: Both Sales and Marketing have created a data dictionary and have established standard processes for updates that have moderately successful usage
  • Attribution Process: CRM reporting using first or last touch for Marketing vs. Sales attribution
  • Primary Challenges: Both first and last touch neither accurately describe opportunity drivers nor comprehensively reflect Marketing and Sales program impacts

Stage 3 – Growth Startup

  • Definition: Specialized attribution software deployed in first version
  • Revenue: $5M ARR – $50M ARR
  • Sales-Marketing Alignment: Comprehensively defined Sales vs. Marketing source new business, upsell/cross-sell business and optimization of handoff processes
  • CRM Deployment: Utilize industry best practices for data integrity and reporting, generally solid compliance from Sales and Marketing teams, and relatively accurate sales forecasting; Initial deployment of third-party attribution tools
  • CRM Usage: Sales operations focusing on tight rep compliance with CRM, Marketing Operations focused on data quality and completeness
  • Attribution Process: Sales vs. Marketing sourced opportunities identified by campaign touches driving the MQL; utilizing both Sourced and Influenced models to optimize marketing performance
  • Primary Challenges: When sourced and influenced models do not accurately capture full account-based attribution impact or when weighted touch models are required to adjust campaign influence over customer journey

Stage 4 – IPO Readiness and Public Company

  • Definition: Specialized attribution software deployed in second iteration
  • Revenue: $50M ARR – $500M ARR+
  • Sales-Marketing Alignment: Business operations teams fully integrated across Sales and Marketing with BI dashboards/reporting; Monthly/Quarterly attribution reviews for program and process optimization; Early deployment of predictive revenue models
  • CRM Deployment: Sophisticated CRM deployment managed by business operations team with sophisticated reporting (BI tools) and data accuracy for regulatory compliance
  • CRM Usage: Well established guidelines and training; key processes are reinforced with end user compliance
  • Attribution Process: Multiple attribution models including weighted touch attribution and account-based models supported by analytics team to assist in utilization and interpretation of the data
  • Primary Challenges: Managing time, cost and complexity of attribution reporting as well as the ability of most marketing team members to absorb the complexity of these models

What has been your experience? Do these levels ring true? Was this helpful to your planning?

Lesson: As organizations grow, so do their needs for better attribution. It is important to make the right investments at the right time to keep attribution management time and costs in line with overall revenue goals.