Yield has considerable experience working with companies that are backed by private equity groups and looking to transition from “traditional” marketing to a discipline that excels at demand generation. This experience has revealed 4 primary roadblocks to achieving the results expected from this transition.
Roadblock #1 - Starting With Software
Companies of nearly any size likely already have basic marketing and/or customer technology installed, specifically a website (with Google Analytics), marketing automation tool (Hubspot, Pardot or Marketo are the big three) and CRM (almost always Salesforce). In our experience, it is also likely that these tools are not being used effectively nor is the data passing smoothly between systems for reporting.
The tendency for most companies wanting to expand their demand generation efforts is to start adding even more software to an already unstable infrastructure.
“We need to ramp up paid digital advertising,” so the Company hires an agency and starts running paid digital across several channels, without a holistic attribution framework to capture important variables and pass them through to relevant systems.
“We need more organic leads,” so the Company starts writing more content, based on tribal knowledge of the customer, and starts adding it to the website.
“Now that we have more visitors to our website, we need to add online chat,” so the Company installs Drift, Intercom, Qualified or others, but doesn’t use the previously mentioned attribution parameters to drive a more relevant, personalized experience, nor is the data passed through to other systems to create visibility on what is working.
Marketing technology is a tool to drive a business outcome, not an end itself. So where should you start instead? Start with the fundamentals.
When a private equity group invests in a company, an incredible amount of work has been invested in validating existing market segments and identifying opportunities. After close, a similar amount of rigor should be applied to validating the buyer and their journey. This knowledge is often assumed, based on years of experience by founders and executives, but is rarely confirmed with data nor is it operationalized with new hires in marketing and sales.
Step 1 - Confirm the Segments
A customer acquisition and sales plan should be built around the data of the customer segments on which the company wants to focus its demand generation efforts. Are we expanding “down market” to smaller accounts or “up market” to pursue enterprise accounts? What is the lifetime value (LTV) of these opportunities, both revenue and gross margin? How much are we willing to invest to acquire these customers? 20% of LTV? 25%? 33%?
Step 2 - Confirm the Buyer Group
Once the segment(s) on which to focus are confirmed and the unit economics validated, the “Buyer Group” needs to be confirmed. Does the buyer behave more like a consumer, with the economic decision maker wearing all the hats, or is it more complex with economic, technical, user and supportive buyers all involved in a multi-stage process.
Step 3 - Validate the Persona of Each Buyer
What are the demographic and (more importantly) psychographic attributes of each buyer in the group? Ideally, the company leverages data from existing customers to “reverse engineer” a set of core attributes for each buyer within each customer segment.
It is common for companies to have existing personas like “mid-market Margie” and “small company Sam.” While these can be helpful to start, they are most often created over time by the Product team and rarely validated and integrated into a cohesive customer acquisition strategy.
Step 4 - Map the Buyer Journey
How does each buyer most often define the problem your product/service can solve? How and where do they begin to explore for solutions? What is the process for comparing those solutions? How involved is the process of defining requirements? What is the typical internal decision process for new solutions?
We see lots of journey maps that are intuitive and hypothetical, but rarely (if ever) do we see a journey map that is validated by data and/or detailed customer interviews. If there is one place where the investment of time and a little bit of money is critical, it is here. No amount of technology and tactics can overcome a fundamental misunderstanding of the buyer and their journey.
Step 5 - Content Audit
Now that you have confirmed and validated the segments on which the company wants to focus, the buyer group associated with these segments, the personas within the buyer group and the journey each buyer takes, you should now assess the completeness and quality of the content you have on hand that helps facilitate the buyer journey.
When auditing your content, do so in a grid that maps type, title or subject, created/modified date, last used and then map it to the segment, buyer, stage described above. For example; a whitepaper that is focused on total cost of ownership that was created 6 months ago and was last used 2 months ago. It is relevant for the mid and large segments, the economic and technical buyer and speaks to the “selection” stage of the buyer journey.
I’m not a gambling person, but I’m willing to bet this process will reveal two things:
- Your content is too broad and generic. It speaks to multiple segments and multiple buyers at multiple stages (if any stage at all). It is therefore mildly helpful, at best, for the buyer.
- You will need more content. A lot of it. Why? Because typically this content is created with the product/feature at the center and not the buyer. White papers, infographics, emails, landing pages, videos, etc. all focused on your awesome product and service, but not what the customer needs to know to solve their problem.
After methodically determining the course on which to set sail, you can then determine what marketing technology and data is needed to enable the strategy.
Roadblock #2 - A Jockey Without a Horse
One of the first hires a company makes, after receiving an investment from a financial sponsor, is to hire a new head of marketing. The intent is that his new hire will develop this demand generation discipline. But this new hire quickly realizes that the tools they need, and more importantly the “control panel” to know what is working, isn’t where it needs to be; a jockey without a horse to ride. Perhaps, more accurately, a jockey with a donkey to ride in a horse race.
So what happens? The highly rated jockey that was hired to develop a demand generation system becomes a plumber. They spend a significant amount of time working on the “plumbing” of systems and data, just trying to get the system to work. They also spend too much time pulling data from disparate systems and merging it together to try to get a glimpse of what is working.
What are they not doing? Spending time on everything we outlined above. Going deep on your customers and how they buy.
So what is the most common response? We are glad you asked!
Roadblock #3 - Hiring a Handyman
The company quickly realizes that they need help “fixing” their marketing software. So the head of marketing receives a little budget to fix the plumbing, focusing on the perceived spot of the problem; Salesforce, Hubspot, website, etc. While this solution provider often has in-depth knowledge of the system in question, they cannot provide the strategic recommendations on how processes and data should flow across systems, v. simply within one system.
The CMO / VP of Marketing should be focused on the outcome they want to drive, not developing a detailed set of technical requirements required by the handyman to execute.
So what should you do instead? At this stage, what is needed is an “architect” with the skills to build. The architect will work alongside the CMO to translate the desired business outcomes into an integrated systems design that enables the company to a) execute on the strategy defined and b) deliver robust reporting and analytics to monitor performance and course correct as buyer behavior changes.
Is this more expensive than a handyman? Of course. But value compounds over time, so if an architect can accelerate both the time to develop the demand generation system and its performance, imagine the magnitude on value creation?
Roadblock #4 - Stopping at Marketing
According to Gartner, soon nearly 85% of the buying process will be completed before the first contact with a sales associate. The most common mistake we see is when the demand generation process stops with “Marketing.” We now live in a digital-first world, which means the same rigor of customer messaging, attribution, journey mapping, systems, data and reporting needs to be applied further down the funnel, specifically with the BDR/SDR/Inside Sales team. These are now an extension of the information delivery system that rely heavily on digital channels (email, digital content, even auto dialers with sentiment tracking), from which we can learn a great deal about the buying process.
The transition from “traditional” marketing to a discipline of demand generation is very common, and has the potential to completely change the growth trajectory of a company, if it is based on the fundamentals of:
- a unified view of the customer, that is built on
- a clean, well architected data layer, made actionable by
- a carefully selected technology stack that is
- integrated across marketing, sales and customer success
If you are a marketing, sales or product leader at a growing, middle-market firm and you feel there is untapped potential in your organization, we encourage you to take a look at our Growth Maturity Scorecard to assess the areas on which to focus.
Alternatively, you can always contact us to chat directly about your growth challenges and opportunities.