In the third installment of our Marketing and Finance series collaboration with B2B in the Black Advisor Council members, Thad Kahlow spoke with Justin Keller, VP of Revenue Marketing at Drift, about why investing in marketing during the unknown is a strong play. As well as how to highlight this to gain buy-in from your finance leaders.
"Because its purpose is to create a customer, the business enterprise has two -- and only these two -- basic functions: marketing and innovation." - Peter Drucker
When the economy gets rocky, one of the first, if not the first department companies usually look to cut is marketing. But cutting marketing is often counterintuitive to weathering the storm of uncertainty. Sure, marketing can be costly, and you may not be able to assign a specific numerical value to each contributor as you can in, say, the sales department. Still, no matter the circumstances, you need to be able to market effectively to potential customers to have customers.
Marketing creates customer awareness, builds trust and brand recognition, and develops sales leads. If you stunt marketing's ability to do these things, the company's ability to grow and expand its customer base and reach will also be stunted. In an economic downturn, the last thing a business should want to do is critically wound its ability to generate customer interest in its product.
Changing the Marketing Mindset
Speaking to Stakeholders
To explain to stakeholders and c-suite executives why marketing is essential, CMOs and marketing leaders need to adjust their thinking. Historically, much of what marketing does has not been easily measured. However, over the last 20 years, marketing has become more metric-oriented – this has been good for improving marketing efforts as well as for defending marketing's value to the organization. Of course, a CMO can quote all the Gartner statistics they want. Still, without showing exactly what value their marketing team provides to the business, the conversation will fall on deaf ears. Instead, the CMO needs to remain convicted to the cause and utilize metrics to illustrate marketing's impact.
In addition, CMOs need to remain confident in their knowledge and abilities. At the end of the day, marketers don't know if a campaign will work, a message will resonate, or what competitors will do. As marketers, we need to be able to trust ourselves and know the decisions we're making are the right ones based on evidence and metric data. If you can't convince yourself, you're not going to convince anyone else that this is the right thing for marketing to do, especially in an uncertain time.
Knowing The Key Stakeholders
To avoid budget cuts and restraints, the CFO is an important partner to have. If Marketing can convince Finance that their efforts are driving leads, supporting long-term growth, and providing monetary value, the business case for marketing to remain funded is strong.
Keep in mind that for marketing to drive the greatest results, they must work hand in hand with their sales leaders. Far too often, sales and marketing are siloed departments that do not work well together. But the data shows marketing and sales departments that work together far outperform those who do not.
Earn Buy-In With Candor
To earn buy-in, make sure you are communicating effectively with leadership. You'll want to present weekly on the general state of the pipeline, check in with sales leaders once a week to give them a quick read on the numbers, and conversely make sure you're in the know.
Write a weekly newsletter to the entire team, with everything the revenue marketing organization does in the spirit of building the pipeline. If leadership ever wonders what the marketing team is doing, they've got a weekly digest of everything they're doing and how that's showing up on the numbers.
You'll want to cover the following:
- The trends marketing is seeing and their take on it.
- The program's marketing efforts that address this issues.
- The successes coming from marketing’s efforts.
And have other marketing team members align with their peers and sales on at least a weekly basis.
The pipeline is the lifeblood of the business. If you're not keeping a pulse on it, then that's an issue. Marketing needs to know the state of the pipeline and, by being able to speak to it, can earn buy-in from executives.
Market Marketing
Share marketing's story with the business because everyone questions everything during a crisis or time of uncertainty. At the weekly check-ins, focus on the numbers but share them as part of a larger strategy. Waiting until monthly or quarterly updates means that perceptions are already formed by that time.
Whether marketing is doing good work or not, people are more likely to walk into a monthly or quarterly meeting asking why you're missing. Weekly communication leads to everyone understanding where things are at and what marketing is doing about it, especially if things aren't going according to plan.
Finally, spotlight your team. Make it known how each team member is helping to fill the pipeline and the value they add to the team.
Shedding the Ties that Bind
Marketers may be tempted to remain in their silo – especially when tension exists between marketing and other departments. But marketers need to know how the business is operating; this isn't information marketing can generate itself. Instead, they need to have a healthy relationship with sales, finance, business development, strategy, and any other departments to understand where the marketing strategy fits in fully. In turn, marketing can add valuable information from the history of the business, the mechanics, and past marketing efforts.
Shedding the ties that have historically kept departments separate can be difficult, but as with any element of business, modernization is the name of the game. Looking to peers and industry trend research is very helpful to adapt and modernize effectively. In marketing, there is rarely the need to reinvent the wheel. There is ample research and advice to overcome challenges and adapt or react to industry trends – research that can also provide an affirmation that your marketing is moving in the right direction.
Marketing Feeds The Growth Engine
Even when unsure about budgets and future buying climate, cutting marketing shouldn’t be the go-to reaction. This can be hard for executives who simply see that marketing is costing them money with no clear return on investment (ROI), but effective marketing campaigns do drive critical elements of the sales process.
Reframing Marketing's Role In Growth
To reframe the mindset of the sales journey and marketing's role in it, Gartner presents two helpful recommendations to support growth. The first is to "build digital sales experiences to support customer self-learning on the array of complex considerations associated with their products, services, and above all else, the customer's change journey." This can include thought leadership content, graphics and studies to show industry knowledge, webinars and podcasts to support expertise, and ads that build brand recognition. All of this is considered marketing's domain and generates the leads that sales can then follow up with and nurture to drive conversions – thus providing immense value to the business and generating growth, as well as positive opinions of the brand.
Gartner's second recommendation is to "shift organizational focus from sales professionals as the primary commercial channel toward digital sales channels to invest in developing rich and valuable customer decision support." In other words, Gartner is addressing the fact that stats show sales professionals have very little control over whether a potential customer buys or not. If the majority of the sales process is happening before speaking with sales and buyers prefer digital research and recommendations from trusted sources, then the role of sales is diminished. Now, sales will never be unnecessary – they are important for nurturing leads and driving conversions. But sales professionals are far less important to the majority of the sales process where marketing is taking over and proving far more effective.
Marketers and Companies Must Evolve Constantly
As we've shown throughout this article, modernization is happening. Business is changing and if your business doesn't adapt, you could find yourself losing your footing. The ability to evolve is critical to longevity and is also important for marketing. Drift is a great example of a business that has been able to adapt to its benefit.
Justin shared, "When Drift started out of the gate, we were just a rocket ship that was crushing this SMB market. And I mean, people couldn't come with their wallets open fast enough. It's a great problem to have, but as you know, companies evolve and mature, and at some point, we need to go upmarket." Justin explains that Drift's revenue team began focusing more on bigger and more lasting contracts. He continues, "In the midst of the economy, Drift is in a unique position because we drive efficiency within a business, within a marketing and sales organization. We have a little bit of cover in that respect as things get tightened up."
Drift's strategy here is an excellent example of how marketers need to be thinking about where revenue is coming from and figure out how to orient and optimize net new revenue. As well as gauging how much focus should be pulled from acquisition and allocated to retention to keep a consistent customer base and revenue. Whereas sales focuses on new revenue and upselling, marketing can help retain customers through consistent outreach and maintain consistent revenue. This can be in the form of a blog, social media posts, webinars, and podcasts – anything that continues to provide value for the customer. Go back to the top funnel, assess channel efficiency, and where new business is coming from. Then look for winners and losers in marketing efforts, deciding where to cut bait and where to double down.
The Nitty-Gritty of a Downturn... and How to Adapt
Deciding What to Cut and What to Keep
How do you ensure you're not cutting something essential to closing business at this moment in time? It is easy to look at the first touch or last touch and say these are the working channels and want to allocate more money to them. Too often, this leads to diminishing returns. Marketing focusing exclusively on the brand is often the hardest thing to invest in, but it's also possibly one of the most powerful things to invest in. When budgets are tight, it's tough to go to your CFO and say, "Hey, I want to run a big brand campaign. I'm not going to be able to tell if it's going to return anything or not, but it feels like the right thing to do."
At that point, you're playing with people's salaries, but so much data says it is the right thing to do in a downturn. A McGraw Hill study during the downturn in the eighties studied 600+ purely B2B companies looking at their investment strategy. The study found that the companies that maintained or increased their brand-driven advertising not only maintained their market share but once the markets were performing well again, had explosive growth out of the gate because they were able to create pent-up demand. In other words, when buyers were ready to buy, they had come to conclusions based on the marketing they had seen.
When you're talking to your CFO about where to invest during uncertain times, you have to ask, “are we trying to survive, are we going into starvation mode, or do we want to play the long game and see what our bottom line looks like in three or four years?”
If you're in starvation mode, there's not much you can do, but if you want to get aggressive and strategic, now's the time to start being a big player. B2B marketers tend to be risk-averse but you can't be afraid to stick your neck out. This moment potentially calls for marketers to be a bit riskier, and a bit more forward-leaning to maintain brand recognition and support future growth.
Justin shared that he said to executives, "I'm not going all in on brand right now. I'm trying to be a responsible fiscal steward for the company. I'm also not taking my eye off the ball. I'm just saying, let's operate completely clinically in this marketing environment. Now, we still want to take chances. We need to service and feed the brand the way it deserves."
In doing so, you're grabbing those efficiencies. You're not asking for additional dollars at this moment, but you apply dollars to the brand to support the long-term goals. You've earned some grace if marketing is hitting numbers and can build trust with the leadership team. You're not spending as much time answering questions as trying to get ahead of your pipeline targets and brand efforts.
Invest Strategically in Marketing with ABM
Account-based marketing (ABM) is proven to build a better buying journey by bringing more high-quality leads to conversion. To succeed, make sure to prioritize your accounts - Tier 1, Tier 2, and Tier 3. The gulf between tiers can't be too big.
If you have an existing ABM program, look at your program and really determine if it is a true ABM program. Too often, what you think is ABM is really just targeted Demand Gen. Don't be afraid to start from scratch. Take baby steps. Identify your list of 100 target accounts. Work with your AEs and Sales team to pick four key accounts to target and market to them with 1:1 campaigns. With this approach, Drift got five ops within the first three weeks of implementing it.
Set KPIs to Measure and Predict
Determine the early indicators where you say, whether it be to your marketing team or the executives, "These metrics/this report doesn't look good. We need to be thinking about how that's going to matriculate over the next couple of quarters." Setting KPIs to measure and predict is helpful here. Again, you have to know what marketing metrics are, to the best of your ability, and how they are affecting revenue and growth.
Follow these steps:
- Check-in with your marketing ops team and/or the sales funnel frequently.
- Start your day, every day, looking at the entire funnel month to date, quarter to date, year to date.
- Examine how you're performing toward your forecast goals.
- Know where things are stalling out.
- Take a full-funnel approach. The pipeline is usually where the most significant dose of reality is. If the pipeline looks okay, you don't stress as much about the earlier funnel metrics. If the pipeline's not where it needs to be, work your way back up the funnel. Lead volume doesn't necessarily translate to pipeline.
The marketing team owns a large majority of sales development – whether sales agrees or not. Between marketing and sales development, about 75% of the pipeline rolls through marketing in the modern buyer's journey. If that number starts to slip, marketing should know it and already be figuring out if it's an inbound problem or an outbound problem.
Don't Let Tough Times Push You Off Course
Perhaps the pipeline isn't building fast enough, or accounts aren't moving through the buyer's journey as quickly. How do you begin to think about building the case to stay the course? What do you look for? What do you ask of your team? What do you ask of the sales folks to make sure that you don't all of a sudden just slash and burn because you had a rough quarter?
The key is acting as if nothing is true or certain anymore. The model marketers have used in the past – act like that no longer exists. Take a completely fresh look at the mechanics of the business and then ask yourself, "Now, what needs to be true for us to hit goals?" When you have a blank slate, it's a little easier for you to brainstorm facts about your business: How it's changed and how to adapt. Ultimately, we're all constrained by the actual physics of a business and can't just do things for the sake of doing something.
Marketing can ask themselves these questions:
- Where can we take 5%, 10%, 15% from other activities and other resources and how do we align them to hit this one metric?
- If we're missing our top-of-the-funnel goals, what does it cost us to ask for another collective 15 hours a week from the entire team to do nothing but focus on that one number?
- How do we drive the urgency and focus on just that one metric and improve it? Out of that, what did we learn from it? How can we improve our day-to-day operations so that this doesn't become an emergency again?
The phrase that I absolutely love is "never waste a good crisis." If you see a dip in numbers, that's a great time for you to lean in, and figure out what's breaking so that you can optimize that going forward. Hopefully, it's not an issue again and if it is, you know how to address it effectively.
Embrace the New Normal in Uncertain Times
Even if businesses want to return to the pre-pandemic status quo, there has been too much change and growth. Of course, now we face a new uncertainty for the short-term future, but as we've outlined here, that can't dictate how marketing is treated within the organization. While marketing can affect short-term growth and revenue, marketing's superpower is generating brand recognition, trust, authority, and market share to support long-term growth. Investing in marketing is how you make your company stronger on the other side.