(00:00:01) - Hey, everybody, it's Jenni from GrowthMode Marketing. You're listening to Demand Gen Fix, the podcast where our team of GrowthModers and our guests discuss the ins and outs of demand generation, and why we believe it's the key to long-term sustainable growth, especially in the HR tech industry.
(00:00:20) - Hello, hello! Deanna and Greg, back for another episode of The Demand Gen Fix, and we are talking again about dialing in your marketing and the levers that impact results, so this is part two of our series. Effective marketing, as everyone knows, is multifaceted, and that requires dialed-in alignment across various components to truly optimize your demand generation program. Each lever is a critical piece of the marketing puzzle, capable of transforming the results of your programs. If your company is struggling to meet revenue targets, it's crucial to examine a series of 12 strategic levers that those of us at GrowthMode Marketing have pinpointed that influence performance and drive results.
(00:01:09) - Like we covered in our last episode, there's 12 levers. So, here I'll just read you the list. Basically, so we have: audience, and positioning, which is what we covered in our last episode. Then strategy, and budget; scale, contact database, brand identity and awareness, content, marketing tactics, marketing and sales alignment, sales processes, and measurement. So, as Deanna said, each one of these levers needs to be dialed in to optimize your marketing. If one is a little bit off, it can have a major impact on your ability to support your organization's growth plans.
(00:01:42) - So, in episode 57 of the The Demand Gen Fix podcast, as Greg mentioned, we talked about the first two levers, which are audience and positioning. In this episode, we're going to dig into the next two levers, which are strategy and budget, and in future episodes we will cover the remaining eight levers. So, Greg, let's start with strategy. What are the potential issues or indicators that may demonstrate it's time to address this lever?
(00:02:13) - If you're looking at what's going on with your marketing, and it doesn't seem to be like there's a cohesive plan, or things are happening, like, more reactive approach instead of planned, more random acts of marketing; starting and stopping, that's a pretty good indication that something is awry, you know? Sometimes this happens because pipeline is weak and everybody's starting to panic, so you're always chasing the next thing to try and get some more leads in. And that's a big flag that something needs to be adjusted in your strategy.
(00:02:46) - I totally agree, I think it happens quite often actually. There are a lot of organizations that we run into that don't actually have any formal marketing strategy in place. They may have a high-level idea like, oh, we do these five things in marketing and they have good intentions behind what they're doing, but it really does come across as a reactive approach to marketing or a random approach. And what I mean by that is, if you are determining month by month what you're going to focus on, and it's a flash in the pan, that's a problem. Nobody is intending to or probably would even call it a flash in the pan, but the reality is it's like, oh, we should write a press release about this. And oh, I was thinking, why don't we do a blog article about this? And we should really test out some digital advertising.
(00:03:40) - And it's a marketing lack of strategy that can be all over the place.Ffrom a reactive standpoint, as marketers were getting pressure from CEO, the board of directors, the sales team, especially if revenue is down or the company is struggling to hit those growth targets that have been put in front of you. That's when the reactive marketing starts to take over because it'll be like, okay, crap, we're down on revenue. We're almost halfway through the year. We need to do something about this. They turn to marketing. They're like, can you put together some campaigns? Can we try some new things? And suddenly you're off track from your strategy, which is building the brand awareness, credibility and trust and ultimately demand in the market, because now you're reacting with putting a bunch of campaigns out there to try to kick up some quick wins. As you think about marketing as a whole, like a lot of organizations that can take a step back and look at their marketing and start to realize where there might be some randomness approaching.
(00:04:47) - Anytime that that's happening, as a marketing leader, you need to take a step back and really evaluate, like, okay, do we have a formal strategy? If the answer is yes, great. Now do a gut check. Are we following our strategy, and are we sticking to what we had intended to do in order to meet the objectives for the year, or are we getting distracted by these things? If the answer is no, then you need to step back and do a strategy. So, if you have a strategy and you're not sticking to it, It's time to assess. Is what we're doing the right stuff, or do we need to go back to our strategy? And if you're not doing a strategy, it's time to take a step back and have a come-to-Jesus talk with yourself about the need for a formal and intentional strategy to support the goals of the business. If you're not confident in internal strategy expertise, not every marketer is a strategist, and so sometimes an organization just doesn't have a team that is equipped to be able to build out a really good strategy.
(00:05:54) - That's okay, that happens, but recognize it and know where you need to say, okay, we need maybe some outside expertise here to bring in to help us build a strategy, so that we can go and execute. When thinking about strategy, maybe you have an existing strategy in place for your marketing, but if the organization has rapid growth plans, or you're entering into new markets, or even you're going through an acquisition that may create the need for a new strategy. And so, again, time to dial in this lever and take a step back and look at the strategic approach and make sure that you're not missing the mark with it.
(00:06:38) - Yeah, or even if you're adding some new products into the mix, or something with a significant enhancement that might need to be handled in a different way, right? Like, a different approach because it's slightly different message, or slightly different audience. You need to keep in mind.
(00:06:52) - The whole point of a strategy is to have a plan and stick to it, and to make sure that it's a smart plan that is well thought out, positioned to your ideal customer profile and really getting that message out.
(00:07:06) - And so, I think strategy is not something that you should build and forget about. It's important that that strategy is evolving. Now, there's probably a fine line between evolving your strategy and random acts of marketing, or getting off course, right? So, you have to be mindful of that, but you want to make sure that that strategy is behind everything that you're doing and that you're continually doing that gut check to say, like, if we are going to do these content pieces, and these campaigns, and these advertising programs, and all the other things that you can do in marketing, how does it align with the ultimate mission at hand, whether it's to create more brand awareness in the market, or to grow the revenue to drive more leads into the sales pipeline? All of the things that, as marketers, we get asked to assist with to really know what you're doing, and make sure that the marketing is aligned with it. So, if you're thinking about the strategy, you're like, you know what, this probably is a lever that we need to dial in, I think there are some things that you can really do.
(00:08:14) - One of the first things that I would do if I were coming into an organization, or if GrowthMode Marketing was starting with a new client, we have well-established marketing programs, and a lot of content is to start with an audit of the programs. So, really assessing like how strong are you in each of those programs, how do they align with the goals of the business and what you need to accomplish with marketing? And where are the gaps, so that you know, okay, you know, right now, for example, we're doing 15 different channels, or different types of marketing programs. Maybe we're spreading ourselves too thin. We can see, okay, we're not as strong over here. We're really strong here. These are the areas we maybe need to lean into. These are the areas we maybe need to cut out so we can focus a bit more. On the flip side, you may look at it and realize, okay, our marketing isn't comprehensive enough. And here's where the gaps are, so we need to build a strategy around how to fill those gaps to have more of an omnichannel presence out there in the market.
(00:09:27) - Right, and another thing you probably want to look at is like, market analysis and competitive analysis, right? Like, are you hitting the right target, or going after the right targets, or the market's the correct ones. What are the competitors doing? What are they saying? How do you compare with your product?
(00:09:44) - Right, it's about getting out there and really understanding the perspectives that an audience has and comparing yourself to the competition because you don't want to copy what the competition is doing. You want to make sure that you're differentiating from them. Just because let's say they're investing heavily in social media, doesn't mean you should automatically invest in social media too, right? It's good to understand what they're doing, but if you look at the strengths and weaknesses of what they're doing as well as the market and you truly understand your audience, you can start to build out that strategy plan.
(00:10:18) - And I think ultimately from a strategy lever standpoint, it comes down to that strategy plan. One, do you have one? Two, if you have one, are you actually using it and staying on course? And three, are you doing the right things, and are you seeing results? We'll talk about this on a different episode, but one of the other levers is measurement. And I think it's really important to continually be looking at and fine-tuning programs based on what you're learning from the measurement that you're doing of your programs.
(00:10:54) - What do you think are some of the things that would indicate that you're having a budget problem?
(00:10:59) - This is probably one a lot of marketers would say, okay, it's obvious we have a budget problem, right? Especially in this economy where budgets are getting cut. The things that I hear people say or ask about, they're unsure of the level of spend required to achieve goals, for example. And I think that's a pretty common question that organizations have; that CEOs have. How much should we be investing in marketing? It depends how you're using the marketing. It depends on your audience. It depends on the brand awareness that you have today, but if you're a smaller organization or a startup, the reality is if they don't know you exist, they're not going to buy from you. And so, you may have to make more of an investment upfront than if you're a big company. Some of the Fortune 500 companies that are in the HR tech space, right? Like one, they have really big budgets. They also have really big brand awareness, so their marketing approach is going to be different. And a percentage of their marketing spend is, while they're spending a lot more, is probably a lower percentage than what you're going to have to spend as a startup, or an up-and-coming HR tech company. But I would say a general rule of thumb, when you're unsure of the spend required, is companies that are on a mission for growth will typically spend a minimum of 10% of the annual revenue on marketing. So, for example, if you're trying to become a $50 million company, 10%, you're spending 5 million a year on marketing, right? That's not a fast and hard rule.
(00:12:37) - That's generally what you see. There are companies that spend significantly more than that, and there's probably companies that spend less than that that managed to be successful as well. But I think that's a good rule of thumb to think about. And I always think about once upon a time I worked at a company called Concur, when it was much smaller and they actually were on a big mission to grow, and they succeeded because they ended up selling for 4 billion to SAP, at the end of the day. But at that organization, they actually invested 40% of revenue into sales and marketing. So, they were determined to be a market leader. I don't think anyone would argue today that in the expense management category, they absolutely are a leader in that space because they spent a lot to get there, that in addition to acquisitions, to grow their client base. But I always think of that as like a story of when you invest significantly in marketing and you do the marketing well, that can help accelerate your growth. Another issue sometimes are, the goals are not realistic for the investment level.
(00:13:49) - So, let's say you do have a high growth mission, but you're not investing at least 10% of your revenue into marketing. That can be a red flag. Like, you can have these aggressive growth goals, but if you don't have the ability to market to get to the level that you need to from a growth perspective, that's a real problem that probably needs to be dialed in. Either you need to reset the expectations for growth, or you need to invest more in marketing.
(00:14:20) - Yeah, I think sometimes with that too, it's like, maybe the budget isn't too small then maybe, like you mentioned before, we were in strategy. Maybe it's just spread around on too many things. Instead of focusing on something that's really performing, it's like trying a little bit of this, a little bit of that, and then it gets diluted.
(00:14:38) - Right, that's a really good point. There certainly are organizations, as a marketer on the corporate side, I've been there. Where it's like I'm given a relatively small marketing budget that needs to go far to support these growth (inaudible word), and I'm not going to get more budget, right?
(00:14:55) - And then as a marketer, you have to get really creative to figure out, how do I make that dollar go further than I would in an organization where I have more budget to work with? And that kind of goes back to the growth goals, is it realistic for the level of investment that you have. That's not to say that you can't do some great things on a small budget, but it is something that can be a red flag that you might have to figure out how to dial in to optimize program success. A lot of times, those organizations and those marketing leaders that are dealing with small budgets, they also have to prove that their budget is a good investment. It's a good idea to be able to prove to an extent the ROI of your marketing. But I can't tell you how many organizations are like, well, our budget is small, but if you can prove it works, we’ll invest what we need to invest into. And that's a hard spot to be in because if you don't have enough money to start with, how do you prove that it's going to work?
(00:16:00) - But it's a reality for a lot of organizations. It’s, okay, you got to prove the effectiveness of marketing quarter over quarter in order to get them to agree to give you the type of budget that you need to hit those growth goals. On the flip side, it's about budget cuts. In this economy, I think it's happened for a lot of organizations. They've seen cuts in marketing that sometimes impact the ability to execute strategic marketing plans. So, if you have a growth mission to get to, say, 100 million in revenue, and you had the budget starting out and you built a strategy around it, great. Now they cut the budget because we're not hitting our revenue goals. That expectation of marketing, delivering to help them get to that 100 million didn't go away in most cases, right? They're still expected to try to do that. The goal remains the same. You just have less resources available to be able to do that. That's a very real reality. I'll go back to the: are the goals realistic for the investment level? But that's a reality for marketers, is really understanding and being able to articulate to leadership how the budget impacts ability to drive results for the organization.
(00:17:18) - And that's tough, if you're in that situation where the budget is cut and then you have to figure out where are you going to; some things you can't cancel, then you end up in that situation where money is getting spent in places that you can't choose it necessarily if you can't cancel it. And maybe that one wasn't doing too good, but you can't get out of that contract. And so, that puts you in a tough spot where you're not being effective with the dollars that you do have, and it's not even your fault.
(00:17:43) - And what do you do in those situations if you're locked into contracts. You figure out how to better optimize those particular programs that you're working with, which ties into some of the other levers that we have talked about, or will talk about as part of this series. There's a couple more things to think about from a budget standpoint as you're building out budgets, like trying to decide whether to hire for a skill set, or outsource to an agency certainly plays into budgets. And also, like, the last minute spend frenzy that can happen in Q4, I don't know that that's happened the last couple of years for a lot of organizations in the HR tech space because they've had their budgets cut, but in other years we've seen it where for some organizations it's like use it or lose it, and that impacts your budget that gets allocated to marketing in the next year.
(00:18:38) - Be prepared for that. If you're that type of organization where you want to make sure that you have determined how you would use additional budget at the end of the year or unspent budget, and not just throw money out the door to spend it, but make sure that you're doing things that truly impact the organization in a positive way.
(00:18:59) - So, I guess some things that you would start to think about and work on when you're having challenges with budgets, like Deanna was saying, were those goals really realistic? And how do you analyze them and help to determine where you should be fighting for more budget, or at least defending your budget, or how to best use it?
(00:19:15) - Or be able to articulate, like, if you're not going to get more budget, and sometimes that’s the reality in the corporate world. But being able to articulate, like, okay, because we only have this for budget, I just want you to know, talking to, like, your board of directors, your investors, your CEO, this is where we're at.
(00:19:35) - This is what we believe we can accomplish with the budget that we have. This is why it's not realistic for the growth goals that we have to hit that based on the data that we have. Now, of course, you need to be able to articulate that by having actual data and insights to build that story, but I think that's part of a growth goals analysis, is looking at the data that you have. The marketing metrics that you have; the sales metrics that you have, and being able to dissect the math backwards to figure out, like, okay, we have this much revenue, which was; came from this many opportunities; that came from this many leads, and this is how much we spent on marketing. So, here was our cost per lead; and our cost per sale, and how much revenue we generate from each sale on average, doing a bit of a scientific breakdown of it. With the math, you can say, okay, if the average lead cost this much, the average opportunity cost this much, the average sale cost this month, this is how many leads we need to get in order to hit this growth goal.
(00:20:47) - And this is our cost per lead. So, in theory, and it's not a perfect science, but this is how much budget we need to deliver these type of results to hit this growth goal. And if you can build that story, then you can go and articulate: to point out if, hey, one of the issues with our marketing today that may be hindering our ability to hit our growth goal is the budget. We're not investing enough in marketing, said no one ever. But maybe what you find out by doing that growth goal analysis is we have way more budget than we need to hit our growth goal, right? I doubt anyone ever has that happen. If you did find that, be a good steward for the corporation and go back and say, we don't actually need this much budget to get there. Do you want to go bigger, or should we cut back on that spend?
(00:21:38) - So, then the next thing you would want to do is go back to your budget and start planning out. Deanna mentioned before, if there's a Q4 uptick, that you have some money at the end of the year that you need to spend, you should be planning ahead for that. Have some good uses for that if that ends up coming your way. If that budget cut did come, what things would you prioritize if you did the strategy and the planning all right in the beginning, everything you have should be important, but what ones would be okay to let go?
(00:22:06) - We talked about strategy and budget today. Those two, actually, go very close together from a lever standpoint because if you think about it like if you go and build this big comprehensive strategy, and then your budget covers a fraction of that, you've got a problem, right? And vice versa. If you've got this budget and you can't come up with a strategy of how you're going to be smart about spending that money so that you can get the ROI from it, you've got a problem, but you need to build a strategy and a budget that align with each other. It depends on the organization. Some organizations, you build the strategy first, and then you get approval for that budget. And some organizations you get told, here's your budget and you have to go build a strategy based on that.
(00:22:49) - So, it's important to not silo either of those because they really do go hand in hand with each other. You can't do this comprehensive strategy if you don't have the budget to support it.
(00:23:00) - I think the key takeaways, strategy and budget are two of the 12 levers, right, that we talked about in the beginning that need to be dialed in to optimize your marketing programs for the best success. When you start digging into these, don't leave any stone unturned. Learn about all the other levers in the mix, too, because they're all interconnected somehow. Check out our last episode, 57, for the audience and positioning conversation, and tune into our future episodes, where we'll go over the other eight levers because we're done with four now.
(00:23:32) - Thanks for joining us on The Demand Gen Fix, a podcast for HR tech workers brought to you by GrowthMode Marketing. I sure hope you enjoyed it. Don't forget to subscribe for more perspectives on demand generation and B2B marketing strategies. Plus give us a like, tell your friends. We'll see you next time.
