#41: Building your 2023 marketing plan with Peter Mahoney (CEO at Plannuh)

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I'm excited to talk to you. I think you're one of the people who kind of breaks this down in such a easy to understand and relatable way. And so we wanted to do something like this and lucky that we made it happen. So just for anybody that doesn't know you and you showed your book before, I have both of your books on my shelf. The next cmo, can you give some talk about, give a little introduction to who you are and what you're doing these days?

Yeah, thanks, Dave. And I'm super excited for this. And obviously getting the right content that's relevant to people is critical and it's one of the things that I've endeavored to do. I love this stuff. I love teaching and helping people understand how to do this. So I spent a long career in marketing as a marketing executive. Probably the longest stint was I spent 13 years at a company called Nuance, about a $2 billion voice and AI leader recently acquired by Microsoft for about $20 billion. And I was the chief marketing officer there, and I saw a little bit of everything in that world. We did 100 acquisitions during my tenure, so I had the opportunity to see every problem known to man.

How many? A hundred?

100? A little more than 100, actually. Really insane. And as you can imagine, bringing all these companies online, lots of different perspectives, lots of. I learned great things, but also saw these common challenges people had, and a lot of it was related to planning. Long story short, after leaving there, I. I went and built a company called Plano, that's marketing, planning and budget management and performance management platform that is designed to help people manage these problems. The centerpiece of what we do is we try to teach and help people and add value. And so we wrote the book called the Next cmo, got a podcast, and in fact, on your platform, Dave, on Exit 5 is where I met a guy by the name of Rowan Tonkin, as you know, a couple of years ago. And Rowan works for a company called Planful. So it was a marriage made in heaven. We ended up connecting, and two years later, Planful acquired my company called Plana. So we're now a Planful company. So great Exit 5 connection.

I love that I have to Try to remember to stay focused, because anytime I talk to Peter, there's a hundred things that I want to talk to him about. But we are here to talk through marketing planning. I mean this in the kindest way, but if the next person that asks if this is going to be recorded, you have to turn on your camera and you have to run a mile and do 100 push ups. That's how it works here in Exit 5. If you ask if there's going to be a recording, you must run a mile and do 100 push ups. No, I'm just kidding. This is 100.

Yes.

It's going to be recorded. People just.

You could.

You could say 100 times, we're going to record this, we're going to record this, we're going to record this. And then for people listening later, this is going to be on the Exit 5 podcast. So whether you can be here or not. All good. All right, so it's that time of year. It is end of October. People are kind of figuring out planning for Q4. A tough economy. How do you continue to hit the number? But starting to think about building an operational marketing plan for 2023. Peter is going to talk us through that. I'm going to just kind of play host and ask some questions. And I would love to take your questions, too. Do me a favor and don't put your questions in the chat. Put them in the Q and A. It just makes it easier for me to sort through and make sure that we get to everybody's questions. So keep the chat going. The other thing I want you to do, if you're here live and you're watching this, you're a smart marketing person. You're in marketing. Please contribute to this discussion. So as Peter is going through things, I would love to have you in the chat be like, oh, we've tried this at my company, or here's what we do, or here's what your approach is like. Chat can be a really great asset for those that are here. So without further ado, I'm going to turn over to you, Peter, and I'll poke my nose in there everywhere that we can.

Awesome. So, by the way, Tiffany says Dave is king. I don't know how you do it, Dave.

That is not true. Kingston, a small bald man with a bunch of LinkedIn followers. That's what it is.

That's good. Maybe you can help me troubleshoot because I'm trying to share my screen. It says, event error creating screen stream. Do you need me to. Do you need to make me something special or not. Dave.

All right, so while Peter's getting this, the screen share stuff connected. Peter is all of us during team calls. I know it is what it is. We're going to figure this out and it's going to be great. But I think one of the reasons that I've connected so well with Peter when he talks about annual planning is because I think it can be this overwhelming exercise. You're like, you know, there's a hundred things that we could do next year. How do we figure that out? And Peter gives like a very, just kind of practical approach to thinking about, okay, what are the company revenue goals? What are some guardrails? And so I think, like, what I've learned through planning is like, the more you can have a framework for how to think about it, it helps you kind of tackle some of this information a little bit better. And I also feel like you, you need to have. You can't just create a plan from a spreadsheet. You have to have an opinion about how you're going to do marketing. And so you have to have an opinion about, hey, here are the three to five bets or levers that we think we have in this plan. The plan is very rarely going to be just some, like, input in a spreadsheet that you're going to drag and like, boom, this is what we're going to do next year. It's like, no, we've kind of done some research. We've had different breakouts, we've talked to different parts of the team. We think that based on what we need to do next year, we need to grow 50%, we need to grow 25%. Right. Here's what we think the levers are. We could improve free to paid conversion. We can crack this new segment. We can go after this new channel, we can improve this part of the funnel. I think having some three to five ideas and hypothesis about, about that makes a huge difference as opposed to just kind of going in and trying to.

Make some math work.

Yeah. Like Ellie put in the chat, goal strategy tactics tests. I think we put something out there before that was goals, just even simpler, like goal strategy tactics. And so the goal, you work, you're going to work back from the company revenue goal to figure out what the marketing contribution should be. And then from there you're able to have an opinion on what strategy are we going to go after to achieve these goals and then what tactics. Alex says, are you sponsored by Gymshark? No, but I wish. Who else could be a Sponsor of this liquid death Mike says I just ordered a new pair of G1 Jordans this morning. I think you would approve. I love Jordans. Peter's back. Oh yeah.

Dave, how are you?

All right. I gave us some context and we're ready to let it rip.

Great. Excellent. Thanks Dave for having me. Thanks everyone and apologies for the technical disruptions. I have to do this as a chrome screen so I'm going to have to call some audibles on the way that I share some resources that we're going to talk about along the way. So just some logistics here. We're going to spend about 45 minutes or so and as Dave said, ask questions along the way. And I know Dave will because Dave is not a shy man and feel free to do the same. Like Dave said, if you can put them in the Q and A tab it's a little easier for us to parse them. But feel free to use that chat tab too because we want to hear what you're thinking along the way. If you've got questions, if you want to tell us what's going on and how you're feeling, then let me know along the way. That's all good. We're going to talk about building an operational marketing plan. As Dave highlighted, it's something that is timely this time of year but we spend a lot of time talking about. I'm going to show a couple of examples of what we do in my company's product and plan but everything that we do is generic. I'm a big believer in telling people the right practice and you can use it regardless of tool. So all cool and it should we punish Scott for asking if their slides going to be available?

Dave, I just checked with the panel and that's a more specific question. He didn't ask about the recording, he's asking about the slides. And so I think for that we will just take five push ups and we will send the slide. Peter, is it okay if I like make a copy version of this and share it or do you want.

Do you have a different. More. More than okay because this is what we're going to do. You'll see this link here down at the bottom. There are some resources that we're going to share along the way. Some templates, some tools and I'll have links to all of those highlighted. But here's the cool thing here. Great. So a couple of things to keep in mind. So we talked about me, so I'm not going to talk about me too much. I will say that Dave mentioned. I. I wrote this book called the Next CMO A Guide to Operational Marketing Excellence. It was sort of a labor of love. After doing more than 30 years as a marketing leader, basically wrote the. The manual for how do you run a marketing function. You can get a copy of my book for free. I encourage you to do it. Five stars on Amazon. Very well reviewed and thank you someone. Michelle says, fantastic book. I really appreciate the feedback and Michelle is not related to me, I promise. So we'll have a link here so you can get a free copy of the book. It is really a great resource for you, so I recommend that you do that. Also check out my podcast. So it's not as good as Dave's, but we interview some pretty cool cmos. These are some of the ones CMO of Qualcomm, Cognizant National Instruments, just to name a few. In fact, I've got one. I'm interviewing the CMO of HCL, another like $20 billion company. So we do a lot of great talks here and we'll include some links along the way so that you have access to all this stuff. In fact, what I'll do, I'll even drop some of these links in the chat as we're going along because they can be really helpful. So there's the one for the book as an example. Get a free copy there. Okay, so that's some stuff for some context. Now let's talk about what we're going to talk about. So Dave and I went back and forth on sort of the key things that we thought would be most important for this audience at this particular time. And here's the list. I'm not going to read for you because you're pretty good at it. But Dave, tell me, is there anything in particular here that you got more excited about than anything else? So I make sure that I keep you excited and happy because you're the only audience that I'm looking at, honestly.

So, like, the, the real question is, I think it. I think it's all good. I do think that the first three are probably the most important, like figuring out how to spend and, and cost per opportunity. I'm not saying that stuff is not important, but I think that most of the questions that I see are about like, where the hell do you even, like, start? Like, how do you organize this stuff and what goes into a good plan? And while you were off figuring out the screen share thing, I mentioned how, like, in my planning experience, like, I went from being almost paralyzed by the spreadsheet plan and more like that's just an input that you have to use. And so like, hey, if we're trying to grow by 30% next year, there's no like formula in an Excel spreadsheet that's going to show you how to do that. You have to be able to like ingest that, think on it, come up with some bets and say like, hey, these are the three to five levers we think we're going to have. And so I think, I think you're going to give people that stuff. But that was the stuff that, when I, when you, you know, we were talking through this stuff, I was like, yes, this is the stuff that's get people interested for sure.

Yeah, absolutely. No, that's, that's great, Dave. And I'll make sure that we, we focus on that stuff along the way as we get there. Let's start at the start, which is always a good place to get going. And by the way, I've got a fair amount of high level content here. There's some areas like this that are fairly dense. And this is why we're going to send you the slides and we'll send you the recording so you can go back over these things. I wanted to write down this one in a fair amount of detail. I promise. This is my wordiest, densest slide that I have. And the point is that there is a standard approach that you should think about when it comes to building a plan. And one thing I see more than anything else, I used to go, Dave, to one of these 100 companies that we acquired and one of the first things I do is go to the head of marketing. I'd say, show me your plan. And what do you think they showed me? More often than not, I think they.

Probably showed you like a financial model.

They did. They showed me a budget. It freaked me out. And I said, oh my God, that is not a marketing plan, it's a budget. And the reality is that a budget and some numbers, without the context of who you're trying to reach and what you're trying to do and what your goals are, is really empty. So this is the process that I use and I refined over time and it's documented in the book, by the way. And the point here not to go, I'm not going to go through every line here because we're going to dive deep into a couple of these things, is that you need to take sort of a comprehensive view and you need to make sure that you're looking externally, you're not just copying the spreadsheet from last year and pasting it into this year, you need to make sure that you actually are considering what you need to achieve and what the outside world is along the way. So these are the steps. And one thing that I'll highlight is we built a great template, if you're a template person. So there's actually a tool on our website that is a marketing plan builder that allows you to go through and basically fill out all the spaces. It'll create a PowerPoint deck for you as a starting point. So that's going to be linked here and I'll make sure you have that after the fact. But it's a really easy tool to go in and start to build out sort of the framework of your overall marketing plan. So that's kind of a good way to start in a lot of cases. So, but what we're going to do is we're going to spend a little bit of time going deep into a few different areas, because I think these are the ones that people miss and I think is super relevant to make sure that we're doing that. So, first of all, you really need to focus on creating some goals. We talked about, I think this idea of a measurement framework and the idea of how does this work at the end of the day is critically important for you and obviously figuring out your, how much you're going to spend in your budget parameters, things like that. So these are some of the things we're going to go through in a little bit more detail as we, as we go through the rest here in the first part is about setting goals. And this is an area where this may feel rudimentary to people, by the way, but I think it's really important to make sure you have a basic understanding for what a goal is at the end of the day. So a goal has a bunch of elements in it. You know, it's defined. What is it? It's a structured statement of your business objective that seems pretty obvious, but it's got things in it. It's got metrics and targets and milestones along the way. A metric is just the tool that you use to measure things. A target is the amount of that metric you expect to get to. So how tall do I want to be? I'd love to feet tall. My metric is going to be height. My. My target is 6ft. I haven't quite made it yet, unfortunately, I'm about three inches short. And my milestone is that I want to be 5 foot 9 by the time I was 12. I think I was about 5 foot flat by the time I was 12, so I didn't quite make that either. Same concept within a marketing construct. So let's look at this in a marketing construct. So one of the things people often tell me is they'll say, well, my goal is to grow revenue. Okay, great. By how much? What are you responsible for specifically? And by the way, if you don't have a goal of growing revenue, then you're in the wrong job. Right. So that's got to be pretty primary, obviously is driving growth for the business. So if you don't have a goal that's related to that, then you should look at creating a goal to make sure that you, you have that along the way. Here's an example where if your goal is to grow sales by 30% as an example, then the first thing you want to do is say, well, what am I responsible for? Because you need to be discreet to say, to give the mission to your team. So maybe I'm responsible for 75% of the pipeline required to grow 30%. So that's a little bit more precise. So now I've got a very specific goal and I'm going to use a set of metrics to figure out whether I'm going to achieve that goal or not. So as an example, I may have pipeline. You know, we talked about the fact that I want to grow pipeline. Great. So my primary metric should be pipeline. But I might also have some sort of proxy metrics, some tracking metrics along the way, like opportunities, maybe qualified leads or MQLs. They'll tell me if I'm on track or not to hit that target. So that's the metric. Then you've got targets. Right. So what are my targets? I need to generate $25 million, a new pipeline rep. Is that 75, 30% to represent the 75%. So that's the specific target that I have. I can map that to number of opportunities in MQLs, et cetera. And then you also need to determine the milestones because most of us are dealing with either some seasonality or ramp along the way.

So when you're thinking about the goal, like to start right, like this contributes 75% of the pipeline required to grow 30%. Can you talk about where people should be setting that goal from? Because, like, you know, I think if you're at a company, it might not for every company, it might not be obvious what the marketing goal should be. And so where does that come from? I've been lucky that in companies that I've been at it's been earlier stage and it's been very simple. And it's like, hey, we need 10 million new ARR this year. We expect 70% of that to come from marketing contribution, 30% of that to come from sales contribution. Can you kind of just talk about where that comes from or where people could go look for to get that?

Yeah, it's a great question, Dave. And people sometimes struggle with that. I'd say that you want to go as high as you possibly can in the organization. If you've got a relationship with the CEO, CEO or the CFO who's building the plan, then reach out to them and say, what are the business goals? Ideally, you should understand if you're a top leader in marketing, you better understand the specific business goals. Sometimes if you're further on earlier in your career, maybe you're not the top leader. Ask your head of marketing or ask someone on the FP and a team, the financial planning and analysis team. They're the ones who are building the finance plan. I'm a big believer in getting a tight relationship with your counterparts in the finance team. They're the one who's setting the plans. They're the one who are determining the levels of investment over time. And if you can help them understand, one, that you care, that you're looking out for the business the right way, and two, you have an appreciation for what you're trying to do and you have a clear plan to get it. You're. You're going to be much more likely to get the resources that are there that make sense.

Yeah. I want to address this one question from Ryan and Chad. There's been a lot and this has come from out of a recent podcast. The last episode that we did Latin from Six Senses. She was like really bullish on look, look, I don't care where pipeline come like in our org. We don't care where pipeline comes from if it's sales rep generated or marketing generated. And there's been a bunch of questions from that. So Ryan said there's a lot of talk about how marketing leaders shouldn't really care if marketing contributes to 30, 30 or 75 as long as a revenue team, we hit the goal. How does that thought come into play when setting these revenue goals like in your examples? I think the way this comes into play is, is now on the way in when, when you're creating the plan for the year, this is the time to have those conversations. So the 70% is just a number that I made up, but now's the time to be saying as an org, hey, what, what do we want? I think typically this is where to Peter's point about working with finance, the finance leader, whoever's doing finance in the company will have some, some kind of thought. And if there isn't any, well then this is the time to like get on the same page with sales and say, hold on. Because to me, in my opinion at least the point, the point of marketing is to make sales easier. And so marketing is, marketing exists to make sales easier. And so if the company revenue goal is $1 million in revenue, new revenue this year, then I'm going to start saying, okay, well, where do we think that's going to come from?

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If two resources here we have salespeople and we have marketing. What's the breakdown of that going to be? And that's where I would look to like assign goals based on your marketing motion. And so, hey, we have much more of an enterprise kind of outbound driven motion then I would expect more of that to come from sales. But we're going to, we're going to goal these teams together on revenue. Peter, do you know what I'm trying to get at with this question? Maybe you could explain it in a different way too.

Yeah, absolutely. I think you're right on. Dave, a couple of things that you brought up I think are really important. First of all, it's about the top level of what's the company trying to accomplish. That being said, you need to figure out who's responsible for which part of the mission. So if everybody's in charge of it, nobody is. So you need to figure out at least have a thesis that says that, all right, we're supposed to generate a million dollars of sales. How much pipeline do I need to get a million dollars of sales? First of all, you should have a really tight understanding of your funnel. Actually, ro, who we've mentioned earlier, posted a link to this funnel builder that we have that helps you in the chat. So definitely check that out. It's very cool. But the idea of figuring out one from the goal, what is the prerequisite to achieve that goal and then who's responsible for what. If you can commit to 70%, then you should commit to 70% and that says that the other 30% of the pipeline should be developed by sales. And this is a great opportunity to do Another point you brought up to have a tight collaboration with your sales counterparts to say, hey, here's my plan. My plan is I'm going to generate 70% of the pipeline. That means you need to be up for the 30%. Are you cool with that? And if they say no, then you need to work it out. You need to make sure that you're aligned around who's doing what and who's responsible and have a really clear understanding of who owns what is critical for success. Let's talk about, hey, we've got a set of goals and we've got a set of targets we're going to. One of the things that I think is critically important is starting in your plan at the beginning of the year with an overall, you need to have a thesis for how you can achieve these things, right? So this is an example that I like to use a lot because it highlights a few things. First of all, you see in this chart, I've defined a set of goals, and the goals have these little black dots in them that are my metrics and targets to give you a sense of the structure that you should see. So in this case, I've got three goals. Driving growth, increasing visibility and launching a product. Each of those goals has a set of metrics and targets associated with it. So as an example, driving growth means, hey, I'm going to generate $10 million of pipeline, 4 million of revenue in 4,000 qualified leads along the way. So that's how I'm starting my plan. Next I need to say, how am I going to do that? What are the campaign constructs at a very high level that I expect that I'm going to put together to achieve that? I like to think about these things at the very highest level. And as you do that, you should define a campaign in a way where that the campaign success measurement is the same measurement that you use in the goal. So if it isn't so, for instance, if you say, well, I can't measure my goal, my campaign, by pipeline revenue or qualified leads, then it's probably not a campaign, it's probably a tactic. So you need to think about up leveling the tactics and grouping them together to say, all right, well, maybe I have too many major thematic campaigns. I'm going to put some stuff in the top of the funnel and I'm going to have a targeted account approach in emea. So those are my broad campaign themes. And the next thing you need to do is assign quota. So in your campaign framework, if you've been involved in quota assignment overall, it's really critical to have this concept of being able to say, first of all, you want to make sure that you're assigning enough quota to these campaigns so that if you're successful, you hit your target and ideally you have over assignment because sometimes you don't make a target. A sales rep isn't going to make 100% all the time. A campaign isn't going to deliver 100% all the time. So it's critical to have this framework in mind as you're building your campaigns. You can do this at a very high level. Is a great way to get started. This makes sense to you, Dave?

Yeah. My one question for you was on this was going to be just are you thinking like when you're doing it, are you thinking, are we thinking about this at the annual level? Like, are you. These are. These are the five campaigns that we're going to have for the entire year.

Yes and no. So it depends on the complexity, it depends on the timing horizon that you're in. Let me give you an example of how some companies plan. So I just had on my podcast the CMO of National Instruments, $4 billion company or something like that. How many campaigns do you think they have, Dave? They're running in their plan at any given time. What would you guess?

Like 40?

When this CMO took over, they had 42 campaigns. They now have six. And the goal is to develop a coherence to your plan. So you should be in the business of marketers are great pattern matchers. Right. So how do we connect these things up to tell a simpler story? And this is a $4 billion company can do it with six campaigns. So most of us on this call probably don't have a $4 billion revenue responsibility. If you do, then welcome and you can tell us a lot, I'm sure. But you don't have to have 4,000 campaigns. You can do it by developing this high level construct to say, these are my key strategies. This is how I want to boil them down to that level of this high level thematic campaigns. What's important to note about your timing thing, Dave, is that sometimes you don't have great visibility into what's going to happen in the second half of the year, the out year. But you should try to think strategically. You should at least have a rough draft of what you think those core constructs are going to be and then you can refine that visibility over time.

I'll give you two examples from companies that I used to work with. Like when I was at Drift, we started to make a shift that was into more enterprise. And so one of the campaigns would be like, sometimes I think they can be used interchangeably with like themes, almost. Yeah. And I know everybody kind of has their own definition, but for me it's like one of our campaigns this year is going to be to break into the enterprise. And the campaign would be like, build awareness and start to book meetings in the enterprise. And so that's a guardrail, a pillar for like, what is the team going to be focused on. So then if you're a team member and you're starting to think about your own individual plan, so you run the blog or you run the event or you run events, you're looking at this and thinking, well, how does my individual plan as the product marketing person or the event person, how does it roll up and, and support this broader plan? So I, I really like that. And I just think, I think to your point about the 42, I mean even I've never worked at a company that size and I, I'm the guilty of the head of marketing who has too many ideas and the team is doing too many different things. We're like, I wish I had this framework because I think to be just more disciplined and be like, here are the five themes or five campaigns that we have and we're going to operate in and we're going to innovate inside of those things as opposed to just keep coming up with like more campaigns, more campaigns. You rarely need more campaigns. It's like in this example you have, it's like there's a million different ways to go and attack top of the funnel. And that's where the creativity is. It's like, hey, as a team, we need to grow top of the funnel. Each month, each quarter, we're going to do different things to try to like to try to break into that.

Dave, you got it exactly right. And it's, the idea is to give people a roadmap. So you give people a framework that says, hey, we're trying to break into the enterprise. So we need an enterprise campaign. And there might be fifty, one hundred, a thousand tactics underneath it. It's okay, there might be one tactic underneath it and someone had a great question. I think it was Raza. So was, hey, does this apply to small companies? Early stage startups, same thing. So you should think about this. If you have 20 campaigns and you're an early stage company, you're doing it wrong. You should probably have two or one.

We're trying to book meetings. Like I just was thinking of, as you said that it's like, it gets harder, it's actually easier when you're smaller because later it's like, well, we have APAC and we have EMEA and we have this channel and we have this segment and we have this thing. It's like, oh, that's where you get into like the campaign creep. I think to exactly what you said at this stage. Like focus is where the strongest ROI is going to come from.

Absolutely. And not only focus, focus is critically important. There's another benefit too. It's the idea of coherence. People understand it if they can see it on a page and they can see it simplistically and it's really critical. And as marketers, our job is to be able to communicate complex information in a way that is understandable by her dad or anyone else. Right. So what's your daughter's name again? Dave.

That's Annie.

Hey Annie, how are you? I'll take that as good. So totally right.

She said good.

It's about that coherence and making sure that we're doing things the right way. So let me try and move to the idea of this idea of as I get these targets. How do we think through more complex things in a funnel? Because sometimes we're dealing with. If I say I've got a goal to generate a bunch of revenue as an example, I'll say, well, great, well, what if I have a 3, 6, 9, 12, 48 month sales cycle? How do I think about that? So one of the things that's incredibly important as marketers just for us to really understand kind of our funnel metrics of what's going on, how do these things all ladder up into this sort of higher level view? So what I'm going to do here is I'm going to share this idea of funnel building. So here's a model and this is in our product and we've also. What I'm going to. I've got a link that I'm going to share with you. There's a free version of this tool that I think Rowan or Kelsey shared in the chat too that you can use. But this is kind of a fancier version that's in our product that you can check out. So a couple of quick things to understand. So from a funnel perspective, here's an example of how I might think about putting together a funnel. So a funnel is going to look something like this. I've got maybe leads, opportunities and deals and maybe my leads really start at inquiries as an example and they go into MQLs and they go into sales accepted leads and they become opportunities and deals. So the next thing you want to think about so what are the stages you think about? And then a couple of how do you think about the conversion? So maybe only 2% of my inquiries convert into MQLs. Of my MQLs, a good benchmark is about 2/3 should convert into sales accepted leads. And then if sales accepted leads, Maybe it's about 20% that turn into opportunities. And if I've got a pretty good close rate, maybe 30% close. Okay, so now I need to think about, well, what's my average deal size? So if I'm selling something that's say $25,000 as an example, and then I have a revenue target that says I want to get to $5 million of revenue, then great, now I have some understanding of what that means. First of all, I understand that I need to get 200 deals at 25,000. That math is pretty easy. I need about 650 opportunities, 3,000 leads. I need a quarter million dollar inquiries if this is really the case along the way. But what I wanted to show you is something that's even more important about this. So model your funnel. The next thing to understand is what's the value of each of these things along the way. So this is what I think about as the average revenue per outcome. So for instance, if the average deal closed deal is worth $25,000 and I close 30%, that means the average opportunity in my pipeline is worth 30% of that or $7500. It means the average sales accepted lead is worth $1500 and an MQL is worth $1000. And in fact, it can even get a little bit more tricky and say, well, maybe I've got a, I'm a SaaS company and I've got 90% gross margins. So that's going to say that in margin dollars an MQL is worth $900. So critical to understand because then all of a sudden as you're building your campaigns, you have the ability to say, all right, how many MQLs do I expect to get from this campaign and what am I spending? What's my targeted cost per lead? If it's $200, that's great, it's probably going to give you a good return. If it's $2,000, I'm probably destroying budget and eroding value over time. So really critical to be able to do that. Gwendolyn, this tool is Plana, actually, believe it or not, a planful company. So that's sort of the funnel modeling kind of thesis behind this. So again, if you have a longer sales Cycle. It's really important to go through and understand what the value is of each stage along the way. And I'm going to show you in a second. When you start to think about how much money should I ask for, why this is important, it all starts to come together. So as I start to then talk about how much am I going to spend, Dave and I went fast there. Did you have any questions there? Do you think people had questions before I go into how much you should spend?

I think we're okay. I think we should keep going.

And we have Q and A time. So I want to get through this next part pretty quickly. So because there's some really great questions I want to make sure that we're handling along the way. So next thing is the question is how much do I spend? Right. And there are a couple of things that I always keep in mind when doing that. The first thing that I do is define what I think of as my budget guardrails. And this is sort of, I define this as what I call the zone of possibility. Right? So at the bottom level, I've got some percentage, I've got some commitments that I've already made. Maybe I've got a tech stack that I'm paying for. Maybe I've got some long term prepays and events coming up. Maybe I've got some agency commitments, a PR agency. Whatever it is, you need to understand and document what those commitments are. And that's sort of your baseline. If you think about that, there's no such thing as zero based budgeting. It's probably 15% based budgeting or something like that. At the top level, you've got a cap. And that cap is I can't spend more than this as a percentage of revenue for a couple of different reasons. It may be that I've got a P and L guideline that says that overall marketing can't be more than 9% of sales, as an example. Or I've got CAC, which is a customer acquisition cost target. So it's really important again, go back to your finance counterparts and determine what are those parameters that we should work within. Because ultimately you have to operate within a business. And you could say, hey, I can hit my targets if I spend 150% of revenue on marketing. Which may be cool if you're super early stage and fast growing. But you really need to understand these targets. So you can understand first, what's this zone of possibility that you're working from?

I just want to pause on that for a second because this is a point that I feel really strongly about is I think it's important to remember that your, your job is in marketing. Your job is not in finance. There is a finance department or counter within the company. And so, like, there's a lot of questions that are coming up about, about cac, how to calculate cac. It's great to know that stuff. But ultimately, like, that stuff, you don't just make that up in, in a vacuum. That is like a strategic business decision. It's the same way that the organization figures out which range of the market should we pay our engineers at? Or should we have 401k? Or how are we going to do payroll? Like, and if you don't have any of that information, then, like, I think the first step is having a conversation with the CEO and saying, hey, look, I really need a finance counterpart because I'm having a. You know, we don't have any insight into this. I just would push people to be like, you own the marketing piece of this. How can you create a collaboration and become business partners with the finance people? I'm not good at finance, I'm not good at operations. But I've been at two great companies that have had really strong partners there, and we were able to work collaboratively and that made all the difference. I wasn't keeping myself up at night being like, oh, my gosh, how am I going to calculate cac? Because I go like, no. Dave Vital, who worked at Drift, who is this amazing finance leader. He's like, nope, we have an opinion on how we're going to calculate cac. Dave, you're good at marketing. You do the marketing. We'll tell you how to think about cac. And I just think that's a very underrated piece of this that we don't get into.

Absolutely, Dave. And I think that it is important to get your head around to the level of comfort that you have getting your head around it. If you want to be a top marketing leader, you really do need to understand some basics. Dave undersells, as usual. He undersells himself. He's a very smart man. He gets this stuff. And if you want to be a cmo, then it's really important these days. In fact, I was talking to the head of the CMO recruiting for Heidrick, because I just did a reference call for someone. I said, what do you look for in a cmo? And she said that, hey, that the top thing that we're looking for now is people who have real financial and operational iq. They really need to understand that because marketing is becoming, as the top marketing executive, it's becoming more and more important to understand those things. Also, another quick plug for the book. We cover a lot of this stuff in the book and it's a great reference. May not be one of those things that is like a page turner, but it is a great reference and I recommend you check it out. Here's the next stage that you think about and I'm going to try and go quickly because I want to save a little bit of time for this next piece along is all right. If I want to figure out how much to spend, I should figure start with my goals. If my goal is to generate, you know, 1200 opportunities as an example, and I know based on my funnel that the cost per outcome historically is about $1,000, then I know that historically it would cost me about $1.2 million to get that. And again, understanding these funnel metrics are really important because then you can start to say, great, if you want this now, maybe I can improve my performance by 10%, 15%, maybe I can be wildly successful and do 20%, but you can't ask me to generate something that is ten times more efficient than I've ever done it before. So understanding these metrics is critically important for you to figure out how much you're going to need to deliver on these outcomes. And you can use this same thesis, by the way, the same approach across more than just demand gen. You should think about what are the other goals I'm trying to generate. Maybe it's an awareness goal as an example, maybe it's a product launch goal. What historically have you spent? What should you spend? What do you think the value of that thing is that you're creating that will give you an upper bound for what you could be willing to spend for it along the way? So really critical to understand some of the math behind it. And then the last thing, I'll include this in the follow up in the link because I didn't include the link here. We've got a great benchmark tool that does sort of. It's like a benchmark of benchmarks. It will add them all up and give you. So in this case, you can start from your current plan, compare it to some industry standards, and then compare it to some of the other metrics and it'll give you sort of again a little bit of data to help you sell your plan. And then I just want to quickly go through this and we can talk about some questions next. How do you get approval for this thing, I built my plan, I went and used some of these resources and now I got a great plan. How do I, how do I do it? First of all, you need to focus on the results you're going to deliver versus the stuff you're going to do. Nobody cares. So if you talk to your CFO or your board or your CEO or your cmo, if you're in the marketing team, they don't want to know about the things you're going to do, they want to know about the outcomes you're going to deliver. Second is you need to show that it's connected to what you're trying to do as an organization, whether that's within your marketing organization or the company writ large. Third, you need to connect all of your campaigns to specific business outcomes. So not, hey, I'm going to get 27 downloads, what's that going to translate into? Ideally, you want to be able to connect everything you do all the way down into the P and L. And so it's a critically important thing to do. You want to highlight cost per outcome and ROI when you can. And again, that's one of the things that we do really well in our software. But even if you can sort of estimate some of these things with a spreadsheet, that's a great start. I like to, when I'm proposing a plan, show contingencies, show plan A, plan B, show if I'm 10% more successful, 20% less successful, especially leading into some economic malaise that we're going into right now, it's critically important to say that, hey, what if we don't hit the sales plan? What are you going to do? So make sure that you have some plan as an alternative to say, if we don't hit it, this is what we're going to do. If we're nailing it and we increase by 20%, that's what we should do. If you have benchmark data, you should provide it. And overall, you need to show and communicate to people that you have management rigor, you're thinking about this responsibly, you're much, much, much more likely to get your plan approved. If at the end of the day you're demonstrating that you've got good fiscal discipline on top of the great marketing that I'm sure you all do. That all makes sense. Dave, what did I miss?

No, you love it. I mean, I think that the hard part is, I think to do this properly, it would take like a six hour workshop. I think this is great. I think what you just talked about is really important. And I think that one of the things that made me think of is I think it's really easy to like, be really selfish and not want to have other. No, I can't show you the marketing plan. I don't want. I. Whereas, like, I think that the opposite is true, which is like, the plan is not a paint by numbers playbook for how you're going to go do all those things. The plan is like, I think you need to share it. And I think to what the stuff you just were talking about, like, you need to be vulnerable. And so I learned from somebody who was really great at planning and what he always had was like a slide up front that was like, hey, here are some of the questions and assumptions that we're basing this on. And here are some of the outlying things. And so it's like, there's not some perfect deliverable. You're going to have like a, you might have a high, a middle and a low, and there might be a bunch of contingencies in it. And it's like you're kind of always looking at it every quarter, ideally, and, and kind of recalibrating. But I think it's, it's less of. I just want to reiterate that it's not a paint by numbers approach. It's like a living and breathing document that's kind of, basically, it's setting guardrails and kind of cones and lanes for you to drive on. But the course is going to change and how you get there is going to change along the way. And to your point, the more you bring other people, like, I want to see people bring others into this. Like, be the marketing leader that you're collaborating with others, tap into the wisdom of others. Like, and when you, when you block everybody out, they don't end up wanting to help you on this. So I think to think like a true exec is to, is to make this a collaborative effort. Okay, we have a million questions. We're never going to get to all of these.

But let me make one key point as you're getting into that. So clearly people want, you know, the detailed version of this. So you and I should collaborate to say, can we do like a half day or full day workshop around this?

I didn't, I was over in the other screen. So people are like, yes, let's do it.

You know, take our money. We want to do it. They'll, they'll pay for it. So we can definitely. We, we should do it. We could, Should Put together a like a half day or a full day kind of thing. I think it'd be awesome. We have lots of content to do this, but let's do this. Want to get to some questions?

Yeah, this is great. I feel like I'm on Oprah right now.

You get a car. You get a car.

Yeah, that's. Everybody gets a plan. Oh, somebody asked about CAC and do you calculate salaries in that one?

Yeah.

Where does Mark does marketing salary go in that definition?

Yeah. So the true calculation of CAC is 100% of what you're spending on sales and marketing. So it's a very, very high level view of your customer acquisition cost. And so anything that's related in your P and L to acquiring a customer. So it's salespeople, it's their salaries, it's their commissions, it's their variable costs, their T and E. And so that's why it's a reasonably big number usually. And you have to fit within that envelope and you have to figure out what percentage of that total customer acquisition cost are we going to spend on sales and how much are we going to spend on marketing? Because it can't be more than 100% of your target. So you need to figure out those two. And we talk about some of that in the book. And that's something we can dive into in a bigger thing too, it looks like. By the way, Natasha has a great question here. How do you start when you're the only person in the marketing department? And lots of people upvoted that one, Dave, So maybe we should talk about that.

Go ahead, let her.

I'll tell you the process in the framework and the plan is exactly the same if you have 100 people. If you have one person, it's the same thing. Now, it can be simple, it could be short. You should use that template we have on our website, which is a great way to at least get the topics down. And maybe you say some of them are na, but you should really start to think about my market. Who's my target market? What's my message? What's my strategy for marketing? We have a whole session that we've done on sort of marketing strategy. How does that work? You really need to consider all of it. Even if it's a sentence or two. Make yourself think about it because your plan is going to be better. So think about, you know, check out Natasha. That template, I think is a good way to at least start to get the list of things that you should consider in your plan. Don't fall into my plan is going to be a spreadsheet. A spreadsheet and a budget and expected outcomes is a really important element, but it's not the whole thing at all. So that's nice.

Okay, this question. Oh good. They're, they're like ranked by upvotes.

Silly.

Dave, this question from Miriam. Is an annual plan worthwhile for a fast growing startup where everything changes every couple months? Resources, focus, market, et cetera. Our previous efforts to plan out farther than a quarter have fallen flat. Let me, I want to answer this one because I've made mistakes on this and here Peter. So I think that it's worth having an annual plan because you need to know where you're going and you need to have goals. And I think so setting goals for like you can't answer the question like where are we going as a company right now? Then like that's step one, you need to have a plan. So like you can have to have a higher level revenue plan. I would say that if there's so many unknowns and the tactics change and a lot of those things change, have an annual plan that's based on goals, but be okay with adjusting that plan every quarter. Like don't blindly stick to a plan where if you go do something for a month or two and clearly it's not working, don't be afraid to blow up the plan because unlike a big company, you don't have to like go explain that to Wall street. Right? It's really just internally you're going to, you're going to blow that up. What's your reaction to that, Peter?

I think you're exactly right. You need a plan. Some kind of an agile plan is critical. You need to have a framework for what you think you're going to do. It can be drafty in the out periods, but you need to have a high level framework. Start with the goals, start with what I'm trying to achieve. Exactly what Dave said. The campaign framework that I put together had like four things on it. That's a great way to start. And you don't have to be more sophisticated than that at the beginning, but if you're less sophisticated than that, you're going to fall into a really deep pit of despair. So make sure you have a high level view. You can refine it. I like to think about sort of building my plan at the beginning in Minecraft mode and then you can get ultimately into higher and higher resolution over time as you get closer. But you need that high level blocked out view at the beginning, even if it changes, it's easier to move a little, a big block around than a thousand individual tactics.

Also, the lesson that I would say is like, I was like a 28 year old marketing manager who initially had to do this and I was like, ah, we don't need the plan right now. And I wish that I gave myself the discipline of like, even when we don't need it, to do it, to learn how to do it before you need it. So then when you need to do it, you actually know how. And so I think like, it's just part of the, you're going to have to do it next year or the following year and the CEO is going to ask you or the board's going to ask you, like, the more you can build in that discipline before you even need it, you're going to be in a better position to operate. This is a really good one from Katy Kelly. One of the biggest challenges connecting visibility, thought leadership, brand awareness, et cetera to those financial goals. What are your thoughts on how to do this, Peter?

Yeah, this is one of my favorite questions. And first of all, I'm a huge believer and I'm showing you a bunch of math and some of the specific kind of conversion rates and things like that. You can do that with thought leadership. You can do it with a bipartisan, building a thesis for yourself. So here's the way you think about it. So for instance, you might start by saying, hey, with my thought leadership, I think I can double the organic traffic to my website. Okay, what does that mean? What's my current traffic? What would double be? What does it convert at? Again, it's down to math, but at these very, very high level kind of assumptions, you know, what are the things? Why are you doing it? And what is a possible outcome that you could get to? So if you say, I'm going to triple my organic sales, but I sell, you know, $5,000 a year in organic sales, it's not going to justify a lot in a thought leadership campaign. There are two reasons though that you do this kind of thought leadership and it depends on sort of your overall goals and your stage as a company. You might be focused on, hey, I want to fill the top of the funnel, I want to get opportunities. In some cases it's about awareness and authority and it's about making sure that I actually can close more deals. And again, do the same math, do I think that I can increase my win rate by 10% if I do? What's that worth? So again with the Back of a napkin, a little calculator, a spreadsheet. It's a really useful construct to say what is my high level view for what I'm going to achieve with this? What do we expect a reasonable outcome to be? And then what's the value of that outcome? And you can do that on a napkin and come up with a reason. If it's $10 billion, then maybe you got something. If it's $10,000, maybe it's not worth too much effort. So it's a really good way to sort of frame the value.

I also don't entirely agree that you can't measure any of those, those things. I think the, the what's the financial benefit of thought leadership and brand awareness? To me that is if more people know who you are, more people are coming to your website and if this is in a B2B context, are coming to buy your product. And so this is why one of the things that I love is the idea of self reported attribution. Right. It might not be perfect, but it's a proxy. And so if x percent of people told you that they heard about you through some event that your CEO is at, or through LinkedIn, you can attribute that. It's just not a direct response. It's not a direct response channel.

Totally agree with you, Dave, by the way. And we do that all the time. And, and it's, it's how we've identified that we've got a whole bunch of people who are customers. Because of my podcast, I was going.

To ask you that. Like perfect example, you have a podcast and a book. Peter, you're very analytical person. How do you quantify whether the podcast or the book is, is working, right?

Yeah. And some of it is like that, self reported. We ask people where they heard about us and we take in that data and we build some anecdotes to get started. And the second thing is we have a thesis. And the thesis is that by increasing our visibility, we're going to generate more organic traffic. We're going to have more people coming to us versus us having to reach them. And we can see that trend increasing dramatically over time. And so that's why we did it. And we leverage the proxy metrics. What are the early indicators that say we're on path? And it's everything from how many people are listening and subscribing. Is it the right people? Those are really great proxy metrics along the way. Not everything can be a direct line to revenue, but you have to have a basic set of logic behind why you're doing things and what it's related to to make sure that you can get there.

Rowan said, what was your biggest planning fail, Dave and I would give you was this Eisenhower. Whose quote was this? My or somebody else. But my biggest planning fail was failing to plan. Looking back where I just was like, oh yeah, we're doing a bunch of things like as growth is happening, I think the more disciplined it could be. Okay, not bad. There's still 490 people hanging around, which is pretty good for the, for the end of the hour. So there's a million questions. I feel like Peter and I and the. And the plana slash planful teams will connect because there's clearly a huge appetite to do some. Some more stuff here and I think it'd be really valuable to people. So let's just wrap up and make sure you can plug all the stuff so people can find it. And to everybody that's listening, we're going to send out the follow up. When you get that, you're going to get a link that basically lets you log into Goldcast to watch the recording. And with that you'll also get the transcript in the chat comments and we'll have this on the podcast later. But I think that would be the best follow up listening experience. But Peter, I'll let you send us out of here.

Okay. Yeah, thanks Dave. And thanks everyone for listening. By the way we do this. Our thesis is that we can get better awareness by teaching people and show them some exciting stuff. So definitely check out a demo if you can. That's how we measure success. So we can justify doing more of these things over time. So do. That would be great. Would love to see you and would love to talk to Dave in the team about doing a deeper, longer, deep dive in this area because I think there's a lot of great stuff. So Dave, awesome as always to see you. Look forward to the next time and thank you all for listening for a whole hour. I really appreciate it.

Hey, thanks for listening to this episode.

Of the Exit 5 podcast.

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