#96: How To Build Your Marketing Plan and Get It Approved (with Rowan Tonkin, CMO, Planful)

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Rowan, good to see you.

Good.

Yeah.

I'm glad that we're doing this topic. This is a topic that I've needed to spend more time on and I think you all are a great fit to present about this topic. But for people who don't know you, who are you?

What do you do? Sure, yeah. Rowan Tonkin, I'm the chief marketing officer here at Planful. I've had an interesting background in the way to this role. I actually started my career as a customer support rep for marketing technology way back in, you know, before SAS was SaaS, I think. And then I became an implementation consultant working with marketers like implementing marketing technology. So doing professional services, helping companies like shell and PayPal transform their, their planning and approval processes. Then I got into sales for a bit. I was a solution consultant and a sales rep and then I became a product marketer for this type of technology. So I spent three years in product marketing, then led revenue operations and demand gen at a big data company and then joined here as CMO of Planful. So got a bit of a weird and wonderful background, but planning and working with finance and working with that type of technology has been at the core of my career and so been around these conversations for a long time.

All right, so sometimes when we do these sessions, right, the people that we do the sessions with are a sponsor of some sort. And what's, what's cool about this one though is Planful reached out and they're like, hey, we want to do something with you with Exit 5. But the best part about this is what you're not going to get A, there's no product demo, there's no software that Rowan's going to go through. This is like a philosophy on how to think about working with finance. And then it's actually the best form of marketing. Because if you believe that Rowan is smart and the content is good and the content is helpful, then you're going to reach out to Planful and want to actually learn more and see how they can help you. But vendor aside, like, I'm excited to get into this session because this is an area for me. I'm somebody who went from marketing manager to CMO over the course of four years. And like when I use that tagline with Exit 5, like, because you didn't go to school for B2B marketing, this is like the perfect topic and thing that I would budgeting, planning, forecasting, working with finance. As much as I try to try to label myself as a creative marketer and I got these great ideas at some point that runs up against to this, like you have to learn how to operate as an executive. You have to get in line with how the company is thinking about marketing. All of a sudden you have a couple million dollar marketing budget. Dave, even though you're this like fun creative marketing idea guy, you can't just go willy nilly, do whatever you want now that we have a budget and a team of hundreds of people. And so I think this is a session that's going to be very relevant to A, if you are an up and coming marketing leader and maybe you've never done this and you want to learn more for the first time. Or B, you're in this already but you're looking to sharpen your skills. And I think this is a session that I wish I had years ago. And I'm excited that we'll dive in. I've seen the deck, I've seen the content. And so Rowan's gonna drive and we're gonna hop into this, but I'm gonna play host and mc and what I want to do is we're not just gonna like flip over to Rowan and go do slides for 50 minutes. Right now it's just going to be interactive. So Rowan's gonna, we're gonna use his slides as a jumping off point. I'm gonna interrupt and ask questions. I'd love to take your questions from in the chat too. The easiest way to do that though is just to Help me out as.

Don't put them in the chat here.

Go to Q and A. Because in the Q and A, then we can upvote them and figure out which questions are most pressing and most popular right now. So, without further ado, I'm going to go on mute for a couple minutes, and I'm going to kick it over to Rowan to get us into the deck.

All right, thanks, Dave.

By the way, Rowan is doing the. Anybody that's been in marketing or worked at a company, Rowan's doing the dance right now, where he is on the road presenting from his hotel room, which is like, anytime we do some type of webinar session, there's always one spot speaker that's like, you know, in their hotel room for an hour because they're at a conference or something. So we've been there.

Yeah. Hopefully you can all see my screen. Just let me know we're good.

You sound good. It looks good on screen. So you got it.

Awesome. I'll post on LinkedIn for those that want to follow along with that joke. Dave. I'll post my setup. It's pretty. It's pretty crazy. I got laptop standing on trash cans. All right, so you've met myself, you've met Dave. So let's jump into it. Let's talk about what we're actually here for, which is to talk about planning, but let's demystify it a little bit. When I talk to a lot of folks about planning, a lot of people don't understand, like, some of the concepts and the frameworks that actually govern the whole process.

Right.

It's not like your finance leaders and your CEO don't want to do certain things. It's just that they're governed by certain things that we need to understand to help us become better marketers and help us, you know, what I say is elevate our financial iq. Because when you've got that elevated financial iq, it helps you get the resources that you're looking for. It helps you get a little bit more budget. It helps you get a little bit more headcount, and you're able to create leverage from that. So that's what I want to take you through today. Get that understanding of where this comes from. So I think the first fact that I want to let you all know is there's a myth out there that finance teams are the enemy. And I've met plenty that feel like that. You know, they come from that scorekeeping mentality, making sure that we're all on track. And, you know, we get a little bit of fear from that. But fundamentally, at their core, these folks are super smart. You know, they didn't go to school to live in spreadsheets. They went to school and they got a CPA or they got a business degree because they want to drive business forward. They want to create value for businesses. And they think like investors. And effectively, their bosses are investors, right? All of our VCs, our PE firms, our boards, they're investors trying to drive the growth of our business. And when we think about that, investors think about specifically in SaaS, why do they love SaaS businesses? Why do they put so much money into it? It's because we're pretty predictable. Like a SaaS business is pretty predictable. Get it on the right path, follow the right systems, and you get predictable revenue, predictable free cash flow, and that turns into a great business. And so with that predictability comes all these playbooks. And those playbooks really govern how we in marketing get to invest and get to spend our money. And they get to allow us. Where are the guardrails?

Right.

Dave talks about guardrails all the time. These playbooks give us those guardrails and make sure that we're not, you know, burning too much cash or ruining the company because we had a great idea that didn't work. And that's really what finance are looking to kind of drive.

Well, I also think this is such a good frame to go into because I also think that you have to zoom out and think about the lens of, like, you as a mark, like, you're here to support the company. As much as we talk about marketing here, like, marketing is just actually one piece of the company. There's sales, there's product engineering, finance. Right? And so I think of it as, like, part you have to be able to partner with finance if you're going to serve the company effectively. And so why make it a battle and why be enemies from the gate? And so I have always thought of it now as I used to get really defensive about it at first. Now that I've had a little bit more age and wisdom and I can back off a little bit, I've realized, actually, wait a second. Partnering with finance and making them my best friend means that I don't have to pretend to be an expert in an area that I'm not an expert in, the same way I'm not an engineer. But I often will want to use engineering help to do something awesome in marketing. It's the same thing for finance. And so that was a big change for Me and I, I love that you started that out of the gate, like, hey, this is about, like, how can you build this relationship? And I think that's what's going to make you most successful. This is great.

Yeah, it's all about the go to market engine.

Right.

It's not just about marketing. And you know, how many sales reps you have just often will be a determiner of things like how much marketing spend are we going to get? Because you've got these rules here that, and I want to caveat this by saying it depends on what type of LED company you are. Marketing led, product led, sales led, whatever, led. There's a lot of different ways to go to market and there's a lot of variations inside of bigger organizations. But when we think about all of those variations, there are some fundamental truths that are imposed upon marketing budgets and marketing plans. Because sales and marketing spend as a percentage of operational expenses typically has to be in some formula.

Right?

And again, it depends on the stage that you're at if a series A is going to have a higher percentage than a series E or D or a post IPO company. Marketing and sales spend as a percentage of next year's revenue is also a really big indicator of what phase you're in and what governance is going to be imposed upon you. So if you don't know these questions and what benchmarks you should be following, I'm going to take you through some places to go and get them. But work with your finance team to understand these things and understand some of these ratios because then you know, hey, what are they going to be expecting of me next year as well?

Right.

Like a lot of us are starting planning for FY24 and just having this understanding helps you understand that I'm going to need to do something else. So these are some common rules. Right. We've all heard marketing spend as percentage of revenue, sales and marketing spend as a percentage of revenue. You know, there's lots of rules around there around marketing spend itself. Hey, you should always have around about 60% program spend, 40% headcount. I've seen that in the 70%, 30%. But people are typically looking for these ratios. And that comes back to boards, investors, VCs all understand that the playbook dictates these types of things. And yes, there are always exceptions, but they're looking for that predictability. These are common ones. Go and speak to your finance team about how they think about this. Often your CFO will have some philosophies and maybe you need to Talk about those philosophies with them to get on the same page. Now another truth is you typically hear we must get more efficient over time. That's not always true because when you're opening up a new market, a new product, maybe you're creating a category, you're going to be inefficient at the start and you then might decide to even be more inefficient in a certain phase. But over time, over, you know, three, four, five years, you should get more efficient. It's our job. It's our job to start better using the capital and create the compounding growth, right? Like, you know, I know a lot of us, we invest in SEO early because we know that we're going to get that compounding growth long term. Well, you should also think about that in the way that you're planning. You know, when those numbers change, sales and marketing as a percentage of revenue over time they are going to go down, right? We're going to get less of that because the goal of the investors of the VCs is to get to profitability, right? You may not be there now, but when you get to that profitability, that's when some of the magic happens and you can reinvest that profit. So we should get there. So I want to give you some tools for where can you learn about some of these, you know, benchmarks, some of these frameworks and more about really finance specifically. So Rev Op Squared by Ray Reich. They have tons of great reports around state of the market. You know, where's what are people doing in our industry? Same as Insight Partners. They produce some great content around all of this. The SAS CFO Ben Murray, he has courses and newsletters where you can learn how to elevate your feedback financial iq. Many of us follow the Kel blog. Dave Kellogg, you know, has some great detailed blogs about how to think about certain aspects of a go to market organization for for B2B SaaS. And then another gentleman, CJ Gustason creates the Mostly Metrics newsletter. This is fantastic for helping you understand, you know, value of equity and things like that. But also really breaks down SAS metrics and SAS financials and helps you understand how companies go to market. Great ways to elevate your financial iq.

Can we go back just double click on that one for a second. One of the number one questions people ask is like for that previous slide that you had about like percentage of you know, marketing and sales as a percentage of operating expenses, sales and marketing spend as a percentage of revenue you mentioned that these things vary over time. Seed A, B, C, whatever. Do you have a place that you would go to to find one of those benchmarks? Like if I was a series A startup and I wanted to know what percentage our revenue, what spend percentage should be, like where do I even go to find something like that?

Yeah, I, I would look at Insight Partners. Firstly they have a really good breakdown and they break it down by these types of things like is it a product led growth company, is it series A, is it, you know, where is it? Because it, it does all vary but they create cohorts and cohorts help us figure out, okay, where are we? So I go to Insight Partners, they have great data there and then a rev op squared have a lot of great data. And then finally mostly metrics. They also break this down to say here's how these types of people are doing it and where that fits in with typically public companies. But that also gives you an understanding of where you need to get to. Beautiful.

Thank you.

All right, so I think there's another important frame when we get to planning that is really important. And this is going to dictate really how you go get your plan approved, how you think about your plan and how you build your plan. And you've got to understand that in our business we have lots of different metrics, right? Like in marketing, you can see over on the right, we got leads, MQLs, number of meetings, conversion rates, all our channel metrics. You know, we've got metrics coming out is and often we try and answer questions from our CFO or from our VP of finance about how we're doing. We try and answer those questions with operational metrics and operational data. But what we need to do is level up and go to the next level, which I would consider the commercial metrics. These are the things that you should talk about outside of marketing, you know, on your company town hall, on your, you know, with your one to one with your sales leaders with, you know, the reps. Okay. I'm talking about win rates, pipeline, average selling price, how much we're spending to get each dollar of pipeline. They're our commercial metrics and they're driven by those operational metrics. And then the final point is those commercial metrics drive the financial metrics of the business. That's what finance mostly cares about. And we need to report back to boards and report internally to the C suite. How are we doing on bookings, revenue, gross margin, net revenue retention, free cash flow, all of those things are big important financial metrics. And what I see a lot of folks do is when they get asked a financial or a commercial question, they answer with the operational detail. And that's where a lot of that conflict comes in. And this is something that we really need to step back as we building our plan. Start with the financial plan, right? All the things that we just talked about, hey, where are we going to be as a percentage of revenue? What is our goal for this? That's going to determine how much budget you get. I would love to say to all of you, and I'd love this for me to be true, hey, I'm just going to go out and build this great plan and it's going to be 30% year over year of what I had last year and I'm going to achieve X. But even if that were to be true, the company might not be able to support that because of their operational expenses and it's not going to fit in the framework. And so it'll never get approved. Like we kind of get laughed out, out of the room. So we need to think about those things because they're constraints and they're guard rails for us to do our job. So these metrics, think about them in terms of financial, commercial, operational, and then think about, okay, I'm being asked this type of question. How should I respond? Especially when it comes to planning and use these operational metrics to build your plan, but use financial and commercial to communicate your plan. We're going to talk a little bit about more of that.

That slide is so great just because this is like, we get so in the weeds with the marketing metrics. And like, this slide could be the answer for like, well, why, why do we have a podcast which one of these metrics like? And obviously it's not a direct relationship, but you have to be able to have a story. Well, we think that if we do this, here's what's going to happen. Like, this is almost. It's so easy to get in our heads in marketing and you have to zoom out and think about the metrics of the business. I love this slide. And my last anecdote I wanted to mention is when I started at HubSpot, Mike Volpe was the CMO there at the time and he did this new hire training for all marketing people and he actually had a slide like this that was not marketing metrics. It was like, these are the metrics of our business at HubSpot. Here's what we care about, here's what the board cares about. Bookings, revenue, ARR. Gross margin. And he broke these down and gave definitions for everybody. And so whether you're a designer, an engineer, a creative director, a blogger, like, everyone's first entrance into the marketing team was getting familiar with the definitions of these metrics from a business standpoint first. And then he would explain, like, how marketing moves those. And I just thought that was such a great example of bringing this to life inside of a company.

Yeah. And that is a great way to elevate your team's financial iq.

Right.

It's a fantastic mechanism to say, hey, this is what drives our business. This is. You know, HubSpot's a fantastic business. Right. With fantastic financials because of that focus.

Right.

I'm sure they have a intense focus, Dave, on. On the operational metrics that drive all of that, but every quarter, every month, you should be checking in those financial metrics. Are we actually seeking. Achieving what we sought out to do? All right, I think we got a poll coming up here, so I want to ask folks, how often and how frequently are you working with your finance partners? So is this the.

How you want me to hit? The how frequently do you need to review one?

I think it's how. How are you communicating with your CFO or VP of finance? How close? It was the second one.

How close do you work with the cfo?

Yeah, that one. Yeah. All right.

We just did that. We just threw a poll in here. We're getting fancy. If I go to poll, I think I can show this one. So there should be a poll right now. Is it happening?

I'm not sure. I can't see. I got my screen share going. I'm flying blind. Dave, you're gonna have to sort me through.

Okay. All right, let me see here. All right, here we go.

There we go.

Do you see it? Are you just.

Yeah, I'm gonna have to.

Oh, can you stop presenting for a second?

Yeah.

Now I.

Here we go.

All right, here we go. Live results. How close do you work with your CFO to plan and build, to build and adjust your marketing plan? 16. Very close. 40. Close enough. 36. Not much. All right, so I'm concerned about. Close enough. Close enough to me is, like, when you ask somebody, like, you know, when your doctor asks, like, how many drinks do you have a week? And you're like, yeah, I have, like. I have, like, one or two. Or how often are you working out? You're like, a couple days a week. Like, we know you're lying. Close enough.

Yeah.

That's. Anything other than very close is like, there's probably something worth digging in there.

A little bit, right?

Correct. You know, even if we trust the close enough group, we've got 40% that aren't working with finance. That concerns me.

Right.

And think about all of our problems in marketing or our perceived problems. If you said, oh, if only I had more of this, which is typically money or people, and you're not working with finance, that's a big problem, guys. We really need to think through that.

I don't know if this is right or wrong, but I'm just. Based on my two experiences as a VP of marketing and a cmo, I had a weekly meeting with finance, and not too dissimilar from the meeting weekly meeting that we'd have with sales, but, like, we would every week pull up the latest marketing metrics, pull up the current budget and burn rate and run rate and headcount and hiring plans. And I just feel like if you're not. And what's great about doing that weekly.

To me is, like, sometimes there's going.

To be weeks that you're like, yeah, we don't have that much to talk about. Like, let's meet for five minutes and say hello and cancel the meeting. But again, back to that, like, working out analogy. When you have that appointment with the trainer on the calendar every week or every day, you're going to be more likely to go and do that. And so I've always been biased to, like, let's have that on the calendar. For me, I need that discipline of meeting weekly. And so I'd say one call to action is like, you can get that meeting on the calendar, have some type of weekly collaboration, 20 minutes, 30 minutes. Like, would you go about fixing that?

Rowan?

Yeah, I would start with, okay, let's get a monthly sync or agreement. Like, start, hey, we're going to create a project around getting better at working with finance. Who's going to be doing that, who's leading it, who's involved, and then reach out to finance and say, hey, I've realized, like, I need to get better at my job. And one of the ways I can do that is learn from you and ask them to be the partner that you want them to be, and they'll love you for it, number one. And then they'll work out a cadence that is right for you. Like, some businesses might be monthly, other businesses where you want that. That budget agility like you had there, Dave, of weekly, like, that's so powerful, especially when you're like, okay, this week we're good. Move on. But the next week you might be like, oh, there's a big opportunity in the market. I sense something going on, and I want to throw some more dollars at that. Are we good? Where am I going to pull that money from? Yeah, and that's so important right now.

I also feel like there's some in some elements, like, I wanted that meeting weekly because I think, like, if you only talk to finance team, let's say monthly, and it's only in that setting of some type of formal review, they're never going to build a relationship with you. They're never going to build the trust with you. And so, like, towards the end of some of my tenures, for example, like, I had the CFO saying, like, I think this guy and his team are great at marketing. Like, how can we give you more money? Or, like, yeah, you need to build that relationship with them beyond just, like, the quarterly, like, you know, sanitary business review. Right. You got to be able to, like, show them, like, who you are and what you do beyond the metrics. And I think that's how you earn the right to get some of that other stuff in the future.

Well, like, they need to teach us. We need to teach them, and we need to teach them how those operational metrics that we're looking at week to week drive the commercial and the financial. Because when you get to that little nirvana state of the CFO saying, hey, you know, your stuff, let's invest more in that stuff, that's the place that we all want to get to. But you can only get there when you give them an understanding of, you know, they need to elevate their marketing iq. Right. They don't understand really what the business drivers of marketing are. Sales drivers are. Are a bit easier.

Right?

You just give them opportunities and pipeline and look at the, you know, conversion rates and make sure that they're holding true. Marketing is much more nuanced, and we need to teach them those nuances.

All right, get back into the driver's seat.

All right. This is a better view, too, because I can. I figured out how to do the sharing. All right, so how do we then build our plan? We'll start with those operational drivers. What are the assumptions in your plan? You have to write those down. Like, we're going to assume these conversion rates from whatever your funnel looks like, and they might be different for different products, they might be different for different regions.

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You've got a or different segments of your market so you're going to start with those assumptions because that's also how you need to communicate your plan is need to say, hey, these are the assumptions I made. And then we can test those assumptions to see if the plan makes sense. You know, coming into FY23, if you were assuming your conversion rates were the same as they were last year or the year before, you might have got caught out. Because I think we all know our win rates are probably hopefully holding steady for most folks. But sales cycles have absolutely extended for most businesses. We're seeing a lot more pressure on pipeline for most businesses. So it's really hard out there. It's much harder than it was last year. If your plan was built on conversion rates from an average of the last two years, then you might be struggling against your plan and that comparison is really important. And then so we're going to talk about this in a little minute here, presenting your plan with commercial and financial outcomes. So here's how I built my plan. These are the operational drivers and assumptions that I made. And here's how we're going to present the plan. So let's jump into how we should build a plan. So select your planning approach, right? Is it going to be tops down? Is it going to be bottoms up? What way do you want to actually plan within your team? And business and finance will probably have a good view on that. Seen plenty of companies and most marketing teams do. Hey, I'm going to take last year's plan, I'm going to copy that all across and we're going to do a little bit more. Is that the right approach? Like should you maybe look at it from a zero based perspective? Hey, what worked last year? Maybe we'll do some of those same things, but we should just maybe start fresh. Then define your goals for your plan. Like what are the business goals you're trying to achieve? Take those metrics from previous slide, like take the operational metrics, use those funnels and then determine how much you want to spend on your biggest chunk of expenses, typically demand generation, typically. Then create your overall budget.

Right.

I'm going to break it out. I think about it in terms of what I call direct and indirect and we'll talk through what those ratios are. But here's the stuff that I can correlate directly with pipeline using things like attribution and here's the things that I can't and here's some experiments and when you build your budget in that way, you can then communicate, hey, finance. Here's the predictable stuff that I know and here's the stuff that I'M testing and here's the stuff that you know, we spend money on a podcast. It's hard to do attribution on a podcast. You can do self reported and you can do lots of things, but it's hard to justify that investment to a finance person who wants inputs and outputs. So classify it as this is a bit harder and they'll put it through a different process in their minds. Add in your committed spend. Like we already have commitments for next year. You know, you've got SaaS then that runs year over year. You've got event spend that you might have already said, hey, you know, we want to get the best booth next year. So put that in there and then assign the owners. Ownership is really, really important because when there's no owner, no one's monitoring and you're not finding the underspend and therefore you're not spending all the money that you could be every way through the year and you're losing budget agility. So think about these steps in terms of, okay, what is the planning approach finance want to go through? How do I want to go through the plan as a leader or maybe as a functional leader of a department. Hey, I want to go bottoms up or I want to go tops down. Define your goals, apply budget based on those goals and then run through that process. So next step, now you've built your plan, you got to communicate it, right? So I think the really important thing to do is to focus on the results and focus on them at that commercial and financial level. So start at goals. Hey, we have this goal, this goal I'm spending this amount of money on and these are the outcomes I'm expecting for that goal. And those outcomes could be different per goal, right? We all have goals around increasing brand awareness. We all have typically goals around increasing sales or increasing revenue. We all have goals around maybe like I need to do more upsell, right? So you're going to have different goals for different parts of your business and they require different levels of investment. They also require different results, right? Not every goal is going to have a revenue number associated it and nor should it. For example, increasing brand awareness, it's really hard to track that brand awareness to revenue, right? Like you can spend projects with agencies and consultants and get there with an eight week project and $100,000, but not all of us have that. So focus on, hey, I'm going to be trying to achieve organic website traffic and my goal is brand awareness and that's how I'm going to represent it. Here's how I'm investing, and here's how that outcome is tracking over time. And that's communicating in financial terms, not the marketing terms, because you have a cost per outcome. Context matters, right? A lot of these finance people don't know what good is. Just like we don't know some of the rules that are being governed on us. So give them the context. And that comes back to what Dave was talking about earlier. You got to bring them along throughout the year. You've got to help them know how our business works and what those operational drivers of our business are. Some businesses is SDR activity might drive most of your pipeline. Other businesses, it's all content led. Other places it's all event led. You've got to talk through to your finance person because they may not know that and they might have been somewhere before where it was all kind of demand gen and you know, webinar led. And then next thing it's, they're in a new business and you're talking about other things that they don't understand. So you've got to help them, right? Got to tell the truth. This is a really important one. When things aren't working, you got to tell people it's hard. I think most people should have read Cialdini's influence book. When we make decisions, we're committed to those decisions, and then we're consistently apply that commitment. And so as marketers, it's often really hard for us to say, I really wanted to do this thing. I thought it was going to be super successful. So we keep just doing it because we're like, no, I'm committed to that decision. So it's really hard to step back and say, oh, it's not working, right? So you've got to tell the truth to yourself. And then to finance about, hey, it's not working, and then tell the whole truth, right? Don't just give them that little sliver. You've got to tell the whole truth. Hey, it's not working. And the opportunity cost that we missed out on is, is this or, or whatever that might be. You have to tell the whole truth. Because when you do that, they then understand, okay, we've taught them the operational drivers, we understand the commercial and financial outcomes. Now how do we get back on track? And they can help you do that. And then I think this is really important when we're doing, having these conversations, it's about teaching, not preaching, right? Quite often, and we're on the receiving end of this sometimes as well is you get preaching from other leaders and you're like, yeah, yeah, I get it, I get it. And you just. It goes in one ear, out the other. You got to teach people, you got to sit down and help them understand how marketing is actually working. And that comes from the consistency that Dave was talking about, right? You can only elevate their marketing IQ by being consistent. And in Dave's analogy, you got to go to the gym every week. Probably more than that. Right, Dave?

Every day, Dave Kellogg talks about. To your point about the truth in our podcast that we did with him, Dave Kellogg talks about. I forget the exact way he phrased it. He's much wittier and smarter than I am. But he basically says that, like, you have to present the facts and not have a bias or not try to, like, couch how you explain them, and you will do better and gain more credibility and get help from the rest of the organization if you present the facts. And I've made this mistake of this number, this metric is down 30%. And I'm going to get smashed in this executive leadership meeting. And so I come in with my whole presentation ready to defend it and explain why when, like, what I should have done is explained, we missed. Here's why, here's where I need help. And, like, that can sting, but I think you make so much more progress when you take that approach versus the younger me approach.

Yeah, the younger you was telling the truth, but not the whole truth, right? Like, you weren't opening up and looking for feedback and getting that, you know, you're putting that little bit of spin on it, right? Because we're marketers and we're good at doing that. We're good at marketing ourselves. And it's not nice to stand there and say, hey, I missed this. No one wants that. No one likes that feeling, but it's really important that we do it. All right, so we've talked about this. What does communicating in financial terms look like? And this is kind of what Dave was just saying. Hey, we generated 2 million in incremental pipeline from this activity. We're expecting to convert to 450 of incremental revenue based on our historical conversion rates. That's very factual. There's no spin there. And it's also very financial, right? Or even commercial. It's speaking at that level, that higher level that our stakeholders understand. But when we speak in marketing speak, which are our operational drivers, you have to know them. I'm not telling anyone here don't know marketing speak. We have to know this because it helps us communicate in financial and Commercial terms. So when we say, you know, email campaigns delivered 14.5% CTR, does your head of sales know whether that's good or bad? You created 4,000 MQLs in Q2. Was the conversion rate of those good? What was the plan, what you were expecting? How does that flow through the funnel?

Right.

You can see that we're talking about things that a lot of other people don't understand. And when you speak like that, people gloss over it and they don't understand and they're often embarrassed to ask the questions or they don't want to. You know, a lot of people try and be nice. They don't want to embarrass you in front of everyone else. So they might ask you later or forget to ask you, and then you haven't communicated what you're really trying to do. So how does this, what does this look like? Right, so obviously Dave said, we have software. This is how we look at it. And you can build all of this in a spreadsheet. You don't need software to do this. I can tell you that. Software absolutely helps, makes it more efficient. So we have a goal here. We're going to drive growth, right? We have different metrics here to drive that growth. Each of those metrics have a target, each of those metrics have a current state. Each of them have a cost per outcome, right? And each of them have roi, therefore connected to that. They all have different tactics, right? If you think about the world of okrs, this is our objective and these are our key results, right? And we're tracking each one of them. And that's also really important. When you track each one of these metrics and you're looking at a cost per outcome of all of them, you can then say to finance, hey, my key metric here was number of deals in pipeline. I'm off on that. But surprisingly, the amount of ARR has increased because our ASP went up against our assumption. For example, right? You could be behind on your key metric, but ahead on your other one. And that's news, that's information you can share with them. And then here are all the tactics, initiatives, campaigns that are driving to that goal, right? You structure it in a way that says, hey, this is what I'm going to do to achieve that, how much money is being allocated to it and put all the things that, you know might be free, right? Like you might have a LinkedIn, organic LinkedIn strategy. Put that in there. Because then, you know, hey, these things are actually driving value and putting there. So that's how I would talk about it. Each of these campaigns will have their own metrics, but I would talk about the goal based metrics.

Right.

Because they're the commercial and financial ones. Attribution will help you with all your campaigns. How are my campaigns working? That's what we need to know. We as marketers need to know about all the attribution, but at the finance level, they just need to know, hey, what's the ROI on our goal? Not all of the tactics that support that. All right, so the other thing that we need to do when we're building our plan is how do we align our goals to company goals?

Right.

I said it earlier when we were talking about efficiency. You might have an efficiency, a goal in the company to open a new market.

Right?

Hey, we're going to go from North America to apac. Well, that's great, but it's also more expensive to do that.

Right.

Typically you need to hire people. We need to go and create a brand out there that might not be there. We need to go and figure out what does the market look like, how do people buy over there, what's the process? We might need new content, we might need to localize all that content. It all comes with an associated cost. But if there's a, a company goal tied to that, then everyone can understand, hey, this company objective of going into a new market is going to cost us more and it's going to be more inefficient than other parts of our plan. And then, so you'll then become a create your marketing goals around those company goals. And again, that's much easier to then communicate week over week to your leadership team, to your finance team. Hey, remember our company goal was this. This is how we're achieving that. These are the tactics that we're implementing and here's how our outcomes are being achieved and what it's costing to do that. And that might change the company goals.

Right?

The plan might have said, hey, we're expecting to do that at this cost and it's costing us way more. Your CFO needs to know that. Because then they might say to the CEO, hey, do we really want to do that this year or should we slow that down? We are often the front of the market and we can help guide our CFO to help guide our CEO to make decisions as well.

Right.

If we start seeing organic website traffic come down, is that a symptom of something in the market? We've got to be able to communicate that to them so that they can help Course correct the business. All right, I talked about budget allocation before. I said direct, indirect. This slide captures it differently around strategic and productive and non strategic. When you think about building your plan, a lot of our spend should be in this productive. Like we're able to understand how it drives those commercial goals. We know that it's going to typically work. We can build predictable assumptions around it. And then you're in your non strategic spend. Things that you're like, ah, okay, I have to do this because of like legal fees and things like that. Like you've got to do some stuff, internal spend, right, Travel expenses, all of that. Then you're going to leave aside some money for experiments because you want to test new ideas that may may move over time into the strategic and productive. Always keep money for experiments and keep it separate so that you can show hey, I did this experiment. Now that's become something that we can apply and be consistent with and has become predictable. And so you want your productive spend to be about 60 to 80% of your spend and then you are going to spend money on infrastructure. I saw a question in there and we'll get to some questions later about how do we think about tech spend? Ask any vendor, they're going to be able to pull up some ROI metrics for you on how to justify the value of that. But as you're thinking about that internally, it's hey, this spend will help us with this goal and it's going to help us get more efficient and therefore we'll be able to achieve a lower cost per outcome on some of our goals. So when you think about your infrastructure spend, of course that's something that I think is really important for us right now. A lot of our leaders and CFOs and CEOs don't want to sign up for three year recurring costs.

Right.

Typically this type of ad spend is what finance classifies non recurring because they can stop it. It's a big lever that they can slow down. And so they want as much of our spend non recurring.

Right.

Ad spend you can dial up and down, you know, events, obviously it has a longer lead time, but you can dial them up and down. We all sign up for, you know, three year agreements for software. That's a three year commitment contracted that we can never pull away from. And so that's why there's a lot of pressure from CFOs right now on that recurring spend because it removes a lever from them as they're trying to build the business and looking for more flexibility that's why often you might hear them say, hey, can we use a contractor? Instead of getting a salaried headcount for that? Because you can dial it up and down. It's a lever that you can pull. All right, tools that can help you. Right, so we'll get into a big chunk of questions here, but as you're thinking about going through your planning process, we have an operational marketing index. It's going to test your marketing planning and budgeting acumen and help you understand where the gaps are in your plan. And I know we'll put these links into the chat so you can jump over there. So go take that. It'll give you a score on where your understanding of your marketing, planning and budget acumen is at. We have written a book about all of this. So a lot of what I've talked about today is in the next cmo. Written by Peter Mahoney, Scott Todoro, and Dan Faulkner, the founders of the business, this is a fantastic guide to give members of your team and to give even to your finance business partner to help them understand how we as marketing think about things. So 100% recommend this, dog ear it, write all over it, scribble it. It's got some fantastic stuff in there. And then obviously Planful, right? We help you do this, we help you with that budget agility. Planful.com Exit 5. We built a landing page for you to go and download a lot of the content that I talked about today. This is a way to increase your budget agility. I used it as a customer so much that, you know, Planful will then acquired planner the company. So I found it so valuable I bought the company. All right, I think that's it.

Just to show that that was not hyperbole, I found my copy. So I have the original version of Neximo and I just opened to a random page and it is dog eared and marked up with my notes. I used this when I was at Privy. Actually I have a specific note in here from it, so good reference.

Yeah, mine is very similar to that mine when I first got it, I'm like, oh, I need to share this with this person who doesn't understand how accruals work.

Right?

So all right, go give them the book. Get them to read that chapter. There you go.

All right.

That was great. Seriously, anybody that's listening watching this recording in the future, take notes. This is how you do one of these presentations. The flow was great. The detail on the slide was great. The topic was great. While you're here I'm going to put you on the clock, my friend, and let's get to some of these questions. So I'm going to just sort these by most upvotes right here. First question is how do you make the case for tech investments that don't map one to one with metrics like pipeline, ARR or the more operational metrics.

Yeah. So depending on the size of the tech investment. So there are things that I believe are table stakes that if you don't have, you're going to be behind your competition. That's one way to frame it with your finance lead. I also think about it as a percentage of your headcount, how much of your tech spend, how does that translate to your headcount? Because then you also need to keep a track of every time I hire someone I need to buy them a new Salesforce license, a new this license, a new that license. I've seen other CMOs, they talk about it in the fact that it's like well how much is it per user per year and if someone submitted an expense for that every month, would I approve it? Right. They think about it from a T and E perspective and it's like would I do that? And so that's how I tend to think about those tech investments. Work with the vendor. I mean they do this all day, every day in terms of how to get these things approved and over the line. But I would say right now it's really hard to do. And specifically because of what I was talking about before finance right now are viewing tech spend as a recurring three year commitment that they're like oh, can I get out of this? So work with the vendor on hey, maybe I, you know, could I do a 24 month agreement like try and get as much flexibility and get your procurement team to help you with that because that's their job.

I also think you I would push back on that. I think you can make most tech and tools you can map to pipeline, ARR or more operational metrics. I was just thinking of some on the spot there like let's pick one. I use Zencast or to record my podcast. That's 300 bucks a year.

Right.

That's time that someone I would have to find someone in Fiverr, have them edited, find software to record it.

Right.

Or canva, a design tool. Like I think you could make this case, you can tie it back in some way. How are we going to make the team more efficient that you can make that case with a lot of the tech tools?

Yeah, yeah. And that's why I say every vendor will have their own view on that, but they're also really good at that. In saying this is where we see the value and how we would frame it for your, you know, your internal teams.

All right, this one's for you. You can answer this if it's not going to give away anything secret or confidential, if you're comfortable answering it. But as a CMO running a a successful company right now, what's one of your big bets in marketing for 2024? I think you all just met to talk about this. Maybe. So it might still be fresh.

Yeah, we're actually here in San Diego having a planning offsite. One of our big focuses is we're building some fantastic new products right now. And that is how do we get that in the hands of our customers? Our big bets are a little bit of upsell growth through product led growth. So that's one big bet. But also trying to get. And then this is specific to our audience is more events for our customers. So customer events, you know, our user conference, they're things that are our big bets in 2024. I'd also say we've done a really good, really good job of kind of making some big bets over the last few years that are paying off. So we're just going to keep being consistent with those.

Let me see what else is worth answering right now. Okay, this is interesting one. What are your thoughts about co creating a marketing plan? Who would you involve when and what phases and when and what phases of creating that plan?

Yeah, well, this is all a team sport.

Right.

As I said at the very top, you can't do this in isolation because when you do it in isolation, you'll be disconnected from your sales team.

Right.

If you're thinking about new products, you need to be connected to the product team. What is their release plan for those? So you're going to have to have connections to all of these things. I would work with my sales ops leads around what's their quota capacity that they're looking for? Where are the investments they're making in those? What does my pipeline waterfall look like to back into that? I would obviously include my finance team and I would absolutely be including my CEO. Hey, strategically, where is this going? You've got to make sure that the CEO is involved in your marketing plan because they might want you to make some big bets that you haven't thought about.

Yeah, like the question there is the answer. You have to co create a plan and an ineffective plan will be one that you just create with marketing and present to the company.

Yeah, Correct.

You know, we talk mostly about finance today, but, like, I found that if I don't bring in, say, how can you make the marketing plan without product, without sales, without. You know, you have to. Part of planning is kind of doing this roadshow where you got to figure out, like, what's the product team working on? What improvements and efficiencies are we making in sales? What are we doing differently? What market? There just has to be collaborative, just based on the nature of what marketing is and does.

Well, a plan is an amalgamation of a bunch of decisions. And when you make decisions in a vacuum, like just with your marketing team, those decisions get questioned and people question the veracity of those decisions. If you make those decisions collaboratively, then the plan is the plan and everyone understands it and it's really easy to get it approved.

All right, this has been great. I'm going to let us hang up now so we can let you go back to go to the lobby and get a snack in your hotel. Rowan, this was fantastic. We've done a bunch of these and I can tell just basically I got a bunch of messages during this session about how helpful this was. And so thank you for doing this. Kelsey and the rest of the team at Planful will be sending, making sure you get all of these resources. We will send out the video recording to everybody, but you'll also get an email from them with with all of the resources. You can check out those resources in the chat. Go to planful.com and tell them that you heard about them on this session with Exit 5. I think what's cool about this one is this is going to be one that people listen to a lot after this. And so people attended today, but they're going to re listen, dig through the slides and so I know people will get it. Got a ton out of this. Rowan and the team, thank you for doing this. Great topic, great session, great job to all of you at home in the chat. I appreciate it.

Thanks, everyone. Have a great day.

All right, we'll see you all later.

Bye.

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