Creating a Demand Generation Budget From Scratch

Okay, now it works. Good evening everyone, thanks for joining tonight our third meetup of the year. How many of you have never attended one of these meetups? Oh wow, a lot of first-timers. Great, so we do a meetup every 2 months more or less, this is the third of the year. We're going to do at least 3 more, by the end of the year. We are trying to cover different topics related to demand generation and account-based marketing. So if you are interested, please keep an eye for the next events. And I always take suggestions for different topics, people that want to speak, if you want to host, if you want to sponsor. All of these things help the community which we're trying to grow. We are now more than 600 members, so so please keep an eye on this group. So today we have a topic that I'm really passionate about, which is creating a demand generation budget, but also looking at CAC, looking at funnel metrics, and really understanding how much you should invest to get to your goals. Because I think there is still a lot of issues and concern on how much we should invest, how can we justify that budget? And so that's why the topic tonight, and we have great speakers that are going to be explaining some of the tricks. So my name is Franco again. I'm the founder of a company called SAS MQL. What we do at SAS MQL, I'll explain later. But first, let's look at the agenda for tonight. So I'll just make the intro very quickly, hopefully. And then we'll have Sahil. Who is going to go into how to measure the ad spend against the actual revenue. So he has some very interesting slides. Then Steve from Medallia is going to go more into the funnel metrics and how you start from the funnel metrics to build a demand generation plan. And then Jack from SurveyMonkey, she's going to touch on how you look at a budget and start from scratch to develop those to develop that document. And then we'll have a panel and Q&A at the end. Okay, so in a second we're also going to learn what Upstage does since Sahil is going to speak for us, he's going to touch a little more. Derby is super nice to host us for the third time this meetup, so thanks again for hosting, very appreciated. And so now I'm going to touch on the introduction, which I decided to title "Why You're Not Spending Enough on Customer Acquisition." Which is, if you look at most of the companies, especially in SaaS, and companies from Series A to Series C, D, E, F, the problem is never that they are overspending, they are spending too much. Most of the time they're not spending enough, and they have very aggressive goals. And they need to get to their goal because they have investors, they have board members that are pushing them to get to their goals. But they don't know how to quantify the budget and how to allocate the budget. So my background, since most of you are new to these meetups, I was head of enterprise marketing demand generation at Branchmetrics before I founded SaaSMQL. I was at Optimise, which is a YC company, at WaitOn, Couchbase, and last year I decided to start this business to help SaaS companies, particularly with account-based marketing, understanding who they should target, what are— which one is the— who is their ideal customer profile. And then we basically help manage the entire strategy and execution from account-based marketing. So we run campaigns on ads, on direct mail, emails, display, events as well. And then we track ROI and pipeline from the campaigns that we run. These are some of our clients. So let's jump on the talk. So the first thing I wanted to point out is there is no such a thing as a free customer. So a lot of— some of the clients I was talking to, especially last year, they were telling me, well, we're getting a lot of customers for free. Why would we spend money in demand generation? We get introductions, we can get free speaking slots at conferences because we know people. So, you know, why would I spend $3,000 per opportunity? The problem is you can get all of those things when you're an early company because you have board members, you have connections, but those things don't scale and at some point they're going to stop happening. And you should always ask yourself the question, okay, you're getting free free speaking slot, you're getting free customers, you're getting, I don't know, 3 free customers a month. If I tell you I want to have 6, can you do that? Can you double that? Can you 3x your customers or your speaking slot or whatever you're doing for free? And the answer is almost always no. So what I want to point out is the key to demand generation account-based marketing is to figure out the paid acquisition. If you can figure out paid acquisition, you have a business model, you have a business. If all you're doing are free things, those things are going to stop happening. You have no control on those. You can't scale it, you can't 10x, you can't do any of that. And that's why the cartoon here. So let's look at some of the benchmarks that I found. This is from For Entrepreneurs, which is a great resource. First of all, how many of you know what CAT means? Probably, you know, many of you. But basically is the customer acquisition cost. So how much did you spend to acquire one single customer? That you can look at just marketing, maybe just sales, just programs. But when you look at the full picture, you're looking at the total amount spent in sales and marketing, including salaries, including software, including everything you can put in. And then you look how many deals you close, and that's your acquisition cost. So when we look at the ratio, how many dollars are we spending to acquire a new customer? This is an important picture here. We're seeing that the median is $1.13 to get a dollar in revenue. So, you know, this would be a bad business if you were not in SaaS. So we're talking about ARR, so annual recurring revenue. So in order to bring $1 in new ARR, you're spending $1.13 median. Some of them are spending way more, $3, but because they have a good LTV, which is your lifetime value of those customers, so we assume that those customers are going to renew at the end of the year, hopefully. Maybe not all of them, but the majority should if you have a good product. So once you're bringing $100,000 of ARR, you're actually bringing probably $200,000, $300,000, $400,000 in LTV. So how much are you willing to spend to bring that $100,000 in ARR or $300,000 in LTV? And so these are the metrics. So the top performing ones are $0.50 to $1. So they can do it in a pretty good fashion. But we also have to see what's going to be their LTV. Because usually those that have a high performing CAC, that are very efficient with their CAC, they are more towards the small business. So they might have a high churn. Very, very smaller LTV at the end of the day. So the average payback period is 12 months, which means it takes 12 months of that paying customer to pay back the acquisition cost. So $100,000, it means the first year you're not profitable. You become profitable with that customer after the end of the first year. So why companies are underspending in demand generation? Number one reason I would say is the lack of confidence in their ROI and their marketing attribution. We had a full event a few months ago talking about marketing attribution. The reason for that is, if I go to a client and I say, how— like, if I, if I bring you— if I ask you for $30,000 and I bring you $50,000 back in a client, would you do that? Of course they will. You will always spend $100,000 to bring $200,000. The problem is Sometimes you don't have that visibility, you lack confidence on your metrics and your campaigns, so you're not feeling confident in starting that investment. And in other cases, I see companies that, yeah, marketing takes time. Demand generation campaigns takes time to see a full effect. You have to nurture those leads, especially in B2B. And they have a goal for this quarter, so they say, I'm going to just hire 3 more reps. They're going to onboard in 90 days. Days, and hopefully they're going to be full quota by Q2, and they're going to bring money. But it doesn't work like that. So many times they don't have the scalable system to really ramp up their campaigns where it needs to be. So they already committed to hire reps. I have this conversation many times where they say, well, we're already hiring 5 more reps, so we don't have any money to spend on DemandGen. So those reps are not going to have any pipeline to begin with, and they're going to have to basically just do outbound and try to source their own pipeline. I already talked about the free customer thing, that they're still trying some hacks and see how long they can pull it off. And then many times there's nobody owning demand gen that is pushing to get budget, that is pushing to implement those campaigns. So what you want to do is for each channel you should have something like this. I took this from Bizzyball, which is now part of Marketo, which is now part of Adobe. It's a cool chart. I think this is what we also try to do all the time, is for each channel that you're running, you should know what is your cost per lead and cost per opportunity. What is your return on investment? So if you can create something like this for your channel, then you start having ideas what channels are performing doing really well, what is your return, how much money will it take to get out the revenue that you want to hit as a goal. And I like this because it's particularly simple. You saw a lot of dashboards that are super complex in attribution, and you don't want to get to that, you don't want to take that route. So the first thing also you want to do is understanding what's the value of your funnel. So when you start from the Let's say your new customer is $50K a year ARR. All of this is ARR. So you know that you close 1 out of 5 opportunities. So you have a 20% close rate. Okay, so one opportunity is worth to you $10K. Then how many meetings, qualifying meetings, it takes to get one opportunity? Let's say it takes every 4 meetings that you have a good conversation with a qualified account, a qualified person. You start one opportunity. So one meeting is worth to you $2,500. So you should be willing to spend up to $2,500 to get that meeting. And this is just ARR, so we're not talking LTV. You should be absolutely willing to spend $2,500 for that meeting. Remember the $1.13 or 12-month payback period in the previous slide. So you should be willing to spend that much. So once you've done this calculation, Then you start from your revenue goal. Let's say you want to close $2 million new business this year. Your average deal size is $50K, so you need 40 new logos. At a win rate of 20%, you need 200 new opportunities, which means you need 800 meetings to get to that goal. At a cost per meeting up to $2,500— did I put $2,500, I put $1,500, but let's say $1,500 is $1.2 million that it will take you to get to that goal. Up to. So you can be like a cap, but you should be willing to allocate that level of budget. So once you know all of your conversion rates, you should actually know it by segment. Because if you're doing both enterprise and mid-market and small business, those have different conversion rates. Usually, so you don't want to mix them up together unless you see a lot of similarities, but usually they're not. These are other benchmarks that I found from Forrester Research. It's not super recent, it's 5 years, 6 years ago, 7 years ago, but you can have an idea what kind of companies in SaaS, B2B companies, what kind of conversion rate they have from MQL to SQL to pipeline, which means an opportunity. To one deal. So end-to-end, less than 1%. That's kind of another benchmark. So if you are hitting those kind of values, don't feel bad because that's kind of the benchmark across. So once you have defined what your total budget is going to be, you need to know where to allocate the budget. And these are some of the tactics that you can distribute, you know, your budget to. Email marketing is always very popular. Content, if you can push on content, you're going to start getting leads. All of those things takes a lot of time, so you want to start early. Then you have the obvious online ads, events, marketing automation, trade shows, SEO, you know, the usual thing. But you need to know, if you've done the slide from this guy here, you need to know where to put it based also on the return that you get from each of these channels. And then you also want to divide the budget, and we'll touch on that also later with some of the other speakers, but you want to divide your budget based on account tiers. So you don't want to— if you have 3 segments of accounts, so you have your top premium accounts, your tier 2 and tier 3, you don't want to distribute the budget equally if you're doing ABM. You want to allocate the budget based on how much they're worth to you and how much of your revenue they are responsible for. So if 50% of your revenue comes from Tier 1 accounts, you should put at least 50% of your budget. And then the other things I want to touch is your allocation between marketing and sales budget depends on your go-to-market strategy. So if your go-to-market strategy is mostly high velocity, self-serve, swipe your credit card, that's mostly marketing responsibility. So you need to put most of the budget in marketing, sales, and might be doing some low-touch follow-up or mostly kind of support. But that's how you divide the budget. But once you start becoming like more inside sales model with SDR and AEs, then it's more of a 70/30. And then vice versa if you are more outbound field reps enterprise. So a question that I put below, which I was asked in the past by my CEO who I was reporting to, is why should I invest a million more in demand gen versus hiring 4 more reps? 4 more reps meaning enterprise reps. Each rep $250K, kind of all in, they're going to have a million-dollar quota each one. So why should I spend a million dollars more more in demand gen. This question was obviously coming from the VP of Sales. But you need to have an answer for that. The answer we covered earlier, like the reps will have no pipeline and you cannot scale the company if you haven't figured out paid acquisition. My probably last slide is this other thing that you want to ask yourself. Are you in the fast grow mentality or CAC efficiency mentality? So we work with clients that they told us, you know, we have a goal, we need to hit 40 new clients by the end of the year, no matter what. I don't care how much we're spending per client, we need to get there. We have budget, we raise money, but we need to get there. So the approach changes significantly. So now we're less worried about what's the cost per opportunity, we're trying to hit that number. Once we hit that number, then we're going to start refining and see how we can lower the CAC. But then if you're more early stage, you still don't have all that funding that you can— that allow for that fast growth, then you're still controlling your budget, you want to be more efficient. So at the same time, you cannot expect the same fast growth. So don't have the goals of a fast-growth company and trying to be in a CAC efficiency mentality, because the two things don't go head to head. So conclusion: To recap, there are no free leads or free customers. Get a clear view of your funnel metrics from the beginning. Decide how much you're willing to invest. So you want to be fast grow or low CAC, so how much you are willing to invest for $1 of new revenue. Track your ROI, and the distribution depends on your go-to-market strategy. And with that, I finish my introduction. We can leave the question at the end, so we'll go straight to the next speaker so we stay on time. So I want to introduce Sahil from HotStage, who is going to take the stage.

All right, so a few different changes. I'm usually a walker, so I'm going to stay right here. I'm going to just spin circles. It's going to be a little bit interesting for me, but anyways, welcome guys to the space. I hope you like it, hope you're comfortable. We've actually— I just got one of those Facebook moments, or when you remember from a couple years ago. So we actually moved into this space 5 years ago today.

Wow.

So it's a very auspicious day. So welcome. So very quickly, AdStage, just at a high level. I'm not going to talk about AdStage in this presentation. We're a cross-channel analytics platform for your paid media. So if you're running digital advertising, you want to get all that data in one place and understand if it's working or not, that's what our software helps with. And we're a SaaS business, so a lot of what Franco is speaking about resonates really well with us. And a lot of our customers are SaaS businesses. So what I'm going to talk about today is a topic that I actually just gave this talk at a conference called B2B in the Black, where they brought a bunch of CMOs and VPs of Finance or CFOs together to have the conversation that a lot of marketers and finance folks have to have, which is, is my marketing spend actually producing revenue? And so the lens that we're going to take a look at it from is really around paid media acquisition. And I think Franco actually just briefly touched on it. But how can you prove that if you put $1 into advertising, it actually yields value or return, ideally more than the amount of money that you're putting into it? And so we're going to go through some high-level things. So very first, we're going to start off with something very, very high-level. The marketing organization is dramatically changing. We all know this. It used to be a cost center. It's now a revenue center. How many folks here are marketers? I assume a very large majority. And so all of us are being empowered, we're in this new role, so we're gonna first start off there at a very high level. We'll then move into the conversation that marketing has to start having with sales, your counterpart, and then we'll go into a couple tactics. So we're gonna get pretty tactical towards the end of this. My hope is that you can actually take some of these things back to the office and apply them. Maybe not tomorrow, it's Friday, but maybe next week. And then we'll finish off with a couple different tools that you can maybe start to use to help with this. Sound good? And also, I'm gonna try to go through this pretty quickly, so I might skip around a little bit, just because I think I only want to stick to about 15 minutes or so, right? So let's start with the very first thing. So the CMO's role and responsibilities are dramatically changing. Really, every marketer's role and responsibilities are changing. Our importance in an organization is also changing. So if you look at some of the data, and you think about it, when your CEO's being asked, "Who's in charge of maintaining growth or actually growing the organization?" it's starting to all fall on the CMO's shoulders. And in fact, if you think about it, one of our top mandates as CMOs is growth, and is driving continued growth, and sustained growth, and obviously profitable growth. Another stat that we actually heard recently, which is a little bit alarming, is that most CMOs, the average tenure is less than 2 years. So the conversation that we need to have in order to prove the efficacy of our work is incredibly important. 'Cause we're honestly some of the first people to go, I think CFOs actually have a lower lower tenure though, so I think that's the only difference. So just thinking about this, when you do talk to CEOs, this is a survey done to a bunch of CEOs, and they said, "Who in your organization on the C-level is in charge of growth?" And it falls squarely on the CMO's shoulders. So IBM recently released these 11 trends. They do this every year, it's the IBM Watson Group. And one of the biggest trends I thought was really fascinating is that there's this rise of the new marketer. A lot of us probably here, especially in this city, they understand this, but the technical marketer, the digital-first marketer. People who are graduating from school now from marketing programs, it's very different than what happened maybe 15, 20, even just 10 years ago. And so you're starting to see that these digital-first, digital-native marketers, who came with the mark-tech-eters, are the ones that are starting to score higher. And it makes a lot of sense, right? We're growing up in a world where there's marketing ops, there's systems that we need to connect. A lot of marketers know SQL now, and they're starting to be able to actually connect data at a fundamental level. So this is something that's a trend that's continuing, and in fact, this technical marketer is the number one most hired, or I guess most hired and also most sought-after role when it comes to marketing organizations. Everyone is looking for this technical marketer to come in and help connect all these different systems. All right, so then how do we start thinking about bringing marketing and sales together? Those are your two revenue-driving units. You're starting to see this new role, the CRO, the Chief Revenue Officer, sit on top of both marketing and sales. So how does this actually start? How can we start to have that conversation? So before we get there, one of the things that we talk— when we actually go and speak with CMOs, they're very aware of this. They know that they have to bridge the gap between marketing and sales. They're aware that that's a big hurdle. Typically those organizations were in separate silos. And many organizations they still very much are, but they're aware that they need to start breaking down those silos and working together. One of the craziest things that we find, and I think all marketers here will probably grin at this stat, but we know that the vast majority of leads that we actually drive, the revenue, the pipeline that we build, many of them aren't even contacted. This is a huge, huge amount of waste. The amount of waste that's spent on this, they say, is over a trillion dollars a year in terms of lack of marketing efficiency and sales efficiency. With not being able to work together and make sure they're following up with that pipeline that's being driven. But the good news is that with companies that actually are able to increase their efficiency and they do have true marketing sales alignment, they do a lot better, right? This 208% seems like a relatively random stat from HubSpot, but the reality here is you do see this across the board, right? You see organizations that truly have their marketing and sales teams in lockstep will produce more profitability quicker, and therefore be more successful organizations in the long run. So how do we do this? How do we bring these teams together? So we thought we actually came up with this word, but we definitely didn't. But Smarketing is actually the solution. So what we did a couple years ago when we had our kind of traditional sales team and marketing organization was once a week, we had the whole sales and marketing team go into a room together. We called it the Smarketing team. And we would talk. For an hour about all sorts of things. But it all starts with this kind of initial introduction and having these folks in the same room together. You're gonna get the constant struggle between sales saying they need to hit quota, they don't have time to talk to you, but marketing, in order for us to prove the efficacy of our job, to prove the pipeline we're delivering, to make sure that it actually gets closed and leads to revenue, we have to become partners with sales. So one of the very first things that we did, actually Pallavi is our VP of marketing, and she joined us actually almost just a year ago, One of the very first things that she did is she went to one of these meetings, and all of us were blurting out those different words, SQLs, MQLs, etc. And for the most part, our definitions were correct. Sales folks knew the definitions, and marketing folks knew the definitions. But when it came down to the nuances, they were not. We were off. We were off, but just a little bit. The definitions weren't perfect. And so one of the very first things that we did was we put this doc together, a Google Doc. We listed out every single one of these key metrics that both sales and marketing should align around, and we just made sure that we defined them properly. So we created this SLA between the two organizations so that this way, when we are speaking about the amount of MQLs that we're driving, or SQLs that we're driving, or the efficiency, we're all speaking the same language. It's really simple, right? This is—

these are—

so far, none of this requires any engineering work, no kind of other resources that we need outside, or any budget. It's just time, and it's time that we should be spending together in the same room with marketing and sales. So now we're going to go into the other benefit really quickly of when you get the marketing and sales organization together, you can do a lot of, I guess, a lot more powerful things. So for example, one of the things that we benefited from was refining our ICP. Marketing can, of course, take a lot of data, go sit back in their corner, and put together an ICP, but being able to actually speak with sales allows us to create an even better ideal customer profile. So for example, I found this. This was one ICP that I saw just somewhere, and it's pretty good. This is a lot better than most of the companies that when I go look and ask them about their ICP, it's pretty well-defined. There's a lot of characteristics here, the different tools that the target customer may be using. But does anybody have a guess as to what's missing here from this customer profile? I'll give you a couple seconds to interpret it. Buying authority. Buying authority is one idea. Anything else? So one of the biggest things that's missing from this ICP is the psychographic side, right? It's the other stuff. It's not just the hard facts, what tools do people use, what their title is, how much do they make, what job or industry they're from, but it's the other things like what kind of rapport do you build with them, what's their attitude, what's their, you know, how do they actually, when they get into a conversation, what are they interested in? And so these are some of the things that sales knows really well, that marketing may not have as much access to because we don't always interact with the end customer.

Right?

We're interacting through touchpoints, through content, through white papers, but sales is actually jumping on a call every single day. So they can actually, in this meeting, give us this information to build something that's even more complete. So when you bring these folks together, you have a lot of different benefits, right? You can, of course, talk about collateral you're gonna build, different touchpoints that you wanna build out, a nurturing campaign. It's our job as marketing in many ways to help accelerate the pipeline. And we can do that now throughout the entire pipeline. More often than not, back in the day, marketing was used at a very top of funnel. We used to throw up billboards. We used to have things that weren't very measurable. But now that's changed. With digital advertising, with content, with every single thing, we essentially have touchpoints throughout the entire pipeline. And so when you bring these two teams together, for us as marketers, we have the ability to create better targeting. We have the ability to understand what's actually working. Who do people enjoy speaking— our sales team, not just the type of person they want to speak with, but who they actually build better rapport with, and then ultimately we're going to close more deals. So just to kind of wrap this piece of it up, the idea here is that it's really simple to get started, and it really just starts with having a meeting set in the calendar. We had this, you know, this recurring meeting called this marketing meeting. We eventually started even bringing customer success into it because the way they have interactions with their clients, and this is how it starts, right? So now you have this idea of bringing sales and marketing together, but But how do we actually start to execute on this in a tactical way? So now I'm going to get into some of the more tactical side of things. And what I mean by that is the very first trend that we've really been kind of interested in at AdStage, we're actually building product around this, is as marketers, we're all starting to break into the CRM. So how many of you guys on the marketing side have access to your CRM, your sales CRM? So a pretty good number, starting to get there. And sometimes it's report-only access, which is great. Sometimes it's actual full access. But the idea here is that as marketers, it's very important for us to now have access to the CRM, because that's where our end result lives, of all the hard work that we're putting in, the campaigns that we're running, the content that we're running. So how do we actually get the most critical data into the CRM? So now I'm going to start bringing this back down to paid advertising. So when we're running an ad campaign— so how many folks here are in charge of paid media, or of course your organizations? So when we're running a paid campaign, let's take a Facebook campaign for example, we don't care how many clicks or how many impressions it gets, right? What we care about are do any of those clicks eventually turn into a closed one opportunity. But in order to actually pull it off, in order to get that beautiful dashboard that Visible had, for example, your systems have to be set up correctly. And so the very first side of this is even when we start with lead capture. So for example, at AdStage we use HubSpot, so all of our forms are HubSpot forms. And one of the things that we do is we have our hidden fields, and we're tracking anytime someone comes from a piece of content or an ad. We have those UTMs that we've done perfectly, of course. And when they come to a form and they fill it out, we make sure we capture those UTM parameters. And we're gonna send that over to Salesforce or whatever CRM we're using to append to the record. This is what it looks like. And then from there, what we do, again, bringing it back to the paid side. So in order to actually connect this data, the process that we have to go manually is we go through our ad channels, in this case Facebook, we'll download our ad table down to the URL that has all the tracking parameters. Then we'll go into Salesforce because we have access to it as marketers, and we're gonna go download an opportunity report, and then we're gonna hopefully run a VLOOKUP process and combine the data. It's a pretty manual process, and I'm skipping over a lot of really, really complicated steps, but that's the idea. And so one of the tools that we actually use, that I just wanted to pull up there, is the Salesforce is a really cool connector. So if we don't have full access, it allows us to at least get everything into GSheets for us where we can start to connect those things at a data level, right? Because ultimately that's kind of what we're trying to get to. And when you do this, this is a high-level view of what you actually can see, right? You can see your ad performance, you can see your ad costs, you can see your LinkedIn spend versus your Google Ads spend. But what's more important is you can see what's happening down the funnel. You can see which ad channel in particular is actually profitable. More profitable. It may be the case that Facebook is driving more leads, but ultimately, while LinkedIn is driving less leads that are more expensive, you have a higher LTV and a lower CAC, for example. So how do we actually do this? How do we take some of these different strategies and start moving them down the funnel? So one of the things that we talk about, and actually you just had this funnel up as well, so maybe just a few years ago, let's actually take it back to maybe 15, 10 years ago, as paid marketers, our job was was to sit in a corner and build a bunch of ads and get leads. And it stopped there for the most part. And I don't mean that in a demeaning way. That's just the truth. We didn't have access to be able to track further and further down the funnel. But that's dramatically changed. And so now what we're starting to push ourselves to actually measure too is things like MQLs. And now we're getting even better. How many of these slides now, you've seen these funnels that everyone puts up as a paid marketer, or even just a general marketer, and we're going all the way down to the customer. Because the reality is that we can actually track all the way down. We can go beyond the MQL, and we can get all the way down to closed won revenue, down to LTV, and that's critical. So let's just do a quick example, right? So in this case, if this was the data I was looking at for my ad channels, I would very quickly say, well, it's obvious, right? I should probably cut spend on LinkedIn, and I should increase my spend on Facebook. But as we all know, smart marketers in this room, a lot of us being technical marketers as well, if we look just a little bit further down, the entire picture changes. How many folks has this happened to when you've been actually analyzing your data? 1, 2, 3. How many folks don't know because they can't— they don't have all this data connected?

1.

Wow, I guess you guys are all pretty good. But in any case, this is something that we see time and time again. In fact, there's a stat. So Google's head of B2B Trends, I guess he runs kind of the B2B side of things at Google AdWords, had mentioned that— so if you guys are familiar, inside of Google Ads they have this ability to connect to Salesforce data. Right? Connect your Google Ads data to Salesforce data. And people that do connect their ads to Salesforce data increase their budgets by 40% on average. And I was actually just talking to one of our LinkedIn customers, and they had mentioned they were just working with a client last week— or last month, and they started to push them beyond just leads to actual close and revenue. And they quintupled their budget. So it makes a lot of sense, right? Once you can actually tell that you're turning $1 into $10, it's very easy to start investing, assuming you know your payback period. And then it makes it really easy for Paula B to come to me and say, hey, I need more budget. And ultimately, for a lot of us, when we're speaking with either CFO or CEO, whoever it is that controls the budget, we have to have these cold hard facts. All right, so I'm going to go through these last pieces pretty quickly. But under the same context of trying to take some of these top-of-funnel strategies further down funnel, this is what's changed over the last few years, right? Even if you think about this from a keyword perspective, so this is an example on the keyword side, it's not just about net new lead acquisition. But what we can do is we can start actually designing campaigns that really are specific to different stages in the funnel. For example, if I'm ready to actually close someone, get them into a buying cycle, I can start using things like buy Buy now, demo, trial, instead of just check out our white paper, or download, or come to a landing page and see what we're all about. The other thing, and this is actually probably my favorite product that was built by the ad channels, this is the first time that Google actually copied Facebook, was when Facebook launched custom audiences. So how many people here know custom audiences? Familiar? It was crazy, right? So what we used to pay Gartner and Forrester tens of thousands of dollars to do lookalike research for us, months to spit out a list of lookalike companies that we could go target, Facebook does in seconds. You take your first-party data, could be email addresses, you upload that to Facebook, and Facebook ads will then target those exact people. And not only that, you can say you want to find a 1% match and find me similar people to those folks. All that research kind of totally commoditized through technology. But what this allows us as marketers to do is to be able to upload every single section of our sales pipeline and and target very specific messaging to them depending on where they are in the sales pipeline. And that's when you really start to do kind of the more advanced strategies. All right, so just to finish up on the tools side, I thought this was pretty crazy. So most of us probably know that the Loom Escape has over 7,000 tools in the martech space, and continuing to kind of grow. I think it's finally starting to slow down just a little bit. What's even crazier is on the enterprise side, a marketing organization has 90 tools on average. I was just talking to a marketing ops person, you, right, Logan?

Yeah.

And your job, you're using Segment to try to stitch together these tools in many ways with the event data, right?

Yep.

It's a very small portion of it. But that's the challenge is when you have 90 different tools and you have all of this really critical data in all of them, your systems matter so much. And so there are a lot of great technologies out there like Segment, which is one of them, that can help you pass that information together. And that's what we use. We use HubSpot, we use Salesforce, we use Segment, we use Mixpanel, and all these different tools only together will actually create for us the ideal customer profile that we want to target. This was a survey that was done too, but it just goes to show that for marketers, one of the top tools they now consider in their toolset is the CRM. CRM continues to rise over and over and over again, even beyond the DMPs, or the data platforms used before. I won't go into this one. This is the Google product that actually connects to Salesforce data. HubSpot has their kind of bi-directional closed-loop reporting. They're all pretty familiar [Speaker:JOSHUA FEIGELSON] All right. So just to finish off, what did we learn? So the biggest thing here to take away, my recommendation, is just that the marketing organization is changing. I think much of this is not really anything crazy. I think we all know that. But what's critical for us is to prove every single touchpoint, the value of every touchpoint. How can we prove every single dollar that we spend and where to put the next dollar? And from that, we'll be able to claim more budget. And obviously, we'll make the CEO a lot happier because we're actually helping them with growth. And we won't be one of those stats where we're gone after 2 years, actually. And that's it.

Thanks, guys. Appreciate it. Thank you, Sahil. Great, great presentation. So we are moving right along. Our next presenter is Steve Eretov. Eretov, yeah. Perfect. Who is VP of Demand Generation at Medallion.

Thank you.

Thank you.

So it's interesting when I— whoops, wrong direction. There we go. When I was invited to come tonight, I joined Medallia about a month ago, so the topic is very relevant to me. I'm deep in H2 planning now, working on budgets. And so a little bit of background on myself. I've had full-stack marketing roles. I've been for the last 5 or 6 years more involved in what I call more growth marketing. I think demand generation is probably the wrong term. The reason for that is, as has been mentioned, there's been some common themes. Marketing itself is really so tied to revenue now. The question really becomes, how do you align all of marketing to get to the outcomes you're being held accountable to? And there's so many different disciplines. Disciplines that you have to be conversant in that go beyond the marketing discipline from mark-tech to data to analytics, that the marketing function has become so technical and the question you really have to answer is how can you craft your marketing organization in a way, structure the people, structure the processes, structure your relationships with sales to the outcomes that you're being held accountable to. I think that, again, this is a common theme I've heard tonight, and it's absolutely true. I really don't care what you're told in terms of your job. As a survey, everybody, who's in demand gen here and actually has accountability? If you're told you're responsible for leads or pipeline or qualified leads, that's just not true. What you're held accountable for is revenue. Your finance team will work backwards on what they they believe are the acceptable conversion rates from leads or pipeline to the closed one sale and give you numbers that relate to that. At the end of the day, you're held accountable to revenue. Most cases, particularly in the B2B side, 35% to 50% of revenue is being asked for to be delivered by marketing. Your marketing organization in a mid-sized company may have a couple hundred people. You probably have a marketing organization with 40 or 50, and half of them are non-demand gen roles. That really becomes a challenge about how you can do this with predictability, how you can do it in a pretty way. And we talk about budgets and really I think the whole question about what the budget is is almost the wrong question to ask. The right question really is what are you being asked to deliver and really what do you need to do from budgets, from investment, from organizational alignment, from planning, from strategy to get to the outcome that you're being held accountable to. The benefit is if you can solve that equation and you can build trust with sales and you can build trust with finance, budgets really become sort of meaningless. The other reality is that the budgets, I think in most cases if you can prove that you can invest a certain amount of money and get a return that's positive, you can get budget. So you're really looking more at a margin budget versus a hard dollar budget of how much you're allowed to spend. And these are the kind of things you just —got to figure out. When I was talking about marketing the skill sets now, I think now when you look at the marketing team, the fascinating part about the demand gen role is that you have to be very conversant in so many different disciplines. The marketing strategy becomes crucial to understand how can you solve the problem, the tactical execution of campaign, media excellence. Operational support, martech, how do you create a martech stack, we were talking about it earlier, how do you create a martech stack where the individual solutions talk to each other so data can transfer, you can deliver a consistent customer experience across your channels, you can get the data back to measure what's happening. That has to happen with marketing. Most marketing teams I've found really aren't staffed that way, so the question is how can you develop the skill sets, and in many cases, the success of demand gen and ultimately the CMO are dependent on solving that equation. Talk about that, talk about that. The planning process, in my humble opinion, I think that the— obviously the budget will be driven by what you're allowed to spend, but I don't think you can separate the financial budget from the planning cycle because again, if you frame the problem statement as I know what I have to deliver from an outcome, from dollars and pipeline. The question is, what do I need to do to get there? So as you build out the financial model, you have to be answering the question, how am I going to get there? How am I going to structure my engagement structure, my campaigns? How can I feed all stages of the funnel to get to the outcome that I have to deliver in my certain periods? And so the planning cycle has to work concurrently with your marketing strategy development. You'll probably see probably 4 or 5 different funnels tonight. It seems simple, right? If I know what the outcome is for required sales, my average convert— or responsibility is 35% of sales in this example. If the average conversion from an opportunity to sale is roughly a third or whatever that number is, you can work backwards and get to the number of leads it required to input. The reality is, how do you do that with sales? Scale, how do you do that across all of your different channels when different channels play different roles? You may have down funnel campaigns like AdWords that convert very highly, but you also have to build the upper funnel pipeline with enough leads that will convert 6 months down the road for a bigger sale for your enterprise team. Managing that mix has become what becomes really important. One of the challenges I've tasked my team with is starting to answer the question, don't think about what campaign you're going to run. Think about what ownership you have around the accountability to that revenue number you have to deliver. And I think it's sort of a freeing question because you start to approach your endgame differently versus— I think the old— the comment that was made earlier about you sit in the corner and you run some ads and you generate some leads. The reality is, if you have to deliver a revenue pipeline within your quarter, you have to think holistically about what new pipeline do how many do I create this quarter, but if I look at the leads that were created last month, last quarter, how can I get a certain percentage of them or a higher percentage of them to progress through the funnel and actually reach the MQL stage, reach the SQL stage, and push into the sales process? So each channel you look at plays a different role in that process. Upper funnel, you're gonna use content engagement campaigns most likely. You're gonna go out and find companies you think are the right audience for you and create content that tells a thought leadership position, helps explain your unique story for how you approach the problem. But often it's really easy to create leads. Probably anybody here that creates leads can go create 1,000 tomorrow. The question has been raised is how do you find the right leads that will progress the sales process and balance out your high funnel and lower funnel needs? but some of the options are available. Clearly your market automation system can be engaged to find companies that you think are the right targets. I think one of the secret weapons we have as marketers is your own channels, your website, your Marketo system or your marketing automation system are incredibly powerful. Your website, if it's not, it should be both your largest source of leads as well as deliver generating the highest quality leads. All of your other media that's running in the marketplace will often result in more traffic to the website. Your best friend's gonna be your SEO person. Your best friend's gonna be the person managing the content development. You have to have a say in understanding what the experience is on the website because the more traffic you convert to hand raisers, the more funnel you're gonna create out of that channel. So that's probably one of my biggest piece of advice is is that when you look at your mix, you can certainly balance out the cost. Your own channels are certainly free from a marginal perspective, but they have to play a very important role both in acquiring new leads and also push them down to the funnel. When you get to the middle funnel management, one of the other learnings I've had, and Sahil made this comment as well about how do you answer the question of take early-stage leads and push them through? How can I create campaigns campaigns that are targeting specifically those companies. I was talking to Bobby earlier and I was using an example where with my prior company we were asking the question, "How can we take opportunities that are sitting with the sales team and try to increase the close rate of those companies?" And the way we approached it is we said, "What we want to be able to do is find who the people we believe in their roles in those companies that are influencers or decision makers on that purchase." And the thesis was, well, if we expand the number of people we're having conversations with, it's much easier to make a sale than just talking to one person who may be the contact the sales team is interacting with. So we spun up— Terminus is a company that allows you to target display advertising not only to individual companies, but to people with certain roles in those companies. So we spun up campaigns. The goal of these were not to deliver leads, but really to drive engagement. We wanted to tell our story. To people that we thought were going to be influencers on the purchase to help improve it. We also went to ZoomInfo and bought names of the people for the same roles, and we started pushing emails out to them. What we found is after a couple months that we were able to increase the close rate of the sales team by about 30%. We actually structured the test in a way where we had a holdout sample. We could measure what the lift was. But it's a good example of saying, think more holistically about what you need What do you need to do to deliver the outcome? Pipeline, close one revenue. And you start to approach the problem set in a little bit of a different perspective. Answer the question, how can I use media, how can I use my own channels to try to get to the outcome of revenue? And certainly, bottom funnel delivery, again, there's some channels that work well for that. Paid search is a perfect example because people are proactively going to Google and Yahoo to search for solutions. So they're active in the market. They're showing the intent signals through their behaviors that they are interested. So almost by definition they're going to convert at a higher rate. Certainly when you run your things like marketing or MQL models, you factor that in and make sure that the source of lead is one of the factors that determines whether or not you think that lead is sales-ready or not. Yeah, so now once you understand the funnel and once you start to lay out your strategy, The fun part really comes down to just the devil's in the details. Again, it's talking about— I think it probably— the tactical level. I think one of the challenges I also put to my team is it's not enough to understand the waterfall overall for your business. You have to understand the waterfall for each source of leads because each one's going to have a different conversion rate, each one's going to move through that funnel differently. So if you understand that, break that down, and go back in your data— obviously you have to have attribution, you have to have access to Salesforce to to understand what the end close rates on each source are. But once you look at historical, if you assume that that will continue in the future, you can start to build a plan from the bottom up and start saying, if I know what my outcome is, then I can layer in different tactics and programs for each channel that add up to the end result that I have to deliver. And that's really where you start to build out, OK, if I run email, if I run social, I layer that in with my paid channels. How much do I spend, and is it giving me the outcome that I'm being held accountable to? So that's where the blending really becomes a planning and the forecasting revenue. The forecasted conversion rate's obviously important. That's one of the, I think, the levers that we have to push and pull as well, that the focus you put on trying to improve your conversion rates— I will be wrapping up— the focus you can put on your conversion rates will pay out. It's a worthwhile area of investment. So I always start my budget activity planning with the end result in mind, and yeah, so— I'm getting the thing. So again, my only recommendation is make sure that as you go through the planning cycle, really focus on the strategy and the knowledge about what role each channel, each tactic plays, and that will get you a much stronger probability that the outcome is what you're expecting.

Thank you. Thank you, Steve. Awesome.

So one more presentation before the panel. So the next speaker is Jack Foster, who is Senior Director of Demand Generation and Marketing Operations at SurveyMonkey.

Hi. So the good news is is that a lot of what I'm going to talk about has been talked about tonight, and hopefully I'm going to put this in 6 tips, basically, how you can build a demand-driven budget from scratch. So I'm Jack Foster. I've been in marketing at technology companies for over 11 years and in SaaS for over 5. I've had the privilege of building budgets at both public companies that are very large enterprise, very well established, SaaS startups. I was the first demand generation marketer at Lever and I built the team and built the process there. And I'm most recently senior director of demand gen and marketing operations at SurveyMonkey and I'm leading the charge around our B2B business, which is a newer initiative for us. And so I have also had the pleasure of doing some of this there. So hopefully you'll get some tips from me today. Tip 1, this actually, Franco, you mentioned this when you were presenting earlier, you really do need to understand what stage your company is in before you go into building a budget. Are you in kind of this building a foundation, finding market fit, like getting pipeline and revenue at any cost, or are you, as you mentioned, going for CAC efficiencies? Do you have a repeatable business? How are you gonna be scaling programs? Really sitting down and understanding this with your founding team or with your leadership team leadership team, your boss. This is really critical before you actually start going and putting things into place. This is also going to help you get executive buy-in later. When you need to go prove your budget, you can set expectations up front and refer back to that. So first tip, know the stage that your business is at. This has been mentioned a lot, and it's probably my best tip of the night as well. You absolutely have to align sales. There's, you know, there's the old saying that marketing is a cost center and now we're revenue drivers. This is what that means, right? You are responsible, as everybody else has said, for a bookings number, and you need to really understand what you're on the hook to deliver from a marketing perspective. And you need to understand that by segment. And if, you know, however else you're potentially segmenting your business, it could be by company size, it could be by product, but whatever your different segments are, understand what you're on the hook to deliver. The way you approach SMB is going to be different than the way you approach enterprise, right? You might be on the hook, again, to deliver upwards of 90% of the SMB number, but only 30% of the enterprise number. But having those clear expectations up front is really going to be key. And the other thing when you're doing this and you're sitting down and having these conversations, understanding the definitions of what sales-driven means or what marketing-driven means, and as a couple of people have mentioned already, having the systems in place to be able to actually measure that. So at SurveyMonkey, you know, one of the first things that I did was sat down with our sales leaders and we really did define, okay, this is inbound, can we, how can we measure this in our Salesforce system? This is outbound, how can we measure this and align to those goals? So putting a stake in the ground upfront and really understanding that's gonna be key. 3, define a strategy. So once you have a good sense of what your goals are going to be by segment, again aligning with the key stakeholders across your organization on how you're actually going to approach those segments is gonna be key, and it's gonna change your channel mix, right? The way you approach enterprise is gonna be different likely than the way you approach mid-market or the way you approach SMB. What you're willing to spend on those channels channels to acquire new leads and customers is going to be different. So really sitting down and mapping out what your strategy is for each of your segments is again going to be a really critical step and help you get that executive buy-in later. Again, it comes down to really understanding also where you're going to deliver here. If your main goal is to deliver in the mid-market, understanding the channel mix and and what you need to do to deliver in the mid-market is important. So setting the strategy, understanding where your goals are set, and aligning that to your other business partners is gonna be critical before you actually start building your budget. So here's another funnel-ish slide. You need to know your inputs. And this has been mentioned a couple of times, but I can't say it enough. Really understanding your conversion rates, By segment is critical and by channel. Demo requests, AdWords, as everyone has mentioned, is going to have a much higher conversion rate than maybe even trade shows or content types of programs. And so understanding what those are upfront, if you don't have benchmarks already, find benchmarks online. You can find them— Bizible has great ones, some people have been mentioning those slides, HubSpot, you can definitely find what industry industry benchmarks are and use those when you start to build your model. But if you obviously have historical information, I recommend using historical information and potentially adding in efficiencies as you build your model out. Understand your average order value by segment, right? Again, enterprise is probably going to have a higher deal size than an SMB deal, and that needs to go into the different funnels that you're building and how you're building your plan. CPLs by channel is going to be important, and then you do, you build your model from the bottoms up. Here's the goal that you're working towards, you know, with all of these inputs, where do you end up needing to get to from a lead perspective? You know, this has happened to me, I'd love to hear if this has happened to you guys before, but once you actually build that model, how many times have you gotten to a place where it's, you know, you need an infinite amount of leads and it's gonna cost you millions and millions of dollars and it doesn't look like it's gonna work, right? So that might happen, but then you need to start building scenarios and understanding kind of what levers you can pull, what you're able to do to actually get to the bookings goals that you're working toward. Measuring success. So I mean, again, there's so many different ways that you can measure success. I would highly recommend just picking a couple of key performance indicators that you are working toward when you are measuring marketing success. There's millions of things that we can be measuring and I'm not saying, you know, if you have a team of analysts that are able to do that, great, but if you're like a one-man show and you need to be doing this kind of from the ground up at an early-stage startup, pick a couple of key performance metrics that are going to be how you measure marketing success. ROI on channels, right? What is your attribution window? I think this is something that really does come into play when building your marketing budget. Does marketing get credit for like 6 months after a program goes live, or does marketing get credit for a year? What's your sales cycle look like? What's reasonable? Establishing that upfront so that you're able to say when you are asking for more money, "Yeah, we did drive this much and this is, you know, this was the timeframe that it happened in." You need to have that stuff upfront or you might run into problems later. And then we've already talked a lot about this, but understanding LTV, CAC, all that is super important as everybody has mentioned in here, but I also feel like you don't need to do this alone. Partner with your founding team, partner with your board members, partner with, you know, whoever, whoever has kind of expertise in this area for your business so that you can be understanding these metrics and understanding how to use them to influence your business decisions. And finally, socialize. So as you're building your entire plan, you really should be bringing along your key key stakeholders with you. Sales should be your best friend in this process. They should know from the beginning, again, what the goals are, what the strategy is, and you should really be partnering as you're moving through your Demand Gen plan and getting buy-in from the sales organization and sales leaders. That is just gonna help you later answer that question of, you know, why invest a million more in Demand Gen or why invest in 4 more reps? You should actually probably have that answered already with your sales leader before you go into a meeting with your executive team. Socialize it with your team. Make sure that if you're leading a team that everybody believes in and understands what the goals are and what you're working toward and making sure that they are on board with the demand gen plan and budget. And of course, cross-functional partners. And finance is a big one. Finance for me is a partner at SurveyMonkey, and hopefully you're in similar situations, but Lean on these different stakeholders as you're building this stuff out to get their buy-in and to also understand how they can help you build this to be effective. So finally, just a couple other things. Remember, there's no silver bullet, right? When you're building a plan, channels don't scale indefinitely. If you're earlier in, newer in a channel, you might see efficiencies that you're not really able to scale out to huge numbers. So there's no silver bullet when building a budget or a plan. You really do need to have a mix and you really need to understand how different, you know, different activities are going to lead to different outcomes. But you know, you might get that question of like, well, if we spent all of our money on one channel, wouldn't that be the most efficient? Probably not. Things just don't scale indefinitely. So keep that in mind. Look at seasonality as well. You know, businesses have slower times. You might be able to drive more from marketing in in certain quarters versus other quarters, consider that when you're building out your plan, right? And leave room for testing. I think we all like to have, you know, really specific outcomes for all of the things that we're planning, but we also want to have wiggle room for what we want, you know, if we need to be reinvesting in something that's working well, or if we just want to test things that maybe we don't really know if they're going to work or not. So when you're building your budget, I highly recommend putting that in there. There as well. So this is one example of how, you know, a budget build could look for you, what your top of funnel programs look like, what the spend is, the program type. You can take a look at this in more detail, but it kind of gives you a nice screenshot, a nice snapshot of how you could start to think about this in a more practical way, so you can bring this back to your organization and think about if it works for you. I think that's it. I feel like I went really fast.

Awesome, thank you, Jack. Great presentation as well. And so now we take a 60-second break so we assemble some stools and we'll have— we start the Q&A. So in this 60 seconds if you can think of some question to ask to any of the speakers. If not, I obviously have a lot of questions. So think about it, we have 60 seconds and we'll be back with a Q&A panel. Awesome, so we're back. That was fast. Okay, so we'll start the Q&A. We also have on top of our speakers, we have another panelist with Logan from metadata.io. If you have come to previous meetups, Metadata has been sponsoring our meetup group and really contributing to this community. So, um, Drogan is Director of Growth, correct, at Metadata. So he has done this a lot of building the budget, so he's also going to participate on the panel and give his input to this. So let's start with the first Q&A. Is there any question anyone for us?

[Speaker:AUDIENCE] So I'd like to know what the panel thinks is the most cost-effective way to generate demand for a paid iOS app.

[Speaker:MIHAI IONESCU] OK, who wants to go first? Who has experience with mobile acquisition? I can answer a little bit. 'Cause I worked at Branch and Optimise, so both cases we were platform for mobile apps. So is this obviously consumer apps, right? So we saw that by far the number one channel has always been Facebook. So Facebook, Facebook, Facebook is a big deal in mobile user acquisition. Another way, so the problem with mobile apps is that you you cannot do the same thing like with SEO that you do with our website, but there are ways today to drive your user from your site into your mobile app. So you can build content on a site that drives your SEO up and then try to turn those web users into mobile users. And so there are all those banners, Branch is one option that you can use to do exactly that. I would say definitely what we saw with a lot of clients doing user acquisition meant doing Facebook for the most part. I don't know, any other input that you guys done, any mobile?

I mean, it's just tricky. So you have to pay for the app as a consumer. And then do you have a good idea of what the LTV of the consumer is?

Or what your— A few dollars.

Yeah, so that's the challenge. Paid channels actually typically don't work really well because the LTV is really, really small. So you have to resort to other things. You have to resort to the inherent virality of the application. So can you build in certain referral features, so expansion features like when you download all your contacts. When you sign up for WhatsApp, for example, the very first thing that they hit you with is the ability to download every single contact from your address book. And then any time you message someone from that, in the actual first message, it says, hey, I'm using WhatsApp. To message you. And so paid channels are actually really challenging. The only companies that do really, really well from a mobile perspective on paid channels seem to be mobile games, because their LTVs are massive. So I don't know if paid is actually the recommendation. On the marketing stack, I would probably recommend other things from the marketing standpoint other than paid channels, like advertising.

[SPEAKING PORTUGUESE] Unfortunately, building that variety in the product is really tricky things to do is figuring out how can you get people to refer. If you can hack that, then obviously you can scale really, really fast. But it requires a lot of thinking. Not every product can be naturally viral as a product. So it's definitely one option. Any other questions? OK, let's do here.

I was going to ask, so in an ideal world, obviously there's perfect sales-marketing alignment and all your tech stack is ideal, but in reality that's often not the case. How do you control for when you choose your metric that you're evaluating campaigns on? Closed one, you lose basically once you hand it over to sales despite nurturing and hopefully a lot of communication, but there's also a lot of variability in sales processes, quality of, you know, even SDRs or AEs. You know, how do you kind of control for that in your planning when potentially the sales org is undergoing changes that, you know, kind of beyond your control?

Who wants to take this?

I think that's where knowing the existing conversion rates are really important. And using those to build a model and understand what the kind of current state is. I think one mistake I've seen made is if you use just industry conversion rates and they're not really aligned to what your company can actually do, then you're going to have a different outcome. But if you're starting from a baseline and understanding your conversion rates, I'm not saying that's solving the entire problem, but you should at least have a decent idea of what you will deliver from marketing based historicals. So that's one thing to take into consideration.

I think the other side of it though is that there's the planning for what you think the outcome is going to be, really understanding before you get to a negative outcome where the process is starting to break down so you can diagnose it and fix it before it starts to become a real problem. You're absolutely right, I mean, if there's an SDR, if it's a B2B sale, understanding their role, understanding the qualification criteria that they're using, if that's working properly. That's where the alignment between marketing and sales becomes incredibly important to make sure that you're working towards the same goals, working with the same terminology and nomenclature about what is qualified. And I think what I've done is that probably on my first day at the last couple of companies I've started with, I've gone to the head of sales and said, I own this number, and to try to set a level of trust that we're on the same page. Page. So as you start to challenge where the process might break down, where you see bad behaviors on the part of salespeople— not that they ever do that— a good example, or easy one we all run into is you push the lead over to the salesperson, and instead of converting the lead to an opportunity, they'll create their own direct opportunity and record the sale, so it breaks your credit and it breaks the attribution. It breaks the feedback loop to know which campaign that you want to optimize around drove that outcome. Understanding that, and sometimes you just have to dig into the data and really try to figure out what went wrong so you can solve it. And you kind of own it because otherwise you have to live with the consequences.

Yeah, and I find that that process of creating opportunity that breaks is one of the most common challenges and very hard to solve. We tried in the past to enforce validation rules whatever you name it, to enforce reps to create the opportunity properly. But it's not an easy challenge.

There was a question here. Mostly for Steve, but anybody else, when you mentioned the mid-funnel campaign that you did, you know, sort of this where they were stalled out and you used both— you used ZoomInfo for emails and a couple other display tactics. Was there an existing SLA with the sales team? What was the process for getting permission?

And I ask only because traditionally, once that lead hits the sales team, there can be a certain level of sensitivity about who owns that relationship.

And would just be curious how that played out. Yeah, it's a good point that often the salespeople want salespeople want to keep any conversation they're having hands-off from marketing because they have a fear that we're going to screw it up. In this case, I partnered directly with the head of sales and we worked together to create the structure of it, and so he bought off on it and it kind of removed that as an obstacle. I'm doing something similar now with Medallia where we approached the head of sales and said, said, look, what we want to do is implement this program. What we're going to do is we'll say any opportunity that has a close one date that's forecast within 30 days, we'll keep those off the track and we'll keep those as sort of a holdout group. Anybody else is fair game for trying to help them along. And then a follow-up to that is, was there orchestration in terms of the sales folks? Obviously there was communication, but were they then increasing the outreach, following up on the emails, like what was the—

Yeah.

In that case with Cision, no. In the case we're doing now, we're actually using the SDRs for the follow-up. So we're trying to find the right roles. The SDs, sales directors, often don't want to coordinate with marketing in a structured way. They have their own playbooks. And we always face a challenge of how do we create a process we can repeat? Over and over and over again so we have a predictable outcome. So at least if the SDRs are within your sphere of influence, you have a way to be able to see— you can repeat that process.

So I have one question for me, for the whole panel. Let's start with you, Logan. Since you guys do a lot of ad optimization, how often do you— once we have a budget and we have all the channels allocated with a certain budget based on conversion rate, but obviously the results change. How often should you review that budget and revisit your channel allocation and make it match the reality?

Yeah, that's a really good question. For those of you who don't know, Metadata does automated AI optimization for ads. So as a demand gen marketer at a demand gen company, I'm fortunate where I don't have that problem. My software does that for me. The challenge is, was before I had that, there's other channels that I still have to optimize. So I have to look at the sales cycle, right? So whatever my middle sales cycle is, if I'm not looking at like at least half of that to making those corrections, then I'm really gonna be behind the game. So at a bare, bare minimum, if I have a 90-day sales cycle, I'm reviewing all of my programs in 45 days and making adjustments.

Okay, cool.

Any other tips on optimization. Maybe Sahil, you want to touch on this? Sure.

Yeah, so for us, we actually, for a long time, we were running our paid media stuff in-house. We actually ended up hiring one of our customers, one of the agencies that uses our software. And so, probably as, I think you have a weekly check-in?

I would say sometimes it feels continuous, and I'm trying not to do that and pull back. A little bit and honor the sales cycle, but yeah, I mean, I think it's sometimes important to continuously be looking at numbers and adjusting.

[Speaker:JOSH FEIGELSON] Yeah, I think one of the biggest challenges that we see is actually, maybe especially when you do outsource to an agency, is not having enough of a hand in it. I think we kind of just assume the agency's going to do a great job, and how often do you hear someone is dropping their agency or wants to drop their agency? And so I think having good visibility, it's a good thing for us because a lot of our customers will buy our software even if they have an agency. Agency in place, so the in-house team has control over the data, and they can kind of keep their agency honest. But we have a channel set up in Slack, and so a lot of people, even internally at the company, it's called Ad Strategy, and so if we see one of our ads in the wild, or if we see something that we're a little bit confused about, or if one of our CSMs is in Intercom, which is what we use for customer support, and we actually, in Intercom, we pass through, using Segment, we pass through all the data, so you can see any new trial, or you can see the UTM source, the term, et cetera, that they come into the system with. And so if we see anything odd there, right, for example, over the weekend we had about 25 different kind of spam signups, and a lot of them came from a single— we could tell they came from a CPC campaign. So we were able to pass that through to the ad strategy team, and they would pass that on to our agency. So in our case, as a smaller startup, it's a little bit more crowdsourced of how we optimize and continue to, but that's what we do.

OK, one question here, then I have more questions.

Hi.

How do you take in the complexity of attribution when you're breaking down your budget, like Facebook, email? Do you just prefer a last touch or first touch when changing the budget, or do you go through the system of assigning percentages to each one?

I will start with Jack since you touched on attribution window as well, which I would like Do you also touch?

I think the first step is just picking one model that you can at least apply. So we have a last-touch model right now, and then I'll also look at influence from the channel as well across all of the opportunities. So even if it wasn't the last thing that started the opportunity, we can tell, you know, I can take a look at the history of opportunities or pull reports and Salesforce and see that. I think attribution is really, really difficult and it's something that I think all marketers struggle with. So I think just honestly picking one model and at least starting with that to build your plans is probably step one. And then figuring out how you can evolve it beyond that or as you're starting to see trends is the next step from there. I'll say one thing about attribution.

It's a very hot topic, obviously. So attribution is this promised land that all of us marketers have been trying to get to, but no one's gotten there. Pretty much nobody. You had Adometry back in the day. Maybe that was 5, 10 years ago. You had Bizible. They got acquired. Because Bizible's great, but no one— for attribution to truly work, it has to almost be perfect. Because attribution can otherwise be very dangerous. So you may actually start to optimize on the wrong thing because your attribution's off. And I actually think, not to be very morbid, but I actually think that attribution's going to become even increasingly difficult given all the different regulation changes that we're starting to see with pixel tracking. And so you see that the browsers like Mozilla and Chrome, you're seeing even ad channels and their different stance and how they're going to track data. And so assuming we can't use Evercookie and cookie someone forever, which we won't be able to do, you're going to start to miss, tracking parameters are going to drop off, or being able to track someone across sessions will also drop off, or across devices is going to drop off. So unfortunately, I think what Jack mentioned makes a lot of sense. In Google Analytics, for example, I think they have 7 or 8 attribution models built out that you can just very quickly toggle to, to give you a good idea, but it's really going to be directional. You should be very cautious in using it for any sort of final decision. Decision-making would be.

Do you want to try to chime in there? I agree with everything that was said. I think the multi-touch attribution is a little bit of a rat hole, because you're going to make assumptions that are going to be incorrect. They just are. Having said that, I think for the B2B side, actually, the other reason it's become more complicated, because as you go the ABM route and say, "I'm trying to close an account," there's multiple people involved, and so you're trying to deliver attribution across numerous people and multiple touches. I think the one key insight you do want to try to pull out whenever possible though is, what is the ideal experience that gives you the outcome you're looking for? So it's less about assigning partial attribution on the percentage of revenue to individual touches, but if you know, for example, there's a cadence of contacts or content consumption or activities that tends to lead to a better sale percentage, that's really where the insight is useful.

You know, I think there's dangerous in attribution too when we talk about sales and marketing alignment, right? Because sometimes with attribution we start fighting over who gets credit for that same deal, and we have to remember we're one team, right? We're winning together and we're losing together. So whatever attribution model you go with, you want to make sure that it doesn't like create a culture of infighting, but a culture, a culture of more of like collaboration and how do we win more deals together. Together in an ROI-positive sort of sense. So whether that's first touch, last touch, or like a marketing attribution and a sales attribution and split that out, might be something to think about as well.

That's a good point. And during the attribution event, I mentioned the example of, you know, this fight that was coming in a previous company where I worked, where, you know, marketing was taking credit and one of the reps said, "No, that opportunity, I met him 2 years ago on an event, so it's mine." So those were pointless arguments because nobody is being paid for sourcing opportunities you have to close. And so I agree, like this, sometimes it can create this fight over who sourced the opportunity even though it shouldn't happen.

Right, it's reality. When everybody has goals for revenue then there's going to be some— Exactly. Trying to grab the revenue.

So I want to go back to Steve and I have a question that I have every time comes out when you build a budget. How much would you spend on branding and non-attributable programs? And in particular, how much do you spend on billboards? We saw your billboard on the 101. So how do you justify those kind of investments?

I'm not going to claim credit for the billboard strategy. It's interesting. If you're responsible for the revenue generation, brand plays an absolutely important role. You have to be able to see the marketplace and the message. It's very rare if you send out a direct mail communication, whatever channel it is, and it's the first interaction with your brand that that person has had that they're going to convert. So you really have to see the market, help them understand who you are, what you do, what value you provide, how you help solve problems. So I'm not sure there's a perfect answer to how much brand, Certainly, there's certain audiences where you have to build awareness of who you are and what you do. I think you look at earned media investments of how you can get influencers to talk about your company to help build awareness. Brand plays a role in that. Certainly, that's really where it comes down. I think the blending of media also plays a role, that you're going to allocate a certain portion of it knowing that's going to play an upper funnel role. And it's never going to have an attribution model that pays out. It's just an investment you have to make, or you're you're going to have issues scaling.

I would like to hear everyone's opinion because, again, especially when you're early, you want to do PR, you want to do analyst relations, you have to invest $40,000, $50,000 a year at the minimum. You want to do billboard campaigns, that's another $40,000, $50,000, $100,000. How do you justify that when you cannot come back with an actual ROI?

We recently actually— I think the best way that brand's ever been described to us was, "Your brand is essentially the sum of every single touchpoint your potential prospect may have." And that goes beyond marketing touchpoints. So for example, I think probably everyone here is a consumer of Amazon, and probably the vast majority of us can say Amazon's customer support, for the most part, is some of the best customer support. Certainly they built their brand on that, right? And that's another touchpoint where you have to care about brand, and so whether it's a piece piece of content, whether it's your customer support, your customer success team, any interaction that they have with a billboard, a piece of digital content, an advertisement, has to be consistent. And so, I will say that in many organizations, it has to be somewhat of a top-down philosophy that they do appreciate and understand. You will go to organizations where they don't, and they'll have that question of, "Well, why are we spending $50,000 on 20 billboards in California," or whatever. And that's a challenge, and that's something that hopefully will change in time, given that media mix model, and that all these things play a role together, and you have to accept that. So most organizations— I think the head of demand generation at Host Analytics, she had a really good— actually, very similar to what you just mentioned— is she had a conversation with the CFO. And she spoke to the CFO specifically about this, this idea of brand is every single touchpoint, it's the website. I mean, even redesigning a website is a really challenging conversation if it's converting. So people say, well, why are you going to redesign the website? And the marketing people understand that there's a certain brand that you want to evoke when you come to it. And she basically did the same thing. She has a certain budget, a certain percentage that's carved out that's brand. It's her budget too. So she's taking budget away from some of her other direct demand generation opportunities, but it's carved out and they just have an understanding that's going to be used towards brand, top of funnel, and it's going to have maybe a viral effect to it. But at the same time, that is her budget she's sacrificing to go towards brand. Brand rather than pumping it into an ABM strategy potentially or something like Google AdWords. So that's kind of another take.

Yeah, I mean, one way to maybe think about measuring brand, you can do brand tracking studies before and after. So you launch a large-scale brand campaign or any type of brand campaign, and you can get the opinion of, do people know your brand before you launch it? And then what's kind of the sentiment or familiarity familiarity with it after. That can be difficult if you're a startup, and you know, how do you actually look at that? But there may be other ways for you to actually track brand to some degree if you need to get some metrics. I also think just like real-world examples, right? Like, there— if you could look at successful companies and look at branding campaigns that they've done— I like your definition of brand and all the different touchpoints, but if we're talking about like brand marketing, you can find good examples out there in the wild and bring those to your executive team and show that these successful companies are doing that may help you build your credibility. But I think I agree, I mean, you need to have a portion of it dedicated from your budget, otherwise you're definitely just looking at short-term, short-term goals and you will suffer in the long run for sure.

Yeah, so this was a fun project for me that took about 6 months to figure out the answer. So I did a 2-quarter A/B test A/B test with our SDRs, and what I had them do is I basically had the first question that they asked on every cold call that they made was, "Have you heard about us, yes or no?" I was able to obviously track the conversion rates all the way through the funnel based on whether there was brand awareness or no brand awareness. So the second quarter, what we did is we pushed very heavily towards brand awareness. So out-of-home, it was those display ads. It wasn't anything that we could track firmly in the ROI. Then again, we kept that process in place. "Have you heard about us? Yes or no?" And then we tracked those two conversion rates, compared the before and after, and then measured the ROI. Now obviously there's some organic growth that's happening. There's some word of mouth that starts to travel as well, given the stages that we were at, but we still saw an increase of conversion rates for cold calls for people who had heard about us versus not in that second quarter, and it was about 120% lift. So there was definitely something measurable that we could kind of tied to it. The challenge that we still really haven't really figured out how to tackle is, OK, where's that upper limit? Where's that diminishing return when we invest in brand? So what we're doing is we're doing incremental increases until we start to see that max branch out. And then we know, OK, this is probably the top of our brand budget, or what that split should be between brand and demand.

[Speaker:MIKE] And it's very situationally dependent, depending on what your competitive set is, what Are you a very small player in a big industry? Are there a million disparate competitors or one giant owner of the sector? All that matters. And I think your tactics about how you try to get your brand out there— you're a marketer, you have to be creative. If you have low budgets, you have to figure out ways to get your name in front of your audience with whatever resources you have to work with.

Yeah, and if you have a good way to collect that "how did you hear about us" thing during the first sales call, That's probably the best type of data if you have a way to structure that data. Someone saw the billboard and decided to call— unlikely, but it happens. Or I got people that said, "Oh, I saw you on Quora." I didn't have that attribution, but they told me that was the answer. So it's the same thing to keep an eye on. Any other questions from the audience? Okay, so we have two.

Hey, yeah, my question is, so if we're talking about building a marketing budget, what is the next line item that you would see you'd actually be adding? So Facebook marketing's been around almost 8 years now, Instagram is here, WhatsApp is around the corner. Where do you see the market going? So much about marketing is being an early adopter, breaking through the market noise. Where do you guys see it's gonna go?

Great question. Start from you, Lorenzo, we're going online.

Yeah, that's a really, really good question. I think that what I see happening is more and more merging alignment between sales and marketing. So I think that we hear it, but I think we're actually starting to see it take place. So when that happens, I think we're going to look at sales and marketing as one and the same. And so the investments might come from the sales side, and when we're doing some of those marketing activities. That would be my honest opinion.

It's a really hard question to answer. I think when I think about where we're trying to build, there's obviously lots of channels, and there's kind of your core channels that you're going to invest in. You have offline channels that you can invest in. I think I really look at how you can continue to improve your process and in the process between sales and marketing too. So are there technologies out there that are gonna help you do that? I mean, that's probably where my next line item goes to, right? How can I work with the set of things that we already have and continue to improve process and what are the things that are gonna help me do that? I don't know if I have an answer around like the next big channel out there that we're gonna be purchasing or looking to be on, but I think I think process is probably where I focus, you know, once you kind of have your core set of activities.

Yeah, so my whole talk was on marketing sales alignment, so I agree with what they're saying. But I think on the technology side, so you already have a line item for technology, but I think that that line item is going to continue to increase, and that's okay, because I think you're going to have displacement potentially of, you know, manual work that you're going to have in place. And so it's kind of on the same side of, if you think about about agencies and how agencies are changing. So I was at Publicis in London at one point, maybe 2 years ago, and their chief strategy officer came in, just randomly came into a meeting and said, "Hey, our agency's gonna die." And so, which is like a very aggressive question, but I think my response was that, "No, I don't think they're gonna die. I do think that anything that can be automated through technology will be, and I think that may mean displacement of a certain amount of jobs, but I also think the specialization will need to change dramatically. So for the agency, the specialization will need to become far more focused on creative. Things are a lot harder to automate. And so I do wonder if even in in-house organizations, if we're going to have to follow something very similar. So we're going to continue to adopt more and more technology, but we're going to have to specialize. And maybe that's through training. So another line item could be just training on marketing operations or more technical marketing or whatever's next. Even going back to creative, I think one of the big acquisitions that happened in the last two quarters was Drogo5 by by Accenture, if you follow that at all. And they were entirely focused— they're an agency, but they never did a media buy. They were entirely focused on creative. And I think that Accenture found that to be a little bit forward-leaning and pretty interesting. And the last thing is that we actually looked at— there was another stat that was published this year. There's already more money being spent on technology than the actual media spend itself, which is crazy. And so I don't see that slowing down, so I just I think that that line item potentially will expand.

And I'm gonna violently agree on the technology side. I think the goals that I have are how can I add scalability to my marketing process and how can I increase my ability to hyper-target my message to different audiences in a very specialized way. The one caveat though is I think that a lot of companies invest in technology and really fail to train the team to actually know how to use it. So my recommendation is is when you buy technology, make sure it's a clear strategy about how it's going to be used and make sure that you're getting your team up to speed on how to use it and it becomes part of your processes, otherwise you tend not to utilize it.

I don't have anything.

Yeah. So I think a better question and what keeps me up at night and I know what keeps other marketers up at night is what are we going to do when email dies? Because we see it going away, we know GDPR is already in place in EMEA, we know California's coming up with it. So when the workhorse that's been driving a lot of our leads and our inbound traffic, that email correspondence, gets cut off, how do we replace that without losing the inbound demand that we go through? And I think that is a reliance more on the tools and the technologies and on the inbound, the creative. We have to get smarter as marketers.

And I also want to answer the question, first assuming that all the channels will better when they are working together. So there is no one single channel that's going to work by itself. But to answer your question in specific, what we saw working well as the kind of new trending channel is number one by far direct mail, which is an old channel coming back as a new channel. We had an event talking about it. But it is working well because there is not a lot of competition. Email now is going down as well. Facebook Ads is still okay. LinkedIn has a lot of competition, but it's still working obviously well because everyone is there, but the cost is going up. AdWords, also the cost is going up because there's more competition on AdWords. The other one that we saw is Quora. So if you're in B2B, Quora Ads are looking very, very promising. We ran a small test a few months ago and the traffic that we were seeing Obviously you have to have topics on Quora, you have to match that, but the cost per click, per lead, and all of that is really, really small because the competition is small. So keep an eye on that. And then one more thing is we're investing in technology that allows us to react right away when a lead from a target account is on our site. So we are biased, we are partner of Drift, but we always recommend Drift to every client because it's phenomenal, and I think that's what a lot of things are going, is to conversational marketing and be able to react right away and be able to identify those visitors that come to your site and trigger an action. That's very hard to do, but if you can do it, every time we were able to do it, the person was really impressed. The rest. So it's something to keep an eye on. Angelica, you had a question?

Yes, just kind of to anyone, what is one mistake you feel you made either earlier on in your career or just anywhere in this kind of realm of demand gen budgets that you really, really learned from and helped you grow in the end despite it being a mistake?

So, budget mistake, let's start from the right.

Many, many mistakes, a lot of hard-won lessons. Probably the biggest lesson I've learned over time is that demand gen works well when you are able to control the entire process, you can define a strategy where you're saying, "Look, I know the outcome we're getting." In a lot of companies, demand gen is kind of carved off as a separate discipline within marketing, so you've got the brand, you've got product marketing, you've got creative, content, content writers, and often the demand gen team will be the recipient of their work, and they'll say, "Here's your new white paper or thought leadership piece. Go craft a campaign around it." That tends to fail, and what I mean by that is if the demand gen team is saying, "Here's the objective I'm trying to deliver. Here's the audience I'm going after. Here's what I know about our competitive set, that persona. Now go build a content piece specifically with these details in the brief, then the probability that's going to actually deliver the outcome they're looking for is much higher. So the organizational alignment within marketing to have a campaign cycle that's really driven by the campaign strategy, which should be owned in Demand, and having the rest of the team support them, it's a very dramatic shift in really sort of the weight of how marketing resources are allocated. That's one of the things I found, that without having that alignment, it's really hard hard to meet your numbers on a consistent basis.

So my perspective, I guess I'm the CEO on this stage, so not really a marketer directly, so I want to be mindful, but I think from my perspective, so we hired our first 3 folks that we hired to run marketing, and we're an early-stage startup, were our customers, and they tended to be very, very technical marketers, demand gen marketers, and they're very, very good at a lot of the systems, the operations, and a lot of the demand engine stack. I think one of the things is that I undervalued some of the other sides of marketing as well. So for example, some of the creative side, some of the brand strategy, some of those things that you hear about, and maybe in Silicon Valley we'll laugh about them and say, "It's all technical marketing. It's all about the demand gen curve for us." But the truly great brands and the truly great organizations that we've seen actually live for multiple generations— forget Facebook or Google, been around for maybe 20, 30 years. Think about Coca-Cola or Procter Gamble or whatever, whether you like them or not. But they've survived through multiple recessions. They've survived through multiple generations. And I think a lot of that is because of their strong consistency around brand and around a lot of that creativity. And so I think that you do have to have both. I think you really have to have the demand generation side, but you certainly need to have that other side of the brain as well. And I think undervaluing that early on in our first few years, I think, was a mistake that I made.

So I think in demand generation, um, you can get pushed like to, to always need to be delivering more. And sometimes you may think you need to do like more activity, and that can end up just actually not working in your favor. So really staying focused and understanding like how you can, you know, just don't, just don't try to take on too much because you If you have 100 activities, you're not going to do any of them well, whereas you could have 10 or 15. I've seen that happen a lot where it's like, "Well, what can we add? What can we add so we can increase here, increase there?" And it may not be about adding, it may just be about optimizing. And then the other thing I would say, we haven't really talked about this very much tonight, but also get out and talk to your customers. We're really focused on the acquisition side. Position, and we're talking a lot about the technical aspects of marketing and all the mechanics that go behind that, but it's also really important to build those relationships and understand your customers. That is going to help you inform the decisions that you're making, some of the stuff that we've been talking about tonight. So I'd say that too.

Yeah, to piggy off that, for me it was compromising. I knew the numbers, I knew what the conversion rates were, I knew I knew exactly what I needed to make my programs work. I went into the e-team meeting and they wanted me to compromise. They wanted me to be, "Hey, well what about this and this and this? We want you to do all three." And so I said, "Okay," and I should have said no. Because I got mediocre results on all three, then it's like, great, now where do we invest more money? Do we invest more money on A, B, or C? And all the results were just kind of meh. If we had gone with the one channel that I knew was going to be I think we would have had significantly more results. I pushed harder the second time, got exactly what I wanted, and that's exactly what came out. So I think sometimes when you have the number behind you, you have that support, don't be afraid to say no to that executive team because you have the data to support you. That was my biggest mistake.

[Speaker:MIHAI_IONESCU] Yeah, and to piggyback on that is running campaigns that just because some executive wanted to run or because you have that idea that it looks looks cool is a mistake, because at the end most of your revenues are going to come from 2 or 3 or 4 activities. So you don't want to do things for the sake of doing, because it takes a lot of time. So we are pretty much out of time. So thank you everyone for joining tonight. Thank you to the panel. And we hope you found it interesting. We'll have a meetup every 2 months. Next one is going to be in September. We hope to see you there. Thanks again.