Datadog's CMO Sarah Varni: "Building Pipeline: Balancing Sales, Inbound and Partnerships"

All right. Thrilled for today's session. We've got Sarah Varney. She is the CMO at Datadog. So we've known her previously. She's been at Twilio and Attentive, and we reached out first when she joined Datadog back in February. But she's been heads down and is now ready to share some insights with you. So she's going to be talking about all things pipeline alignment, building pipeline, balancing inbound sales partnerships and more. So get your— all your pipeline questions ready so she can answer them at the end. All right, Sarah, thank you so much for joining us and welcome.

Thank you. Excited to be here.

All right. First, as we know and love, we like to get to know you a little bit better. So some teaser questions to warm us up and see kind of what you're working on. So tell us a little bit more about your day-to-day role and what it currently looks like.

Yeah. So I'm, I'm the Chief Marketing Officer here at Datadog. As Caitlin mentioned, I started back in February. And the CMO role at Datadog covers a lot of the kind of usual suspects of marketing. We've got product marketing, corporate comms, events, partnership marketing, and sorry, I'm forgetting the last, solutions marketing. So we run the full range, you know, and cover the funnel and obviously demand gen, because we'll be talking a lot about that today. But it's a pretty standard kind of marketing org for a software company of our size.

Great. Tell us about a project that you are working on today that you're most excited about.

Yeah, Datadog's a super interesting company and from a marketing standpoint, my predecessor was here for about 10 years before I started and built up a like phenomenal engine in terms of new logos and pipeline generation and that's been the core kind of marketing motion for the company. But now we have a really sizable customer base. We've got over 27,000 customers. And so one of the parts of the team that I'm building out is how we really market to that audience. And, you know, Datadog also has a really extensive portfolio of products at this point. We have over 30 SKUs. And so I'm trying to think about how we build out some of our first-party programs alongside some of the third-party work we've done with huge partners like AWS or, or Google. Awesome.

Okay. Challenging things. So what's been the hardest thing or a big challenge for you in the last 7 months?

Well, in marketing, we call them opportunities, Kaitlyn. We don't call them challenges. I love the optimism. Yes. No, I mean, honestly, like, I think there are parts of the marketing mix, like I said, that I want to, to build out. I think that our first-party programs is part of it. I think international too. There's places where we've been super lean and it works. But as we've gotten more momentum in the field, I think marketing needs to, to, to build out some of their functions so that we can be more regionally aligned, not just kind of look at things at a high global level, but like, all right, what's happening in Japan for our, you know, paid digital for the next 3 quarters? Like, I don't think that we've had the right level of staffing to get to that level of detail. And so that's something that I've been pushing the team hard on to make sure that we're, we're just getting better and better with every quarter.

Love it. And then current favorite SaaS tool or platform?

I mean, I don't, this is not like some like brand new tool, but, and it's very relevant for the conversation today, but I am a huge fan of Tableau in terms of getting everyone to be on the same page when it comes to a topic like pipeline. I think, you know, if you've got one place to go where you can toggle by country or segment and or pipeline source, which I'll talk a lot about in the next few slides, you're just going to get better adoption for whatever program you're trying to drive. And we were, we were big users at, at Twilio at least, and that was something that through a huge phase of growth really helped us all be on the same page. Okay, great.

All right, Sarah, we have people joining us from Canada, D.C., Austin, Texas, Silicon Valley, San Francisco, East Bay, Chicago, Dublin, Ireland, and more. LA, so love to see it. So, um, India, more LA, Davis, California. So definitely connecting us, um, and we're all excited to hear, uh, your strategy and your tactics around pipeline alignment. So please go ahead and take it away, and I will be back for Q&A.

Great, thanks so much. And shout out to the East Bay. I'm from Alameda, so gotta represent. Um, all right, well, let's jump in. I have a simple set of slides, and for some of you, this might be like very much Pipeline 101, But I was surprised leaving kind of the Salesforce ecosystem, and I kind of lump Twilio into that because there's a lot of Salesforce people there, that this wasn't like setting pipeline by source wasn't always the norm. And so I thought it would be a useful topic to talk through, especially given that we're in planning season. So just 2 seconds about me. As Kaitlyn mentioned, I started off at Salesforce. I spent over a decade there, and those were really formative years for me as I was learning how to to kind of navigate the world of software marketing. From there, I went over to Twilio where I was the CMO. And when I came on to, to Twilio, very interestingly, they were at about a $400 million annual revenue run rate with 30 sales reps. So super healthy self-service motion that I walked into, but their growth was flattening out a bit. And so they brought on a new team of leaders to really help them evolve into the enterprise market. And so I was part of that phase of growth for about 4 years. From there, I went to a customer of Twilio's who was Attentive. They were— they are a late-stage startup in the SMS marketing space. I'd say the biggest learning I had there was really how to influence people. I was fortunate going from Salesforce to Twilio that a lot of my teammates had also been at Salesforce. And so we kind of were all we had all been, for better or for worse, had been taught some of the same mechanisms. So there was just kind of a speed of trust with executing on some of these enterprise programs. At Attentive, that wasn't the case. And so I had to kind of get people, influence people on how I thought we should approach pipeline in a different way. And then at Datadog, you know, the jury's out what I'm going to pick up here, but hopefully, you know, we are approaching world domination in the observability space. Ability space. Just one more, you know, quick note on the different go-to-market motions for each of these companies, because I think it's super important in the context of thinking about pipeline. Salesforce, notoriously very much direct selling organization, almost 100% sales-led. Twilio, like I mentioned, started off as PLG, but then developed more of a PLG/sales-led hybrid model. Attentive was also very much sales-led and even had, still does today, has a fairly heavy SDR presence downmarket, which was interesting and new for me. And then Datadog is more in that bucket of Twilio where we definitely have customers that get up and running self-service without any interaction from our employees, but we also have a healthy sales team which will help people graduate into more sophisticated use cases of our product or, you know, multi-product usage. Okay. So like I mentioned, I thought this is a relevant topic to bring up right now because I don't know, I know everyone has a little bit of a different schedule when it comes to planning, but it's certainly planning season here. And I geared this presentation somewhat to marketers, but I know we've got a variety of different titles and roles on the call. But, you know, planning season can be tricky and you're— I'm, I'm assuming a lot of people on the call are going to be pushing to get to a certain growth number year over year. And I think that there's always the discussion and healthy debate about where that growth is going to come from. And so, I've been surprised that, you know, setting joint targets from the, the start of the year is not always the norm. And one thing I've been sometimes challenged by as a marketer is, you know, I'll come into a strategy and ops review and it's like the marketing pipeline review. And while I think it's important to drive accountability in the marketing team, and I definitely don't want any one of my team shying away from that conversation, I also think it makes it so that the conversation is about just marketing and not thinking about pipeline holistically. And while it drives marketing accountability and they, the marketers are focused on what they're doing in their swim lane, they also start to not care about the other sources as much and don't think as a shareholder. And so I think that having more of a holistic pipeline model that marketing, sales, your channel team, your inside sales team are looking at altogether drives a better kind of team result at the end of the day. And so I'll talk through how we structured that both at Salesforce and Twilio. So, you know, I just had some prompt questions. And again, these are like largely for a marketer, but I think like if you're, but I think it, you know, just thinking if you are on a C-level, if you're a CEO or more of a general executive, you know, I think just thinking about your organization, like, are you, are your targets set up in a way that everyone feels joint responsibility for driving pipeline across your your marketing channel, your SDR organization, your AEs and your partners? And then secondarily, do you feel like you're all set up for joint success, or are you only focused on, you know, your one particular department? So at Salesforce, and this was slightly before my time, but when I walked onto the team, they had what they called a Four Horsemen model. And I didn't— I don't know what was going on at Salesforce at the time. I didn't realize that this is like a deep, like Old Testament biblical reference that like refers to like plague and famine and other terrible things. So pipeline must have been dire at the time. But the idea was that I think it was just a clever way to say like, look, all of these 4 components are going to, you know, feed our overall numbers. So we would look at what the inbound contribution was, what our SDR, BDR contribution is. So those kind of inside sales reps that are paid-to accounts to go prospect for AEs. We'd look at our AE, account executive, generated pipeline and then our partner generated pipeline. And obviously this can differ pretty significantly by segment and what your go-to-market motion is for each segment. And so I thought I'd talk through just some high-level examples. These are not real numbers, but just kind of broad strokes because I do get these questions quite a bit from people who are just starting to establish their pipeline models like, What should I expect from what source for each segment? So let's look at a commercial example. So commercial, you know, from a marketing team, they're probably going to have a one-to-many approach. You're going to have more low-touch programs, a lot of digital, a lot of online components to this. You're not going to be, you know, sending people out to have steak dinners with customers to close smaller deals. And you're unlikely to have, not in all cases, but you're unlikely to have a BDR team supporting an AE team to prospect because the deals are likely going to be smaller and it's just not going to pencil out, you know, from an economic standpoint. So in a commercial example, you could imagine that, you know, 60% of your pipeline could come from inbound, maybe a little bit higher. And let's say that your AEs generate 40%. If we go to commercial, I mean, sorry, if you go to mid-market, you'd see that those percentages shift a little bit. And mid-market is a tricky one. This is going to sound very obvious, but the low end of mid-market operates a lot like a commercial small business account, and the high end of mid-market really can look exactly like enterprise. So it's a tricky one to straddle. But, you know, roughly, let's say inbound is now going to drive 30% of, of your pipeline, you would start to see the SDR function contribute a bit here. So let's say that they're at closer to 20%. Your AEs stay steady at around 40%. And then here's where you might start to see some partner influence pipeline as your deals get more sophisticated and people like, you know, your regional systems integrator start to get involved in your deal cycles. Finally, finally, as you look to enterprise, the inbound number would come way down in terms of sourced pipeline. So let's say that that's around 10%. Your SDR would step up slightly, your AE would step up slightly, and partner would also. So, so here you can see how this might look across a company that's serving all these segments and what you could expect from, from which source. Let's go just into some like, why does this matter slides? But, you know, as I, as I stated at the beginning, I think it's just really important to look at all of these sources together because if you look at them in isolation, you might not identify actually what's wrong or where, or where things are going well. So if you are, for example, looking at your quarter and you're seeing that, all right, like basically Marketing and sales are moving kind of in lockstep together. Let's say they're both at like 80% of their target. And, you know, that you might— that might be a sign that like, all right, maybe we have some other macro challenge. We're not hitting our target. Or maybe it's a couple of things. It could be that the target was wrong. But let's say the targets are right. You know, that could be a sign that, hey, look, we've got some competitor out there that's hitting us hard and we're getting kind of— we're having issues across the board. There could be macro factors. In terms of, all right, there's been, you know, a slowdown in funding for startups. And, you know, we're just kind of seeing that hit our numbers across the board. What's probably more, you know, and it's not going to be perfect. You're not going to be able to like completely nail this down, but that's like where I would probably point first. What is probably more interesting is when the numbers are going different directions. So you might see marketing like completely missing its target and sales crushing it or vice versa. And especially if that's kind of happening out of the blue, I think it's good to inspect things like, have the rules of engagement changed? Is sales qualifying leads in a way that's different than they were the last quarter? Did marketing invest or divest in a certain program that could be, you know, driving that, that drop? But, you know, I think I'm always— my spidey sense always kind of goes up when I see those numbers go different directions unless, targets for whatever reason were not set the right way. But let's just assume in this scenario that you've got a great FP&A and strategy and ops team and they've, they've nailed the targets. I think obviously a huge benefit of doing this is that both marketing and sales have skin in the game. I never want my marketers to take a victory lap if they have hit their target, but sales hasn't. And I think Salesforce did a great job of making marketing really feel ownership for pipeline overall. And so if marketing was hitting their target but sales wasn't, we would go and sit with sales and say, all right, like, what are some of the things, even though we're not going to get credit for this, who cares as a shareholder? Like, let's think about the different programs we can put in place between now and the end of the quarter, whether that's like dinners or roundtables or whatever the kind of things might be that marketing traditionally get credit for but are still going to help that overall sales number. And then tied to that, you know, marketers are going to take more of a shareholder view. They're not just going to care about their their own metrics, but they're going to think about things more holistically and how they can do what's best for the company. And you kind of get out of the finger-pointing who gets credit game. And then I think it's like, all right, well, that's great. You can set these targets, but then maybe no one looks at them and they just kind of like, you know, drift off into space after the year starts. I think it's really important to have a regular cadence where all of the key owners of these sources are in the room. So having a monthly pipeline council and not just like reporting out the news, but saying, all right, here's where we see pockets of opportunity and here's the programs we're going to put in place for the next quarter or month or weeks to hopefully rectify any issues we're seeing or to double down on what's working. I think quarterly reporting on the horsemen and just being very transparent, it's— and creating a safe space where people feel okay with reporting places where you're in the red or you're in the yellow. I think that's only going to build trust in the model and more adoption of it over time. And then like I said, develop a joint action plan. It's not just like, hey, marketing, go fix this. It's like, all right, how are we going to work on this together? What are the things that we can all kind of, you know, put our heads together on to improve these numbers where we're seeing the most opportunity or areas of weakness? So those, that is all I had slide-wise. I am happy to jump into any questions people have. And happy to share what I've learned in these different roles. Awesome.

Thank you, Sarah. Yes, get your questions ready. We do have a couple questions already, and I think a lot of them are just more clarifying questions and asking for a little bit more context on some of the numbers and the metrics that you just walked through. So first, tell us a little bit more about like who's driving inbound and who's in charge of handling those inbounds. We had a comment like 60% inbound on the commercials. Is awesome. Are there any tips on driving that rate, or tell us a little bit more about how you can achieve that and what you've seen be successful?

Yeah, so I mean, marketing, uh, is the main driver of that inbound channel. And so the ways that we've, uh, typically done that are through, um, paid media, uh, and your kind of usual suspects, whether that's Google or LinkedIn. Um, and then I'd also say webinar programming. Um, we also We also use third-party events to build up our database to then go market to those people via digital. So those are kind of the 3 major ways. And then those are all paid tactics. The other way obviously is organic. So having, depending on what space you play on, play in, having a really solid content strategy doesn't have to be, you know, doesn't have to be 10 people. It can be, It can be one person that's just kind of really focused on the keywords that you need to rank for, for your category and just slow. It's a long game, but chipping away at that over time can be a really cost-effective way to make sure you're getting traffic and eyeballs to your site.

And do you guys have a content strategy or like a target goal you hit for blogs or pieces that you put out? I know we've talked a lot about that at Saastr. Just, we, we do push out a lot of content. So just curious from your perspective what you've seen work.

Yeah, I mean, we, I think it's got to be a mix, right? I think there's probably— I don't have the like perfect split. I don't know if anyone does, but I think you want to have like, what are those like bread and butter terms that you need to rank for, for your category that you're just going to help to kind of defray some of your SEM spend in ranking for those words. And then, but, you know, that's kind of looking at the past and seeing what's already ranking and where you've got search volume. I think you also want to spend, call it, you know, 20 to 30% of your energy thinking about what are those new terms we need to rank for? Like, what are the topics that are going to be— that are starting to pick up steam in our space? And we want to, you know, build some credibility sooner rather than later. I think about an example back— Twilio was really good at this. We launched our WhatsApp for Business API, and the team focused a lot of energy on that launch around making sure that we were going to rank really high. From a content perspective when that product went live. And they had done so much kind of pre-work on that front that we even ended up ranking higher than WhatsApp when the launch went live. So they were great. Our developer evangelists were killer on that front and great about like thinking about, all right, here's the topics we need to get ahead of because they seem to be hyper relevant for our audience.

Great.

Question, a couple questions from the audience. One more just to kind of plant the seed. You had talked a little bit about finger-pointing with sales and marketing. Obviously this happens a lot. So can you tell us a little bit more? How do you work with the sales team currently? Like how do sales and marketing kind of work together? And you talked about that monthly council, like tell us more who's on that, what does that consist of that is meeting monthly and who's kind of responsible for driving it? Is that you or somebody else?

Yeah, so I think it depends on the company size, like how big or small that— well, I shouldn't say big or small. I think it depends on the company size who you'd want to have in the median and how broad it would be, I guess. So like here at Datadog right now, it'd be too much to cover globally all of our different pipeline cuts. You could do it, but it just wouldn't be as useful. So like right now we have a commercial pipeline council, we have enterprise pipeline council, and I would even argue that we need to get more granular than that. But, you know, we have our head of commercial sales in the room. We have my head of demand gen, myself, our head of channel marketing, because that's another contributor to the model. And we don't have channel sales in that one because it's more commercially focused. We do in the enterprise. So we basically will go around and say, we'll look at the funnel from like marketing qualified leads to opportunities to pipeline and see where we've got some issues and just try to be like very, you know, open and, you know, there's no, you know, just make it a safe space for like saying what's really happening. So, you know, on the marketing front, we might say, hey, look, like we're a little bit flat on traffic in LATAM. And so we need to think about like, do we have enough translated content for the languages we're supporting? Like, let's diagnose what's going on there. We might say on the flip side, hey, look, we're seeing conversion from MQL to opportunity fall off in, you know, let's say in Germany. And is there any dynamic happening there that might have— do we have any attrition in Germany where the leads aren't being followed up on in a certain amount of time? Like, are there any ways to kind of diagnose what might be happening there? So we can rule out that it's like not an issue with the leads that are being created there. So it just creates a good dialog of like everyone kind of thinking through what might be changing. And that's also a great place to surface like, oh, hey, actually we just changed the rules. And like regionally too, sometimes the rule, the like lead qualification might tweak, might change based on like how that particular sales leader likes to run their business. So it's a great forum for that to be like, oh yeah, well, our new VP of Germany actually wants them to have 2 meetings before it's turned into a real opportunity. Or, you know, and so a meeting like that will just surface some of those things so that we don't go chasing a bunch of different stuff that might not be as relevant or helpful to fix the actual problem. Right.

And are there KPIs or are you tracking metrics in that meeting as well, or is it more just kind of exploratory? And how do you set and track those KPI metrics? So especially when you're working across so many different parameters, teams and locations.

Yeah, so we're looking, I mean, my kind of core metrics that I goal my team on are MQLs, opportunities, pipeline value, and then we do look at the win rate just to make sure we're not generating a bunch of pipeline that we're excited about that never closes. And so we look at that at the global level, and then we look at it at the regional level. And then we're getting closer and closer to even looking at it at the country level, but You know, we have to, we're kind of in a middle phase of that right now, but those are kind of the core things to look at. And we obviously, like I said, this was just the commercial meetings. We're just looking at the commercial segment.

Sure.

Great. Okay.

Question, Tom, I'm going to invite you up to ask your question live if that works. Thanks for joining us.

Wow.

I didn't think I'd get on video. Uh, nice to meet you, Sarah. Uh, I used to work at Salesforce also. I was there between, uh, 2010 and 2018, I think.

Oh, nice. Yeah.

So we crossed some of the same, uh, water together. Um, but yeah, I, I just wondered if you had, uh, any, um, thoughts around where SDR/BDR should roll up to, like sales or marketing.

Yeah. So I, um, I personally have never, uh, been at a company where it rolled up to marketing. Um, and so I'm, I guess I'm biased that, uh, it's worked fine being in, in sales. I think like I've largely worked in companies that serve enterprise though, and I would say like when a company skews more mid-market and below it, it, I could see a world where it makes more sense to, to report into marketing. But that's just been kind of my experience.

Cool. Thanks.

No problem. Great.

Thank you, John. Tarek is driving, so I'm going to ask his question. What's marketing responsive? What's marketing responsibilities for outbound, especially in a space where majority of the team is product solution and product unaware?

Yeah. So I think that when it comes to outbound and marketing's role, I think that there are product marketing elements of that and enablement KPIs that you can put in place. Like, do all the sellers know how to effectively position the products? I think you can look at win rates, although, you know, it's— I don't know that you can 100% tie that to, to marketing, but there is a like kind of joint target that you could probably look at together to a certain degree on that front. I also think, you know, for outbound too, there are a lot of different marketing programs that marketing probably wouldn't get credit for, but that are still very important. Like how do you get an enterprise prospect to come and meet with your team in real life? And that might be a prospect dinner, that might be an ancillary event to a third-party event. So I kind of, I kind of bucket those in that outbound motion. Like, what excuses is the marketing team giving sales to, like, call someone and get them engaged with the company? I think that, that a lot of those tactics kind of fall in that bucket for me. Awesome.

Thank you. All right, Sashi, I'm going to invite you up to ask your question.

Thanks. Hey Sarah, we are connected for a couple of years now. Very interesting insights. I am a former CMO turned into an analyst, and I just wanted to get your perspective on— there are a few channels that I didn't hear you mention, and probably it's because you don't have those channels, but more and more CMOs of technology companies talk about MSPs as a very good channel. May not be highly profitable, but cost of acquisition is low. Sometimes sales just handles like value-added resellers, and then there is direct. Do you have those relationships? How do you manage that? And do you calculate customer acquisition cost by channel? That was my question.

Yeah, I mean, just in my, my previous 3 roles in particular, that has not just— that has not been as big of a mix for us. Like, Salesforce didn't have as much of a reseller network or channel network that way. So it hasn't, but I certainly see a world where it could be and should be. And, you know, these are the, the four horsemen were the ones that were like driving the most for us. And that's why we rallied around it. But I certainly don't think that that should prohibit anyone from adding another source that's, that's meaningful. I think it's, I think the trick is just making sure that you know, you have the smallest amount of metrics that can motivate the biggest group of people. Because I think sometimes if you throw up like too many metrics that the average person day to day in the meeting doesn't understand, it's just going to become less useful. But if MSPs are a big contributor of pipeline for the company and something that you have, you know, sales ownership or people that are like assigned to those relationships in the company, I certainly would add them. Great.

Thank you, Sasha. All right, Danny, I'm going to invite you up. Question about attribution.

Hi, Sarah. Thanks so much for the presentation. Yeah, the obvious question, we talk about the Four Horsemen and how they contribute at different stages of business or size of business. How do you think about attribution and mitigating the inevitable conflicts of this is my deal, this is my pipeline, this is yours, your pipeline.

Yeah. So, you know, when I talk to this model, this is like a pretty conservative, like I'd say, like last touch or like true sourced pipeline. I think, you know, at Twilio, what we would do on top of it was make sure, like especially for like our enterprise segment where it's going to be harder to measure all of the marketing touches that we, we had like a rough guideline. I think we'd say like, all right, we want to make sure that marketing is touching 70% of all enterprise pipeline. And we would regularly look at that to make sure that we were not, that we were kind of touching the right deals and hopefully helping sales move things along. So, you know, that's roughly how we approached it. I think one thing that I have found the most useful with attribution, like, look, attribution's like the white whale. It's like, I've heard, I've had so many, like, you know, it's a fool's errand. I could go on and on and on. There's just so many, there's so many kind of, frustrations around attribution. It's the thing everyone kind of is like, steam starts coming out of their ears. But the thing that I found most useful to kind of get people on the same page is to go through a couple deal examples in the enterprise where you normally have the most conflict about this stuff and say, look, like, here is Capital One. Let's look at the history of Capital One. I remember this like very specifically at, at Twilio and like we would, we, we looked at them, we had been engaged with them for like 3 or 4 years. It was interesting. And we had a couple of developers that had played around with it and come to an event. Maybe not a lot of opportunity. Then, you know, something kind of spiked like a year in and they came to another event of ours and sent different people and then opportunity shot up. And we just kind of— we looked at the course of, of the deal and some of the marketing touches and the sales engagement. And we looked at like 3 or 5 of those every quarter just to like get people on the same page and be like, okay, look like Yes, like sales was probably responsible for like getting that, that deal off the ground and getting the opportunity. But like, the marketing activity was also important in them, like knowing about Twilio in the first place so that when they did have a real project, it was easier to get off the ground. And I think when you kind of look at it like that and again, like where everyone kind of is in the same boat, we're all going to try to hit our overall target. It's not just about, you know, fighting across sales and marketing. There's more appreciation for the different programs that marketing might advocate for. And you won't be as quick to throw out like, hey, we shouldn't throw out us going to like re:Invent because we don't see deals from it a quarter later. Does that make sense?

Yes. Thank you very much. Appreciate the insight.

Awesome. Thank you, Sarah. We've got a lot of questions that are coming in, so we're going to keep firing away on these. Ali, if you want to come off and turn your video on, yeah, I can invite you up if you want to ask your question.

Hey, Sarah, thank you very much. This has been great. A quick question. I've been in a small startup, and what's your thought on allocation when you have limited budget? On small startups, as I mentioned, on between the Four Horsemen, we put a lot of emphasis on the SDR, BDR, LinkedIn mining. We were getting conversation, but nothing came into actual deal. So what's your thought on resource allocation when your resources are really tiny? And give you some context is more on a SaaS side. So obviously we are here for SaaS. So what's your thoughts on that?

Yeah, I mean, I, I think it's, um, I'd ask a couple more questions about your business. Like, are you selling to enterprise? Are you selling enterprise? Right. Um, you know, I mean, I think that, uh, uh, you want to get some general education and you want to like get your brand out in a, like, from a PR perspective or just like a general, like, hey, we're a legit company. We've got good backing. We've got good momentum. So people like, trust that you're not gonna like go out of business if they sign up with you. Like, I think there's just some like basic credibility you need to establish. But you can largely do that through outside agencies. I don't think you need to bring full-time people on for that. I think where you'd want to focus is, you know, what are the enterprise kind of, what are the, what's the circle of influencers that you need to kind of get on board? And this is just like, me riffing a little bit, but like, all right, what are the kind of programs I can create for my particular buyer? And like, if it's like, hey, come to this dinner where you're going to meet your peers, we've got this like cutting-edge technology that is really going to help to move the needle for— I don't know anything about your space, didn't tell you anything. So I'm just like saying in very broad strokes, I don't know, every kind of category of influencers operates differently, but like, people operate with a certain degree of, you know, fear of missing out or FOMO. And so if you could like gather together, you know, regionally in the places where you think you're going to have good momentum, you know, if you can say like, hey, we're going to put together a small dinner in San Francisco with some of your peers that, you know, to talk about the future of AI and accounting. And I've got this company and that, you know, like if you can get like one locked in, then that'll get the second and third and fourth. And then you get this kind of group of people and then you can learn from them and grow from, from there. I think like figuring out kind of more, you know, targeted programs overall, not just events, but also like if you were going to do any digital spend, like, and you know who your buyer is in particular, like can you go through like LinkedIn and target them, you know, digitally that way. But I think, you know, if you're selling to enterprise, you have limited resources. It's really important to kind of zero in on a target set of buyers. And then once you get a couple of those in, use them to get to your next 10 and next 20. You know, I know that I've been, I've been lured in to evaluate certain marketing software in that same way, like, hey, come to this dinner at like this new cool place. With a bunch of your, you know, CMOs that are your peers. And I should watch what I'm saying. We get a bunch of invites after this call. But, you know, you know, with a bunch of your peers to learn about this new AI technology that can help defray your SDR costs by 10%, you know, like, I'm like, all right, like, even if I'm not interested in technology, at least I'll get to like share what's going on best practice-wise with some of my peers that you know, I might not otherwise, you know, you know, be able to connect with. So those are just a couple ideas. If I sat down, I'm happy to connect after and learn more about your business and help you more. But those are some of the things that I've seen work for companies on limited budget.

Thank you very much. I appreciate that.

Thank you.

Okay, we have a couple people that are in busy places or driving or something, so I'm going to ask their questions on their behalf. So question from Ash, and they also mentioned they'd watch the recording after so they can hear their response. Are you seeing a shift in resources to a smaller SDR/BDR footprint in lieu of AI agent-made systems that can help build pipeline?

Excuse me. I'm not personally, but I don't— you know, I've definitely heard— I've been at a couple of these infamous CMO dinners where I have heard people going that direction. But personally, that's not been my experience. I definitely think that some of these tools are going to help people do that. And there are some tasks that we shouldn't be putting, like, our precious human resources on that, you know, we can, we can definitely solve through AI. Great.

And just a reminder for everybody, this recording will be available immediately after on our Saastr YouTube. So if you go to Saastr's YouTube and look at the Streams tab, you'll be able to watch the recording there. We also put these slides up on SlideShare. So slideshare.com/saster, you'll be able to find them there if you want to, um, reference some of those numbers and percentages that Sarah, um, walked us through. Okay. Question from Christine. What are other cuts you look at besides geo segment? Mostly curious if industry has been a cut in what scenarios?

Industry has not been a cut in my, um, different roles, but I definitely could see it, it, it, being that way. And I think I'd say actually when I left Salesforce, it was starting like Salesforce had like they called it like the, I don't know, something like application performance matrix or accountability performance matrix. That's what it was. That was my cue to leave. No, I'm kidding. It was, but it was just getting very complicated because they had to look at like, you know, they had 20 products and so they had not only had regional targets or segment targets, they also had product targets. So it got very complicated, but it was necessary for that scale of business too. So yeah, generally in the market, like Twilio, Attentive, Datadog, Datadog is a little bit larger in terms of employees than when I started at Twilio or Attentive, but complexity-wise, in all those roles, we didn't get to the, the level where we would do industry, but I could certainly see that being a way to measure things too, if industry cuts, if you've got particular concentration. All right. And especially I'd say if you have overlay teams that are focused on industry, like that would be a natural place where you might want to cut that out to make sure that you're supporting them the appropriate way and that you're building targets based on what their quota capacity is. Good point.

Great. Question from TJ. Lots of LinkedIn chatter lately around the value of measuring MQLs as a key metric. How do you define an MQL at Datadog or Prior Rules? Are you hand raiser? Those content downloads meet scoring threshold. How do you guys do it?

Yeah. So, I honestly don't know ex— exactly what, the like true definition is here at Datadog, but generally what it's been is like, is it a real lead? Is, do you have like, you know, is, do you have enough information for the inside sales reps to go follow up and qualify it? So like, is it a real email? Is it a real phone number? And you know, look, I think MQLs are, I think it's good to measure them, but I don't think it's the only thing. And I'm not gonna like, Again, my teams, I don't want my team to take a victory lap on MQLs alone because it's a fairly easy number to manipulate. What I care more about is like what the MQL to opportunity conversion is. Is it really turning into real business? And, you know, I get much more focused on that. I do think MQLs are important to make sure that you are continuing to drive awareness and that you're getting people interested in, in your products and your offering. But I don't think it's the only measure that marketing should be accountable for. Definitely makes sense.

What allocation of marketing budget do you typically see between pipeline generation and branding? And then what marketing costs would you exclude from CAC, if any?

Yeah, it, it totally depends on the company and the— and, and I think the— it depends on a bunch of different things. It depends on the competitive environment. It depends on the end buyer and their kind of tolerance for marketing too, or appreciation for it. It depends on the CEO and, you know, what, what their feelings are about it. So it just— in my experience, I think it's just there's a range. I'd say like generally my rule of thumb has been you want to spend like 70 to 80% on true pipeline generating, bird in the hand tactics, and then, you know, 20 to 30% on awareness. And yeah, I mean, I think that, you know, things like your PR or your AR retainers or something that like are going to be tricky to tie back to a demo action that would feed into the CAC model. And so that's where I would, you know, I would, I would pull those out just because I don't think it's going to be— those aren't, those are not channels intended to drive to a demo necessarily. And so I think that that's where you want to be careful not to include in that calculation because it's going to make things not— it's not going to look good, but also it's just not— it's an apples to oranges comparison. You weren't doing that to drive to a demo that would feed into that. CAC model. And so it's not a very fair representation of, of what that spend's actually doing. Yep.

That's helpful. All right. I hopefully last question from me and then we'll have a few more audience questions that are still on. Question from Jill. Do you have customer marketing or community? And then do you have a KPI for NPS?

So we do have customer marketing. Oh, sorry. Someone's like, Now you're good. Okay. Yeah, we do have customer marketing and, you know, customer marketing is interesting, can be defined different ways. Like at Salesforce, customer marketing was really like case studies and references. I think customer marketing in other places is like, what does your lifecycle marketing look like? And, you know, how are you continuing to kind of engage people post adoption of your or post-sale of your first product? So we have both of those components. Within marketing here at Datadog. I'd say that, you know, just like on the event side, I think we're less mature in how to sell to existing customers versus new business. We've just been very, you know, focused on new business and logo acquisition, which is hard to argue with. It's been a successful approach. But I think that as we evolve, we need to, you know, get better at how we make sure everyone knows about all the great ways they can use the our, you know, additional products. We don't have an NPS score. That's more, sits with our CS team and our support teams. So that is something that I, at least in Datadog at the stage of growth we're in, that I don't own.

Okay.

Or number I have. Sure.

Kirish, I'm going to invite you up if you want to ask your question live.

Cool, cool.

Hey Sarah, great insights. So I'm ex-Plunkett Sumo, so great. And this business very well. So I wanted to get your perspective on how you allocate your budget at the macro level. That is, you know, what's staffing, what's programs, tools, and other. How do you look at your budget for the upcoming year?

Yeah, I mean, I think it just, it again, it totally depends on the, the company that you're at, what segments you sell to. I think roughly like I think generally you want like a 50% headcount to 50% program spend. That's generally how I've tried to structure my overall budgets. And then, you know, I think it totally depends on what segments you're selling to as to like what your mix would be between digital and events. You know, if you're skewing SMB, it might be 70% digital, 30% events. If you're like heavy enterprise, it might be the reverse. It just kind of depends on where you're selling and who your buyer is. And then like eyeball, I don't know, like there's all these reports, you know, out there from either Gartner or even I think a lot of VCs have done a good job of kind of Chronicling how to think about this. You know, there's different benchmarks you can think about, about how to fund marketing overall. Like, I think overall for SaaS, it's somewhere like 7 to 9% of revenue should be allocated to marketing. But again, that, you know, depending on what your go-to-market motion is and if you're more PLG and, and, or, you know, yeah, if you're like, you know, more PLG, that could be higher or lower. It just kind of depends.

Yeah, yeah, yeah, you're right. The reason I ask is Datadog sales and marketing spend is much smaller compared to, let's say, Salesforce. That was like in the 60%, and here in the, in the mid-20s.

Oh, I know, right?

So as a marketeer, it, it's, it's exciting, and as you said, opportunistic, right?

So yeah, I mean, it's different though, but it, it, it's It's worked in a lot of ways. And I think the difference there is that Datadog has a really healthy PLG motion. Once they get people into the product, you know, they're going to use more and more of it. And Salesforce didn't— I don't want to speak for them today. I'm sure things are different, but like, it was not as easy to get up and running with Salesforce and get it set up. And so there was always some level of human intervention. So it was just it was different. And so that's, you know, and yeah, totally different, totally different approach and strategy between the two companies. So cool. Thank you. Yeah. Thank you.

All right. This might be our last question. Shahana, I'm going to invite you up to ask your question if you don't mind.

Yeah, thanks so much. Hi, Sarah. All right, so lately I've been dealing with this dilemma where I did not— I mean, I don't really understand how much to focus on intent platforms versus other digital platforms, social media platforms like LinkedIn. So if I have a certain budget and I want to— let's say it's a very limited budget and I really want to spend it over the next 2 quarters, then what should I focus more on for a SaaS tool? So that's one thing.

Yeah.

And if I am on the intent platforms, I mean, if I have a limited budget again, so which intent platforms should I be more focusing on or how to make, you know, the best possible use of the intent platforms?

So yeah, this is where I'm a little bit out of my depth because I'm not going to be able to speak to the the differences between the intent platforms. But I mean, I think like deciding whether you need one or not is just how much are you leaning on your sales team and like how much do you feel like they need extra support to know where to focus their time? And, you know, if they've got more leads than they can handle and, and, you know, you really want to make sure you're pointing them in the direction of the things that are going to be most productive, then yes, I think intent platform can be, you know, super helpful in that regard. Or if you have a really lean sales team and you like need to make sure that they're, you know, spending their time as productively as possible, I think that, you know, those intent platforms can certainly be helpful. If you don't have, you know, if you, if your database isn't where you need to be, I would say like, you know, you might want to shift focus more towards like, hey, are there some industry events that are going to really help me build up my database in certain markets. Because there's certain countries too where you can't just go run Google Ads too and build up your database. It doesn't— some of these platforms don't work. And so I think you need to kind of assess country by country too what channels are going to be most effective and then, you know, what tools are going to map to that best. And some digital might work great. You can use that to build up your contacts and some it might not and you might have to go to other means either for that content syndication, what is going to take longer, but like at least it'll eventually, you know, build up those, that contact list over time or events like I mentioned. But it can be really country dependent.

All right. Thank you.

Sure.

Okay.

One more question from Anon. How do you handle multiple attributions between the different channels? And then second part to that, how do you handle the different areas of PLG, SLG, and PLG leading to SLG? Just since you've bounced around the experience there a little bit from your past roles.

Yeah. So yeah, I mean, I think like there's so many different ways that people, people tackle attribution. I've seen different models where there's different weighting for the actual action that people are taking. I generally, agree with that approach where, all right, like someone reading a white paper is going to get less credit than someone actually attending a live event of, you know, a first-party event. And so I just, I think that that is, I think that that's a good way to do it because it just shows a level of investment and a level of kind of drawing people in like further down the funnel. In terms of PLG to SLG, you know, I think at Twilio what we tried to do, it was just you learn something new with every company. With Twilio, we had a developer audience that was very healthy and evangelical about our products. We wanted to make sure that we didn't, in introducing a sales team, really piss them off because as I'm sure a lot of you know on the call, developers don't want to be marketed to. They don't want an SDR calling them asking about their timeline and budget. That would be a disaster. So we really wanted to make sure that we, we didn't shake that up. And so we were very disciplined about having sales engage with our leads only when we saw them, the customer kind of raising their hand for help or looking like they wanted to have more of a commercial conversation. So we did a lot of engineering on the growth side to say, hey, what are the moments, the meaningful moments when we see someone using Twilio that we think what's the threshold where we think sales should get engaged. And we did a lot of fine-tuning on that to make sure that we weren't putting our base at risk and doing anything that would feel off-brand to developers. Awesome. That's so helpful.

Well, Sarah, thank you so much for this. We had so many questions, which is great. Hopefully you got all of your questions answered. So thanks for sharing your insights. Had a comment here that I think just sums it up really nicely. Thank you. Terrific presentation, really succinct and great answer some questions on the fly. From all participants. So thanks so much. Really appreciate it. As a reminder, recording's available on YouTube and the slides are up on SlideShare. Next week we are back with How to Win Back the Craft of SaaS Sales. So Lauren Padelford, um, who's now the CRO of Slice, he's been the CCO at Bill and Podium. He's coming back. He's gonna do an AMA. Jason M. Lemkin's gonna join him. So get all your questions ready to be answered. We'll be back next Wednesday at 10:00 AM Pacific. See you all then.