Pendo CMO Joe Chernov: The Content Playbook Is Dying. What Are You Replacing it With?

Alright! Good morning, good afternoon, good evening, wherever you are in the world. Thank you so much for joining us at SAS Terrannual. You are at a roundtable session with Joe Chernov, the CMO of Pendo. Thank you so much for joining us today. We are going to dive into some housekeeping items before I hand it over to Joe. All right, you joined this roundtable and you popped out with your video. That is on purpose. You are on mute, but it is an interactive session and we would love for you to ask questions and engage in the conversation as well. We encourage you to either raise your hand with the icon in the, the toolbar below at Zoom, or the chat is open. You're welcome to drop in your questions or your statements or your ideas in the chat, and Jo will be able to address those as well. It's 30 minutes, it's jam-packed with content, and we're looking forward to spending the next 30 minutes with you. They are recorded, it is broadcast live as well, and I'm going to kick it over to Joe. Thank you so much for joining us.

All right, thanks Tammy. And, uh, to be really clear, at the end of this talk we need to have a conversation. So I have about, I don't know, 5, 10 minutes of slides for a 30-minute talk. So we definitely need to use the chat feature, use the hand raise feature, and have a discussion at the end. All right, so I lead the marketing team at Pendo. But I built my career in content marketing. I have seen over the years this sort of degradation in the efficacy of content marketing, at least in B2B, and it's been gnawing at me because one, it's a bummer to see something I worked really hard on giving rise to start to stall out, but it's also a bummer because as a CMO or as a founder, you got to find a way to replace the business value that content marketing once delivered that it is no longer delivering. And that's how this conversation ends. This conversation ends with a discussion about, so now what? Okay, so this is how I, uh, this is how I look at marketing. I presented this 2 board meetings ago. There's more to it than one slide, but this is what I, I discussed. Done well, demand gen, particularly this sort of inbound model of demand gen where there's this notion of a form that somebody fills out in exchange for some value to be delivered by the company. Maybe it's an ebook, maybe it's some type of interactive experience, and you give up your identity in exchange for that. And now the company has a qualified lead or some measure of qualification, and that sets in motion their marketing program. That is what I would call, done well, high-floor marketing. That is to say that you aren't going to necessarily hit high-growth goals built on the back of that alone, but you're always going to have some value delivered to the sales team from the marketing org. Some value that need to build on top of. Um, in order to reach the goal, you have to introduce the concept of leverage, which is another talk entirely. But what I want to talk about is, as content degrades and the floor is no longer so high, that bar starts to come down, what do you do to boost it back up, or what do you do to fill the gap? Um, all right. And so let's start with like, what's gone wrong here? What's happened to content marketing? The dirty little secret is like bad content marketing has kind of ruined content marketing. Um, so let me go back one. Um, so what happened to it is we just got lazy as marketers. The stuff we started to publish was kind of rote. It looked like what everybody else was publishing. There was a lack of kind of innovation. It was blog post, form, ebook, and we never really broke that cycle. The way we tried to fix the sort of decaying of efficacy was do more of it, and doing more of it only increased the noise, making the signal that much harder to find. And for a while, there were maybe pockets of industries that weren't doing this form of marketing, and so you could find a space that was kind of, um, you know, fresh snow, but there's not that many industries with fresh snow anymore, and there was this added challenge where marketers became measured by this notion of a marketing qualified lead, and The executive team wanted more and more of these marketing qualified leads. And so what marketers started to do is lower the bar to become one. And then what that ended up meaning is the minute content marketing worked, somebody filled out a form and entered that company's sales funnel, they got swarmed with sales calls. And so now people sort of brace before filling out a form, before entering a company's sales funnel, because they know, gosh, is it really worth the aggravation I'm gonna find when I fill out this form to get whatever it is this company's promising, because I know I'm gonna pay for it in my time. I'm gonna pay for it with a sales rep coming at me before I'm ready to have that conversation. So if any of these things are happening in your organization, you probably have a decaying efficacy in your content program. So like no matter how much you're publishing, traffic doesn't reflect it, or, um, the number of people that come and fill out a form and enter your sales funnel, uh, the number of those that actually become a good lead, become an opportunity, starts to decay. You start to see a drop-off in the efficacy of, um, the quality of the, of the leads you're pulling in. Your costs start to rise. Regardless of the quality. Um, this is the telltale of all telltales. You hit your numbers, you gin up exactly the number of leads that the company expects you to deliver, but sales misses its numbers. That doesn't mean marketing is doing its job and sales isn't. That means marketing is, um, is not holding itself accountable for the quality that sales leads, uh, sales needs. So your victory lap comes at their expense. That's a, that's a telltale sign. If your SDRs, or if your inside sales team, would rather place an outbound call than follow up on your leads, you got a real problem. And, and this is a really subtle one, but, um, your inside sales team get on the phone with somebody and consistently they hear Yeah, but what do you do? That means that your content marketing isn't educating your buyers. Um, and in terms of what it is that your organization delivers, what the value your organization provides is, um, any of these signs means that there's something wrong with your content program. So, um, before I go into the discussion part, Does this like line up with what any of you are experiencing in your day-to-day? Let me see here. Does anybody have anything to add? Any other experiences that might like run counter to this or complement this? Did I, did I miss part of like the real world of running a SaaS marketing program and, and, you know, are you experiencing any of this too? All right, well, I will consider that we are all on the same page. So I can chime in if, if you'd like. Please. I'm totally in line with what you're saying, and I think if I'm hearing you correctly, what you're saying is there's no single point of where things have gone wrong. It's a mix of everything. But obviously, I think it's super interesting to also learn from others where they're struggling the most because you're pointing out quite a few things. And where would you say is the prime challenge? Is it just bad content or is it everything altogether? I think it's, um, I think what happened is, um, I'm prone to say, show me how I measure and I'll show you how I behave. And what happened is marketers finally had a metric. We called it a marketing qualified lead. It doesn't matter what you call it, but we finally had a metric that like set in motion marketing being measurable. The dirty little secret was there was no universal definition of that marketing qualified lead. That varied by organization. You had to find your own. And so when you have a metric and early on you could attach some value to that metric— what does the CFO want? What does the CEO want? What does a chief revenue officer or VP of sales want? They want more of them. And so marketers strive to create more and more of these units of value, and eventually you either run out of runway, that is to say you've pulled everybody into your database, or you start to experience this natural decay in quality, right? If the more efficient you are, then each new name you convert will be incrementally worse than the one before it, right? Or you would have converted the better one first. You start to stray from your ICP, ideal customer profile, and you start to see, um, that you begin to miss your number. And so what do you do? Well, there's no universal definition of this MQL, so you start to lower the bar because you keep your job by generating more of them. And since there's no universal definition, well Who's going to really be the wiser if you say— if you lower the definition, right? Maybe you use a lead scoring system that says at 100 points you're an MQL. Well, ratchet it down to 90, ratchet it down to 80 until you're hitting your numbers, but what you're passing along to sales isn't valuable. I think underneath all of it, that's what happened. We tried to keep our jobs and at a disservice to the organization rather than pushing back on the volume requirements. I think, you know, I've been at this for a while. I've seen this play out in a number of companies. I think that's the underpinning of it all. And what that ended up doing is saying, well, shoot, if I need to get more and more of these, then I'm going to publish more listicles. What's a listicle? But, you know, kind of, you know, maybe there are times it makes sense, but if you only publish listicles, it's kind of lazy. I'm going to publish content that strays really far from what we sell because I want to appeal to as wide an audience as possible to get as many clicks as possible. Well, those are the people that have no idea what you do when your inside sales rep talks to them, because what you were publishing was designed to convert. It wasn't designed to educate a buyer. The original sin of all of this is this notion of an MQL being the sole unit of value that marketing delivers. And then the second challenge is not pushing back on the organization when they say, "Great, I want more and more of those things." I believe that's what happened. I'd love to hear if others have a different point of view on this.

Enjoy, there are quite a few questions coming through and responses in the chat as well.

Oh, I didn't see it.

It's definitely lighting up in the chat.

Okay. All right. It feels easy to get caught in the SEO engine machine. Yeah, I mean, that's part of the temptation, right? Like, within marketing, you have your own funnel, and that funnel begins with traffic. And traffic is not like— it's not prejudicial, right? It's just visitors. What you really want are the right visitors, but show me how measure, I'll show you how behave. If you want to report to your organization that like we're getting more and more and more eyeballs here and you get rewarded for that, that's what you're going to do, and that's going to inform a more generic content strategy than a more targeted content strategy. Um, somebody says, I'm actually experiencing SDRs wanting more and more content leads despite it not converting. Um, that suggests to me that maybe outbound is even worse. Um, or maybe they are— again, show me how I measure, I'll show you how I behave. Maybe they are report— maybe they are rewarded for the number of calls they make and/or the number of emails they send, right? And so if marketing is handing over a bunch of leads and the way they are rewarded, the way they keep their job is, um, sending out 50 emails a day or making 50 calls a day, we can serve up 50 emails or 50 calls, then they're just perpetuating this broken cycle. Because it starts with self-interest, right? The CMO starts with self-interest when he or she lowers the bar. It's to keep his or her job. When the SDR says, give me more things to follow up on, it's probably to keep their job because there's the wrong KPI in place. The KPI in place is an activity-based one, and sending them leads makes the activity response rate that much easier. They have less research to do. Just, just guessing. Um, to what extent— yeah, so somebody asked a really good question. Uh, to what extent can you avoid the problem by measuring quantity and quality? So the conversion rate of MQLs. Um, I had a CEO that I could summarize as his outlook on life was men are not great. And so for all metrics, you needed to have a check and a balance. And having a check and a balance is, um, in this case would be you have a volume goal, but that volume needs to adhere to a certain quality score. If it doesn't, then you don't get credit for the output, the volume output. I think that's a healthy thing to put in place. I'll tell you a funny story. Um, we shifted to an account-based model in that company. And what we found— let me see if I can get the— I have to get the story right. But what we put in place was a model where we generated— it was essentially the ABM equivalent of a marketing qualified lead. It's a marketing qualified account. And in order to become one, you had to have a 20% likelihood to convert. And what we measured was the number of leads that, uh, of qualified accounts that we generated in this 20% bucket. But if we dropped below 20%, I didn't get credit for the volume. And so it nullified all of that output. Um, and that's how I was measured personally. And it was a way to keep myself honest. So I think that recommendation is a good one. Um, somebody saw a marketing director get fired for pushing back on sales when they wanted to water down the definition of an MQL. Sales wanted to water down the definition of an MQL and the marketer stood up for it. That's interesting. Um, what do they say? Um, nobody ever gets, uh, no couple ever really fights over the dishes, right? It's just emblematic of a deeper issue. I suspect This is emblematic of a deeper issue because the company should want the marketing director to be a champion for quality, unless they're so precious about quality that the sales team has inside reps that have nothing to do. So I could see this playing out by the sales team saying, you're too much of a purist marketer, and I get that you want quality, 'But at this rate, I have SDRs that can only outbound. And surely if we lower the bar a little and deliver some more volume, that quality will exceed an outbound call. So can you meet me in the middle?' And then if this person towed the line and said, 'No, it's quality at all costs,' then, you know, they don't understand the economics of the business, that there are some— there's some expensive headcount that are sitting idle. Maybe that went on a little. It's hard to know all the details, but that's a guess from some experience. Is number— no, the number of website visits isn't really still a metric for marketing, but it's a leading indicator, right? If your traffic is down, then likely all the downstream events are likely to follow as well, unless you've been really judicious about not attracting the wrong traffic which is fairly tricky to do. But no, I wouldn't report— I don't report to the C-team what our website visits are. But it is an important thing to know from an inside marketing standpoint. The marketing team should be tracking that because it is a leading indicator. Somebody says that how-to content is often overlooked, and it's been a top performer for her. And I agree. I think that's a really good example. How— so how-to content being like more product-specific, educating an audience on like how to get more value out of your product, how to better use your product. Um, and I do agree that that it can be really effective. Companies will move away from how-to content when they are, um, addicted to the top of the funnel. Because how-to content doesn't bring in the same traffic as, say, a listicle would because it appeals to a more narrow band. However, it's going to educate your audience and the right audience. Like, only the right person is going to click on how to use your product. It's got to be somebody that's leaning forward. And so while the number, the n, is going to be relatively low, the quality for that content is high. And so that's why I think of content marketing as more of a portfolio. You do need a little bit at the top of the funnel. You got to keep new DNA in your gene pool, but don't be so consumed by that that you're not thinking about content as a middle funnel or even bottom, bottom of funnel accelerator. You just got to be a little careful there. Um, so how do you educate an org to get them to respect good marketing. Most SaaS CEOs I've met aren't willing to wait for good marketing practices to work. Keyword: wait. Like, marketing takes a long time. Good marketing takes a long time. Um, you know, when I was at HubSpot, we had— now the scale is all wacky there, right, because there's so many eyeballs, but We started our sales blog. We waited until we had 500,000 monthlies to begin to try to commercialize the blog, to put a single CTA on it, because we wanted to be really pure about like getting good content, lots of people coming, lots of people coming back, and only then would we try to monetize it. That took a long time even there, but like $600 million ARR company. They figured it out. Um, I think that story may help. Now, that CEO may say, well, that's HubSpot. Yeah, but HubSpot wasn't always HubSpot. Like, that's how they became it. Um, all right, I want to skip ahead because I want to talk a little bit about what I know of CMOs I'm friendly with, or what I'm personally doing with my team to do to, um start to kind of wean ourselves off of content as the sole source of demand creation. And so think of what Envision is doing with like movies and movie theaters, right? Like when I joined this industry in 2009, uh, brand was a dirty word. It's not anymore. Um, and so some companies are using brand as their differentiator. LinkedIn has a share of voice product that's not at all about conversions, just about how many people are talking about you. Um, account-based marketing— there is scale now in ABM. Like, before you had software-enabled ABM, account-based marketing was like, you know, getting tickets to the big game. It's not that anymore. You can run ABM at cohorts of you know, a couple thousand companies. So is it, you know, is it HubSpot? No, it's not their market. Their market's much bigger than that. But if you have an addressable market of, you know, 5,000, 10,000 companies, you can manage your marketing program through ABM, and there's software that can, uh, enable you to scale that. Product-led growth, right? Like, as— so product-led growth is the notion of maybe freemium or free trial, but some way that your potential buyers can sample your product without having to deal with a human being, totally self-service, self-provision, and get a taste of the product, get some value from the product, and when they've reached their natural limit in usage, upgrade to a paid version. It's like while we were out charging, air quotes, for our content, your product team was kind of eating your lunch. By building a free version of the product that people can use and get value from. There's a huge role for marketing to play here. And then there are, um, certain ideas that I haven't represented here that folks on this call have some experience with and can, um, would be game to talk about or, or endorse. So here are 3 ways I think companies are weaning themselves off of content, but I'd love to hear more ideas. Is anybody running product-led growth, and does that come from your— if so, is it marketing-led or product team-led? So somebody says product team for now. I think it's, I think it's probably the best imaginable answer. I, my sense is that the product team has a, has adjusted to the product-led motion faster than marketers. And now we're playing catch-up with product. I have this hypothesis that we're a year or two away from martech companies saying, talking about the importance of sales and marketing alignment and replacing that with product and marketing alignment. Because I do think that that's coming. Ali says, we're kind of half pregnant with product-led growth because it's neither marketing nor sales team Who the heck runs it then? Um, I'm marking neither marketing nor product team. Is it the sales team? Um, I'd be intrigued to know who, uh, who leads it. And, um, we do both. What does that mean? You do both content and PLG, or both product and PLG? Product and marketing run PLG. All right, so Ali says it's like half shared in a shoddy way between marketing and product. Okay, um, that's funny. So I would say that marketing, um, you got a chance to grab the brass ring there, um, because the quality from like a product qualified lead is only going to relieve you of the burden to generate more and more top-of-funnel leads. And if anybody on my team were on this call, they would laugh here because I say it a lot. That is the hamster wheel of death for a marketing department to just live on purely being a lead gen, a lead output machine. Nobody wants to do that. Marketing is much bigger than that. So if you could grab the mantle and take over PLG, it's only going to take— it's going to lighten the load at the top of the funnel. Somebody said PLG wasn't converting. I think some— I'm no PLG expert. I'm the executive sponsor of our PLG motion, but it's much more technical than I am. And so I'm kind of like, ooh, I'm not that technical. I would say this: it is likely influenced by the sector you're in. It is also— it wasn't converting. This is not if you build it, they'll come. Like, you have to— it's so crazy to think about, but like, you're gonna have to spend meaningful dollars in driving signups for a free product. And it's like totally counterintuitive, right? Um, but you can't just build something in free and assume that folks are gonna come to it. I'll say this, uh, without mentioning company name, I know a really household name SaaS company and their free product gets like 2.5, I think it was, signups a day. And so this isn't necessarily going to generate the volume that you're used to in other aspects of your marketing, but the expectation is that the value that you have, like advocates in the world, will make up for it. But you are going to have to put some dough behind it. Somebody else said, when the product team leads PLG, What do you suggest in terms of having a fluid conversation, fluid coordination with marketing sales? Yeah, Charlie, um, it's— I think the product team, like at Pendo, a PM tech owns free day-to-day because it is technical and it is a SKU of Pendo. But now what has to happen is if he wants, um, the resources behind this product that he loves because He's, he owns it. He's only going to get those resources if it delivers value to the business. That's where sales and marketing come in. And now sales and marketing have to talk about, you know, how much cannibalization we're willing to tolerate. We talk about where we should set the threshold for a product qualified lead, then we can pull the PM back in because that person will need to instrument the free product to say like, when X happens, you pop open a form asking them if they want to upgrade, or when X happens, you alert a sales rep to call in. So product has to play a role, but you really do need this sort of triumvirate of marketing figuring out this, uh, the promotional model as well as where the PQL threshold is set. Sales having in place a motion that is able to follow up on these free users based on where those thresholds are set. And the product owner himself or herself instrumenting the product to support those motions. They really all do need to come together to make this work. This is a hard thing, right? This isn't putting out an ebook with a form in front of it. This, this sea change is a hard thing.

Awesome. Thank you so much, Joe. I know we are slightly over time here. We will collect all these questions that we have come in as well and make them available after the session. These will be recorded as well, and we'll have the recordings available over the next few days. I hate to cut this short.

OK. I hope it was helpful, everybody. I'm @jchernov on Twitter. If you want to ask me a question following up on this, I'm always happy to respond. OK.

Thank you so much, John. Bye.