Why, how, and when to outsource some or all of your marketing function.
BSMS 21 - How to report marketing to the board of directors
Today we dive into the subtleties of board meetings, and offer a framework for how you should leverage them a marketing leader, founder, or CEO.
We talk about what boards are for - how can they help you? What do the members want out of the meetings (and the company)?
We also talk about how to interact with the board, and how to prepare for meetings. What should your presentation include? What questions should you be prepared to answer? What questions should you ask?
One key takeaway is “don’t lead with your chin.” In other words, don’t offer up non-board level details or conversations to the board. Board conversations should be very selective, and oftentimes what is valuable to you may not be to the board.
Some of the questions Stijn answers in this episode:
- How can boards help you as a marketer?
- What should each stakeholder get from the meetings?
- What three marketing slides should you bring to the meeting?
- Which questions do you always need to be prepared to answer?
- What should you ask from the board?
Hello and welcome to episode 21 of B2B SaaS Marketing Snacks. I'm Mike, Product Lead at Kalungi and as always, I'm here with Stijn Hendrikse, one of Kalungi's co-founders and executive CMO.
Today I asked Stijn to monologue at me a little bit about what kinds of things to report to the board as a marketing leader. He's got an interesting perspective having sat at both sides of the table, and he gives some really interesting high level advice coupled with a tactical playbook for the three slides you should bring to every board meeting as a marketing leader, and the exact things that you should put on those slides in addition to a few questions that you should always be prepared with answers for.
Before we jump into this one, I want to give a quick shout out to something really cool that we've been working on. Stijn has been consolidating his years of experience as a marketer into a book that documents along the playbook that we use at Kalungi to help early stage startups build marketing functions that are set up for long-term success. And also, with the ability to capture quick wins. He shares a lot of his stories and learnings from his time leading global product marketing for Office at Microsoft, and as a CEO, multiple time board member, investor, marketing leader, all that good stuff. But what's most cool about it, I think, is that it's coupled with a real framework that you can take and use right away.
It's got stuff for companies that are just at the MVP stage. So if you're just getting to a minimum viable product, if you're moving from there to product market fit, or if you're already at product market fit and you need to kind of get to the next level and beyond. And it gives a lot of different strategies and tactics that you can use at each of those stages to get to the next level. Stijn is getting pretty close to releasing it. I think it's slated to launch in Q3 of this year, but we'll be sending out early access content to people starting soon.
If you're interested in learning more about it and getting entered to win your own free hard copy, head to T2D3.pro. It's the letter T, the number two, the letter D as in dog, and the number three, dot pro. If you mention this podcast in the referral field, we will hook you up with two entries into the book giveaway. You'll also get one for every person that you refer into the early access sign up if they write your name in. So the more you share, the more you can win. All right, cool. Let's jump in.
This is one where it's interesting because I've not actually presented a board report before. Now, I've been on more, the boots on the ground kind of role from a marketing perspective, and I've often prepared things for CEOs to present to a board, but I've not been on the other side. And it's interesting because I think you have the perspective from both sides. You're a board member, you've been a CEO, you're a CMO, and so I'm really curious to hear how the things that you look for from the perspective of a board member and what you're looking to show as a chief marketing officer when you report up.
Yeah. Like with all topics, Mike, in marketing, the first question you ask yourself is who's it for, right? Who is my audience? And a board is a very interesting audience because it... I don't think there's a single answer to that question. A board often uses multiple people in different roles. One is of course, the role of shareholders. So some of your board members are investors who are looking for a return, and they're mostly looking in the board meeting dynamic to get an answer to the question, “how is my investment doing?” right? And “Is what I invested in still performing towards the investment thesis I had?” And of course then the marketing leader has to use the board materials to communicate that or to help the CEO communicate the answer to that question.
Another role that a board has, is to provide strategic support for a company. To be a coach, a mentor for the CEO, and help the CEO with either advice or access to other resources, to their network, right? Board members might have a role in sort of giving a CEO introductions to talent, introductions to a banker, introductions to other investors, right. And when that is the role the board is playing, then the marketing leader has to support that again through the CEO by asking the right questions to the board so that the support that the board is eager to give or wants to give or can give if you ask them is actually helpful.
So if a marketing leader is, for example, contemplating a certain strategic change, right? To go after a new ideal customer profile or to enter a certain market, it is fantastic to ask the right questions to the board to get, maybe help with that market entry or to get help with a certain introduction. How do you use the board members to your advantage as a marketing leader? And there's a lot of things that you can use to answer the question, “Who's it for and what roles does a board play?”
But maybe we start just with those two, right? The board as an investor in the company who wants to see a return on that investment and the board as a set of resources, right. Who can help you as the marketing leader to achieve your goals. So I can jump into one of those. Does that make sense, Mike?
Yeah, that makes perfect sense.
So let's talk about the first one. If you're the investor, what I would typically look for as a board member is a relatively straight forward, ideally one slide answer to the question, “What are the outcomes of the marketing work, marketing investment, at what cost?” And there's two ways to measure impact or outcomes.
One is called the lagging indicators, things like revenue impact, funnel growth, new customers, or the second one, it's called leading indicators. The things that could lead to that revenue here, right? Marketing qualified leads and the growth of those marketing qualified leads, new sources of where those leads come from, channels that are producing those leads. A product launch or a product marketing campaign that's driving, maybe, success with a new audience or uptick with analyst conversations, Gartner writing about the product might be an outcome, right?
So you have the outcomes and then leading indicators like Gartner coverage or MQLs and lagging indicators like funnel impact revenue that comes out of those leads, conversion rates, et cetera. I love to see that as a board member in a time series. So a slide that shows how whichever of those metrics you pick, right, how that is doing over time. So a simple slide that shows MQLs, for example per month, or sales qualified leads or revenue impacted by marketing pipeline in a time series is a great board slide. Getting that right is not easy because you want it to be super simple.
You really only want to see, for example, one number per month, like MQLs would be a great example of that, that's clearly defined so that the board doesn't spend a lot of calories on interpreting the number and what does this actually mean and how do you measure it and what's the source of the data, et cetera. You want all that, of course, to be extremely clear.
And then you want to have the other side of that equation, at what cost that you produce these outcomes? What I love to see is a slide that has, let's stick with MQL as the indicator or the KPI that you've picked that shows, say 12 months of MQLs, maybe trailing 12 months. And then you see in the same chart, maybe you use a line for one and a bar chart for the other. You see what the cost of those MQLs is. Always make sure that it's apples to apples. So if you choose MQLs as your outcome metric, then also use cost per MQL as your cost metric. You could also use customer acquisition cost, CAC.
But then, make sure that the outcome that you project is also customer. So new customers, cost per customer. I think a very good board slide make sure that the nominator and the denominator are in sync, that it's apples to apples. So MQL, cost per MQL, new customers cost per customer, that the data is put in some kind of a time series. The worst slides I see in board meetings are slides that don't provide any context. An MQL number without a comparison to, for example, last month or last quarter. And then of course, when you have apples and oranges, that's also very bad on a board slide. Where you have, for example, MQLs but then of course per customer, for example, because there's no correlation or there might be correlation but it will take too much brain power to get that clear.
And in the scenario where you don't have a ton of historical data to work with and you're kind of just starting to get things spun up, let's say you only have three months where that comparison between MQLs this month versus last month might not be maybe as meaningful when you're still getting some programs spun up. In that scenario, would you present that number and then maybe kind of shift the narrative towards the leading indicators and progress against those things? What would you recommend in that scenario?
Well, the first question you then ask yourself is, should you have marketing as a topic for the board meeting? The worst thing you can also do in a board meeting is show up with data that's not actionable, not relevant, not complete, not accurate.
I think it's totally fine for a marketing leader, if they're relatively new in the role to say, "Hey, Miss or Mr. CEO, not ready!" Because what you don't want to do... Marketing typically should take 10 to 15 minutes on a board meeting at most, right? It's a relatively tactical topic. It's very important, but it should not lead to a huge discussion on missing data or interpretation of data. So unless you can create those slides that are just clean and clear, then it might not be a good time yet to talk about those numbers. That doesn’t mean marketing cannot be a board topic, but in that case, it should take a different angle.
If you don't have any data, then maybe it's time to talk about why you're investing in marketing, and what does that strategy look like? You talk maybe about some market strategy choices, what markets to focus on, what is your ideal customer profile? If you feel that is a good use of the board's time. And answering that question is easiest done by understanding what is it that you can get from the board. Does the board have certain expertise that can help you at a strategic level with some of those strategic choices, and that might be a good use of the board's time. Or if you have things that you want to share with them that are about that first question, right? “What's happening with my investment?”
If, for example, the marketing leader is really new and makes a ton of choices at this time or decisions around team investments, what roles to hire on the team, what may be investments to make in certain marketing tactics. If that is relevant for the board members as investors, then that might be worth spending five or 10 minutes on. And in that case, you were not ready to show that slide that shows MQL progress, et cetera, but you're more sharing some of the strategic foundational choices you're making and decisions you're making to keep them up to date on that.
So that would be a typical, I guess, first board meeting where marketing is on the agenda the first time. And then in the next board meeting every quarter, you're more ready to show progress with that update slide that we discussed with some data.
Cool. Yeah, that's really helpful. And so aside from things like MQLs and kind of progress against, I guess your true north metric, if you want to call it that whatever your OKRs are, what are some of the other kind of big ticket KPIs and metrics that you should be thinking about?
There's three slides that I usually want to have for the first part of the board materials. Remember, one was educating the board on where you are with their investment and the other one was asking for help. I'm still with that. How do you educate them on the investment? So I use three slides for that. One is the slide that I just described, outcomes over cost of those outcomes, MQL over cost per MQL, customer acquisition over customer acquisition costs.
The second slide is what is driving those outcomes. If there's a double click on, for example, the MQL volume or the MQL progression, that gives you a good answer to the question, “What is driving this growth?” That's a fantastic slide. Again, be very careful to have apples and apples on that slide. If you for example, want to show the sources of your MQL growth, then having the channels broken out, organic paid or referrals, maybe outbound campaigns would be great. Just make sure that if you have multiple channels, that those are easy to compare and contrast. Are you using the same way to measure performance in those channels?
But if you can, then that's a fantastic slide, right? That shows both what you're doing with those channels, from an investment perspective, what is it costing you to drive, for example, paid search or buying leads to Capterra or investing in an analyst relationship. And then how that then is impacting that outcome that you described in the overall slide that you just started to give us the in first slide.
So slide number two, what's driving the outcomes by channel, maybe by tactic, by campaign. That's a great slide. Again, a time series is probably the best way to make sure that people can translate and connect the first slide with the second slide. Then the third slide I usually have is putting that in context of your overall plan, which is typically a 12 month plan.
You have your first slide being, this is where we are, and this is how our MQLs are performing. Slide number two is, where are these coming from? And slide number three would be your 12 months plan that shows both actuals, let’s say right now we're in may... We are in June, we just started June, five months into the year. What are the actuals? Well then QLs and maybe some other specific metrics, conversion rates, how many MQLs get to SQLs, maybe to opportunities to win.
So you have a spreadsheet that shows literally all those metrics for January, February, March, April, May in actuals. And then you show the rest of the year in your forecast, and it could start with your budget, start of the year and then during the year, you update that to change it into the forecast that you now believe you can hit for the rest of the year.
So that's, I think, the next slide, that's the third slide. How does the current state... How do you put that into context of your overall plan on how you're doing against that plan. That's where you have your more detailed discussion if you want to have it on how our conversion rate is doing. How is the cost of your marketing evolving and how do you see that happen in the rest of the years, is your budget still adequate, are you challenged there? Is your budget, maybe not enough to drive the outcomes?
In that slide where you have sort of your 12 month plan, I also really like to have the split between marketing and sales. The funnel is not purely driven by marketing. In most companies, sales drive at least a third of the funnel through the relationship that your sales executives have, the sources of leads to maybe partners. So in that slide, I usually show what part of the funnel was driven by the marketing, tactics and activities and what part of the funnel do we expect to be driven by customers coming through sales relationships or partnerships.
So those are the three slides, Mike. Outcomes over cost, where did those outcomes come from, what's driving those and how does that then fit into my 12 months plan?
From the perspective of a board member, what kind of questions would you want the marketer or the marketing leader to be prepared to have an answer to always?
That's a great question. As the marketer, you don't... I like to say, "Don't lead with your chin." Don't offer up all kinds of detailed discussions that are not really board level material that you also don't necessarily have great... They're not very valuable for you as a board member or as a marketing leader. But you know that certain questions could come up and it's good for you to have an answer ready. A good one, for example, that you almost have to be ready for I think is, "Hey, if we would give you so many extra dollars, what would you do with those?" I think as a marketing leader, you have to be ready for that question.
It's not really a fair question because I think when you start your year, you want to know what resources you have to work with and you build a plan around that. So for someone to suddenly say, "Oh, if we would give you more," it's not necessarily very helpful. It would be better for you to know that before the board meeting, but it comes up and then it's good for you to... It's kind of the way of asking, "Do you know what other opportunities are out there? Do you understand what's working well, where we could double down?" So I think that's a good question to be ready for.
Another one is to really be convicted about the ideal customer profile, the market that you're going after, the positioning that you're applying to do so. And as a marketing leader, if that is ever up for debate, if you think that your product market fit may not be exactly where you want it to be, or that there's a change or strategic discussion that we have changed to what part of the market you're really focused on. That is of course, an important topic to be prepared for.
And if you plan to bring this up yourself, as the marketing leader then make sure that you and the CEO are on the same page on that. But it could be something that the board brings up, right? The board typically comes with a desire to help, to add value and so they might come into the meeting with a new thought on a certain industry or a certain vertical to test out or to experiment with. And so for you as the marketing leader, to be very educated, up-to-date, convicted about what the ideal customer profile, the ideal market focus for the company is right now and where it maybe should move to in the future. I think that's very important.
Another great topic that I think a marketing leader or the CEO more, but of course the marketing leader will provide a lot of support here, should be ready for is questions around customer churn. Churn is, of course the most important metric for a healthy SaaS business, and the marketing team has a big part to play, right? Making sure that customers, when they sign up, they get onboarded correctly. We use nurturing for that. We use the right content for that, education. And then when customers are onboard and they become more active users of the product, driving what we like to call engaged advocates, people who not only use the product but like using it and then tell others about it. That's of course a very big job of marketing as well. Both have fantastic impact on churn if done well.
Both the onboarding which sometimes leads to actually good churn early in the lifecycle of a customer. If a customer is not a good fit for your product, you might as well find out during onboarding and make sure that you don't end up servicing a customer at maybe a high cost or with the potential of them becoming dissatisfied. So onboarding has a huge impact there, and then the ongoings of nurture and marketing to your existing customers.
So churn is a question that the CEO could get from the board, right? "Hey, how are we doing with churn, both good and bad churn?" And marketing has a big role to play there. Are we doing the right sort of content marketing to our existing customers? Do we understand how to follow up and nurture or try to get customers back who have churned in the past? Those are all part of the marketer's job.
Sure, yeah fair. cool. Any questions that a marketer should have for the board, go the other way?
Yeah. Board members have fantastic perspective often on the competition because they sometimes are even on boards of other companies who might use your competitor's products and they hear about that. So getting competitive insights through your board might be really useful. I also think it's important. It's another important topic to always be prepared for, board members, also, as investors will always compare you to the competition. They'll come to the board meeting with, "Hey, I saw XYZ do ABC, why are you not doing that?"
So I think that... but competition and competitive insights, I think doing research as a marketing leader, you do that with all kinds of tools and the board is one of those tools. As board members input into your competitive analysis, how you feel your position versus the competition if the board has any thoughts on that.
Another of course, an easy one is influencer marketing. When your board members... And make sure you know, as the marketing leader, look at their LinkedIn profile, understand what their relations are with other influencers in the space, can they help you with introductions? Can they help you understand if those influencers could be of any value for you? Can the board members themselves be part of your marketing formula? Are they influencers of certain communities that you can interview, you can help them get their brands elevated through maybe content that you can help them produce that can then of course have a halo effect on your marketing. I think those are important things to use the board for.
Make sure the board is bought into this strategy. You really don't want to end up in a board meeting, dynamic, where they are questioning everything you do and that starts with you making sure that you're very proactive towards the board to make them understand what your strategic choices are that you are making together with the CEO. And then the board sort of becomes your co-sponsor because they feel they were involved in those strategic choices. They want to really see you be successful as the marketing leader and then you're not ending up on the other side of a constant questioning of the strategy, but you become really the tool, the execution vehicle for the things that they have already signed off on strategically.
Yeah, I think that's probably every marketer's... Well, at least that would be my fear going into a session like that would be the fear of getting disapproval and kind of ending up in this tug of war where you're kind of having to justify every decision and...
Yeah. The other thing that's of course very important is know your numbers. Be extremely diligent before a board meeting to test the materials that you're sharing. Check the numbers, don't delegate. Well, delegate some of the work, but then verify it, right. Inspect every number, make sure your CEO and you are aligned on your story and how you interpret those numbers, what you think they mean. The worst thing that's going to happen in the board meeting is for the leadership team to be misaligned.
And of course, by the way, sometimes the marketing leader is in the meeting, presenting some of the materials and sometimes it's the CEO who presents the numbers, the marketing work, on behalf of the marketing leader. And then it's even important for you to be super aligned, maybe even do some kind of a rehearsal to make sure that your CEO understands the numbers and that they can present your work very well.
In the end, as a marketing leader, you want your team to follow you. You want the rest of your leadership team to see you as a credible leader of the marketing function, but you also want the board to be willing to follow your lead when it comes to the marketing strategy, through the big marketing decisions. So knowing your numbers, et cetera, is a good starting point to be credible and I think that's very, very important.
Also on that note, Mike, credibility starts with being very... to also be vulnerable, to be honest about the challenges. When you are in the venture capital space, when you're part of a startup that has gotten growth funding risk capital, by definition, not everything is going to be known. There are risks that you're taking, things will go wrong, assumptions will get proven to be the wrong assumptions and things will go a little different that's planned. And if you are the marketing leader, credibility also means you have to be honest about those challenges. Don't try to wing it.
When you're presenting in front of a board, you're presenting to very, very smart people. And the worst thing you can do as a marketing leader is trying to fool people. If things are not as they should be, times are tough and numbers don't look great, just be open about it and be transparent. Don't try to hide it. Come prepared, master the numbers and be extremely well prepared to answer the question, "What are you going to do about this, what are the actions that you're going to take? What are the insights that you're getting from these numbers, from this data?" But don't try to make it look better than it really is.
There's a little bit, of course, when you present to the board, the CEO can fall into this trap, the marketing leader, there's often a little bit of imposter syndrome. You feel maybe that you don't have the right to be there yet, you're still maybe not a senior, you're presenting to this very smart group of people who've invested in this company. And the worst thing you can do is try to wing it then, to look smarter than you are or to try to hide things. It just doesn't go over very well and it doesn't last very long either, right? If that happens, two board meetings in a row, you're probably gone. So it's not a formula for success either.
Mm-hmm (affirmative). That's fair. How many did it take you to feel comfortable reporting these things out to a board? Because I'm assuming some of it comes with just kind of understanding how heavy to lean in on some of these topics and when to back off and when to put things in an appendix and when to kind of bring them to the forefront. How long did it take you to feel comfortable with that?
I don't think you ever get really comfortable with it. Board meetings are never going to be easy. They become easier, but they're meant to be challenging, right? The board is the ultimate custodian of making sure that a fast growing software venture actually grows as fast as they can. The board's job is also to challenge, to constantly raise the bar, but doing it in a way, of course, that sets the company up for success. So if it's unreasonable, if it's not very productive then the board doesn't do their job, but they're definitely there to challenge you. So a board meeting is never going to become easy in that sense.
I think if you start getting into a groove of having high quality materials, be on top of your numbers, understand that you're not there to present some kind of theater or a rosy picture, but really to have helpful, insightful conversations with people who can be an amazing asset to what you do. People who have a lot of experience, who come with the right intentions. Their goals are completely aligned with yours because you both want the company to be successful, and they usually have very valuable insights to share.
Once you start getting into the groove of using that great tool to your advantage, I think that's when it becomes easier, Mike. But again, you have to come to a board meeting with the intention either to show real progress, because you've been able to do a certain amount of things in that three month period between two board meetings and you are there to basically be excited about your reporting on some of that progress, to share real insights. If things didn't go as planned and you learn something from that, that's extremely valuable and then that can lead to new ideas that you may want to share. If you need some input for that. But I think that's really how you prepare.
All right. And that is it for today's episode. In our next episode, we're going to be talking about the most important piece of content that you can have as a company and some of the tactical steps and ideas you can take to create it. It’s one of my favorite topics so definitely stay tuned for that one. And as always, if you're enjoying the podcast, we would be so grateful if you shared it with someone else or wrote us a review on whatever podcast platform you listen to us on.
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