How do I move my software product upmarket? You need to understand the differences between your current customer base and the one you want to have.
BSMS 40 - When do you need a truly strategic marketing leader?
Welcome to episode 40 of B2B SaaS Marketing Snacks. My name is Mike and I lead product development and product marketing here at Kung. And as always, I'm joined by Stijn Hendrikse, who used to lead global SMB marketing for Microsoft and has since been a part of 30 plus startups, including Acumatica, Mighty Call, and he's founded Amy and is the co-founder of Kalungi. Today we're talking about what to look for in a marketing leader in terms of their strategic contributions. This topic was inspired by a question that we got from a T2D3 community member and the question asked when it made sense to bring on a strategic marketing resource who can help develop a true go-to-market versus bringing on specialist tacticians who will help you build the foundation but usually don't have the same level of executive experience to see the bigger picture and into the long-term.
And so in this episode, we talk about a simple framework that you can use to understand what you should expect from your marketing leader at different company stages. And then we talk about some really specific interview questions that you can use to identify and figure out who those people are and if they know the right things that your company needs depending on your company stage. So as always, if you find this useful, we'd love for you to share it with someone else that you think might also be interested. And we of course love feedback, so feel free to reach out with any questions directly to us if you have thoughts or topic suggestions. And thanks for choosing to spend your time with us. Let's get into it.
So the next question that we have that I wanted to talk about was, it came from a user on the T2D3 Office Hours voting app, and this one is about what they should look for in a new marketing leader. So to give a little bit more context, the question is when should you bring marketing resources in-house as you scale and at what level of seniority? SaaS marketers seem primarily to be growth drivers like acquisition, retention, brand content and social, etc. But irrespective of what you actually call the role, when do you bring on the strategic marketing resource who helps you develop a true go-to-market? So that's where we start.
This is probably the single most important reason why it's so hard to bring on marketing for an early-stage SaaS company because early on, even when you're not even at MVP or when you're just getting to MVP, you're making a lot of very strategic decisions, right? You're answering questions like, who's it for? What is my ideal customer profile? Not necessarily based on the customers that you are now servicing, which is more of a product market fit question, but who am I trying to help? What is my ideal customer profile focus? Who am I solving this problem for? And then that's the second very strategic question. What is the problem you're solving? What's it for? And answering those. And that's really a positioning question, right? How are you solving a problem in a way that's unique, special, that nobody else can or will?
So those two questions: Who's it for? What's it for? Your ICP question, your positioning question are very hard to do by anyone other than the actual founder. So if they have some marketing d n a or they can really get strategic around what is the go-to market strategy? What's it for, who's it for? Then maybe they play this role and you don't hire a marketing leader, but if you want to get some external help, either an advisor, someone who's maybe not full-time but helps you answer these questions or you want to hire someone full-time, maybe earlier in the life stage of your company, then that is a very strategic role. So you need someone who's actually done this before and who understands what the go-to market options are that you have, right? We talk about this in I think in another episode, how your go-to market strategy is usually one of three things where you either go to market by differentiating yourself, by really finding a part of an existing market where there is a group of customers that is under serviced in a certain industry or with a certain job to be done and you build a capability that helps them better than anybody else, and that's a differentiation strategy.
Or you found a category where there are existing solutions, but there are customers that are over serviced and now you are coming in with maybe a solution that's easier, simpler, cheaper to disrupt this category. And then finally, there's the strategy that is dominating a category which you don't necessarily choose to do early stage, but you want to, but it's more something that you can achieve over time. But those are very early-stage challenges that are hard to do for your young, new-to-the-job marketing leader who's right at that cusp of becoming a fantastic marketing team director, but may not be the one who you give the range to determine the positioning and the go-to market strategy of your company. So that's why I think why this challenge is so big that early on you need that person. Pretend when you get to product market fit or when you want to do the hard work to go from MVP to product market fit and hire someone to do that, that's a very technical role.
That's about interviewing every person who clicks on your trial and learning from them and testing a ton of things, whether it's ads or whether the content you produce or the nurture campaigns you run. We have this checklist, Mike, I think it's in our templates as well, like the checklists on how to get to product market fit. They call the 10 by 10 list: 10 things that you do to kind of 10 milestones that give you a sense of how are you on your journey to product-market-fit? And all of them have, first you get, let's get 10 unique visitors on your website, then let's get 10 of those people to actually click on your content to sign up to subscribe. Then once you've hit that milestone, now let's get 10 people to get a trial etc. - and we should share that link - but that is a very technical job.
You want a marketing leader who literally works her or his way down that list to check those boxes, writing up a couple of customer testimonials. So that's not necessarily the person who's your most strategic thinker. You almost don't want that because often, sometimes those things are hard to find combined. And then after product market fit and you maybe raise some more capital and you now have to grow beyond a couple million in ARR, and you need to get to what's called T2D3 growth. Now you go back to a very strategic challenge because T2D3 growth is all about doing 20 things in parallel, diversifying your dimension, growing your ARPU, ARPU expansion, getting your churn under control, improving retention rates, getting your LTV ratio to improve. And of course, those individual item also include technical items, but the marketing leader that you need there that oversees all of those things and hires the first product marketing manager and the first person who's going to do analyst and influencer marketing, and the first person who's going to be really optimizing your content marketing, that's a strategic leader who's able to hire that team and to hold people accountable across the variety of growth levers that you now have to instrument and to operate.
But that's I think why these three phases, the MVP, product-market-fit, and more T2D3 growth stages require first a very strategic marketing leader, then more tactical, and then again, someone who can really level up the function to a more strategic level again.
Yeah, and so I think one of the challenges for a lot of founders, I've experienced this with some of my clients, is that if they don't come from that marketing background. They don't necessarily know exactly what to look for in that first strategic hire or the more tactical hire after PMF or the more strategic hire further along down the line. So I think, do you have any insights into questions you can ask or things to look for to help founders actually identify the right people for each of those sets? I think when you're interviewing somebody, it's very easy to, I think, come off like you understand strategic marketing, but when you get down to it, does this person actually, are they thinking about all the things that they need to for the stage that your company is in?
Yeah, we could come up with a couple of questions that are good litmus tests. So let's start with the first one, right? You need someone who's a strategic thinker who can really answer why is this the right ideal customer profile, right? Who's it for and what's it for? What's our positioning? A question that is something asked that's super simple, but it's actually pretty deep when you take the time to let someone explain and ask why a couple of times is why is our product or is your product priced the way? And then you ask why a couple of times, and it immediately allows someone to explain things around, do they understand go-to market trade-offs, pricing that's more market-based versus the competition versus value-based. Optimizing your opportunity to do a revenue expansion over time. Do they understand how to look at that market, the category that you're going in and who are the other players, the value of your solution?
Price is also an instrument to communicate that value, right? So you're leaning into positioning a little bit because price, it's such a multidimensional topic. So if you just want to ask one question, you can ask, Hey, why is X product priced like Y? And take me through how you either got to that or what you would do about it if you would be in charge. So that would be an interesting question maybe to see if someone has the strategic chops for an early-stage company. And then there's the typical more, "Hey, how do you think we should position ourselves? It makes us special," etc., all the questions that are more about going right at what is it for or the questions about who's it for, what is the job to be done, and why is that valuable. And almost walk down the how ladder and up the why ladder a little bit.
I think we talk about [the why-how ladder] in another episode as well where you ask someone to explain what problem you're solving and why that is valuable. It's very easy to walk down the how ladder by asking a couple of follow-ups say, "Hey, how does our company do that, that makes it special?" Or climbing up the Y ladder asking, "Hey, and why is this so relevant for our ideal customer prospect? Why is this meaningful? What does it do for them? What's the outcome? What can they do with our solution that they couldn't do before?" So those would be a couple of questions for assessing the strategic capability of someone who would be your early-stage marketing leader, whether that's a real CMO or a founder or a CTO who wears that hat as well, or an advisor.
And then the last customer, maybe still for that person would be more about the go-to market realities given your ACV, right? You basically say, okay, you have had this price discussion and out of that will come some kind of an ARPU, ACV indication, right? You're selling your solution or you plan a sell your solution for whatever, 10,000 per year or 100,000 per year. So you have kind of a sense of what the economic value of a typical customer will be, assuming a certain lifetime value, etc. Now, a nice follow up is, okay, what is our go-to-market strategy that we can afford based on that ACV, right? Are we going to buy our way into the market, buying clicks or are we going to have to really disrupt the market by buying share with special ways and then turn that volume somehow into value? Are we going to differentiate ourselves and have a premium price model? Okay, that's the first person.
Now, let's say you're hiring someone to get you to product-market-fit, who's going to be the execution force that you need to really get 10 visitors, 10 subscribers, 10 trial signups, 10 paying customers, 10 paying customers who tell someone else 10 customer case studies, that's our list. So I would ask someone like that, "Hey, what's on your marketing dashboard?" And most marketing KPIs or OKRs or whatever instruments you use to define through your dashboard have both what's called leading indicators and legging and things that are helpful to measure on a daily or weekly basis or at least look at and things that are more meaningful at a monthly or quarterly cadence. So I would ask, "Hey, what's on your dashboard?" And, "Tell me a little bit about things you'd look at every day or every week and the things that you look at more from a planning perspective."
Yeah, go ahead, Mike.
...can I take that one step further? Because, so that's kind of my sweet spot for my clients. I've helped hire a couple of marketing leaders who are, the go-to-market strategy has been set, we kind of know that direction now, we just need somebody to go make it actually happen and go build the team internally. And so that's one of my favorite questions to ask, and I ask it in every single interview except I twist it a little bit. And my adjustment is this, instead of just asking what's on their dashboard, I say, "If you have a dashboard and you can only have five reports on it, what are those reports?" And then I kind of just sit back and let them actually explain. And I think that their answer to this question is probably the most telling about how they operate as a marketer and as a marketing leader, how strategic or tactical they are.
It tells you what they care about and if they can actually back metrics out of desired results. And you can tell a lot about their working style. Are they intuitive and kind of big picture or do they think about in the weedy kind of things? So are they asking about, when I ask the question, do they then ask questions back to me about what the tech stack is or what the limitations are? Or how deep can I go on the reporting? Can I break it down by sources? Those kinds of things. Or if someone just gives rattle something off that tells me a little bit about how they think. Do they ask questions about the company's goals before actually saying, "Okay, here's the dashboards that I'm going to build based on those things." Are they balancing dashboards across different disciplines or focusing on certain areas? Are they covering the top, the middle, and the bottom of the funnel? Are they thinking about things like customer satisfaction or looking at marketing through the lens of other departments? Are they looking at sales like conversion rates down the funnel after an opportunity, or are they just looking at primarily top-of-funnel website sessions, organic traffic, things like that?
And do they look at percentages or absolute numbers?
There you go. Yeah. And how do they measure? Do they start on Monday or do they start the week on Sunday? Yeah, absolutely. I think that one for me gives me a lot of information about where their strengths are. They tend to answer what they feel comfortable with, and you can get a good sense of if their priority is content marketing or demand gen, or if they have a good balance of those things. So that's my favorite question to ask. And then there's a few other ones that I think are good, but I'm curious to hear what you were going to say. I kind of interrupted you. Sorry.
No, no, it's great. And there're leading indicators, lagging indicators, but then there are also inputs and outputs, and I love to hear people talk about leading indicators and outputs. I'm not that interested in inputs, and I'm not also that interested in lagging indicators. And lemme talk a little bit about what that means. A leading indicator is something like, "Hey, I have to do a certain amount of work, certain amount of activity to get this thing going." If you want to drive content marketing outcomes, you can look at an MQL counter on a dashboard till you're gray, but if you're not publishing content, that thing is not going to move. So especially early-stage companies, someone who understands that, especially now that SEO is so hard to game, the Google algorithm is just so smart that SEO really is about, at this stage of a company, it's about publishing a lot of really good content.
Knowing who's it for, what's it for, and writing about it and writing about questions that nobody else has given great answers to on the web. And because you know your niche so well, you write really good content about it, what your audience is asking, and you are the best to answer those questions. And so that will be a leading indicator, like a certain amount of content published, et cetera. I'm not against having that on a dashboard, and I would challenge anybody who said, no, you have to measure MQLs, etc. That yeah, of course, that's the outcome that you also want to understand. But unless you start measuring some of these inputs that are really leading indicators, so not any input, what for me is not a good input is 12 spreadsheets with hundreds of keywords analyzed on them in SEMrush and just a bunch of data that doesn't really drive people to actually go write content and publish it. That's an input that's not a great input leading indicator for me, blogs published.
And then of course, the outcome, the output is an MQL, right? And another leading indicator would be the rankings in the search engine like search engine result pages rankings, and going up 10 positions or something, a great indicator for that will most likely lead to more traffic over time, and that could lead to more leads and that could lead to more MQLs, which you also want to measure on your dashboard. So when you ask a couple of questions about the dashboard and what goals, then of course you want to ask why are those important? What do those help you do? What do those things help you optimize? Are you using the information that you measure to take action to either gain insights or to make decisions?
It's one of those things because a whole bunch of things are on a dashboard that don't lead to either of those two outcomes, like either learning something new or making a decision to change something are not going to be that helpful. So why do you measure that, right? Then one other question that is my favorite for someone who has to take on this relatively technical marketing leadership role when you have to get to product market fit is: How do you talk to customers and why? And what do you turn that into, right? Every interview with a customer is a potential testimonial or a quote or a piece of content. Even if you're not allowed to talk about the individual customer example, you could turn it into content that is about the challenges they faced or the challenges that you solved for them. So how do you talk to customers and how do you use that to drive product market fit, to learn how your product is being perceived, and how they're getting value out of it?
Why is that important for them? There's this rich amount of fantastic marketing outcomes that start with talking with your customers. So your marketing leader in that middle stage, getting to product market fit has to understand how to do that, has to have you of course ask some of these questions in a STAR format: What's the situation you're in? What's the task at hand? How did you act? What was the result? You kind of want to get clear examples that someone has done that work, and then more building on it. So what is your content strategy? Because everything in this tactical phase, whether it's paid search ads that have to go to meaningful landing pages or going up in organic search rankings, doing good account-based marketing, it all starts with good content foundation. Either the content that is organically crawled or content that you use for nurture campaigns or for great landing pages, the website itself.
So getting people to talk a little bit about how they go about getting fantastic content lead magnets to support all the technical execution they will have to do to get to product market fit is another way for me to measure if someone is ready for this job. And if a lot of the answers lead to the more strategic questions like the positioning questions, etc., then I wonder if this person is comfortable just assuming that we have the foundation set, and that we just need to get the execution going versus going back to the drawing board.
And then you want to talk about the third. Now, back to the strategic level role. Say, yeah, you've reached product market fit, everybody's celebrating, you have thousands of customers who pay you and stay, you have testimonials on your website. The problem is you're still not at 10 million ARR. So someone came and they said, "Hey, here's some money. Here's a series A or a chunk of growth capital, and now let's get to T2D3 growth. Let's scale. Let's get to 20, 30, 40, 50 million ARR." And the reality now is that your marketing leader has to be comfortable with the multithread,ed multitasking charter that's now in front of her or him of expanding your demand gen channels to the channels that you haven't really optimized yet or that you haven't even explored yet. Because if all your growth so far came from paid search, for example, especially when your category gets mature, you will run out of clicks to buy, right?
There's only so much inventory. The organic competition will grow if a category matures. So to get to T2D3 growth, you have to expand your demand gen channels and diversify that, and that's one thing. Second thing, you need to start growing your ARPU by doing revenue expansion with your existing customers and helping sales sell bigger deal sizes to your new customers, which is all about sales enablement, great content marketing to help sales, but also real product marketing and pricing optimization. Maybe there are referral strategies, certain upsell cross-sell campaigns, a very different specific discipline of marketing that you may not have done before. You may have to hire someone, a real product marketer to go do this. The third part of the T2D3 formula is optimizing your funnel. You can drive demand diversification and get more leads, but now you also have to improve how fast those leads convert and how many of the conversion rates themselves, which is all about digital execution, optimization, and experimentation.
It's a different skillset. And then there's two more parts of what's called the ARR. It's sort of the T2D3 formula. One is optimizing the cost at which you do all this. So customer acquisition, cost optimization, maybe even starting to think about how do I get customers that are not too costly to service c T s? And then finally, churn reduction or retention optimization. How do you get customers to stay longer with you to not churn, which also has a great marketing component, whether it's how you onboard them, how fast customers see the value of the solution, how well they are serviced by our customer success team. So yeah, in the third stage, the questions I would ask for someone who's applying.
So in the third stage, the question I would ask for someone who's applying for the CMO or a marketing leadership role at that T2D3 growth stage is really finding out how many of the four or five things that you need to do to drive T2D3 growth have they actually done? How much experience do they have? What are the types of demands you've had success with, and how can they go beyond talking about a great Google search campaign or a great sponsorship they've done? I would want to hear four or five ways of driving demand from events to analyst relationships, all these other things that they have to be comfortable with to drive that diverse demand generation. I would ask them some specific questions about product marketing, pricing strategy, optimizing pricing, optimizing your positioning, the packaging of the product, how do you optimize for ARPU expansion? How do you support the sales team to get to the next level? What experience do you have with that, working with your sales leader to help them hire the hard-to-get talent and to keep those, to enable those? And then finally, how do you work with customer success to improve churn rates, to drive our expansion by doing upsell cross-sell with your customer success team? And I would ask them to give me some specific examples, how they focused on customer acquisition, cost reduction and optimization across all the channels and across running the marketing function, because those would be really the things that a marketing leader in the third phase in the T2D3 stage would need to do.
Awesome. That's a sweet overview. Okay, so I'm going to take it back to the beginning. So the question that was asked, I think comes from a place of uncertainty when you're looking for your first marketing leader, because there's all these different things. What we just talked about is there's this massive group of things that a marketing leader has to focus on, right? At the end of the day, I think you said this in the masterclass that you have on T2D3 becoming a SaaS CMO, right? There's seven things that you have to focus on. There's running the marketing function, there's building a team and managing resources, whether that's in-house or outsourced. There's managing the performance of those resources. There's having a plan, and then delivering on that plan, holding people accountable, not only within the marketing department, but also across the organization to make sure that people are doing the things that align with the go-to-market reporting on the progress dashboards, data synthesis, and then budgeting and making sure that what you're doing is actually getting ROI.
That's a lot of stuff, and I think what a lot of founders struggle with is this idea that they have to find somebody who fits all those groups. And especially in today's competitive market, I don't think that a lot of people are equipped to one, identify who those people are, and two, make sure that they would actually be a good fit for the organization. So I think it's also important to make this note that you don't necessarily need to find that unicorn. I think that there's a way to assess the skills that you have within the company right now. I wrote an article on the Kalungi website called The Five Skill Groups that every B2B SaaS marketing team needs to fill. That details out a lot of how you can think about filling skill groups in your marketing department, and you can kind of scale up or down on certain things depending on what the strengths of your CEO or your product lead or your customer success lead can have to help you do that, especially early on.
So we also have a lot of resources on the Kalungi site that go into some of the questions that we talked about right now, which are like, how do you get down to the core of figuring out if someone's a good fit for your marketing department or the leader of your marketing department? I just wanted to make that distinction because I think it's important to note that at the end of the day, the judgment call on whether or not someone's a good strategic fit for you is up to you, and they don't have to be able to do everything just the right things,
And they have to, the like same TV shows as you.
Helps to have somebody that you like catching up with it at the end of the day. For sure.
Yeah, no, I think it's a great summary, a great list, Mike. It's also, but confirms, of course, everything that we just talked about is someone who's willing to do what's needed, right? Because the one thing that all these three phases have in common is that you don't know exactly what's going to happen, and that's part of being in an early-stage company, right? There might be something that is not going as expected, and it requires the full attention of your marketing leader of you, so that core DNA of people who are flexible, okay, dealing with ambiguity, that's also really critical.