The principles of growth are similar from company to company. 80% of the tools in a marketers toolbox will apply no matter the industry or company. However, it's optimising for the remaining 20% that Carter credits for accelerating revenue growth. Tweaking your marketing tactics depending on the nuance of your customers, is what makes the “magic” happen.
“If we’re selling to oil and gas companies, we're going to have a very different cadence than if we're selling to Shopify or E-commerce merchants.”
Carter defines “demand-planning” as building a bottom up model that gets you to your ARR targets. Knowing your average sale size and percentage close-rates establishes how many marketing qualified leads you need, which drives how many raw leads are needed to fuel that funnel.
Having a solid set of metrics to understand what’s happening in the business, avoids the common friction point between sales and marketing.
“It creates a really productive conversation between sales and marketing. Because it's now fact-based. It's no longer a lot of finger pointing where, you know, Marketing is saying, ‘Hey, we get all these leads to sales but they never take care of them.’ And Sales is of course, coming back and saying, ‘Yeah, all the leads you give me are junk. There's no good ones in there.’ So this removes some of that ego and personality from the discussion, and really focuses it on ‘Okay, what do we as, let's say we have a leader and sales leader of marketing, as managers, stewards of the business, what do we need to be doing to give ourselves the best chance for success?”
The purpose of the demand-planning exercise is to know what go-to-market teams need to be doing simultaneously to hit a certain level of growth trajectory.
There’s more pressure than ever on the go-to-market function to acquire demand cost-effectively. Without a tightly defined ideal customer profile (ICP), companies risk attracting the wrong buyers that will probably convert at a lower percentage. Developing vivid customer personas, enables marketers to optimally spend money on demand generation, improve unit economics and increase efficiency.
Carter references his ACH framework, which stands for Awareness, Consideration, and Hit-rate, for setting the foundation for scalability.
“As we are building our brand, how many of our ICPs and personas are aware that we exist? Do they know who we are? Do they know what we do? If they do that, and they're in a buying cycle? Will they consider us? Are we top of mind? And is our brand or service efficient enough to come to the top of mind when they know they've got a problem that we can solve? And then the final measure is, if we compete for their business, so if they're aware of us, and they consider us how many, how many of those deals do we win?”
One or two channels might work for the most early stage startups or in smaller markets like Australia and New Zealand, but capturing a customer across their buying lifecycle in large markets requires a portfolio of five to ten channels.
“I always try to look at the full lifecycle costs to acquire that customer. So, we're gonna have events as an example, where you might have a higher spend and our cost to acquire those might be slightly larger than, say, an email campaign or a webinar or something like that. But at the end of the day, in my mind, it's always about a portfolio approach. I have yet to see many businesses that can rely on one or two channels to generate their demand. It's always, you know, five or ten. And it's understanding, being able to understand, how cost effectively, are we acquiring demand by channel, to then make more prudent investment decisions?”
However, a scatter-gun approach to channels to market is not what Carter is promoting. While the numbers will never be perfect, scoring the performance of each channel allows you to identify any diminishing returns. Something that Carter says is rising with outbound prospecting.
“The reality is outbound right now, particularly in the US it is not producing at the levels that it used to. So as an example, I used to be able to have an SDR (sales development rep.) team that would book between 15 and 20 appointments, per SDR, per month. That is no longer the case. Now SDRs if they can get anywhere between 8 and 13 appointments a month that they're doing really well. So that channel has become significantly harder, almost 2x harder than it was historically.”
Carter cites email congestion as the cause, recommending a multi-touch alternative, using LinkedIn, video, calls, texts, and events to create awareness and attract prospects.
“Email channels are supersaturated. And I think you can probably relate to this as most of your listeners can. When you show up first thing in the morning, you open your email box, and there's probably 60, 80, or 100 emails in there. Well guess what, probably 50% of them, maybe more, are either things that are unsolicited, or are things that you might be interested in, but don't have the time to deal with right now. And so, this email oversaturation means that there's a lot of static in that channel. So it's very difficult to differentiate yourself to create some separation and to engage the prospect that way.”
Paying close attention to metrics empowers teams to drive ARR growth or respond to slow-downs. Understanding your unit economics allows you to know whether or not you can efficiently acquire customers or prospects. For early stage companies, managing cash flow is critical, so you need to know what effect your metrics are having on burn and runway. “Because if you don’t, you can find yourself out of business very quickly.” Essential metrics like cost to acquire (CAC) and lifetime value (LTV) evolve as the company grows.
“In early stages, you know, we would be looking for dramatic improvements as we learn to more efficiently go to market. In larger, later stage companies, we may see smaller, incremental change, but it's on a much larger audience. So it's equally impactful.”
For later stage companies, looking at profitability is key for planning for the future.
“In the larger companies, or later stage, I'm going to be looking at profitability, right? So are they you know, where are they on the profitability continuum? Are they still needing venture funds to continue their journey? Are they cash flow break-even? Or are they, in fact, profitable - because each of those has very different implications on the decisions that get made and the investments that are done based on where they are financially and their runway.”
Every single person we’ve interviewed on The Raise has said we need to keep abreast of what’s happening in AI. While Carter admits the space is in a hype cycle, he has seen phenomenal results, for example with AI assisted sales call coaching. “You can set a template for how you want a sales call or marketing call to flow. And you can put maybe a less tenured or less trained rep on there. The AI listens to the conversation, compares it to the template, and then suggests questions and next steps in real time for the rep. It's still in kind of an alpha-beta phase. But wow, talk about dramatically changing new, higher productivity, and improving our conversion rates. Technology like this is going to be just absolute game changers.”
Carter says that falling behind in AI means you’re likely to get passed by one of your competitors.
He uses Salesforce’s adoption of the cloud as an example of how quickly AI will infiltrate the SaaS sector.
“My guess is that Salesforce adoption for cloud software was probably a 10 year journey. I suspect that the AI journey is more like two to three years.”
Carter is wary of SaaS companies falling into the trap of claiming they have AI solutions but can’t back it up.
“If you put AI in your literature, or your website or whatever, you better be able to demonstrate it. And you better be able to talk about, you know, not only what you're doing today, but what that roadmap looks like. I was on a call with one of the companies I work with, who has just started to dip their toe in AI. And of course, they've got it on their website. And this prospect said, "Hey, great, I see that you're experimenting with AI, I want to have a deep discussion about exactly what you're doing and how you're doing it before I'm willing to invest.”
As they scale-up, founders and CEOs must preempt their go-to-market workforce needs. While Carter admits he is biassed, in the early stages, he recommends working with an agency or a fractional CMO, as they have a helicopter view of what’s working across the industry.
“Agencies represent a significantly deeper, richer set of experiences and track record than most individuals have. And so my experience has been, as we engage with companies, we're able to bring, as you mentioned, decades of experience into the situation. In the last four years, we've probably worked with 40 to 50 companies. So that's just exploded, the pattern recognition and our ability to deliver value to our clients.”
“You get a huge acceleration from a process and experience standpoint, and it's generally at a fraction of the cost than it would be to hire that person on a full time basis.”
Getting the most out of an agency relies on having a clearly defined objective. Most projects he works on will need adjusting after the first couple of weeks, once each side has learned each others’ inner workings.
Getting a fractional CMO onboard is a huge help during the scale-up phase when it comes to hiring your next team member.
“That coach, consultant, or fractional leader can also help you find your first full time leader in that function. Having somebody with that pattern recognition that spent their career in marketing or in sales helping you select your first leader can be invaluable, because again, they know the lingo, the terminology and what to look for, where first time founders, early stage companies may have less experience there.”
Read, watch and grow in under 5 minutes a fortnight.
A newsletter designed by Atlas Digital.
