Hey everyone, welcome back. This is the expert series that I host every single month that's sponsored by Refine Labs, where we basically bring in either a CMO or other type of expert and get their perspective on a specific topic or set of topics in the hopes of just creating more education for people that are trying to become a CMO. Like Tom has a very accomplished multi-time CMO, someone that I respect a lot and has done some innovative, progressive things that recorded future and other ones that I think is interesting, something that we can learn a lot from. I'm going to spend the first several set of minutes just being curious and trying to extract all this insight and knowledge and experience from Tom.
And then after that, we'll have a period of questions. And so if you have specific questions around your situation or something that's going on in your company or something that we talked about that you want to understand better, feel free to drop those in the chat. Stephanie will queue them up and then we'll just do questions. If you want to come on camera, we find that it's just a lot more productive both for you and for everyone that's attending.
If you're on camera, so it can be more of a back and forth, follow up questions, get more specific. If for whatever reason you don't feel comfortable doing that, you can just drop it in the chat, note that you don't want to come on and then Stephanie will be able to read that off. And we'll still answer your questions. So thanks all for being here.
Let's get into it. Tom, maybe I gave you a little bit of an intro and said some things of would love from your perspective just to let everyone who you are, what you do before we get into it. Yeah, first, I have by far the worst background of anyone on this call. I'm sitting in a conference room.
This is a whiteboard behind me. I apologize in advance for lack of professionals, especially compared to Chris. Your studio looks spectacular. So thanks to the intro.
I'm Tom, I run marketing at a cybersecurity company called Recording Future. It's been an interesting week in the field of cybersecurity. I hope none of you got too hit hard by CrowdStrike last week. That was fascinating.
I've been here for just about five years, which is an eternity for a chief marketing officer, maybe another whole conversation. We are over 300 million in ARR. So we're a company at scale. I have a team of about 45 people.
I've been doing this for 15 years this or so. I'm not sure I'm an expert, but I've definitely learned lots of lessons the hard way and happy to share those lessons with you. Amazing. So I know you spent time talking to other CMOs at your level and networking and understanding what other people are doing.
So maybe just from your perspective, what do you think are the core trending hot topics in the world of middle market CMO? Yeah. So I think it took me a long time to get here, but I've become more convinced than ever that the go-to-market exercise needs to start with account selection and starting as small as possible. It doesn't make sense that the path of success is going from a universe of whatever number of 44,000 accounts.
Of course, we want to sell to anybody who can buy from us, but I talk to people at Snowflake and Databricks, maybe two of the most successful companies on the planet. Databricks targets about 3,000 accounts and Snowflake targets about 7,000 accounts. And these are enormous businesses. So I've become convinced that in the recorded future, we've got about 10,000 accounts now that we actively go after.
That was a big change for us this year. So I think that the smartest thing that we've done in the past, maybe since I've been here in the recorded future, is narrow our aperture so that we can align marketing, BDR sales, our partner organization, all on these same 10,000 accounts. And we try to align it so that at least 80% of our marketing budget, we can say when specifically these accounts. 80% of the variable marketing budget going to those 10,000 accounts and being able to say that confidently is an incredible thing, right?
If you go and spend money on Google ads, you can't actually say that in a Google ad. And by the way, a lot of the 20% is Google. Yeah, for sure. That is the challenge.
Yeah, but the fact that only 20% is on Google, I think is really interesting because you do not generally see that mix. And it's a message that we've been deploying in our consulting of like, when we invest dollars, we need to have confidence that it's going against an account that can actually buy from us. And you just don't get that luxury in Google unless you're, even if you are like a mirror or some high volume PLG, you still don't really have confidence that it's going to be an account that makes the CAC LTV equation makes sense. So interesting insight there.
I love the perspective on account selection. I know that union economics and pressure on cost of acquisition specifically on new logo, but across the board has been an issue for companies. Like what are you hearing the market about that? What's your perspective there?
To me, I think headcount is the biggest offender of CAC. I look at companies who are half the size of my company with twice the size of a marketing team and the math doesn't make sense to me. Like my team, certainly if they were on this and some of them maybe will complain that we'll probably be a little bit too understaffed, but I'd rather be on that side of the equation than on the, I'm 150 million ARR, I've got 97 marketers. I just don't think I could make that math work.
What I love about programs that can scale it up and down if something's working can very easily scale it up. If it isn't, I can very easily scale it down hard to do that with people. But I think marketing orgs have become bloated and I think that's a problem. We value ourselves on the size of the team, not on the output of the team.
Love that sentiment. I guess we'll follow on to that because there's a strong argument that smaller teams, move faster, are more aligned, actually get more done with significantly less resources. What's your perspective there? Yeah, I don't know because I've always purposely ran smaller teams.
But the hardest thing to do when you go up, when I started here, we were in the high teens, I think or so in people in our mid 40s, the hardest thing to fight against is that sort of stasis. We don't move as fast as we did when we were 90 million or 10 million or 4 million or whatever the number is. I think fighting that mentality as long as possible. I think there's this perception is you get bigger, you have to have more process, you have to work differently, you have to slow down.
I just don't agree with that. I will fight that as long as I'm in marketing. I just don't think that's true. Getting a little bit more detailed.
If you had to list out the three most important things, I don't like calling them bets because I think bets imply that there's a significant risk to it. But the investments that you deploy against key strategic initiatives in marketing, what are those top three right now? Yeah. So we're pretty bought into the notion of demand creation and that we're not in the direct response universe and that every time we go out there and try to sort of fish for demo requests or fish for direct response results, we spend wildly and effectively.
We've made a pretty big investment this year in separating tactics where some of our tactics, we have very little expectation that anyone's going to click on anything. But in doing so, we see our overall numbers go up. So if I look at just cost per opportunity, we've seen our cost per opportunity go down even though we're spending a ton more on marketing channels that we have no expectation are going to generate quote unquote leads as a result. And until we see that change, we're going to keep funneling money and demand creation.
So that's I think investment number one that works really well for us. Number two, and y'all are probably going to think I'm crazy on this one. I've fallen in love with direct mail. And I think this is, you know, my basic philosophy as a marketer is do things that no one else is doing.
So like we are all obsessed with email. People are fighting over the inbox, which gets a busily low open rate fractions of a percentage point open rate these days. I can send you direct mail and I'm almost certainly going to get it to you. Maybe you don't go to the office.
I'm still going to get to somebody at your organization. I'm going to get a better and we are getting a better open rate on direct mail than we get an email by far and it's cheap and we're not sending out gift cards to people. We'll send books. We'll send educational materials.
We'll send handwritten notes. But man, we're getting in front of exactly the right people through direct mail. So call me crazy, love direct mail, cheap, effective, and that sort of come out of nowhere. And then the third thing for us that's unique again back to the like, the two things that others aren't doing is we built out a news organization.
So we kind of look at Bloomberg as our comp. Bloomberg is a company that sells terminals to financial professionals, but most people know Bloomberg for Bloomberg news and we decided to kind of follow the Bloomberg model and build our own news organization. We're not a media company. We don't sell sponsorship or advertising, but we sort of feel like if we can own the news and be the trusted source for cyber security news, that that's going to have a good impact on our brand.
Like that's my big brand investment. It's probably those three things are directly, I was important as the first the other two, but those are three things that I'm thinking about. Yeah, I just want to double click on the demand creation point with having no tangible clicks or leads or conversions against that spend, but seeing improvements to higher order go to market metrics like cost per opportunity or customer acquisition costs or sales cycles or conversion rate from MQL to stage three up top level business metrics are the indicators that a demand creation strategy is working, not number of MQLs or number of demo requests. You noted that I just want to double click there because that is the number one reason why demand creation initiatives fail is because they use the same metrics they do in a lead gen model to evaluate whether demand creation is working.
Yeah, and I'll tell you the impressive thing is we've got our CFO to buy off on this. We have a every other week meeting with our CFO in my head of account based marketing and I and a few others on my team, we go into this meeting and we talk to demand creation story and we say we spent this much money in these channels and I can't show you you look at standard pipeline metrics, source influenced, it shows up as zero, but we go through the story of but actually cost per opportunity and the cost per metrics are trending in the right direction as we spend more CFOs like sounds great. Let's go. Let's put more in.
I think that's a really good piece of advice for all you want to be CMO. The most important relationship is the CRO. You want the sales team and marketing be aligned. I think the second most important relationship could be the CFO and I think people sleep on that.
Couldn't agree more. Talk us through the outside of that meeting, the working relationship with the CFO and then the practical skills that a marketer needs to be able to go in and have a successful relationship with the CFOs. I think that the idea that as a CMO you need to be able to understand a P and L and be able to look at a balance sheet and be able to calculate core metrics and finances looking at. I think some people do sleep on that type of thing.
They think I'm a marketer. I'm a creative. Yeah. Well, helps them.
I'm the least creative CMO in the planet probably. So maybe that helps. The path to our relationship with the CFO is come through our FP&A partners. So there are two people in finance that I work with who are responsible for the marketing P&L.
And I could argue they're part of the marketing team in some ways. We meet with them very frequently. They're the ones that help us think through budget allocation. They're the ones who help us go through the modeling process.
If we did this, how might our model change? They're the ones that will advocate for us behind the scenes to the CFO. And it's not always perfect to see if I might come back to us and say, hey, we did this huge RSA event. Doesn't look good on paper.
Should we think about something differently? That happens too. The key is the people in finance that are responsible for your P&L, they can help explain it to you. I've never done accounting before, but the partners of that team there can walk me through the P&L and the assumptions they make and then how those assumptions can change.
If we do cut CAC a little bit, if we do get our cost per op-down, how's that going to impact our 2025 planning? It's going to get us more budget, maybe more headcount. Yeah, I love that. I think the connection between go-to-market leaders and finances at this very moment, more important than ever and growing by the quarter.
Do BDRs or SDRs, that sort of outbound development team report into marketing or sales at your company? It has reported in marketing. We put it back into sales recently. I think their advantage is to both.
What we wanted to do is create a more clear path for BDRs to become sellers. I think that's maybe the downside of having BDRs be in marketing is maybe some of that sales DNA isn't as easy to cultivate, but it honestly doesn't matter. It's more which leader has the most time, the most expertise in managing that team. In the recorded future, we've got a great leader, that team.
We've got a couple of great leaders who could do a better job than I was able to do when I was running it. Yeah, I think it's super interesting because I think a lot of companies have been either considering or actually flip-flopping on this one. There's the core thing of like, oh, if we put SDRs in marketing, then the CMO can be fully accountable to pipeline. I do think that there is some type of rationale for that argument.
But then other companies have been flipping back and saying like with our SDRs or BDRs and marketing that most of those people are joining so they can become a sales rep, but then they're not even in the sales department. And they're not getting that like culture in the experience of working with reps and some of those other things. Yeah, honestly, it doesn't matter, but it does. Right?
To your point, when you hire somebody, they want to sales career and you're telling me you work in marketing, it's a bit of a bitter pill for them. But I still feel like I'm accountable for pipeline. Even though the team doesn't report to me, they sit literally 10 feet over there, right behind this wall I'm pointing at. So it's not like they don't feel like they're a part of the engine.
It's a line which we are, I could care less. I think there's a lot of companies out there, especially that sell to a technical or senior level audience like yourself have been questioning some of the traditional BDR model. So interested to hear. Yeah.
Yeah they are for sure. I think it comes down to ... I mean, first of all, we've yet to see what AI's really going to do. There's clearly going to be some impact there.
You've got a million vendors out there talking about the idea of an AI BDR. I got a demo from one of them yesterday. It's very clear something is going to happen there. It's not there yet today.
I can say that very confidently. But I think what's going to change. First of all, I hate predictable revenue. I know you and I rely on that one.
So I'm glad to see that model go away. But I think the teams are going to scale. It's not going to be this linear for every three reps. We hire one BDR and we're just going to hire hundreds of them.
I think that model is already over. And it's going to be about how do we use tools like AI to get more productivity out of smaller teams? Yeah, fascinating. There's a burning question here that I have.
I think a lot of people are going to appreciate. I see a lot on LinkedIn of the CMO that one year at this company and then all of a sudden now the CMO at another company, then 18 months later, the CMO. And just kind of hopping around for a period of time where it's difficult to make a really big impact as a CMO in that less than 24-month period of time. What are the secrets to be a long-tangured CMO at a company like this?
What are the things that you've learned that have allowed you to be a CMO for five years, which is incredibly rare? It actually is. Incredibly rare. And I find it even weirder because there are serial CMOs that literally just go from, and I don't want to like, you do you.
If you can make more money and jump around, I can't judge. But it does seem weird to me because you can't make an impact as a CMO in here. It's really hard to make an impact. You can come in first three months, you're getting to know the team, second three months, you're starting to put some things in place.
It's really hard to drive an impact in a short period of time. The only job I've been fired from is Subway. I was fired from Subway in Champaign, Illinois. I was a fighting line I grad.
I lasted two weeks there. I wasn't fast enough in the subway production. Like it would be lunchtime, and I couldn't make the subs fast enough. So they let me go.
That was tough. I haven't been let go since. I think it's a few things. I think it's about partnership, building relationships with sales is the most important thing you can do.
Fastest way to get fired is if the CRO doesn't like it. So I would obviously build a good relationship sales. I was in sales for the first half of my career. So I think I have a little bit of empathy there.
You have to have a good relationship with sales to have any shot of lasting. You have to have a good relationship with your other sort of C-suite peers to have any chance of lasting. And then I think you have to be respected by your team. I haven't had insane turnover in reporting future, thankfully.
I think we've been able to do some good things here. But I don't take that for granted. It's amazing to be able to be the same place for as long as I've been. But I don't think it would happen without a good sales relationship.
Like that's the key. Do you think that because you spent the beginning of your career in sales, that that allows you to do that part a lot more effectively? Yeah, I think it does. I mean, I've been the recipient of shitty marketing.
Like I've been the guy. I was a sales engineer. I was a quoted carrier for one quarter. My rep went on maternity leave.
They gave me the territory for one quarter. I hit my number, I did one deal, hit my number. And when I was asked, I want to be an AE full time, I said, absolutely not. Get me out of here.
This is where all sucks. Like I hated being in sales. I hated carrying a quota. So I was a good SE.
And I was recipping in a terrible marketing, terrible pitch decks, terrible messaging, terrible competitive intelligence. So it does help. Like I know, if I saw us deliver a pitch deck and I wouldn't deliver, it's probably a good sign. And I still have this day.
I think I earn a little bit of capital because I can say, look, hey, I've been here for a little bit. Not as long as a lot of you, but I've been there for a fair bit. Selling is hard, man. I hated being in sales.
End of the quarter having asked for the deal. I was great at 95% of the sales cycle. But like last day of the deal, my deal wasn't in. I had to beg to my champion to get the PO issue.
Like that part of sales is awful. No, thank you. Pro tip though, as someone that's trying to be a CMO, spending some time carrying the bag, whether that's an official role or somehow being able to get that experience in the marketing department, I think is a huge advantage when you think about the CROCMO relationship and being able to really empathize and understand with that side of the go-to-market. That's why I like the BDR career path.
Like I love people that have come through, we hire a bunch of BDRs in marketing because you have to learn how to sell to BDR. You learn through the grind. It's an incredible way to teach you sales skills. Whether you want to be an AE or not, I love that career path for marketers.
I want to spend a couple minutes on direct mail and then we have one or two more topics and then we're going to get into questions. So people that have been logging your questions or things like that, or maybe you're just arguing them up because we're going to get into that in a couple minutes here. Direct mail, okay. That was a curveball.
I've seen you talk about it on LinkedIn, so it wasn't a curveball for me. But for a listener, they could have seen, oh, I didn't expect that part. And you explain the rationale about going to get the open rates and things like that. But from an operational perspective, who is it marketing sending them out?
Is it BDRs going into their targets and doing that by themselves? Operationally, who's responsible for doing that and how does it work? We're like Oprah at this point. You get direct mail, you get direct mail, everyone gets direct mail.
So we empower BDRs to go direct. The thing I like about direct mail is it's super easy to scale. It's almost as easy to send 10 pieces as it is 1,000 pieces and there are very few marketing tactics that you can scale up as easily as you can scale up direct mail. So when we need to drive activity, it's a slow time of the year, like it's the summer and we need activity to drive up.
We can do a big direct mail campaign. And of course, it's incredibly targeted. What, you know, there are very few tactics that you can use that go only to the accounts you care about. And then we, of course, can segment.
We have OpenOps here. These are companies we're trying to renew here are early stage prospects, here are late stage prospects. So it's incredibly easy to segment. It's super easy to scale.
It's cheap. Direct mail costs $20 a send, some reasonably low number. It's hard to find another channel that gives you all those benefits. And we use it just for education.
So the other part of it too is what you send is as important as who you send it to. So we try to base our whole marketing strategy around making people smarter about brand intelligence, what we sell. So we've written a bunch of books on it, like actual books, not like marketing books, like real books. So we'll send out one of our books on ransomware, one of our books on front intelligence, one of our books on risk and compliance.
That seems to work really well. We get great feedback. And then how do you think about the like quote unquote personalization? You said it's easy to scale up from 10 pieces to 1000 pieces which makes me think that like, there's not a whole level of personalization going on here.
And I don't think that's a bad thing. Just to be clear, like I think people are over obsessed around personalization and it just gets infinitely more complex to scale something up when you have the one to one personalized everything. You mentioned about 10,000 accounts. I'm just curious how you think about that balance.
The BDRs can do one to one personalization because they're doing it at a smaller scale. But when our ABM team does something, there's probably four segments we look at like client, late stage, early stage, early stage, prospect. Those are the four segments. So BDRs know a little bit more about you.
So if they realize that you're an Illinois grad, they can send you some Illinois swag, but like marketing, it's those four segments. I wasn't going to go here, but now I have to. Because a lot of people are out there like you mentioned our ABM team does that, right? A lot of people are out there saying ABM is only if you're doing one to one marketing to your top platinum accounts.
Like I don't necessarily see it that way, but curious on your perspective, can you do one to few, one to many? Yeah, and it's called ABM. Yeah, we do one to few and one to many, we call both ABM for sure. So far, our many, it's 10,000 accounts.
Now I will tell you something I stole from Snowflake. This is a good one. I was on, I listened to a podcast with Gerhart and this woman, Hillary Carpeo of Snowflake. One of your podcasts is spectacular, but this episode, one of the best episodes I've ever heard, Hillary is like the Michael Jordan of ABM.
And she talked about this concept called Roomba accounts. You know, Roomba, the robot vacuum. You ever had a Roomba before and it's trying to vacuum your house and like one of your doors are closed. That stupid Roomba will just keep trying to bang into the door, right?
It never gives up, it keeps going. So she called these things Roomba accounts where there are a hundred accounts nominated by sales, not picked by marketing, but sales says these are the hundred accounts that no matter what marketing needs to get into. So we have this concept of Roomba accounts that report a future, there are a hundred of them, sales nominated them. These are our one to one accounts and we will spend unfair amounts of money at these accounts.
We'll build one to one landing pages for these accounts. We'll do different direct mail for these accounts. So our one to one is based on this Snowflake Roomba accounts strategy thing, but the rest of ABM is one to many. Like our 10,000 total accounts, we just break them down into those four buckets.
You heard it here, one to many targeting can still be ABM. It's been a hot topic. It's not one to infinite. Like where it breaks down is one to infinite.
That's not ABM. Yeah. That's marketing. Yes.
When you said like the Roomba accounts, it's basically account tiers. Account tiers. Yeah, tier one Roomba is a hundred accounts, unfair amounts of money invested on these super high LTV type of customers or strategics. Then you have a tier two, which might be 2,000 or 5,000.
Then you have your tier three, which is 10,000 total. And you can have a mix of things that are going to those different accounts. To me, that's what ABM really means. And if you think about it that way, then there's really no difference between demand and ABM.
There should be from my perspective. They're the same thing in my mind. It's the same thing. ABM just has added a new discipline around account tiering and targeting.
Oh, totally great. Nice. Didn't think we were getting there, but I love getting that point in there. Cool.
Last thing, you kind of alluded to it a little bit, but I know this is something that you feel strongly about. And coming from somebody that has actually done it for a really long period of time and the efficiency on your marketing spend and the growth of the company and different things like that are incredibly impressive. I know you attribute at least some of that to the news strategy. I hear a lot of people promoting this idea of building a media company.
You know, building media companies around maximizing impressions so that if you sell a media company sells advertising spots, therefore you make money when you have more impressions, whether that's a landing page impression or organic impression or something like that, that is just not the goal in B2B. We do not make money on impressions. We make money when B2B accounts that are worth a certain amount of money buy from our company. So we'd love just for you to add your perspective a little bit on the media company narrative and some of the places where maybe people should try to shift their perspective a little bit to get the outcome they want.
Yes. And my hypothesis was in cybersecurity, every F1, formerly F1 car sponsored by a cybersecurity company. Right. So when you get to a certain scale, if you're CrowdStrike or Splunk or pick one of your biggest companies, they all sponsor these F1 cars as a way of building brand awareness.
So I remember like hearing getting pitched by all of these, like we can do a Super Bowl ad, we can do an F1 car. And we said, well, what if instead we just built the best news organization to cover cybersecurity. There really weren't any out there that we thought were sort of dominant. So our way of building a relationship with the cybersecurity community instead of an F1 car that goes around a circle a few times a year or instead of a Super Bowl ad that gets shown one time, why do we build a news site?
And let's do it by actually hiring real reporters. We're not going to make this a content marketing thing. And I think most media companies fail because they just, it's rebranded content marketing. Let's hire somebody to write a listicle and they're going to set up publishing one time a month.
They're going to publish one time a week. That's not being a media company. So for us, it was a tiresome reporters and let's have them cover different beats of cybersecurity, breaches, geopolitical news, political like everything in between about what the cybersecurity audience cares about. And let's also let them report on whatever they want.
They reported in marketing, but they're not marketers. They're reporters. They have journalistic integrity. You can't tell them what to write about.
So they can write about anything that they think is interesting for their audience. And they have now built an engine that's getting essentially a million page views a month for recorded future news, which is the brand we've created for our news products. And then we use a newsletter as sort of the gateway between our news products and the products that recorded future sales. So we have a newsletter called Cyber Daily that gets you all the latest news of the day combined with some offers that you get that a recorded future offers, essentially webinars, events we're doing, free products we offer, et cetera.
And the only reason this has worked is because it's not a marketing thing. It's an audience thing. We don't try to monetize this directly in any way. We don't run ads on our site, although we could.
We could build an eight figure media business if we wanted to. The reality is all we're really trying to do is build a relationship with a cybersecurity audience. And news has been a great way for us to do that. Yeah, totally love that perspective.
Shift, like separating the idea between content marketing and like journalism news, I think is a huge insight. And so I'm sure that people will get deeper into the details because that's a hot topic. I mean, we as an example, we there is a story, we wrote a story about the Trump shooter, about how the FBI was breaking into their phone. We put a $300 promoted tweet behind it.
I guess, two loaded X, $300 on the story. It drove 11 million views, a quarter of a million page views back to recorded future site, and a whole bunch of newsletter subscribers off of $300. Really hard to get that kind of scale off of marketing content, off of news. The interaction with this one tweet was wild for $300.
I want to get to the questions they asked, but I got asked, how do you at a $300 million company, how do you execute on that speed, right? Like some companies, if we did this podcast today, it wouldn't get released until September. So how have you created that system where if something happened like that you're able to write it up, get it approved and whatever approval layers, get it out in a place where it's timely and relevant because timing really matters there and most companies just don't move at that speed. This is why it's awesome to hire journalists.
Like you hire real reporters, real reporters are used to trade out. This is where marketers don't get it. Marketers, we publish something once a week or once a month. These reporters put out five or six stories a day.
They're used to being on deadline. They're used to writing quickly. We do have an editor in chief who reviews things, but these things happen quickly. So for me, it's like just hire reporters.
Like reporters know how to move at a pace that marketers don't. They're experts at this. So the process for us is reporters publish articles. We look at what they publish and we think something's interesting.
We'll put a little bit of juice behind it. Couldn't recommend that strategy more, by the way, whether it's X or depending on the content medium, taking content that's already worked organically, whether it's from news or your content marketing and then amplifying it with a small amount of paid, especially because I don't know the exact dynamics on X, but I'm assuming based on its outcomes that the ad spend just got the stuff rolling. And then after that, it was a lot of organic granic impressions from there. Yeah, a few thousand likes, tens of thousands of retweets.
It's crazy. Yeah. Facebook ads used to work like that too, where the page just got the stuff moving and then you got organic impressions from there. Some other channels don't work like that.
But that's like the point earlier, like Facebook, so everyone moves to Facebook. Everyone left to Fx because Elon is Elon. I don't know. I mean, to me, we're having a little bit of success over there right now.
It's back to like, I think one of the cheat codes and marketing is when everyone goes over here, you go over here. I think that generally works. Such an interesting perspective. All right, everyone.
I bet you're dying to ask Tom some questions. And so we're going to transition over there. Stephanie, I'm sure you got some stuff queued up with who do we have first. Yeah, we've got a lot in here.
So we're going to start with David. Next up. Hi, Chris, Tom checks again for the reading site so far. It's been really good.
I've got a lot of the root bar accounts analogy. I'm a CMO, been in B to B for 14 years. My question is around reporting internally. I'm not sure if every day I'll just myself so want to get your thoughts.
So you mentioned earlier that you invested in channels that don't typically have an expectation of return in terms of leads and demos and you also support building relationships with CFOs and define that same. So with that in mind, I was just wondering what's your approach for reporting internally on marketing results and progress? You know, there's always so much going on in marketing. So many strategies, some of which I'll just might not fully understand.
Maybe skeptical on. So yeah, I was wondering what's worked best for you. Any words of wisdom there? Yeah, first of all, your hair is incredible.
My first observation. My second observation is so that's hard. You know, we use a bunch of different attribution models. We'll use first touch.
We'll use last touch. We'll use weighted. Then there's all sorts of deviations underneath there. It's hard.
It's like it's really, but we've got to a point now where the real audience that matters to me is the financial audience, the FB and A team and the CFO that ultimately sign off on all the big POs that I execute. So we've got them essentially trained to be comfortable enough with last touch and weighted attribution to be able to look at a specific channel. And we don't bring up. So we break out demand capture and demand generation, but we tell them look at these two things together because one does not exist without the other.
So when you look at digital as a channel, don't worry about LinkedIn versus AdWords because these are different things. LinkedIn is going to drive AdWords. People are going to search organically or there's the two things are going to work in conjunction. So we've essentially had to do it by getting the finance team comfortable with these different attribution models.
Can I just ask you sit down with your CFO once a month or did you share the same dashboard? Every other week. Like we are literally every other week at this point, head of demand, Jen, I and finance team sit down and look for because we wanted to make the business case. I think that will slow down a little bit.
But we were purposeful about when we invest starting to be in demand capture. It's going to look weird to spend all this money over here and not see direct response results coming back. Yeah, exactly right. Yeah.
And then just to piggyback on some of the things that Thomas said or maybe expand on it a little bit, I have had a hot take recently, which is that you should be able to determine whether or not your marketing is working in an acceptable rate for your company without ever looking at attribution or ever discussing attribution. You should be able to look at how much you spend, how much pipeline you're creating and do the unit economics make sense. And that becomes the fundamental decider of whether or not the marketing dollars are working before we ever go and look at attribution. I think it's a time mentioned cost per opportunity, cost per pipeline dollars, a different ratio that you can use, but either one is centering on if we're producing $15 in pipe for every dollar we spend on marketing, there's no way it can't be working.
Yeah. Yeah. If that's the case, then let the CMO continue to deploy the investments in the way until we start seeing trending down unit economics. I think that there's a much easier way to go about than I see most companies do, which is get really caught up in attribution to justify marketing dollars and start almost not ignore, but not prioritize the most important things like sales velocity, pipeline production, pipeline to spend ratio and things like that.
Yeah. Totally. Amazing. All right.
So we actually have a question about measurement and cost. So Melissa, if you want to come on to ask about that. Yeah, perfect. Thank you guys.
Very great discussion. So my question was actually on the cost for opportunity. So Tommy mentioned that the way you guys measure, kind of see if your demand creation efforts are successful or from measuring the cost per opportunity, I'm going down. So I'm curious, do you put all the marketing activities in one bucket?
So for example, the way you measure it is, do you combine trade shows with digital ads with YouTube and direct mail costs combined and then you cost measure cost per opportunity or do you have buckets? We break them out. Yeah. So we break them out.
So digital, when we look at digital specifically, I won't break out demand creation and demand capture. So I think those are the two things that work together. So I treat that as a unit and that you have its own metrics attached to it, but then direct mail has its own metrics attached to it. Events that we do have their own metrics attached to it.
Big trade shows like RSA have their own metrics attached to it. So I break it out, but I think in the digital world, I wouldn't break out demand, demand capture because I think the whole point there is those two things work together in a way that looking at them individually just doesn't tell the right story. And I think there's a significant value in at least at the CMO level and CFO level, taking all of the marketing expenses, blending them together and then just looking at the ROI of total marketing spend and total pipeline production and looking at the trend quarterly over three to six quarters. And you'll have a clear path about when we make changes to allocations, what is the impact of that over the next three to six months?
The reason that we change allocations is to improve ROI. And so I think there's value in breaking the investments down and looking at events and digital and even channels inside of digital. But I think as a North Star, all of it together becomes the, I think the number one thing that you report on from a marketing efficiency perspective. Yeah, yeah, yeah.
Totally. My objective is to find the breaking point. Every channel has a breaking point where you spend more and the results become flatter go down. I can tell you our trade show we've saturated spending more money on RSA for us isn't going to get us to the promised land.
We have not reached our breaking point in demand creation and demand capture. We keep spending more every quarter until we see the numbers go down. I love that. Any follow up?
I just say follow up on that. Our biggest challenge is that we're robotics company. Our sales cycles are from six months to a year. There's so many different touch points involved.
We go to small events. We go to massive trade shows. We invest a lot in LinkedIn ads. YouTube, there's so many different touch points.
And we know talking to people, they say, yeah, we've seen you at a trade show, we've seen your ads. So it's been really difficult to measure all of these and relate them to specific accounts. Do you have any ways of doing that other than asking people how you heard about it? I was encountering that data, which we do have to experience.
I mean, so we do have a weighted attribution view of the world where you can simply say if this account responded to 10 marketing campaigns and it was a $100,000 opportunity, we'll give each of those campaigns $10,000 credit. That's the simpler way of doing weighted attribution. So we do do a little bit of that. It's not been super valuable for us, unfortunately.
But what you're describing is the reality of the world. That is how people buy these days. I don't know a better answer than some of these weighted attribution models, but none of them are perfect to me. Thank you.
All right. We've got a lot of really tactical questions on direct mail. So I'm going to bring Duke on first to ask theirs. I already answered Duke's questions.
Oh, in the chat. Okay. No, go ahead. Let's go.
So what were the reasons why you chose to work with the reach desk as opposed to like a lab or even working directly with the print mail company? We've used other, I guess they're called sending platforms that the technical category. We'd use one other one. Well, not name reach decks.
We've had a great relationship with super self service, fast, reliable, simple, we can push it out to lots of people. This is a pretty crowded space. There are lots of vendors and lots of approach to the space. We've just had good success to reach desk.
That's one additional follow up. So you mentioned direct mail, I think is something that you're using more for the education side of it with your finance team and sales team. Obviously, that's going to take a lot longer time for people to get bought into. Okay, this might be something that I need and it may not be immediate.
Is that something that just within your team that's widely understood it? Did you have to provide them with that additional context of this won't be just immediate once we send off a direct mail? Here's what happens with direct mail. So we see a much better conversion rate from our BDR activities when they're happening to accounts and receive direct mail.
Like the simplest analogy is we will send a book to somebody. BDR will follow up with you a few days later. Hey, it looks like you've got the book. What do you think?
Do you want to learn more about ransomware? It's become a way for us just to honestly improve BDR productivity. So for the 20 or 30 dollars it takes for us to send a book that's making our BDRs much more productive. It's easy math to do.
So I think we tie it. Sending direct mail for direct mail sake is interesting. We tie it to BDR success metrics at least for our acquisition focused direct mail sends. There's an account that we that just honestly has blocked our emails or doesn't answer our phone calls.
We've seen direct mail be the only way we can get into some of these accounts. Love that. Thank you. All right.
And then Marie had another follow up there. Yes, hi Tom. And it is again around the direct mail and I'm working with markets that are really tough to get addressed. So I'm wondering what is your tips on tricks to get the addresses from those people or the consent to you know their address and then maybe also to keep this list up to date.
Yeah. So that still is the hard part. We do almost all of our sends to corporate HQ. Your next question is going to be about people work remote, which is very true.
So I will still argue that your success rate for direct mail will be higher than your email open rate. Even if a big chunk of the people you send to don't work in the office, what we'll do is we'll send to the office and then we'll say, hey, by the way, we sent something to your office. You might want to have one of your colleagues go take a look. That works pretty well.
But we also do, you know, these all the tools will give you ways for people to put their own personal address in if they want to. But if we do it direct mail send where we just want to put something on someone's desk, we're just going to send to the corporate HQ and we still think the results are better than email. Okay, go ahead. But it's not perfect.
It's not perfect. But it's low cost and the conversion rate with email being what it is right now, we still feel good about it. But you can ask for people if they wanted it home too. Like that's perfectly reasonable.
Thank you. Okay. And then one last direct mail question. Sarah wanted to know what the message that best drives engagement is.
So how do you focus your messaging for direct mail? Yeah, I'll tell you what not to do. So do not send gift cards. Like that is the dumbest thing.
Like let's bribe it all AirPods. Like I can't tell you how many offers of take a meeting with me and I'll give you AirPods. No, like if I really if I think you sell something that's interesting to me, it can help my company grow faster. I'm going to take that meeting AirPods or not.
Like that's where I think education works. Like there are other things. I got a bottle of wine in the mail there a day. I like wine that's cool.
I'll take that. But things that make me smarter will always work for me. So I like books work great for us. Educational materials work great for us.
Even handwritten thank you notes. I got a handwritten thank you note sent via direct mail. That gave me the show. So that was cool.
Thank you. Like I felt actually like I felt good about that. Anything with gift cards and AirPods. They don't bribe people for meetings.
No, that's the dumbest thing to do. Do not bribe. Earn the meeting. Don't bribe it.
If you have to bribe for a meeting, you should find a new company to work at. Like it's not working. I love it. All right.
So hitting back to your Roomba accounts, Sarah wants to know how do you address those? Do you remove them send them back to nurturing educational content? Roomba accounts never stop getting marketed to. They don't get removed.
At least not for a year. Like that's why the Roomba accounts. That's stupid Roomba keeps hitting the door every 30 seconds. Can't remove them.
They're nominated by sales leaders. They get a year's worth of marketing. We go after them aggressively. You can't stop won't stop and we'll revisit it at the end of the year.
But we are seeing incredibly good results with this, which kind of makes sense. Like it makes sense to put all your marketing against the accounts you want to sell. Good things are going to happen. And we've got we've got a dedicated one to one market on the team soon to be to who this is all they do.
All they wake up every day and think about are new ways to reach these hundred accounts. I love that. Right. That's all the questions we've got in the chat.
If anyone has any others or wants to come on live, go ahead and pop them in. Otherwise, we'll wrap up. It's about cutting close to the top of the hour too. I'm sure Tom's got some big things to do after this meeting.
So, Tom, thank you for investing the time and joining us. There were so many things that we learned, especially about the tenure of a CMO. I'll just recap a couple of things that resonated with me, the tenure of a CMO. The importance of the finance and marketing relationship right now.
Thinking about when everyone else is zigging, maybe you're supposed to zag and thinking about that as ways to evaluate opportunities. And then lastly, just when you make changes to your marketing allocations, making sure that you're centered on the right top level performance to go back to the executive team and tell a story about why these changes are making an impact that don't necessarily need to be tied directly to attribution. So, those are my key takeaways. Tom, really appreciate you.
You joining us? This is, I think, the third time that you have been on this podcast. I really appreciate one of the few people that have come back for a second or third time. So, appreciate you sharing all these insights.
Love it. Thanks for all the great questions. Cool, everyone. Well, thanks for being here.
We will be back again next month for another session and for the expert session. So, appreciate you being here and I hope you have a great rest of your week.