Welcome to Marketing Demystified, the podcast that connects the dots for business leaders to drive revenue through effective marketing strategy. We chat with marketing experts on different topics that will help you ramp up your revenue. We stream live on LinkedIn, Twitter and YouTube and you can listen to us on your favorite podcast platforms. Marketing Demystified for the podcast is presented to you by GrowGutter, your partner in your growth marketing.
And here's today's episode. Hello everyone, are you ready to be inspired and formed and empowered with actionable tips to transform your marketing game? You are in the right place. Welcome to Marketing Demystified, I'm your host, Jim MacKenzie, CEO and co-founder of GrowGutter, your growth marketing partner.
Change, change, change, it is the only constant nowadays. It seems that way at least. But how can you navigate the need for change to keep thriving as a business? To discuss that topic, I'm joined by Megan Bowen, the CEO of Refine Labs, a progressive demand strategy and research firm focused on growth stage B2B SaaS companies.
Welcome to the show, Megan. Thanks for having me, Jen. I have a conversation today. Yeah, I'm really excited to have you on.
I've been following Refine Labs for a long time and you guys are doing some really great work. I'm just honored that you are on the show today to talk about your perspective on change and business. Yeah, and there's been so much change over the last couple of decades and even worse over the last five years. And that's something that we preach and talk about a lot at Refine Labs is how you need to be evolving and continuing to adapt your strategies to just the changing realities that we're all dealing with.
Absolutely. And why do you think, do you see companies struggling with change and why is that? Yes, I do. It's funny because Chris Walker and I have been talking about this concept of really evolving your marketing or your demand-gen strategy since 2019.
And a lot of people, we talk about this a lot on LinkedIn and a lot of other people have really embraced that messaging and talked about it a lot. What's fascinating though is I talked to seven to 10 marketing leaders at B2B SaaS companies per week. And even though a lot of people are talking about the changes that need to be made and people agree in theory, what's actually happening in reality at most B2B companies is they are still running and operating on the old school predictable revenue lead gen playbook that really is. And the early 2000s.
And despite the fact that people will acknowledge and agree that things have changed, their actual business strategies and tactics have not. And so there's still an immense opportunity for companies to take a hard look at what they're doing and create a roadmap and commit to making the changes that are needed to be successful in today's market. Yeah. I mean, what do you think it is that holds people back?
Like you said, it's not that the changes that are needed. People are like, I'm not really sure. What you're hearing is everyone's going, yes, this is what we need to be doing. The old way isn't working anymore.
We have to adapt. We have to change. Yet they're just not doing it. What do you think is that blocker that is happening there for people or businesses?
I think there's probably a few factors that are contributing to this. And so number one, and you know, before I teamed up with Chris to build refine labs, I, you know, had a 15 plus year career in different B2B SaaS companies. And so I know how difficult it is. And the reality is there is extreme pressure to grow and to grow quickly, especially for these VC funded or PE backed companies.
And because of that pressure inevitably, and I've seen it over and over and over again, it leads to people grasping at what they believe are short term tactics that will yield results. And leaning on the well known playbooks, kind of like that old cliche of nobody gets fired for hiring IBM. It's like, well, these are the marketing strategies that people have been using for years and years and years. So of course, I'm going to use those as they're sort of cloaked and presented as if they can drive immediately generation and those leads will immediately convert into sales opportunities and revenue.
So I think that pressure and the fact that these strategies and tactics have been used for so long and they're so widely accepted that a lot of people don't question question them, even if growth targets are being missed, by the way. So I think that's one big factor at play. I think the second thing is, you know, I have a lot of empathy for founders and executive teams at these companies. I think another factor is a lack of really understanding what the root cause issue is in their inability to grow their business at the rate that they would like.
And so a lot of people will identify whether it's a marketing strategy or sales strategy. That's why we're not growing when there could be other core fundamental issues in the business. And they're not acknowledging those and fixing those root cause problems. So no matter what tactics they implement, they're never going to going to actually solve for it.
And then the third thing is, I think people have been brought up in looking at business metrics by department. So let's look at the marketing team and the sales team. And what we've found is when you actually dig deeper and do a more granular analysis, take the marketing team, for example, and actually start to analyze your pipeline and revenue based on individual pipeline source. That's when it starts to really become apparent, which tactics are successful and which ones aren't.
And most companies either don't have the data infrastructure to collect that data to do the analysis or even if they are collecting the data, they don't know how to go about doing that analysis in a way that's going to derive really crucial insights for them to make important business decisions. I think there's probably even more to say there, but I would say those are some of the three patterns that I see over and over and over again in my conversations with different CMOs and marketing leaders at these types of companies. Yeah, absolutely. I think, I mean, working sort of backwards from what you were just talking about that, like not having the data to make the decisions is a huge, huge problem, because I see a lot of a lot of companies.
I just had this conversation with somebody yesterday like, company's doing really good, seemingly good marketing tactics, executing them very well. I mean, it looks good. It's very buttoned up, but there's no tracking or even just a definition of what success is going to look like for a particular campaign. And then there's no like, everything is getting measured on vibes, right?
This felt good. This felt like a good campaign. But when the infrastructure and the attribution modeling isn't there in place properly, there's no way to say what works better than something else and then actually like invest in the things that work more. So there is this sort of like, what always has worked is the thing that will do because it feels good and it feels comfortable.
And that lack of being able to measure it is what holds people back from experimenting and trying new things. Yeah, and I think also, or anchoring on measurement, that doesn't matter is another common one. So the classic example, and we try to simplify this concept in our own marketing at Refine Labs by sort of distinguishing between what we call the man-gen versus legion. And so, you know, we've done this analysis and this math on businesses.
So, you know, if marketing, for example, is, oh, you have to generate 1000 mqls this quarter and marketing says, great, I'm going to develop a really great piece of content. I'm going to promote it on LinkedIn. I'm going to gait it. I'm going to require people to provide me their name and email address to get this piece of content.
I'm going to spend a bunch of money on this trade show and build this booth and I'm going to scan a bunch of people and bam, 1000 mqls. But if you actually look at what happens with those mqls of really, really small percentage, I'm talking sub 1% of those mqls or those types of leads will actually convert to a sales opportunity with any reasonable timeframe. And that's because the people that are trading their email address for a piece of content, we're walking by your booth at a trade show and getting scanned, aren't necessarily the qualified prospects that are actually looking to buy your product right now. And so, you know, people will feel good, like, well, marketing hit their goal, it's sales fall that they didn't close enough revenue, but the huge disconnect there is those 1000 people weren't actually high intent qualified leads or buyers.
And so when you start to actually segment your pipeline sources by, you know, whether it's an event, whether it's a gated, you know, gated ebook, whether it's actually someone that goes to your website and completes your request a demo or talk to sales form, you're going to see dramatically different results with respect to conversion to opportunity, as well as, you know, total opportunity and total close one revenue from those sources. And it makes logical sense and what we see in every analysis is of course if people are coming to your website and raising their hand to talk to your sales team, those leads are going to close at a significantly higher percentage, much more quickly. That is a qualified buyer with high intent. And, and then the strategy that we recommend and what we sort of frame up as demand gen is really how are you actually educating your whole market.
So you drive more qualified buyers through that flow, right? How do we get more people coming to your website and raising their hand to talk to the sales team. That's what's going to dramatically impact pipeline and revenue figures, regardless of how many actual, you know, NQLs or leads we have. And so it's really anchoring on what measuring what actually matters and not vanity metrics that don't actually translate into a meaningful business outcome.
For sure, for sure. And I think too, along those same lines, like there is no, I think people really struggle with the fact that there's no universal definition of a qualified lead, right? It's different for every business and it's super, super important to define it for your business and make sure everybody is in agreement. Like if marketing thinks that that content exchange download, you know, for an email is a qualified lead and the rest of the business doesn't, there's a problem, there's a disconnect.
And it's okay if that is a qualified lead for your business that might be fine. Maybe it's low intent and maybe it's, you know, it's going to convert at a much lower rate. But if you know how many you need to push through, you just need more. You're going to convert it 1% or whatever.
If you're comfortable with that and everybody's in agreement, I think that's the problem is like, there's not that conversation about what is how do we define a qualified lead as a business. And do we all agree that this is what qualified means for us? Yeah, and I think the other piece that was also being, you know, putting yourself in your customers or your buyer's shoes and acknowledging that your outbound sales strategy needs to be different for someone that gives you an email address for a piece of content or walks by your booth. You shouldn't enroll them in some super aggressive sequence to try to get a demo immediately.
They might not even be in consideration or buy mode. And it's not to say that you should not reach out to them at all, but how about meet them where they're at? They're clearly in information gathering mode. So how do you engage with them in a way that acknowledges where they are in the process and provides value and information that's good for you and also good for them without really high pressure or super intrusive sales tactics that actually could really turn the buyer off and be like, even if I need that tool in the future, I don't even want to work with them.
This guy was harassing me, right? Alternatively, I see this time and time again where people will complete the request to demo form and three days goes by and then they get an email from an SDR that wants to qualify them before they can even go to an AE and you're dragging your feet. It's like, hey, someone literally came to you and said, hey, I might want to buy your product. We should be getting them in front of our best AE as soon as possible to maximize on that opportunity.
So it's also like thinking about not just what we're going to call it and how we're going to measure it. It's like, how are you actually tailoring your strategies to meet the buyer where they add it in the process to increase the likelihood of making them into a customer. And there's, you know, and a lot of that is sales. Some of that is marketing.
A lot of it also requires that both teams are working together to really define the total strategy that's going to work in the role that marketing and sales play in each one. But that's another common thing that I see pretty frequently. And it's just it's a massive opportunity for these companies to make relatively straightforward changes in the strategies that could have a meaningful impact on their performance. Yeah, absolutely.
I feel like people sometimes feel overwhelmed by the segmentation, right? Like, well, how do we automate all of this stuff? Right? Everything has to be automated and easy and just happen.
And so how do we create these segments? It's actually not that complicated to do it. But I think people are overwhelmed by the concept of it sometimes. Yeah, and I think the most simple strategies are often the most powerful, but I think, again, it's almost like our generation has been trained that for something to be smart and effective, it needs to be sophisticated and complicated.
And I think you made a great point on simplicity. I think simplicity and focus is underrated and always serves business as well if they are keeping those first principles top of mind. Yeah, for sure. For sure.
And so now we've been talking about demand, Jen, and you mentioned, you know, when talking about these sort of like these old tactics or tried and true, they're trusted. Everybody's been doing it all this way for a long time. And, you know, that's that sort of lead generation approach. Like, how do you define and differentiate between the two?
What's the difference between lead, Jen and demand, Jen? So the way that I view the distinction between the two, when you think about lead, Jen, the goal is how do I get like contact information to feed to the sales team for outbound sales cadences and outreach? And there's lots of ways to do that. We covered a couple earlier in this conversation, right?
You know, gated content downloads, event, you know, booth scans or event registration. There's lots of ways that you can collect contact information. And you can give those, you know, those leads who might be firmographically qualified or, you know, fit the profile of your ICP to your sales team to reach out. But what I tell people is like, what's the difference of just going into like a zoom info or an Apollo and filtering a list and just getting the names that way?
There's really not a huge difference between those two. And it's not to say that sales teams shouldn't be doing outbound. Of course they should, right? That's part of the mix.
And the thesis here is not that sales should only, you know, respond to inbound demands, but the lead gen is really about it's very transactional. It's like, how do we get this? The as many people as possible in our funnel. When I think about demand, Jen, the way I like to frame that up is this is a much more holistic strategy.
And there are a couple of pillars that underpin this. Number one is at any given time, probably only two to five percent of your total addressable market is actually looking to buy your product right now. Your whole market isn't like preoccupied with trying to buy your product, right? Like let's acknowledge that reality.
And then you have the rest of your market that, okay, they're not looking to buy today, but they might be in the future, maybe as soon as next week, next month, next quarter, next year. But how you market to those two categories of buyers is very different. So for the people that are in market today, that two to five percent that are in market, we want to capture that demand. We want to capture and convert that demand.
If they're actively looking for you, they might be on Google search. Absolutely. Let's have a paid search strategy so that we can capture that demand and bring it to us. And then we can review sites like G2 or Kaptera and kind of comparing solutions.
There are great strategies that you can leverage through that type of channel as well. And in many cases, a lot of that I would also classify as lead gen, right? This is like very transactional. Let's be smart about our digital marketing and for those that are out there on the internet looking for a solution like ours, let's make them aware of ours and do what we can to convert them into our sales pipeline.
But again, that's such a small percentage of your market. What about the rest? What about that 95 to 98 percent of your market? That's not actively looking for your product.
The way that you win today is that you begin to deploy a strategy to make them aware that you exist, aware of the problem you solve, aware of your solution, aware of your brand, aware of your differentiation from the competition, and knowing that you're playing the medium to long game in that arena, right? And how do you develop really great content, both from an organic and a paid perspective? How do you deploy that content in places where your audience is already spending their time so that you can achieve that goal of building that awareness with your target market? And the goal is, at any point in the future, when they do become ready to buy, they already know you exist.
They know you exist. They know your brand name. They know why you're different from the competition. Maybe they come straight to your website and fill out your request to demo form.
Or maybe they pass through Google by Googling your company name via branded search. And so that's really the key is having a marketing strategy that covers both of those categories of buyers. And what happens today is when you just focus on lead gen, you're just thinking about that first category, which is a much smaller percent and wanting to force everybody through that. Let me get as many people as possible and try to sell to them versus understanding the broader dynamics at play in the market.
And so that's how I like to think about and kind of distinguish between the two. And to be clear, a lot of this is nuanced, right? There are some businesses where lead gen tactics make a ton of sense. Your ACV is really low.
You have more of a transactional sale. It's a B2C product. Like those types of tactics can work. When you're talking about a mid-market or enterprise B2B software product that costs anywhere from $50,000 a year to $200,000 a year, where there's like five different people at the company that need to be part of the buying decision.
Those transactional strategies don't work. They're not just going to buy your product. There's this whole process you have to go through. So it's not saying that those old school tactics don't work in any use case.
That's not true. It's much more nuanced than that. But for the audience that we speak to and the customers that we work with, these mid-market and enterprise B2B SaaS companies, that's the overall approach they need to be taking to be successful. Yeah, I totally agree.
And I think it's really important what you said. And even that percentage of two to five percent, the lead gen tactics work for those two to five percent when they're ready. And finding them is the key. There's so many different ways to do that today, different technologies or just simple platforms like you mentioned.
But for the rest, it's being helpful and useful and positioning yourself so that when they are ready to buy, they know about you and they want to work with you, which is so important. And I hear a lot of people, founders or CEOs of businesses saying, I don't really have time to focus on the brand piece right now. I really need the short-term revenue. And you can't really get it without focusing on brand.
Right. There is so much wrapped up in making sure that you have your well positioned and your well differentiated. And just the way people buy today, they want to do research, they want to figure stuff out on their own. They're not going to come and talk to you on the first day that they discover your website.
They're not going to say, yeah, I want to have that demo. They want to play around a little bit. And if you don't have that available to them, they're going to skip over you and talk to somebody who does. Yeah.
An important thing I like to tell CEOs and business owners, and again, I empathize with this. I've been in this position too. I've tried these tactics and have learned firsthand that they don't work. It's like, obviously, you have short-term business goals that you need to meet, right?
Hopefully, you've done your part with respect to forecasting and goal setting so that you're not totally setting yourself up for failure. But what I tell people is the things that move the needle the most in the short-term is actually current customer retention and expansion and outbound sales. Like, those are going to be the tactics that impact your revenue in the short-term. Now, if you want marketing to support that, there's opportunities there.
You can have an entire customer marketing program that's focused on cross-sell, upsell, expansion, product adoption to improve retention. If you have an active pipeline of prospects, you can engage in a pipeline marketing campaign to deploy messages on social media to people that are already talking to your sales team to help them move through the process and say, yes, right? A great tactic there is to put really compelling case studies and user testimonials in front of people that are actively in consideration to help them get them over the finish line. So there are different marketing tactics that can be used to support that, but just from a business perspective, those are your levers for short-term growth.
Now, for medium and long-term growth, that's where marketing comes into play. I think it's also acknowledging that marketing is not magic. Sales is not magic. Customer retention is not magic, right?
But understanding how you can use your short-medium and long-term levers to deal with the reality that you're in. Yeah, for sure. And I think, too, I like to tell people those long-term strategies, not doing them, doesn't help you six months from now. Everybody's coming back in six months going, we should have started this already, right?
There are certain strategies and certain tactics that take a long time. So saying it's not really good time to do it right now. You're just going to come back in six months saying, we wish we had gotten started, now we're behind. So it's important to invest in both and sort of have that balance of how are we meeting our long-term goals at the same time.
Yep. And so tell me, how do you see, what role does this kind of evolution of demand generation play in adjusting to broader business change? What are some of the things that companies need to be thinking about holistically when making this shift? Yeah, I kind of go back to the core business and marketing fundamentals.
I tell people all the time, marketing can't fix a product that isn't good. Marketing can't fix a product that the market doesn't need or want. Marketing can't fix poor unit economics in your business model. And so I think people, especially, I would say, in the COVID boom of 2021, we had so many of these companies be founded and started and injected with cash.
I think without a lot of the critical thinking about like, are these companies actually set up to be successful businesses, right? Or were they just in the right place at the right time? They got a bunch of capital and now they're trying to brute force their way into growth when they might be building on a really shaky foundation. And so when things aren't working, you know, with a customer, for example, one of the first things I tried to examine, and it's not about deflecting accountability, but one of the first things I tried to examine is what's the overall business strategy?
What is the historical performance? What does growth look like compared to history? How has the market changed from when the company got started? Does the market actually need this product?
People skip over these steps and just immediately jump to our sales team isn't doing good enough, our marketing team isn't doing good enough. And I really think CEOs and executive teams need to take a really hard look at that stuff. I think the second piece is when people are ready to make this start, maybe there's a marketing leader out there who knows that they need to make this change, but they need to convince their broader leadership team to get on board. The only way to do this successfully is by putting together a data backed business case.
The only way you're going to convince someone that isn't already bought into this way of thinking is to show them financials data analysis that proves that what is happening today is not effective and shows a roadmap of how we can adjust and adopt strategies to drive better and more effective results. Yeah, that's such a great tip. I think anytime you kind of show up with evidence, it's much easier to get everybody on board to say this is what this is the current state of affairs and this is where we want to get to and how we're going to get to. One other thing that's sort of popping in my mind as we're talking about this is maybe the flip side of change.
There's a lot of fundamental change that needs to happen with a lot of the way businesses are approaching marketing and demand and bringing on new business. But what about the balance of not too much change, committing to change, but not being sort of all over the place. I've seen this happen a lot. You develop OKRs at the beginning of the quarter and by the end of the quarter, they're not even relevant anymore because everybody's gone in a different direction.
Where's the balance of change, but not too much? Yeah, we have this sort of like three phased approach that we like to take with our clients, especially if you have a larger organization, you just have too much like organizational entropy happening to like move that quickly, right? So step one is always face reality, face and embrace reality. So this is doing that analysis that we've talked about putting the business case together, getting the buy in from everyone of like what's broken and where we need to, you know, what direction we need to shift to.
So that's really phase one. If you don't have everybody bought in, you're going to run into obstacles along the way. This part can take a while to not only go through the analysis and the business case preparation, but actually really validate that everybody agrees and is on the same page with a new strategy direction. Phase two, then, is how do we identify, you know, one, two or three biggest changes that we want to make that we think are going to have the biggest impact.
And let's focus on only implementing those and leave everything else as it is. That might take two quarters, three quarters a year, right? As you shift your digital marketing strategy or you shift your sales strategy. So commit to one to three initiatives and take as long as it takes to see that change through successfully.
Once you've done that and you're beginning to see that repeatable pipeline growth, that predictable pipeline and revenue that every executive team and business owner wants to see. And you have successfully completed sort of phase one of the change. That's when you can begin the next phase, right? And say, okay, great.
We were successful in that. Let's identify the next couple of initiatives that are going to continue to move the needle and let's get those implemented to begin stacking growth. And so that's the overall approach to take. You know, and I work with customers where they might have a huge SDR team and they're feeding them 2000 MQLs a month.
And well, they need something to do. So it's like, okay, let's keep certain Legion campaigns going for a while while we launch new demand, and over time start to shift, you know, gradually. And then you can also say, great, you have these really talented team members. Let's identify another set of activities that they can own and begin to train them up on that, for example, posting content on LinkedIn, social selling, you know, tactics and strategies.
So that we're still keeping that person busy full time while we're also making this shift, right? I get it. You can't make these changes overnight. And every organization is different, right?
So that roadmap is going to be custom for every company. But overall, that's a good way to think about it. Yeah, I love that. I think that the thing that's interesting about everything you're saying is none of this is like, this is what marketing has to do, or this is what sales has to do.
This is all very cross-functional, which is probably the recipe for success, but also not that easy all the time, right? Getting everybody sort of rowing in the same direction, especially if you are a lot of times the move from that sort of old way of doing things is that you've got very siloed teams or you're looking for product marketing to solve a product problem, like you said or something like that. So getting everybody, like you said, that buy-in takes a long time. And I think that cross-functional alignment also takes a long time in some cases.
And that's really important because I don't think a really fundamental change like what you're talking about is possible if people are kind of in working in different directions. Yep, I agree. Yeah. Well, I just can't thank you enough for coming on today and talking about all this.
I think it's such an important topic. And like you said, everybody sort of like is in agreement. Yes, this is the direction we need to go. But I appreciate you giving some sort of tangible steps of how people can start to make these changes in their own businesses and focus on demand.
So thank you for taking the time to spend with us today. Thanks for having me down. I enjoy the conversation. Absolutely.