It sounds so basic it shouldn’t warrant comment. However, we’re constantly surprised at how often we find marketing teams working hard to achieve results that are at best misaligned with high-level company objectives and at worst, at odds with those objectives.
Strategic alignment is one of the key pillars we assess annually in our ‘Serious About SaaS’ Marketing Capability Survey. Given it’s early in the calendar year (and the beginning of a new planning cycle for a lot of businesses), now is a great time to think about alignment and if improving it could make your business go faster.
To state the blindingly obvious for a second, it’s fair to say most SaaS businesses are over-exposed to the success (or otherwise) of their marketing efforts. For sure, some SaaS companies hit the PLG (Product-Led Growth) jackpot and the flywheel spins on its own. But for most, success is hard work and quality marketing plays a critical role in growing the brand and winning customers.
If you don’t believe marketing matters – and there are plenty of leaders that believe product trumps all – then good luck, Godspeed and we’ll see you on the other side.
So, on the basis we’re now talking with an audience that believes in the power of marketing, let’s start by looking at the alignment question from the marketer’s perspective.
Marketers want to help
As a (fairly) universal rule, marketers want to help. They want their SaaS marketing strategy and associated efforts to deliver useful business outcomes. And they want to feel the work they do is valued by the business. However, for this to happen, marketers need to know what success looks like and exactly what they’re aiming at. It’s when they are left to fill in the blanks for themselves that things start to come unstuck…
Marketing objectives (along with every other department’s objectives for that matter) need to be derived directly from the company’s high-level objectives. These are typically set annually and managed through a series of four, highly structured, quarterly planning cycles.
For the benefit of the tape, the objectives we’re talking about here relate to customer acquisition, cost per acquisition, churn, ARPU (average revenue per user), etc. These numbers are key inputs into the financial model that underpins all SaaS businesses and determines how much money the business can spend, when it will require additional capital, etc., etc.
For the high-level company objectives to make any sense the marketing team (along with representatives from finance, sales, etc.) must be involved in setting the goals. If the goals are set in a vacuum by a CEO/CFO, then the chances of them being achievable are limited. From a motivation perspective, goals no one believes are achievable are worse than no goals at all.
Marketing grounds goals in reality
Marketing has a critical role to play in ‘grounding’ the goal-setting process in reality. Marketing – at least in theory – should have a deep and thorough understanding of market opportunity, cost of acquisition, competitor positioning, pricing, sales cycles, conversion rates, etc.
These are all essential inputs into determining whether a set of goals are achievable (or not). If there is no marketing voice at the decision-making table then the odds are stacked against the company from the very outset. This is a problem for everyone – not least the marketing team who has to deliver them!
Once a set of achievable annualised company goals are locked in, the marketing team should be able to start building out a B2B SaaS marketing strategy and a series of quarterly plans that deliver the goals. If the process has been done properly, the budget necessary to deliver the outcomes should have been locked in as part of the planning process. If the budget isn’t there, then the goals aren’t real and we’re right back to square one.
Keeping score
So, with a well-formed set of company goals that are cascaded properly, it should be possible to define a simple KPIs dashboard that holds marketing to account for the things it’s responsible for. The nature of the business (whether it’s Product-Led Growth or Account-Sales Based) will obviously shape the dashboard, but the fundamental structure should be reasonably consistent.
It’s worth taking a brief diversion here to think about lagging vs leading indicators as they are a hugely useful tool for figuring out whether your SaaS marketing strategy is working (or not).
A lagging indicator is exactly what it says – it’s a measure of something that has already happened, such as a sale. In the end, money in the bank is what keeps the lights on. However, measuring the number of leads coming into the business and their conversion rate to sales is a more useful measure of marketing. It tells you whether you’re likely to get to the final result you are looking for well before the fat lady starts to sing. With a bit of effort, you should be able to find a leading indicator for every goal on your dashboard which will help you stay on track and be far more agile.
From a high-level monthly revenue target a quality marketing team should be able to work out:
- how many sales need to be made at what ARPU?
- and for that number of sales to close, how many leads are needed (at what close rate)?
- for that number of leads, how much web traffic is required?
- and for that amount of web traffic, how much activity (of what different types) is required?
Pulling levers
From this simple cascade, you should be able to build a monthly/quarterly marketing dashboard.
Of course, it’s not all about acquisition and the same process can be followed to move other strategic SaaS levers:
- activation
- retention
- expansion
Looping back
For your marketing team to create value, they need to know what the company is trying to achieve in any given month so they can align their activities and be held accountable for their spend.
If they don’t know what success looks like they simply can’t be blamed for not doing the right things. Getting alignment and actively engaging in the marketing conversation every month is key to long-term success, however alien, uncomfortable, or just plain boring it might be!
This stuff is hard. Really hard – and anyone that tells you otherwise is lying. As the leader of a tech business, a huge part of your time should be spent getting alignment between your teams and, in terms of ROI, it’s probably the most valuable use of your time there is.
Health warning
There’s a health warning at the end of this which is not designed as a get out of jail for marketers, but it is a statement of reality that CEOs need to understand:
- marketing is not a precise science
- there is no silver bullet
- what worked yesterday might not work tomorrow
However, as much as we as marketers would like to be precise and accurate in our predictions of what’s going to play out – we can’t. Marketing is as much art as it is a science and while there are playbooks and proven strategies there is always an element of trial and error in getting quality results.
Our goal as marketers is always to do good and help the business, we just need the benefit of the doubt as the only way to truly know if something will work is to actually get on and do it!
