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When going upmarket won’t work

Going upmarket is one of the most talked about strategies inside B2B companies. The reason is straightforward: enterprise customers are stickier, have higher deal sizes and better retention rates.

As B2B companies evolve, they inevitably land at the idea that landing one enterprise client is equal to landing several, if not hundreds, of SMB or Mid-Market clients.

However, they almost always rush to assume that their product will be a great fit for customers upmarket.

Just because the customer is in the same “category” does not mean they have the same level of product-market fit as your customers.

Going upmarket is almost like launching a whole other product to a whole new market. This means:

-Your product feature set needs to match their needs

-You need to spend time in product development cycles with customer feedback to improve your offering

-You need to create new messaging and positioning to compete in the new market place

-You need to create collateral, webpages,...

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Closed Won Sources

If you look through your Closed Won reasons of most companies, you'll find that the top 4 reasons deals close are:

1) Repeat Customers

2) Referrals / Intros

3) Word of Mouth

4) Brand + Content

The common thread between all of these is pre-built TRUST. Deals close because customers have confidence that you will be able to resolve their pain point. The higher the pre-built Trust, the easier and faster deals close.

Despite this reality, companies spend far less time into "Pre-Building Trust". Instead, they think focus on channels where there is no pre-built trust and then wonder why their conversion rates are low and CAC Payback Periods are sky high.

Instead:

-Ensure new and existing customers have the best possible onboarding and experience

-Focus on best fit prospects and landing more of those people where you know you can deliver exceptional value and high NPS scores

-Build differentiated content and presence in the marketplace to have a brand that stands for something beyond just...

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ACV and TAM

Depending on the segment you’re going after, different channels are relevant.

A low ACV with a large TAM and many targets likely needs to focus on SEO, Paid Search and Paid Social. Conversely, having a high ACV with a limited TAM and few targets implies the need for ABM, Sales Enablement and Customer Marketing.

As a general rule, the higher the Price and Annual Contract Value for a product, the lower the Total Addressable Market. The lower the ACV, the higher the TAM.

These two dimensions largely govern what avenues a particular business should take because as ACV shrinks, a company has a much lower amount of Customer Acquisition Cost (CAC) to work with to have a healthy Payback Period.

To put it another way: When deal sizes are smaller, you need to invest fewer dollars to acquire customers in order to break even in a reasonable amount of time.

When there is a mismatch between the approach a company should take and the one it actually takes, havoc ensues:

-The chosen channels...

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Return on Product Marketing

The return on Product Marketing efforts is infinite because it impacts all business metrics.

As we get better at targeting our ideal customers:

1) Overall funnel efficiency improves

2) Gross margins go up

3) Win rates, LTV and NRR dramatically improve

4) Customers are happier and refer more business

As a company builds a more focused Messaging, Positioning and Go-To-Market, the lost revenue from bad fit customers is more than made up by the increased volume and revenue from its best fit customers.

This trade-off isn’t visible initially because you have to say no to revenue before you start landing more of your best fit customers. That’s why founders, CEOs and executive teams get uncomfortable. It's uncomfortable to say no to revenue.

The better companies get at saying no to bad revenue though, the more their revenue quality improves. It also brings way more focus to the entire business because Product, Sales and CS all align around helping best-fit customers succeed.

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Customer Analysis

Understanding exactly who your software is for is critical. In trying to build a bigger business, a lot of founders end up trying to be everything to everyone, even though a smaller group of customers are really their biggest champions.

The key is to break down the customer data by Segment, Vertical, Industry, Size and Geography and compare them against each other using KPIs such as Demo to Opp Rate, Opp to Close Rates, Net Revenue Retention and Net Promoter Score.

A lot of this data sits inside companies but is never actually compiled and analyzed by the marketing team. The better your analysis of your existing customers, the better you will understand who to go after going forward. The more specific your definition of who you're going after, the better.

This is how TAM and segmentation analysis gets tighter and your CAC comes down because you are focused on your best fit customers.

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Marketing Pyramid to Sophistication

A good way to think about building Marketing Sophistication is as a pyramid:

Layer 1 (Foundation): This is where most of the groundwork of a mature marketing engine is laid.

Layer 2 (Programs): This is where most of the actual value from marketing is created, the programs and campaigns to run, the content that is created.

Layer 3 (Resourcing): This is where the right team and budget needs to be procured from the CEO and the Board

Layer 4 (Outcome): This is the ultimate goal of driving revenue growth as a result of all the other layers of work.

Each box in the pyramid represents a key area where the company needs to build sophistication. What’s important to understand is that sophistication does not imply being world-class in that area. In a lot of founder-led businesses, the answer is to get to “good enough” so that you can focus on driving revenue.
Every company wants the outcome of predictable revenue growth, but most have not done the fundamental work required.

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How content evolves on different platforms

It’s easy to build content on platforms early on. Organic reach is easier, audiences are more engaged, content is less saturated.


As platforms mature, all of this goes away and standing out is much harder. This has happened with every platform over time:
-In 2010, you could rank on the first page of Google with a basic Top 10 article. You can’t do that anymore.
-In 2014, you could get way more views on YouTube by uploading selfie videos on basic How-To topics. You can’t do that anymore.
-In 2016, you could build an audience for your Podcast by just doing 30 minute episodes. You can’t do that anymore.
-In 2019, you could write a text-only post on LinkedIn about a challenge you overcame and reach thousands of people. You can’t do that anymore.


Add to that the layer of AI and how everyone is capable of producing higher-quality content at a significantly faster rate.


To succeed in an AI world, it’s important to understand a few things:
1) Longer form and...

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The right order

One of the biggest mistakes made by marketing departments is that they do things in random order (which is often the wrong order), when there are far more qualified prospects to build assets, campaigns, and programs for.


To do things better means doing them in the right order:
1) Start with campaigns prospects in-market and ready to make a purchasing decision.
2) Ensure you have the right product marketing, sales enablement and conversion content in place to nurture them to close.
3) Work backwards to prospects who are less ready to buy but looking for a solution of some kind, build more nurture and educational content to get them to a stage where they are ready to make a purchasing decision.
4) Work backwards to prospects who are not even looking for a solution and help them solve pain points with tools and resources. Nurture them to a stage where they understand what kind of solution they should be looking for
5) Work backwards to prospects who are not even problem-aware and create...

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Methodically building a content roadmap

Content teams are too reactive. Too often, they are just responding to needs from across the organization instead of having a deliberate method to prioritize.

Content is a lot like Product Management in this way. Product Management constantly faces requests from every part of the organization. Sales wants features that will help it overcome objections and close deals. Customer Success wants features that will help them onboard, expand, and retain accounts. Support wants bug fixes.

The list of what Product Management needs to sift through is endless. The only difference is that Product Management has an established process to sift through the noise in order to focus on its core objective of building a better solution for end customers.

Content, similarly, needs a process to sift through the noise. The challenge with Content is that it is extremely difficult to be intentional about what it wants to achieve. It is so easy to get distracted and pulled away from strategic initiatives...

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Finding extra pipeline in demand gen channels

In the last 5 years, I've audited over 1000 technology, software and B2B companies and their marketing spend. One of the most common themes across the board is the amount of inefficiency. Each company is different and has different challenges:

-CAC Payback Periods more than of 24 months

-SQL to Close Rates below 25% (sometimes below 20%)

-Inefficient channels receiving the bulk of the marketing budget, while efficient channels receiving limited amounts

-Misattributing credit for pipeline and revenue to the wrong channels and activities by just looking at last-touch / first-touch models

-Misaligned marketing budgets because there is a fundamental misunderstanding of how much marketing support is needed to hit sales projections

Because most companies don’t look at the underlying data of their marketing spend, there is a lot of inefficiency to be found. This inefficiency means that a lot of budget is misallocated to channels and campaigns that are not very good at driving...

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