Marketing Metrics 101 for B2B Startups

I think people are finally coming around to the idea that good marketing requires good measurement.  I’ve seen online B2C startups use Dave McClure’s Startup Metrics for Pirates as a starting point for measuring what marketing is doing.  For those of us selling to businesses however, particularly where there is a sales team involved and a pipeline to track, the world is quite different and Dave’s metrics don’t cover everything you need to track. Here’s how I’d construct a basic set of marketing metrics for a B2B startup (and a single slide that I would use to present them): Think about the goals before you start The main goal of tracking marketing metrics is to get a measure of ROI or program effectiveness so you can make sure you are spending more and more on things that drive revenue and less and less on things that don’t. A good set of metrics will allow me to predict that if I spend $1 on a certain marketing tactic, I’m likely to get $X of revenue in Y days. A good set of metrics will also give you a feel for inside and outside sales effectiveness and overall sales pipeline velocity as well. Rocket watcher b2b marketing metrics View more presentations from April Dunford. 1. Pipeline Measurements # of Targets– sometimes referred to as “suspects” this is anyone in the universe who is on the receiving end of your marketing. Sometimes it is helpful to track the number of companies in your universe of targets in addition to the number of individuals, especially when you are targeting a niche and want...

Discovering What Customers Really Want

I’ve been fielding a lot of questions from startups about how you figure out what customers really want vs. the “nice to have” stuff.  This process of “Customer Discovery” as Steve Blank calls it is something that a lot of founders I’ve spoken with don’t have a lot of experience with.  I had an email exchange recently with Tim Johnson talking about my favorite question: “So What?” I like to have marketers use it on themselves but Tim related an example of how he uses it in customer engagements.  It was a great example and I asked him to write it up in the post below.  Although his examples are around trying to close deals, I think they apply equally well to an early stage startup that is trying to get at the root of what’s really important in a solution vs. the nice to have stuff.  What I also like about this story is how it illustrates how customers may talk about “brand” characteristics as being important (we like company X because they are “fun”) when what they really mean is something much more tangible (company X’s products work with what I’ve already invested in). Read on… If you want to cut to the chase or destroy all the hubris around a conversation with a customer, the absolutely most effective question you can ask is, “So what?” A softer version is “Why is that important?” The customer will either tell you why it’s a key decision criteria or they will admit that it just sounded nice to have or they didn’t need it in the first place. The...

Avoiding the Number 1 Startup Marketing Mistake

The past 2 days I’ve answered a bunch of marketing questions from entrepreneurs on Sprouter‘s new Answers forum for startups (more on that later).  There were a few themes that emerged but one really came into focus when I got this question: What is the number 1 startup marketing mistake? My answer?  They try to market to everyone. I understand how startups get there.  There is a sort of straightforward logic that says that the more people that are aware of your product, the more will check it out and ultimately pay you for it.  This would work if your product was suitable for everyone (it isn’t) and you had a marketing budget big enough to reach everybody (you don’t).  The trick to effective marketing is focus your efforts on the segments that are the best fit for your product.  Those segments have the strongest need for your product and the best understanding of the value you offer.  By marketing to everyone, you run the risk that the folks that are the most likely to buy from you either never hear about you or when they do, can’t recognize the great fit your product is for them because it appears to be built for “everyone”. Here are 4 reasons you should focus your marketing efforts on specific segments: Targeted Messaging and Offers are Always More Effective – If you are selling t-shirts for fashion conscious 20-something’s you will probably emphasize the styling.  If your business is selling t-shirts to kids sports teams you might emphasize the durability of the shirt or the low cost.  If you are selling t-shirts...

Value not Features – 2 Stories from the Trenches

Product Marketing and Product Management are disciplines where the theory is easily understood but practical execution is really hard.  I asked Tim Johnson, (who frequently leaves smart comments on this blog) to share a couple of his “from the trenches” stories.  What I love about both of these is they illustrate perfectly how shifting the focus from “product features” to “value to the customer” can make a huge difference.   Enjoy! If you are like me, you hate getting into price wars with your competitors – or letting your sales people get into them.  When you have a similar  feature/function set, it’s hard not to fall into the trap.  The best way to avoid ‘buying the business’ is to keep the conversation focused on what is REALLY driving the buyer: the pain they are experiencing, how that is disrupting their business and how it impacts them personally. You will have a different, more significant conversation with your buyer that gives you an advantage and will help preserve your profitability. Know your buyer’s metrics and you will know what you have to say to them. I know this is Buyer Persona 101 stuff for a lot of you but I will illustrate with a couple of stories – and I love telling stories! Story 1 – Focus on Value to Stop Going over the Discounting Cliff Back in 2002, I was a solution architect for one of the big systems management companies.  The SA group was a tiger team that was called in to help close and architect significant deals.  I was the only non-techy on the team because I...

Vertical Marketing 101

I had two conversations last week with CEO’s about marketing to a vertical segment (such as retail banking, healthcare, or manufacturing).  It got me thinking about my experiences doing vertical marketing and what did and didn’t work.  In my mind, great vertical marketing comes down to executing well in three areas – Messaging, Content and Sales Enablement.  Here are a few tips: 1/ Messaging – Taking a horizontal product and putting a light coat of vertical paint on it is rarely effective because customers won’t find it credible. The best products for a specific segment were designed from the ground up for those segments.  That said, in my experience it IS possible to take what is essentially a horizontal product and market it to a vertical successfully if you are prepared to go very deep into specifics of how the product addresses the unique needs of the market.   If you value statements are things like “lower costs” and “ease of use” you aren’t there yet.  If you start getting into things like how your product can help companies be compliant with their industry regulations (such as HIPAA for healthcare in the United States, Basel II/III for banking in Europe, FERC regulations for energy companies in the U.S., etc.), how your product can deal with a particular problem common to the industry (such as managing a large number of part time employees in retail apparel or reducing carried inventory for manufacturing), you are getting closer.  Not only do you have to illustrate this in your messaging, you will need to prove your deep understanding of the segment in your...

Content Marketing and “Trusted Advisors”

In many larger organizations, professional services consultants and sales folks are trained to become “trusted advisors” to their accounts. To attain this status, account managers need to demonstrate a deep understanding of the customer’s environment and pains and offer valued advice and support.  It strikes me that this is exactly the goal of a great content marketing strategy. Why? Because Lead Development is Happening Without You Traditional lead development is a process where prospects are ushered along a path where they are fed increasingly detailed information about a company’s offering until they are ready to make a purchase, at which point they are handed over to sales. The problem with this process however is that people don’t like to be sold to and traditional lead development looks an awful lot like selling. So prospects avoid coming to vendors for information as much as they can, and today, getting the information they need (from forums, blogs, through online networks of their peers, independent review sites, etc.) is easier than it’s ever been.  In many cases, prospects are entering the lead flow process far more sales ready than they’ve ever been, which begs the question – how many opportunities for lead development are companies missing altogether? The Trusted Advisor Approach and Content Marketing How do you do hands-off or low-touch lead development?  The same way sales has been doing it through becoming trusted advisors.  Rather than selling to prospects, you help them. Prospects have problems to solve.  They are looking for information that helps them understand what their options are.  They need to learn the different approaches to solving the problem. ...
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