Sub-topic: Growth loop, impact loop, pirate metrics

Theme: Marketing Analytics and Essential KPIs

Current Trends Yeah, so what I'm seeing is that marketing has become more difficult
to make profitable and investors, even in VC funded companies, are
expecting profitable marketing in order to reinvest. They are
specifically looking for a channel that they can invest in that has
shown not only a high TAM, total addressable market, but also an
opportunity to, you know, 10 X inside of that market. That's what
investors are funding. In addition, we are past the easy days of
marketing and analytics are showing that campaigns must be
continually optimized in order to be profitable because for a number of
reasons related to pixels of the privacy related to, you know, larger
economic factors, as well as buyer behavior, marketing is being hired,
highly, their, their buyers are more skeptical of marketing than ever
before. It has to be dialed in in order to be effective.

Desired Result Companies normally trying to double their gross revenue through
marketing, but I must say that is oftentimes a risk because they don't
realize that they're, that they only got, you know, 10% of their net new
revenue from marketing. So let's say that they're a $5 million
company. They're looking to go to 10, right, as a first step. And
oftentimes that $5 million company only got $300,000 net new
revenue from marketing last year. It just wasn't their core channel.
And what they're actually asking for is to go from $300,000 net new
revenue to $5 million net new revenue, oftentimes in one year, with a
misunderstanding of the ask that they're making and the change that
will be required in order to achieve that and do so profitably. So if I
can recap, their goal is normally to double their net new revenue as a
first step on the path to 3x-ing, 5x-ing, or 10x-ing the size of their
company through marketing. It's a worthy goal, but we must then
break down what are the, what are the key understandings and
milestones and math required in order to achieve it.

Past Struggles The number one struggle that comes from companies endeavoring
into scale their growth with marketing is if they don't have experience
with it, they think it's going to be easy. So they think when they put up
their website, it will work. And when they launch their social content, it
will grab and engage. And when they launch their blogs, it will rank.
And when they launch their lead magnet, the people that convert on
the leads will be interested in the demos or the sales calls. There is a,
because we are so obsessed with our product and our solution and
what it does for people, we assume the other people that see it will
think the same. But in fact, they almost think the opposite. Just
because they took one step that there's no real immediate conclusion
 or some cost bias that they're going to take another step. The market
is going to do what is advantageous and a priority, an urgent priority to
them and almost nothing more. So the struggles that come from this,
simply put is launching marketing that doesn't work. We have pages
that underperform. We have offers that underperform. We have
serious gaps that have not been closed. So a company is unable to
double their spend in marketing because the current marketing spend
is not profitable. They're looking for a new channel to use for
marketing fuel. But what they need to do is fix their marketing engine.
And what I mean by that is they need to fix the core assets that they're
driving things to and through that simply are not yet serving them at a
profitable level. And the core problem regarding analytics is
companies don't know what they need on an analytics dashboard.
And sometimes they even actually have, you know, a dashboard full of
vanity metrics that are sending them off to fight different fires, but it's
still not leading to profitable marketing. So in the pursuit of having
marketing that is profitable, that they can double or triple the budget of
and scale, what they really struggle to do is get that first dashboard in
place so that they can make great decisions, fix the right problems in
the right order that's going to, you know, give them a solid scalable
marketing engine. Most companies currently lack the data to know
what they need to fix.

Everything You 15 years ago, marketing was easy. And you could track your traffic,
Tried your leads, your opportunities, and your customers. And actually from
those metrics, have a decent idea of what's working and not working.
But the internet was young and immature, and it wasn't the place that
everyone was doing massive research. It's where people went to do
deep research. So almost every lead was a more qualified buyer. Ten
years ago, we realized a huge percentage of the leads are not actually
who we're trying to attract. So we broke from traffic into not just leads,
but MQLs, which are leads that actually meet who we're trying to
market to, right, the people who we view as qualified to buy, SQLs,
people who are not just in our database because they downloaded an
e-book or a white paper or a case study, but they've actually shown
intent to buy, such as requesting a quote or joining a demo or
requesting a consult or proposal. And then we needed to start to
understand of those SQLs, how many were we able to connect with
and firmly qualify to advance into an opportunity? And then from there,
tracking, never forgetting to track along with the sales team what is
the, what are the blockers to deals that we lost and the reasons for
deals that we won that turn into customers. Now, even that in modern
days is not enough, because while that gives you some core metrics
to understand where you need to improve, it does not give investors
and controllers of the purse an understanding of where they need to,
where they can reinvest and where they need to pull back. And then
also, these metrics enable you to kind of use a shotgun approach to
your marketing where you can, where all leads are created equal and
all sources are created equal, and we're not drilling in channel by
channel to understand its profitability. Until you can understand core
 channel by core channel, the return on marketing spend, it's going to
become very difficult to confidently know where you have profitable
customer acquisition, and it'll be very difficult to convince purse
holders or investors to double or triple the budgets to allow you to
scale.

Why they Probably the biggest struggling and failure points for companies, even
struggle or fail those with, who are tracking, you know, their data and analytics is they
don't, they're taking the data points that were easy to get and putting
them on a dashboard. But the data that's easy to get, impressions,
likes, follows, leads, clicks, even cost per lead doesn't really tell you
the numbers that you need in order to have profitable marketing. The
failure point comes from having an allegiance to a certain type of
marketing, such as SEO or paid or social, and trusting that it will, even
blindly trusting that it will become profitable over time without setting
up milestones or benchmarks to give yourself pause on whether you
should increase your investment, pull back your investment, or, you
know, adjust tactics or at least test alternative channels. So what's
easy to do as a result is to spend months, quarters, or years working
down channels only to figure out that it is not profitable to a point that
you can scale it, then you have to turn that off and start from scratch
somewhere else. That second endeavor then becomes not a strategic
test, but it becomes a gamble because you didn't test it early enough
and with the right metrics in place to find the messaging and offer that
works. So oftentimes that second gamble also is a loss. And now
you're at a spot where you've lost four quarters, you know, six
quarters in all of the marketing budget that goes with that. And you're
trying to build up from a position of having some idea of what doesn't
work, but lost significant ground on, you know, potential market
incumbents, as well as significant funding and it's a tougher position.
What's even worse is when it becomes quite difficult to now attract
great talent because they come in and go, why would I choose you? I
have to build this entire program from scratch.

Common Right, so I came from the school of thought that marketing was cold,
Misconceptions warm, hot, and we're trying to turn traffic into leads and leads into
sales qualified leads into opportunities. And then we let revenue run
the rest. And we let success run the onboarding, retention, referral
side of the business. I believe now that that was a flawed approach.
The first thing that I learned is that the very best marketing insights as
well as assets comes from our customer base. They have the ability to
tell us what they were thinking and feeling, what their concerns were
in advance of the sale, and what ultimately pushed them over the
edge to choose to buy and choose to buy from us. They're also able to
articulate what's happening as the experience and the result they're
achieving. And that story is the very best form of marketing that you
can have. And what triples its value is when it comes out of your
customer's mouth. And they're willing to tell their story on your behalf.
It is your target buyer finds themselves in that story. And they believe
it more because it didn't come from you. It came from a customer
 who's willing to take time out of their day to tell their story on your
behalf as an advocate. Most companies push this off for months or
years if marketing ever even gets there. And I suggest that this is
where marketing starts. The second misconception is that retention,
resale, and upsell is a function of sales. But it's not. Marketing can
install even the most basic systems that by increasing the retention
rate, by understanding what's going well, what's going poorly, what
are the things that you'd like to see that you're not receiving yet, that
you would generally expect to receive. And if there was a reason that
you would switch, what would that reason be? By understanding that
and allowing most of the time it's not the need to launch new product
features. Most of the time it's the need to get just a little bit better at
tuning the what and the how that we deliver the things that we already
promised. And by making just a small experience feature, a few
automations, oftentimes you can lift your retention rate enough, just a
10% increase in your retention rate from an 81% to an 89%, for
example. If you're a $2 million company, that will generally produce
about a hundred and let's do the math, hold on, about $165,000 that
can generally then go to feed a marketing budget. Now you can hire a
marketing rockstar because you stopped and did that part first. So the
second misconception or thing that I figured out is that you don't need
to start on traffic. We actually need to start on doing the activities that
is going to have an instant return on action and is going to provide
instant revenue. The first thing that is, is getting very clear on our
customer story so that we can tell it in our marketing and our customer
can tell it too. And then having a retention system in place, and then
it's going to sales and getting sales, the assets that they need to close
the deals that they have. If you don't know the questions, you don't
know the objections, you don't know the concerns, you don't know the
channels for which they found them, the reasons why they chose them
to buy, to buy from your company, then you're going to be probably
making some very broad and vague marketing that does not connect
with what your buyers are thinking.

The Key Shift Yeah, so it's my responsibility to provide profitable marketing and a
system to do so. And the thing that I ultimately figured out is my, the
market's opinion that we should start with traffic and leads first is a
little bit flawed. Traffic and leads and pushing your, your marketing
budget in order to scale a certain channel, whether that's social or
SEO or paid or events only really makes sense when, after you've
done the low volume testing to prove high conversion. And once I was
able to switch from thinking about how to increase the volume, but
instead how to increase conversion, my first, you know, three weeks
and three months were spent solving problems that drove conversion
instead of literally creating conversion problems by pushing budget
into a channel that we just weren't ready for. Now what happens is
instead of trying to push marketing into channels for all the reasons
why someone should buy, my mindset is to understand at an expert
level, all of the reasons that someone isn't buying so that I can make a
 better conversion system first.

The Aha So, I'm generally a fan of a small adaption to what's often called pirate
Moment! metrics. And pirate metrics are awareness, acquisition, activation,
revenue, retention and results. I add reputation and then referrals.
They're called pirate metrics because when you put the AAA,
awareness, acquisition, activation, plus all of the R's, it sounds like a
pirate who says R. What I ultimately figured out is that while buyers
certainly come in as traffic that becomes leads and leads that become
opportunities and opportunities that become buyers and buyers who
get results and buyers with results build your reputation and reputation
builds your referrals. We should not approach rolling out our
marketing like this, nor should we approach our metrics like this where
the traffic and the leads are what gets most attention. What we need
to do is do what's a return on marketing effort rather than working in
the order that the buyers buy. So normally what we do is we start from
the bottom and work our way up with a referral system. Why?
Because it's easy and it is the most profitable way to acquire a
customer. After that, we work on retention and result and reputation.
Why? Because it's easy and it is the most profitable way to fund your
marketing is to have customers trust you before they even know you
by building out your reputation, talking to customers, increasing
retention, getting them to place five-star ratings, reviews, and do co-
marketing with you is the easiest and most effective form of marketing
and it gives you the assets for all of the other things you wish to do.
We simply work from the bottom up to create the assets that enable
us to have more profitable marketing because each step that we took
was able to make our marketing more profitable and then when we
achieve proven profitable marketing, that's when you can double the
budget, continue from there, and then double the budget again.

Success Right, so we figured out that there's kind of two circles of marketing.
Principle There's the growth loop, that traditional traffic leads, turning into
opportunities so that we can close them as customers. But there's
also an impact loop, which is driving our retention and results,
reputation and referrals. And what we figured out is that by focusing
on retention and results, reputation and referrals, not only did we have
a more immediate impact on revenue growth and return on marketing
spend, but it gave us all of the assets we needed to do great
marketing. Without the customer stories, without understanding what
they were thinking, what they were feeling, and having that
documented so that you can use it inside of your marketing, what are
you left with? Ten ways to do X, five steps to do Y? You know, you're
left with quite generic content because you're not bringing your
customer, your buyer into the story. At the end of the day, all of our
marketing isn't even about us or our product or our It's about them. So
by including our customers inside of our marketing from day one and
actually involving them in the process of building our reputation
through ratings and reviews, we're able to get more referrals, we're
able to get more sticky marketing and magnetic messaging. And that's
 the way that we actually make the ability for a company that maybe
once was struggling with marketing to outmarket, outsell, and
ultimately outgrow their competition.

Steps to Result The first step for an impact driven growth loop is to interview
customers. What were they thinking and feeling when they first came
into looking for a solution? What were they thinking and feeling when
they talked to you? What were they thinking and feeling as they
bought, like what were the major factors? Why did they choose us?
And how do they feel about that decision now? What impact have we
had in the business? Doing a minimum of 20 customer interviews,
although I suggest 40, is step one. I would include both those that
bought and didn't buy. For those that bought, you ask them, would you
be willing to give us a five star rating and review? By simply asking in
an interview format, the yes rate on that is incredibly high. They want
to see you succeed. They're investing with you with their dollars.
Second, once you've secured the five star rating and review,
oftentimes you can ask them if you can tell their story and have them
like and share it. For which oftentimes they will. And it costs almost
nothing. And it gets your customer in the habit of thinking about you,
talking about you, and it literally has led to customers, businesses
seeing a noticeable uptick in mentions from their clients, driving more
referrals. And it's easy. Third, install a retention system. So that these
following with customers with interviews, asking for five star ratings or
interviews and getting them to drive you referrals is a systematic part
of the business. These three functions can actually fund a large
percentage of your marketing and can be done inside of a few weeks.
And I would argue it's procrastination or hesitation around talking to
customers that we avoid by doing all the unprofitable things that take
months or quarters first. So instead, building your reputation with
existing customers first, inviting them to talk about their results with
you, to basically share the results on social channels and start driving
you referrals. Build in a retention system