Marketing makes or breaks a company. When I am asked what is the No. 1 thing that I would do to help a company scale massively, it is focusing on marketing. Period.
I learned long ago that the best product doesn’t always win. It’s often a “good enough” product paired with killer marketing powered by unique customer insights. As a VC, I have seen this play out time and time again. Many companies get stuck in “feature and functionality” marketing, meaning they miss the opportunity to create durable brands. That happens when you elevate messaging to higher-level needs that solve a pain point for the end consumer and delight them on an emotional level.
I’m passionate about helping companies uncover new channels or reinvent old channels in a way that moves the needle. Finding a new way to make established channels such as TV, direct mail and radio generate awareness around a brand can be a huge competitive moat and propel a company to exponential growth.
I’m not saying that it’s easy. The job of a marketer gets more complicated with every channel that emerges. Among the latest challenging trend lines:
- It’s noisier than ever. In the year ahead, marketers expect a 40% YoY increase in the number of data sources they use, according to Salesforce’s seventh edition of the annual State of Marketing report, for which they spoke to over 8,200 global marketers.
- Purses are tightening. According to Gartner, marketing budgets as a percentage of company revenue fell to 6.4% in 2021 from 11%. The firm reports that “this is the lowest proportion allocated to marketing in the history of Gartner’s Annual CMO Spend Survey.”
- The ponds are overfished. A decade ago, only 17% of global ad spend went to the top five ad sellers (Google; Viacom and CBS; News Corp. and Fox; Comcast and Disney). Today, ad networks are much more crowded, with 46% of global ad spending taking place on the top five networks (Google, Facebook, Amazon, Alibaba and ByteDance).
With this downward pressure on the efficiency of marketing dollars, it’s important to listen to customers, stay curious and remain open to wild ideas that have the potential to break through. Over the past year, I’ve had dozens of conversations with leading marketers to ask them what’s actually working for them, and what crazy idea they tried that seemed ridiculous at the time.
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Here are some highlights of what I heard, and what I now share with all of the CEOs and marketing leads at our portfolio companies:
With developers, marketers need to be problem-solvers, not sellers
“Developers are very quick to sniff out any sort of marketing-speak or BS. They’re looking to get the answer to a problem they have and then move on. How can you get them to the right documentation as quickly as possible? How can you keep them up to speed on the products that are live today, not the ones that will be live two years from now?
Your job is to help them get their hands on the code as quickly as possible. Get them direct access to other developers in the community who think the same way and can help solve some of their problems in real-time.” — Sara Varni, former CMO at Twilio.
Avoid free trials at all costs
“Early on at Curology, we had a hypothesis that by not charging anything at all for a product trial, it was too easy for people to get it without having any kind of mental commitment. We began experimenting with having people pay the shipping cost, $4.95. [That price] was still a very low barrier for people, but we learned that it dramatically changed the perception of value and the mental commitment in the eyes of our customers.
We were worried about what this would do to our customer acquisition cost, and the reality is that it didn’t change at all. We acquired the same number of customers at essentially the same CAC. And we had much better commitment to the process from those folks.” — Fabian Seelbach, president of Goop.com and former CMO of Curology.
By Series A, your company needs a story that resonates with customers, not just your VCs
“If you look at a lot of startups, they’re typically led by founders who are engineers or computer scientists; they’re data folks. And what happens is that the first marketing hires they make are performance-oriented, digital acquisition marketers. That’s what the founders know and love right? Data is analytical and irrefutable. We ran an ad, and this is what happened. And then, when these companies get to a certain scale, you’re back to the basics. What’s the positioning? What’s the story?
Often, the early-stage mentality is that in order to raise money, you just need to deliver on the business metrics. But there’s a bigger problem if you don’t know how to tell your story. If you don’t have the positioning, the company story, the brand identity locked in early on, it sets you back because you don’t know who your audience is. At first, your audience is VCs, but then it’s retailers, partners and customers. If you’re not clear on your story and audience, no amount of dollars thrown at performance will work.” — Doug Sweeny, CMO at One Medical.
SaaS businesses should always price higher than they originally think
“I guarantee you’re underpriced. Every time I look at what we have historically priced in the companies that I’ve worked at, we price at what we think the market will bear versus the price that we want to stick to for value. If you’re going from freemium to paid, start with a high price, because it’s much easier to start with a high price and walk it down than to start with a low one and walk it up.
If you have a SaaS model, and you’re taking a ‘land and expand’ approach, start with a high price and then grow into your expansion. If you don’t have that upward pressure on price, then your ability to hire, create an ASP model and compensate appropriately will create a big headwind.” — David Gee, CMO at Coherent, formerly Imperva, Zuora and Hewlett-Packard.
In messaging, clarity and repetition always win
“It’s very easy, when we are living and breathing our products and brands and companies all day every day, to assume that our customers are as well. I hate to break it to you, but they aren’t. When launching products, there are times where you feel like you’ve described this new feature over and over again and you want to think of more creative ways to talk about it.
You think, “How else can I say that to catch the customers’ attention?” But really, most customers still don’t know about it yet. At this point, it’s less about trying to think of cute ways to change that language and more about repeating your message in the places your customers will see it.” — Coley Czarnecki, head of consumer product marketing at Uber Eats.
Driving successful word of mouth requires very specific asks
“It’s not enough to just ask people to share their stories. First, frame your ask around how it helps other customers. For example, “Did you have a good experience? It would help others if you actually should share your story.” Then make sure to tell them where you’d like them to share, which could be a software review site or a social channel, for example. It’s your job to give them the information. Finally, what are you doing to help amplify those voices and create word of mouth traction?” — Archana Agrawal, CMO at Airtable
Small business owners want to hear from other small business owners, not you
“We have seen how word of mouth is very influential in the small business community. We can get messages into the market very quickly when we properly leverage and scale influencers. As we know it today, social and mobile advertising is over. But people are still spending time on those channels and our job will always be trying to figure out how we can reach people in those channels. Being really hypertargeted may not be the way that campaigns work on social in the future.” — Lauren Weinberg, Global Head of Marketing and Communications at Block.
This article was edited after publication to remove a quote from Ali Wiezbowski, director of bike marketing at Peloton, and former head of global product marketing, Driver Engagement at Uber.