Efficient Growth Marketing Just Got Cool Again
From 2018 to 2021, I led marketing for Firetrace International, a profitable company. As a member of the leadership team, I helped grow profit 440% during that time period. When I started looking for my next challenge, I interviewed with early-stage startups. In one interview, I discussed my experience as a part of this leadership team:
“We grew profit 440% in three years.”
“Profit?” the interviewer hesitated. “So it was an efficiency play?”
It was a strategy overhaul, but that’s beside the point. The point is it was early 2021, and efficiency was the last thing on everyone’s mind. Hard to believe that just 15 months later, we are facing very different circumstances.
Tech valuations in the public markets began a steady decline in November 2021. Now, in June 2022, we are starting to see the ripple effects in early-stage companies. Startups are looking to extend their runways, but nobody wants to compromise on growth. Efficiency is cool again.
While growing a startup has become a lot more challenging, it’s still possible in this environment. It just takes a different approach. Here are the fundamentals behind my approach, as VP Marketing at a Series A startup, over the next 12-18 months:
Control what you can control
Companies are going to be more conservative in their decision-making. Some will have spending freezes. You don’t control that; you control your inputs.
I think of marketing as a system. You have inputs and outputs:
- Inputs, for example, customer insights, strategy, positioning, messaging, and tactics
- Outputs, such as pipeline and revenue
With the market status as it is, now is the time to obsess over high-quality inputs.
Obsess is a loaded word though, so let’s be clear. I don’t mean you should micromanage your team. In fact, quality coaching, a really good marketing plan, and disciplined project management will improve your marketing inputs more than micromanaging ever could. Focus on these things. And don’t forget to celebrate focused and consistent execution.
If it’s not working, don’t scale it
It’s time to be brutally honest about what’s working and what’s not. Before joining CoLab, I worked at Refine Labs, a demand generation strategy and research firm. In my role there, I audited 50-100 B2B SaaS demand gen programs in 12 months. In these audits, we looked at program spend across different channels and connected the dots to pipeline and revenue.
That might sound like something every company is doing already. However, a lot of early-stage companies just don’t have the marketing operations expertise to arm themselves with this data.
As a result, inefficient channels get scaled prematurely. The two biggest culprits are Google AdWords and conversion-based paid social.
With a small budget, there’s nowhere to hide, and that’s a good thing
For example, let’s say Company A spends $2,000,000 per year on Google AdWords, and generates 20 opportunities from this source. Their product costs $30,000 a year. That’s $600,000 in the pipeline for $2,000,000 in spend. Both opportunities came from the same keyword group, which represented only $50,000 out of the $2,000,000 spend.
In a perfect world, this company could spend $50,000 and get the same result. Of course, nothing is perfect. But a more responsible approach might look like this:
Set a modest budget of $5,000 a month for a few months. You won’t get many conversions, but you can track each of them carefully, even if you don’t have your marketing operations all figured out.
After three to four months, you see three opportunities that are progressing through your sales pipeline. All three can be traced back to the same keyword group. So you can scale that keyword group while continuing to experiment with a modest budget on all other keywords.
Here’s the scary thing about this approach:
In the short term, you may have to admit that you don’t have any channels that are working. You know that’s not where you want to be. But if that’s the reality, then scaling those channels before they’re working will only make things worse.
If you don’t have any channels delivering high-quality opportunities at a reasonable cost (on a small scale), you don’t need a larger budget. What you do need, however, is to experiment faster.
Small, fast, and intentional experiments are the best way to find a motion that works. Once you find it, execute it consistently and scale it if you can.
Double down on integrated, strategic marketing
There are three things that affect the efficiency of every single channel you have:
- Message market fit
- Content market fit
- Your definition of the ideal customer profile (ICP)
Invest some time in each of these areas before spending too much money on tactics.
Finding message market fit can be a lot of work upfront. But once you get it down, it pays dividends. Start by being disciplined about customer research. In practice, good customer research means your VP of Marketing (or the person who leads product marketing) is having one-to-one conversations with five to 10 customers per quarter–for research, that is, not to sell. For tactical tips on how to organize those conversations, start with this 23-minute podcast episode.
The research can eventually inform your company strategy and positioning. Both are typically set by the founders and a few key executives in early-stage companies. Product marketing or brand marketing, led by the CMO, would play a larger role in later stage companies.
From there, it cascades: strategy and positioning should inform messaging. And messaging should inform content. That’s how you get content market fit.
Maintaining this tight integration is essential when you’re trying to drive efficient growth. You want to make sure that the time and money invested in content and distribution doesn’t go to waste on unvalidated messaging.
And the same thing goes for your ideal customer profile. The better your research is, the more specific you can be about who your ICP is (and isn’t). You can potentially save 20%, 30%, even 50% of your ad budget by cutting out wasted spend targeting non ideal fits.
Growth can still happen even if you are focused on efficiency
Let’s be real here. We know that the game has changed. Companies are looking for efficient growth, not growth at all costs. The good news is: You can still build a great company during tough times. All you need is a little discipline. The next 12 to 18 months is when the best marketers will really shine.