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Serving the Business
You can get really myopic sometimes on some common metrics that marketing tends to get measured on and just stop it there, when, at the end of the day, you want to be able to translate your impact into the numbers that the CFO and the board care about.
A couple weeks ago I sat across from a marketer at a clients, and we were talking about just overall improving the funnel and making the funnel more efficient from a business output standpoint. And he literally sat across from the table and we were talking about different things to be creative and more focused. And he said, ‘I’m not willing to do anything that’s going to increase my cost per lead.’
Yes. He said that his job is to get a lower cost per lead, not a higher cost per lead. And look, they’re a fairly new client ‒ you’ve got to be careful. But what I wanted to do is reach out and just say, ‘Dude, your job is to close deals, right?’ And I get operationally in the right context. If you identify that Facebook is a great place to generate leads, and you spend 100 bucks to get 12 leads, I’m going to ask you how you can spend 100 bucks to get 18 leads. I’m going to ask you that question. But your job is not to get more leads from your marketing budget. Your job is to get more deals for the company. And it may turn the economics that you’re used to on their head. But you can’t be that myopic as a marketer. That is the path to irrelevance.
Customer Lifetime Value
Yes. Exactly. I could not agree with you more. In addition to that, some of the things we’ve been talking a lot about as well … you brought up customer lifetime value. And we talk a lot about brand, demand, and expand. And it’s really trying to think about marketing and about the full impact that marketing has on an organization. It’s a lot about the brand and getting awareness, and really helping brand the whole company.
How do you make sure they realize the value of your service, of your products? Get them to continue to buy more, to renew, expand their relationship and their purchasing from you. And a lot of times the whole role of customer marketing is very different, especially in B2B. Sometimes you don’t have anyone in the room. Sometimes all they do is references. How do you see customer lifetime value, its evolution with marketing, and the customer marketing role?
I think a lot of companies just sort of have gone a little too far with the idea that, well, you can’t keep a customer unless you acquire him in the first place … which is true. And in any business, the starting point is acquisition, get him in the boat. But we all know that not all customers are equal. Some customers are expensive customers. Some customers aren’t a good fit with our product or service. And if they churn and then are unsatisfied, but they’re unsatisfied because they shouldn’t have been in the product in the first place, the market doesn’t care. It’s just going to be muddy with bad stories and bad karma about your business.
I think everybody in the business has to be thinking about the long-term health of the business, which is not just acquisition, it’s retention. What are you doing to drive not only getting those initial sales, but making those customers so phenomenally happy and successful that they stick around forever, and they tell all their friends, and all their peers, and all their colleagues about you as well? And that is Marketing 101. This goes back to our MBA days. You look at the economics ‒ it’s just so much more efficient to keep your best customers and to make them happy. And now to do that, well, talk about sales and marketing working together, now we’ve got a much bigger dance. We need sales and marketing, but we also need customer service, product marketing, and product development. This is where the entire company has to orient around that customer satisfaction success.
I think in the same way we’re talking about account-based marketing or account-based revenue, thinking that’s an opportunity for marketing to really drive a stronger, more strategic, more integrated focus on the right acquisition … What you’re talking about in terms of overall lifetime value and lifecycle marketing, is also marketing’s opportunity to own a much bigger place at the table. We are thankfully living in a world where there is a very clear path from heads of marketing, CMO, to CEO. That wasn’t always the case. We’ve come from a place where marketing in B2B has been thought of as the arts and crafts department. And boards aren’t putting the arts and crafts people in charge of the company.
But when you’ve got marketers that are now growing up in a marketing department and thinking about the overall value of the business, thinking and talking about and measuring things that the business cares about, now you’ve got a business leader. If you’re a CMO or if you’re new in marketing and if you’re starting at the bottom ‒ and we all did ‒ your opportunity is to not just change what you’re doing, but to change the way you think, change the way you prioritize, change the way you talk. Go spend some time with your CFO and find out the way they talk, find out the words they use and the things they care about. I mean, even if you don’t have an MBA, or if you didn’t go to business school, I don’t care. I didn’t do either of those things either.
But it became really important for me and I became a much better marketer when I started to understand what lifetime value meant, when I understood why margin was important, when I understood the impact of things I could do in marketing and how that would decrease acquisition cost, and increase lifetime value, and the impact that has, especially in an SaaS business, when it starts to really impact the flywheel of business growth and health. You can use those words and you’re still going to have to go back and increase open rates and get more retweets. I’m not saying those things aren’t building blocks. … You’ve still got to do the work. You’ve still got to do the marketing. The marketing itself may not fundamentally change. But how you prioritize it, how you do it, how you report on why it’s important ‒ that is fundamentally different.