Seeing and hearing from successful marketers is invaluable. That’s why we pay attention to directors of demand generation when they share their successes.
In this post we present 5 key pieces of advice on growth, revenue, and hiring in demand generation. These are key takeaways from growth marketers and B2B demand generation veterans.
Without An Infrastructure, You Can’t Build A Revenue System
If you’re just starting out, or tasked with building a demand generation program at a new organization, it’s one of the few opportunities you’ll get to build it right the first time.
Creating a predictable revenue system is like building a tower, there are floor plans, electrical, HVAC, and plumbing and it all needs to come together seamlessly. One mistake and progress comes to a grinding halt.
So the question is, where’s the most important place to start?
Franco Caporale, director of global demand generation at Duetto, says it took about 3 months to put together an initial system.
“I spent a significant amount of time to ensure that I am able to track ROI before I start investing in a direct response campaign,” writes Caporole on Quora.
The infrastructure should be built around tracking ROI. And as your system grows, tracking ROI will allow you reach and report on a single set of goals.
According to Caporale:
Going back to the goals, for the first quarter you should focus on business objectives (implement a marketing automation system, create landing pages and digital assets, develop a content strategy, hire a sales development team, create a lead flow process etc.). Once every component is in place, the quarterly goals of your director of demand generation should be only measured in # of opportunities sourced, # of opportunities influenced and $ amount of pipeline passed to sales.
With a strong foundation, tracking the most important metrics becomes easier, and as a result, so too does optimization.
Define Goals And Expectations Clearly
Jeff Reekers went through the growth stage ($2M ARR) at three B2B SaaS companies. He’s says everything needs to be quantitative, and new demand generation directors should be focused on three things:
1. Pipeline Coverage & Opportunity Creation
2. Lead Creation
3. Deal Velocity
Pipeline Coverage and Opportunity creation should be tracked “religiously” according to Reeker:
You should have a pipeline number you look at every week and your demand gen director should be ultimately responsible for feeding this and reporting on it weekly, while working with the sales team to optimize the process.
Below is an example of Reeker’s weekly tracking spreadsheet:
Separate the In-Authentic Growth Metrics From The Authentic
Brian Balfour, VP of Growth for Hubspot says what you measure is what you optimize for. With the overabundance of available metrics, one of the most important decisions demand teams have is deciding which metrics to track and optimize for.
Which is why it’s important to separate the in-authentic growth metrics, i.e. the ones that make you feel good but don’t measure long-term value.
In SaaS, authentic metrics have retention built in, according to Balfour, retention metrics should be relevant to the intended use of the product. For example, if your product is meant for daily use then daily active users is an important metric, if it’s meant to be used monthly then monthly active users is an important metric.
This sounds obvious but companies get it wrong all the time. Apps meant to be used daily or weekly can post high monthly active users, getting marketers excited. Unfortunately, the reality is there are a lot of installs and uninstalls happening within that month.
For a SaaS product like Sidekick, Hubspot’s CRM, Balfour uses weekly active users as a relevant metric for growth and retention.
Great demand generation directors should embrace honesty and authenticity.
We’re accustomed to feeling skeptical, maybe even annoyed, when we read headlines like, “The Tactic We Used To Grow 823%” or “The Online Marketing Trick We Used To Gain 10K Users.”
But small numbers are always small numbers. Going from 10 to 20 customers is harder than going from 100 to 200 customers, yet both are 100% growth.
Always choose the most authentic metrics for measuring growth.
Look Before You Experiment
BitTorrent is peer-to-peer file sharing software used for distributing large amounts of data over the internet. Facebook and Twitter use BitTorrent to distribute updates to their servers. AT&T estimates that BitTorrent represents 20% of all broadband traffic.
Annabelle Satterfield, PM of Growth at BitTorrent, says growth is everyone’s responsibility, not just the growth team’s. KPI’s should be aligned between marketing and product.
Satterfield approaches growth as a series of experiments:
If the KPI to move is revenue, for example, we look at the levers available to us, and estimate their ability to move that KPI (if we move lever X 10%, KPI Y becomes Z). We try to be indifferent as to whether something is a growth lever or a product lever (example: onboarding vs. a new feature).
One experiment paid off for BitTorrent, increasing daily revenue for their Pro version by 92%.
Satterfield started with a survey asking customers what features they want and why they haven’t upgraded yet. The results informed Satterfield on price, promotion and product.
Each subsequent product feature release resulted in an increase of 30% or more in daily revenue. Satterfield explains further:
That was the product feature part of the research. Going back to the “Why haven’t you yet purchased (premium product)” question– other multiple-choice answers included “It’s too expensive,” “I’ve never heard of it,” and “Irrelevant features.” It seems that promotion was our biggest opportunity. So we added a persistent upsell button on the mobile app. That experiment alone increased our daily Pro revenue 92%.
You can find out more about Satterfield's approach by checking out her recent GrowthHacker's AMA.
Hire Those Who Can Gather and Apply Customer Insights To Improve Your Product
At our stage of growth changing the button colour to red to get more people to complete a transfer probably isn’t what our customers want us to spend our time doing. Figuring out how to move money instantly or dramatically reducing the friction in doing a transfer is the kind of goals we go after.
Customer focus is growth. TransferWise runs autonomous and independent teams each trying to learn what matters to customers. It’s the reason thousands of customers trust Transferwise to handle their money.
“Why do we believe this works? We’ve found other organisational structures are too dependent on “wise people” at the top of the organisation chart. These people are quite far away from customers and very far away from making changes to our product, feel “accountable” for numbers and inevitably become a bottleneck.” says Peiris.
Performance marketing teams at TransferWise, responsible for online advertising have a product manager and developer. The marketing team can make changes to any part of the product. This avoids blaming a failing product and product people blaming failing marketing campaigns.
There are practical challenges such as identifying the KPI’s to move, and having two teams change one area of the product. While there is no cure-all, hiring marketers and PM’s who can use data and customer insights to improve their product is a challenge that demand gen leaders should focus on.
When marketers can win customers, convert them into advocates, and revolutionaries for your cause, good things happen. For example, during Transferwise’s early stage they offered their target audience a referral bonus but realized these tactics only worked for existing customers.
By delighting customers first, convincing them to tell their friends about your product gets easier. Here's a perfect example:
For more by Nilan Peiris on creating a structure around trust and accountability in growth and demand generation, read this article.
Wrap It Up
Whether it’s growth for B2C products, or demand generation in B2B, there are several important strategies to keep top of mind:
Build a strong infrastructure from the beginning
Define goals and KPI’s clearly
Experiment based on well informed hypotheses
Hire based on the ability to gather and apply customer insights
These strategies serve managers well as they build and continue to improve the revenue engine.