← MarTech Podcast ™ // Marketing + Technology = Business Growth
MarTech Podcast ™ // Marketing + Technology = Business Growth
How To Stop Starvation Marketing
00:19:09
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- [00:00]
Benjamin Shapiro
The Martech Podcast is a proud member of the iHear Everything Podcast Network. Looking to launch or scale your podcast, iHear everything delivers podcast production, growth and monetization solutions that transform your words into profit. Ready to give your brand a voice? Then visit iheareverything.com.
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From advertising to software.
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Doug Bell
As a service to data across all of our programs and clients, we've seen.
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Chris Slocum
A 55 to 65% open rate.
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Doug Bell
Getting brands authentically integrated into content performs better than TV advertising.
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Benjamin Shapiro
Typical life span of an article is about 24 to 36 hours.
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Doug Bell
If we're reaching out to the right person with the right message and a clear call to action, then it's just a matter of timing.
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Benjamin Shapiro
Welcome to the Martech Podcast, a member of the I Hear Everything Podcast Network. In this podcast, you'll hear the stories of world class marketers that use technology to drive business results and achieve career success. Here's the host of the Martech Podcast, Benjamin Shapiro.
- [01:15]
Welcome to the Martech Podcast. I'm Benjamin Shapiro, the Executive Producer of the Martech Podcast and today we've got a special episode for you which is going to be guest hosted by Doug Bell, who's the CMO of Chief Outsiders. Doug is a veteran CMO with a background in helping growth stage B2B SaaS companies reach their true potential and I'm thrilled to invite him and some of his friends to take the microphone and share their knowledge with you, our loyal Martech Podcast listeners. Okay, here's a special episode of the Martech Podcast guest hosted by Doug Bell, the CMO of Chief Outsiders.
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Doug Bell
Hello marketers, My name is Doug Bell from Chief Outsiders. Joining me today is Chris Slocum, who is the founder at ClarityQuest and chief growth Officer at Supreme Group, which is a strategic marketing agency growing healthcare and life sciences companies dedicated to providing best in class business and commercialization services. And today, Chris and I are going to be talking about how to stop starvation marketing. Okay, here's my conversation with Christine Slocum, the founder at Clarity Quest and Chief Growth Officer at Supreme Group.
- [02:20]
Benjamin Shapiro
But before we get to today's interview, I want to tell you about what I'm listening to. Ever wanted to sit down to a candid conversation with marketing leaders from the world's biggest brands? The current podcast is your chance. On the current podcast you'll find exclusive interviews with the experts and trendsetters who are on the front lines of digital advertising. And they always leave the ad tech jargon at the door. So subscribe to the current@www.thecurrent.com or anywhere you get your podcasts today.
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Doug Bell
Chris from South Jersey, welcome to the podcast.
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Chris Slocum
Hi, Doug, how are you? And I'm actually from North Jersey.
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Doug Bell
I was hopeful we could convince you to the eagle side of the world. But that is a conversation for later on. I was doing my research heading into our conversation today. This was the first time I had heard the term starvation marketing. So I know there's a book as well. So unpack. What is this idea of starvation marketing?
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Chris Slocum
Yeah, so the name and the idea actually came from my buck from Stop Starvation. But it came from 25 years of experience of talking to chief marketing officers, talking to C level across the board at B2B companies. And it actually had an origin when I was an engineer, before I was a marketer in the 90s, I worked for a little company at the time called Motorola. It was Fortune 50. They were the thing when I was there. Right. Everyone had a flip phone, everyone had it in the back pocket. And I saw them put all the emphasis on technology and none of the budget or emphasis on marketing. And so I kind of coined that in my brain at the time, starvation marketing. And then 25 years later, I revitalized that term because I saw a lot of B2B technology companies going down that path of putting all the money in R and D technology, even sales, and forgetting about marketing until the last minute when it was in crisis mode.
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Doug Bell
That's interesting, by the way, because I think given the current state of the marketing environment, there are a lot of people listening today going, I'm experiencing starvation marketing. But to distinguish the two, one is circumstantial. In other words, there's externalities that are causing huge amount of pressure on a given part of the marketplace. Let's say right now, a good example is there's a lot of pressure on software as a service and two pressure points. One is the cost of capital and the other is people are still trying to understand both buyers and both the product. People are trying to understand what effect AI is going to have on the end result. So there's this pullback on marketing spend. That's not what we're talking about, though. We're talking about systemic challenges where marketing is underrepresented from a strategic standpoint.
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Chris Slocum
Absolutely. This happens in every economic environment. Even when we were in boom times when everyone was spending when interest rates were really low, I saw a lack of belief from the C level in what marketing could actually do for their organization. And it's not across the board, but it's very prevalent in B2B tech and healthcare because they tend to be founded by people who are software developers or business folks. And they never really looked at marketing holistically and what it could bring to the organization. Or even say, like I should have a chief marketing officer on staff. It's the pretty booth, it's the trade show booth, it's the collateral. But it's not attribution and ROI that's changing. But I still see an attitude where, oh yeah, I'm going to put the minimal amount in marketing spend and then we'll just see what happens and I'll hire more salespeople if the numbers aren't where they need to be.
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Doug Bell
Clearly that formula is holding up. So I have to. I'm going to put on my economist hat here. I'm not trained in economics in any way, but I'm going to put that on and say, well, gee, if marketing has to play a key role, shouldn't that have become very evident at some point? In other words, shouldn't there, let's go back to Motorola. Shouldn't some competitor, let's say Nokia back then shown how marketing spend can and marketing great marketing tactics, not just spend and strategy sort of lead the way? Shouldn't the economics, in other words, Chris, have worked themselves out at this point?
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Chris Slocum
They found other ways to blame it on different parts of the channel. And you're absolutely right. Motorola first got eaten by Nokia and then they got eaten by Apple. And Nokia had better marketing than Motorola and Apple certainly had better marketing than the rest of them. Better technology too. But everyone blamed Motorola user interface software, a bunch of engineers. Were there problems in that area? Yeah, but I can tell you the marketing department was where engineers went to die at Motorola. It's why I got out of there. I was like, I was an engineer, but I loved marketing. I went to MBA school. I actually studied under a casino marketer. And casino marketers are like the best. Right? And I was like, why aren't we doing this within tech? Because it works. And people didn't want to hear that story. It wasn't marketing, it was engineering software glitches there. But it really wasn't when you look at the end of the day, because yes, Apple has a fabulous technology and innovation, but they also have equivalently fabulous marketing and brand.
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Doug Bell
I think that's sort of a perfect historical case study of why marketing is important. But we're not. So like Nokia. You're right. Nokia and Apple. I'm going to throw Apple out of the conversation just simply because there is this synergy of product and marketing that is just so hard to replicate. And marketers and product people have been trying to do it for years. Good luck to you my friends. But we got Nokia. They really did eat Motorola's lunch back then. I remember when Motorola, by the way, was the StarTAC and the flip phone and just how technologically dominant they were and how great their channel strategy was. But let's sort of get back into that time machine. Let's come back to today it still exists. So Chris, sort of walk me through where you're seeing it being most prevalent and let's just talk about how to sort of break out of that place for these organizations that aren't allocating enough resources and don't see marketing to be strategic.
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Chris Slocum
I see it most prevalently in companies that do have a tech founder and in life sciences, biotech, healthcare, IT services, managed services, those types of companies with a tech founder and even like private equity venture based. If they haven't had an experience with marketing that's been positive yet, they tend to just go down the route of hire more salespeople. And that happens now. That being said, there's really bright spots and case studies that our agency and others are starting to show and getting that data behind us. There's some data in my book Stop Starvation Marketing that shows what the average successful companies are spending on marketing. And it's not 1% of revenue you want to delta acquire, right? It's More in the 5, 10, 15 depending on B2C, B2B which vertical area you are in. So we have some case study that shows that they were crazy. We had a biotech company PhD founder, she would spend as much on marketing as her lab equipment and that's saying something from a PhD marketer. And I would even go, and what? Like at the end of the day it would floor me how much you wanted to spend on marketing. But she's like, every dollar I spend on this I see a 6x ROI. So why wouldn't I continue doing it? Why would I continue not spending? But that takes a lot of faith and trust to get to that point with folks. And I think we have to get the word out more. And that's why I'm doing your podcast, to get the word out more about this that there are case studies with tech founders that show they took a leap of faith. They looked at the data, they started some a B testing and then the results started coming and they poured more money into marketing only to be really successfully acquired or go ipo.
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Doug Bell
Chris, given what you're selling here. I'm going to have you on the show every day. So it's the month of Chris people. We're going to break through the malaise around marketing right now but let's sort of get down to causal factors if we can and I would love to get some recommendations from you as well Chris. So I feel like I'm going to bring up something that we have been talking about since the first booth opened in the Sumerian marketplace and somebody was like let's call this marketing ready Romi return on marketing investment. And I have to say in the industry for a really, really long time and this has not gone away. Chris which is marketers ability to measure the results of their activity against downstream. So trailing indicators, bookings, revenue conversions. So is it as simple as just marketers still struggle with attribution and ROI or is there a bigger play here?
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Chris Slocum
The positive news is I'm seeing a lot better technology being implemented on the marketing side of attribution. It's easier these days to do UTM code work, have API apps that get LinkedIn into your CRM for example. It used to be a real pain to do that. So that's the bright side of Martech attribution. But at the end of the day it's garbage in, garbage out. And where I find there's still a lot of break is on the sales CRM side of this and making sure CRM input hygiene is really, really good. And that takes buy in from the head of sales and the head of marketing and even the CEO. I run a sales organization here at our agency and the salespeople do not get commissions if their HubSpot data is not input correctly. And that's the way to get really, really good sales CRM data. It's part of our culture actually. It's not just the money. Right. It's part of the culture that you have a personal responsibility. So I think that has to be elevated in sales. Yes. You want your people on the phone, you don't want them so encumbered by Salesforce or HubSpot or whatever they're using as their CRM. But make the process easy for them to be able to get that information that marketing needs to then show where was first touch attribution.
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Doug Bell
So what I'm hearing from you there Chris, is that there's sort of this inevitability to solving the first problem which is being able to measure with some accuracy the impact of your efforts. And it is in many ways just based on the fact that we have third and fourth generation CRM solutions that are full of bad data. So here's the nice part about the pressure and the cutting and all the things that are happening in marketing. And I've seen this is my fifth cycle of watching this happen. I don't know how many cycles for you, but this is not unusual to watch this happen. And out of each cycle comes a leaner, meaner, better marketing function for organizations. So on the backside of this, we're going to have better data, hygiene and probably better products, even if they're self built, but sort of better tool sets to help ourselves understand marketing, ROI or roaming. So that's the good. But I've got to sort of go back to the bad news. You talked about something super systemic and maybe this is just an artifact of where we are with founder culture, but quite often we have founders that are starting from the tech side. That's the norm and they don't get the role of marketing. I'm going to put that aside for a minute because I just, I have to say, at the end of the day, that's up to you, Kris. I'm going to put the burden on you, Kris, to educate those folks out there because you'll have winners or losers if they're not investing. The place I want to spend some time on really is some of the other systemic issues that I think that are out there. And what I would love to start with is just an understanding of the art of marketing. Do you feel like folks don't get what marketing is? I know it's a big question, but do you feel like organizations just struggle to understand the role of marketing writ large when it comes to growth?
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Chris Slocum
Many do not understand. And that's why I was tearing my hair out for 25 years and said, I'm going to put everything in a book that I talk to and educate folks on on this because people want to learn. Usually tech CEOs are very inquisitive and they're like, oh, okay, open my eyes, bring data, show me, show me, show me. Right? So I think it's a case of lack of education of us as marketers too, of really showing where marketing can make an impact and making it measurable. If you say, oh, we do PR and you really can't measure it, that's really hard for a CFO to grasp. They're like, I don't know if I should give you more budget for this. So how do we make it as quantifiable as possible? You can't measure every single thing in marketing. But you certainly can measure a lot more today than you could 20 years ago. That's where I like to go with folks of saying, okay, put together a plan, consider all your options, ab test the heck out of it, measure everything and then at the end of that year, audit the darn thing. We don't talk about auditing marketing plans at all. We just take the budget and say oh Yeah, I want 10% more than last year. That's what companies do from small all the way up to Fortune 50 for the most part, unless they have a very sophisticated marketing organization. So audit your marketing plan. How did we perform? And then usually if you go to the C level and say we performed great in this area, we didn't in this other area, but here's how we're going to correct that and can we get the same amount of spend? Because here's our new corrective action plan. At least they're going to listen.
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Doug Bell
I also have to ask, you mentioned this earlier on, but you talked about percentage of revenue as a benchmark, marketing spend as a percentage of revenue rather. And you mentioned 1 to 2% doesn't get it done. I think there's just lots of case studies and evidence out there that some of the leaders in our various spaces, there's lots of niches in SaaS as an example, but typically the leaders aren't always the tech leaders. Frankly they're often the spend leaders in marketing. So what's a good benchmark for percentage of revenue? And I'm going to sort of test based on ARR level. So let's say I'm pre 5 million. Should I be 20%, 10%? Like how much of my revenue should I be allocating towards marketing?
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Chris Slocum
There's a whole chapter in my book and it has data from both my experience here, our agency and 25 years experience. But it also has CMO survey and some other third parties that are validated. It really depends not only on the size of your organization but which vertical you're in too. So that's broken down like if you're in pharma biotech, the average is like 17%.
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Doug Bell
Wait, did you say 17% pharma biotech?
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Chris Slocum
Yeah, pharma biotech is 17%. Now that's a mix of B2B and B2C oftentimes or healthcare provider plus consumer. When we're like looking at health care, B2B 5 to 10% is more in the ballpark of that below 5 though. I tell people say your company is $10 million of SaaS you're selling into healthcare. Right. And you want to get another $5 million, you can maybe probably do the $10 million with contracts in the books. Your sales organization, what's your delta? Net new revenue, and take at least 5 to 10% of that. That's where we find companies succeed. But it does matter, you know, do you have like kind of monopoly in your space? Are there only three competitors? Are there 80 competitors? What are they spending? Know what your competitors are spending? There's tools to find that out these days. So what does your landscape look like and determine your percentage of spend on revenue? There's other ways to calculate it as well, and those are in my book as well. But B2B product, about 10%, B2B services, 8%. So those are general numbers your audience can take away.
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Doug Bell
Yeah, and that's great. Thanks for sharing all that. That's useful stuff. And I also think it would help the audience to understand that that really changes as the revenue picture. So as your revenue increases over time. So sort of pre 5, 20% is not unusual. Right. But as you start scaling up to 100 million, you might find that percentage dropping back. Because if you're 100 million, frankly, you're probably brand dominant at that point and you're a little bit more sophisticated and have a little bit more sort of sway in terms of where your dollars are going. So what is the name of the book, Chris?
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Chris Slocum
It is stop starvation 23 power growth moves for health, tech, IT and biotech companies. But it has lessons for B2B across the board.
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Doug Bell
And where can we find the book?
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Chris Slocum
You can find it on Amazon, Barnes and Noble, or any major online channel.
- [17:41]
Doug Bell
Well, congratulations for writing a book. I struggle to read them, so I'm always impressed when people write. That's not true. Right? Nobody can see this, but you can see the books on our bookshelf in the background. We're voracious readers, but I'm always impressed by people who actually can put pen to paper and produce something meaningful. Chris, I really enjoyed the conversation we're going to have. You come back tomorrow and talk a bit more. But thanks for joining us today. I really appreciate it.
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Chris Slocum
Thank you, Doug. I appreciate the opportunity.
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Doug Bell
Okay, that wraps up this episode of the Martech podcast. Thanks to Chris Slocum from ClarityQuest Supreme Group for joining us today. In part two of this interview, which we'll publish tomorrow, Christine and I are going to discuss effective marketing for healthcare and life sciences. If you can't wait until our next episode, would like to learn more about Christine. You can find a link to our LinkedIn profile in our Show Notes or visit our company's website at supremegroup IO.
- [18:26]
Benjamin Shapiro
Okay, that wraps up this episode of the Martech Podcast, thanks to our guest host, Doug Bell, the CMO of Chief Outsiders. If you'd like to get in touch with Doug, you could find a link to his LinkedIn profile in our show Notes. Or you can contact him on Twitter, where His handle is MarketAdvocate. Or you could just visit his website, which is ChiefOutsiders.com A special thanks to the Current Podcast for sponsoring today's interview. If you're looking for candid conversations with marketing leaders from the world's biggest brands, then give the Current Podcast a listen. On the Current Podcast you'll find exclusive interviews with experts and trendsetters who are on the front lines of digital advertising, and they always, always leave the ad tech jargon at the door. So subscribe to the current@www.thecurrent.com or anywhere you get your podcasts today. Just one more link in our Show Notes I'd like to tell you about. If you didn't have a chance to take notes while you were listening to this podcast, head over to martechpod.com where we have summaries of all of our episodes and contact information for our guests. You can also subscribe to our weekly newsletter, and you can even apply to be the next guest speaker on the Martech Podcast. Of course, you can always reach out on social media. Our handle is martechpod. M A R T E C H P O D on Twitter, Instagram and Facebook. Or you can contact me directly on LinkedIn. My handle is Benjshap B E N J S H A P and if you haven't subscribed yet and you want a daily stream of marketing and technology knowledge in your podcast feed. We're going to publish an episode every day this year, so hit the subscribe button in your podcast app and we'll be back in your feed tomorrow morning. All right, that's it for today, but until next time, my advice is to just focus on keeping your customers happy.
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Thanks for listening to the Martech Podcast and I hear everything. Production Looking to launch or scale a podcast like this one for your brand? Then visit Iheareverything.