6 SaaS Marketing Trends Learned while Scaling from $47M to $400M

Kyle-Lacy-300×300 by

Editor’s Note: These 6 SaaS marketing trends are the final installment in a three-part interview featuring Tim Kopp. In the first installment, Kopp provided some expert advice on how SaaS companies should rethink the analyst model. In part two, he identified three trends that are driving massive movements in contemporary marketing.

As the former CMO of ExactTarget, sought after advisor, board member, and General Partner at Hyde Park Venture Partners, Tim Kopp has earned (and continues to expand) a uniquely broad perspective that few others can claim. From his days in leadership roles at consumer giants like Procter & Gamble and Coca-Cola to his six years at ExactTarget, Kopp has led world-class teams to outstanding successes. At ExactTarget, he helped increase revenue dramatically from $47 million to well over $400 million, growth that ultimately resulted in one of the largest SaaS IPOs on record and the 2013 acquisition of the company by Salesforce to the tune of $2.7 billion.

His twenty years in the industry have made Kopp keenly aware of the deep and rapid changes in the marketing landscape. When he started out, the marketing model was all about pushing one-size-fits-all messaging through a few channels: TV, radio, print, and out-of-home. Today’s digital marketing technologies and platforms give marketers a much more expansive palette of strategies, tactics, and channels; but they also create additional challenges by giving customers the ability to create their own brand experience.

Throughout all these changes, Kopp has remained at the forefront of the evolution. Over time, the insight he has gained from working with some of the world’s most respected brands has given him the ability to recognize critical truths that marketers – particularly SaaS marketers – need to pay attention to if they want to take their game to the next level. Here are six such nuggets of hard-won wisdom:

1. Branding – Where Everything Starts

“If your messaging is crap, nothing you do in marketing will work,” Kopp says, not pulling any punches. “Everything starts with really strong messaging and positioning: Who are you and what do you do?” Kopp has seen this simple (but, not easy) task trip up many otherwise very viable companies. “So many brands have this identity crisis,” he explains. “Brand decisions need to happen at the executive team level, and then you need a strong marketing leader to sort it all out and amplify it across all your channels.”

Brand is not just critical on the customer-facing side of things. It’s also a key component of a successful hiring and retention plan for your sales team. “What SaaS really amounts to at a level of scale is your ability to add high-quality sales reps and get them ramped up as quickly as possible,” says Kopp. “That ends up becoming your number one success metric.”

While this issue might appear to be a purely sales-centric one, Kopp points out the connection between a strong brand and a strong sales team. “The number one way you can help your company recruit and retain the best sales reps all comes back to marketing – having the right brand and the right messaging,” he explains. “Think about the inherent advantage a sales rep from Salesforce has over a sales rep from a no-name CRM company. The Salesforce rep will ramp twice as quickly because they are able to go into the field with ‘brand air cover’ that provides instant credibility.”

“In the beginning, you have to grind it out – rep by rep,” Kopp says, “But eventually you reach a point of critical mass where you’ve created a predominant brand. That’s what tips the scales and allows you to take everything. That’s what Omniture did in web analytics. All of a sudden, they had a 7,000-person user conference. Salesforce did the same thing with CRM, and ExactTarget did it with marketing. You create the brand and it becomes a movement – something people want to be a part of.”

2. The Role of Agencies – Not What It Used to Be

“When I first came to ExactTarget, about two-thirds of our budget was spent on agency partners, PR partners, creative partners, and so forth,” Kopp recalls. “Over a period of two or three years, we actually flipped that, by building two-thirds of the capabilities we needed in house.” In Kopp’s experience, external agencies have a tough time keeping up with the pace of the SaaS industry. “Context is everything,” he says, “and they didn’t understand the nuances of our business, the pace of it, or the vocabulary.”

While it’s challenging to build and manage what is effectively an in-house agency, Kopp believes that the benefits outweigh the risks. “It’s a lot harder to manage a 300-person, in-house team than it is to manage three agencies that you can just fire if you get fed up,” he says. “But it you look at all the best B2B marketing – from written content to events – most of it is being produced natively, in house.” And while he acknowledges that hiring the right people is a daunting task, especially at scale, Kopp feels strongly about the competitive advantage of an embedded team. “The pace of change has become so dramatic, both inside and outside the company,” he explains. “I think being at an agency, with too much choice, can be paralyzing. There’s just something about knowing the buyer’s language that an agency can’t do as well as an in-house team.”

3. The Talent Migration – Why The Best and Brightest Are Moving to Tech

Speaking of hiring, this is another area where Kopp sees some significant shifts. “When I started in B2B marketing years ago, people laughed at me,” he recalls. “There might have been five CMOs, and they were only in giant companies like Adobe and IBM. There really wasn’t a need back then for a senior-level marketing leader. Today, the most talented client-side people are switching over and taking B2B roles. Instead of going from Pepsi to Coca-Cola or P&G to Kraft, they are switching to tech.” Kopp thinks that the appeal of B2B is two-fold. “The work is more complex and therefore more challenging,” he says. “But, B2B also gives you a direct pipeline to the customer relationship which is much more appealing than, for instance, being at P&G, selling to a bunch of retailers, and being unable to get the data.”

“Ultimately, what smart and talented people want more than anything else is to work with other smart and talented people,” Kopp adds. “And tech – Google, Apple, the bigger software companies – are the companies that attracting the best and brightest.” Kopp adds that, of those best and brightest, it’s important to recruit the most versatile candidates, people who can fill multiple roles. “Look for someone who has the potential to be a really strong player-coach,” he says, “someone who has the ability to get a handle on the big picture, do the work, and also lead.”

4. Your Marketing Platform – Why the CMO Should Think Like a CTO

Insight number four is less a nugget of wisdom and more of a Big Idea to think about as you build your marketing machine. “I think about the job of a CMO as fairly similar to a CTO,” says Kopp. “It’s about building a platform into which you can snap an endless number of apps. When you talk about branding and analyst relations and sales enablement – they are all tools in the tool belt. Your job is to know which one to deploy when.”

The process of integrating apps into your marketing platform is something that happens in phases. “In the beginning, the flywheel that gets the energy going is focusing on demand gen and working with the sales team,” says Kopp. “Then, as you start to generate momentum, the focus switches to sales enablement – messaging, positioning, getting conversion rates up.” This kind of transition from phase to phase is part of the reason Kopp says we’re seeing a big push into account-based marketing.

One of the biggest challenges for marketers is to understand how to get all the “apps” working together effectively and efficiently. Today’s CMOs need to be able to grasp the whole picture, see the entire ecosystem, and understand all the relationships between the different marketing assets and tactics. Running the business at ExactTarget took exactly this kind of insight and long-term vision. “When Andy Kofoid and I sat down to figure out our sales and marketing strategy, we had 44% of revenue to work with and a mandate from the board to double the number of sales reps,” Kopp recalls. “But Andy knew we weren’t ready to hire all those reps because we didn’t have the brand or marketplace to make those reps successful. So, we increased marketing from six points of revenue to twelve and doubled down on connections, analysts, and thought leadership.”

From there, they were able to build a dominant brand that could support the additional reps. They grew their user conference from 600 to 6,000, won an analyst report, attracted higher quality sales reps, and ramped them up twice as quickly. Once they’d reached that point, Kopp was actually able to give back the points and still keep building the empire. “All we needed to do then was hire more reps than anyone, and we’d win,” he says.

5. Prioritization – Where a CMO Needs to Focus

“The number one topic that comes up with every CMO I’m working with today is prioritization,” says Kopp. “Almost every CMO I talk to says they’re responsible for this bucket of things, but – no matter what a company says – it’s all about how to work effectively with the sales team in order to drive sales velocity. That’s the oxygen we breathe, the gas in the car. That’s what gives you the credibility and the lifeline to do other things.”

“It’s shocking to me,” Kopp admits, “when I ask a CMO, ‘What are you accountable for?’ and they can’t tell me. That’s the most important part of the job.” Thinking back to his days at ExactTarget, Kopp explains that he was accountable for very specific goals and objectives. “I had to drive 50% of the new business pipeline,” he says. “It was very concrete measures – highly specific metrics that we drilled down into a scorecard.”

6. Stellar Experiences – The Secret Sauce

While it might seem a little warm and fuzzy compared to topics like leveraging data, ramping up sales reps, and building an in-house agency, Kopp makes a point to emphasize the importance of employee engagement. “It used to be that when you talked to a CMO, it was all about leads – not even demand gen, just generating leads,” he says. “Now, the idea of building a big and powerful B2B brand – what Salesforce did with Dreamforce, and Omniture did with their conferences – is about producing content and creating great experiences.”

The ability to deliver an over-the-top experience – internally and externally – can make all the difference for a SaaS company. “At its core, a software company is just the servers in the sky and the people,” Kopp says. “The CMO is in a really good position to create experiences not only for customers and prospects, but – just as importantly – for the company’s employees. That’s tough. Adding that into the mix makes for a really odd basket of work. This is why I say that the role of CMO has changed so dramatically.”

“Before digital, your job as a marketer was to work with an agency to produce really good creative, and that was about it,” he says. “A good TV spot, a good radio spot – you developed really good creative and you shoved it down those pipes. But now there are between thirty and forty different digital mediums, and new ones are coming on the scene every day. The role of the customer has changed tremendously, so the role of the marketer has to change tremendously.”