B2B Partnerships That Matter
Like many B2B companies, K2 Software has really zeroed in on what makes its low-code process automation platform mission-critical for its customers. Unlike many B2B companies, K2 had already started shifting its strategy and messaging in 2019, months before the far-reaching effects of COVID were on anybody’s radar. In the scramble to prove that its product or service is essential during a downturn, K2 was ahead of the game.
In this episode of Renegade Thinkers Unite, K2 CMO Carlos Carvajal shares how the company’s recent brand transformation and various internal and customer partnerships have helped them navigate the challenges of 2020 and transform automation for the better. Be sure to tune in to hear about the success of K2’s virtual event, the launch of a new sub-brand, how K2 celebrates customer success, and more.
What You’ll Learn in This Episode
- Why K2 transformed into a mission-critical brand (pre-COVID)
- How K2’s marketing strategy is generating revenue
- Why B2B customer partnerships and product partnerships matter
Renegade Thinkers Unite, Episode 211 on YouTube
- [0:28] Why B2B Partnerships Matter
- [6:44] How K2 Zeroed in on Customer Mission Criticals
- [13:06] How K2’s Virtual Event Filled the Pipeline
- [18:45] Shifting to an App-Centric Approach
- [23:11] Launching K2’s Sub-brand and New, High-Level Messaging
- [28:34] Celebrating Customers with Video Testimonials
- [34:06] Why K2 is Testing Gated Content
- [37:44] Metrics that Matter: Pipe Generation, Opportunity Creation, Revenue
Transcript Highlights: Drew Neisser in conversation with Carlos Carvajal
[0:28] Why Internal Partnerships Matter“Where do you point the product roadmap? Where do you focus marketing?” @carloscarvajal @K2onK2 #RTU #podcast Click To Tweet
Drew Neisser: Hello, Renegade Thinkers! Teamwork. We’ve all heard the cliches: “There’s no “I” in team.” “You’re only as good as the weakest link.” “I can’t, but we can.” “No individual can whistle a symphony.” And my favorite… “Teamwork, it’s a lot of people doing what I say.”
That was a joke. We’re supposed to cue the laugh track. But seriously, on this show, we tend to focus on the individual accomplishments of each CMO, zeroing in on all the critical inflection points, pursuing insights that make all of us better marketers. But when I was having a prep call with today’s guest, before he would speak about a single outcome, he had already used the word “partnership” and praised at least two of his team members for their contributions. So I thought, let’s build a show around the simple fact that no CMO can be successful on their own.
Not only do they have to build and lead a highly functional marketing department, they have to create healthy partnerships across the organization with finance, HR, sales, and ideally, product development, which you’ll hear a lot about in this show. To find out how you do all of this and more, I’m delighted to welcome Carlos Carvajal, the CMO of K2, a software company with over 600 employees based out of Bellevue, Washington. Carlos, welcome to the show.
Carlos Carvajal: Hey, it’s great to be here. Thank you for having me, Drew.
Drew Neisser: It’s my pleasure. So how is the pandemic treating you?
Carlos Carvajal: I think it’s similar to everybody. I can’t lie, it’s getting pretty old at this point, but overall, things are going surprisingly well at work given what we do, and companies are looking to try to automate processes more and more. I’m mainly focusing on the positive, but I’ll put it to you this way: My wife said, “So when can you start traveling again?” I think that’s a hint that I need to get back on the road.
Drew Neisser: That’s funny. There’s a group of us that have been friends for gosh, 30 years or more, and we keep trying to figure out how we’re going to get together. And each time we get close, we go, “You know, we can’t do this,” and it just, it breaks our heart. But anyway, you’re based in the state of Austin, right?
Carlos Carvajal: That’s a good one. Yes. I am a proud Texan. I have to admit that I’m in Austin.
Drew Neisser: Yeah. Well, Austin, for those who are not familiar with Texas, is like its own bastion. It’s the only blue part of the entire state of Texas.
Carlos Carvajal: That’s actually very true.
Drew Neisser: You started at K2 back in November 2019. What attracted you to that opportunity?
Carlos Carvajal: You spoke of partnership and I think that’s so key. There’s a gentleman by the name of Burley Kawasaki, who’s a chief product officer at K2 and he actually came over first. We worked together at our previous company, Kony. At Kony, we faced some interesting challenges as far as how to find a market segment that you can drive a lot of sustainable growth in, repeatable success, those types of things. K2 was going through some similar challenges at the time. What I mean by that is that the company at the time would sell to really small companies, really large companies across every industry, use case. If you think about it, you could automate just about any process for any industry.
Really, the mission at the time was, how do we get more focused into a specific area where we can drive a lot of growth and future expansion? I liked that. That was exciting to me; to basically see if we could help the company put focus and like you said from a partnering point of view, it’s not just a marketing problem. It’s a company-level problem. Where do you point the product roadmap? Where do you focus marketing? Sales alignment, even finance and everything else wrapped around it, support, customer success, and more. That was just exciting to me. That was a challenging opportunity.
Drew Neisser: I’m a big believer in focus. We talked about the peanut butter effect where you spread yourself too thin from a marketing standpoint with all your efforts, but companies that do that are not necessarily thinking. It tends to happen through the absence of strategy. It tends to happen because, say, a salesperson says, “Hey, I can sell to that person,” or “I can sell to this person.” And then it’s sort of accidental. Even though it’s accidental, it’s there, and it was part of what you had. How do you, as the marketer, go about trying to bring focus when we’re really talking about business strategy here?
Carlos Carvajal: It is incredibly helpful and, honestly, required to have support from the CEO and the board. That was one of the things when I first came on board that was discussed. Is this something that we’re fully aligned on? You don’t want to go into this process and then figure out six months in like, “Haha just kidding. All revenue is good revenue, go for any deal you can. It doesn’t really matter.” It takes a real hard commitment on that, so CEO support was critical and then beyond that, presenting a valid business case. That’s not something you can do overnight.
To your point on partnership, that’s not something you can do in isolation, but having a really strong go-to-market plan with real data, real customer proof points, looking at the competitive dynamics, and showing other growth opportunities and how they’re driving growth in areas where you can find a niche and really throttle it from there. I’d say it’s a combination of, once again, CEO and board support, and then really reading the situation. Is this something that the company is going to rally around or is this going to be the—I hate to put it this way—but the strategy project du jour that, six months from now, is going to be a different strategy project. I’ve seen it happen in companies before.
[6:44] How K2 Zeroed in on Customer Mission Criticals“We nailed it down to mission-critical defined as, number one, just from a litmus test, would an executive CXO care about this process if it failed?” @carloscarvajal @K2onK2 #RTU #podcast Click To Tweet
Drew Neisser: The Michael Porter definition of strategy is knowing what to say no to. Let’s talk a little bit about the process that you went through.
Carlos Carvajal: One of the first things that we did, we needed to come up with a point of view. We have nearly 2,000 customers. We wanted to really analyze our customer base and do a segmentation analysis and just see where we have repeatable success. Are there any patterns and how would that would compare against the market if we wanted to drive that forward? What was interesting, and I won’t go into the full gory details, but we saw a pattern of use cases. For example, the most popular pattern of use cases was around employee process automation. Employee onboarding, travel requests, things around IT processes, and more. We saw a lot of those, but our concern was that those are getting more and more competitive.
You had other larger competitors—I won’t go into specifics—coming into the space, and frankly, those were getting commoditized. We were thinking that’s probably not where we wanted to go. We looked at other patterns as well, and what we noticed is we had more and more customers that were using us for what we called business-critical or mission-critical processes that drove a higher ASP [average sales price], more strategic in the business, more difficult from a switching costs point of view, all those things. We noticed that we could drive that harder and we had competitive differentiation around ROI. When they told us, “We looked at alternative solutions and we found K2 was half or even less than half of what it was going to cost us to go with someone else and we’re really happy,” we saw that pattern.
We nailed it down to mission-critical defined as, number one, just from a litmus test, would an executive CXO care about this process if it failed? If this process goes down, if I don’t get my laptop one day versus another that’s one thing. It probably fails a litmus test. If we fail to meet a compliance regulation or regulatory requirement and I could potentially go to jail, that’s a real problem. If I have an issue around customer service, customer acquisition, customer onboarding, things that touch the customer, those tend to get C-level visibility. That was the kind of high-level test, then putting focus on regulatory requirements, customer acquisition, customer service, things of that nature. Once we saw that, we felt like we could really drive that hard.
Drew Neisser: Interesting. I’m going to circle back to that in a second. I just want to make sure, what is ASP?
Carlos Carvajal: Oh, sorry. ASP is average sales price.
Drew Neisser: Average sales price. That makes sense. What’s interesting is, some of this work, a lot of this work was done between November and March, pre-COVID, pre-pandemic, but the notion of being able to focus on mission-critical and getting there—this is really interesting timing. We suddenly get to February, March, and since you’re a Seattle-based company, you were seeing a COVID hit earlier than we did on the East coast. Were you mission-critical before that? When did that insight come into play?
Carlos Carvajal: The view that we should lean into that and test that hypothesis and go out and further validate it started, I would say, in the December timeframe. But really, we did take a few months and we brought in an external agency to help us with the validation phase as well. That did lead into, to your point, late February and March when COVID started to creep up on everyone, starting in the Seattle area in the US.
Drew Neisser: The thing I want to put a punctuation point on here is, and this is true for agencies and it’s true for lots of companies, whether your product or service—I’d like to think we’re probably all in the service business one way or another—if you’re mission-critical, you’re getting more attention from the board, you’re getting more attention from the C-suite, you’re more important to that customer. They’re more likely to stay with you and they’re also more likely to pay more for your services.
Thinking about that, it’s just an interesting thing, particularly now. I’ve talked about this, I probably ranted about it on this show: We’re in a world now where the CF-No is in charge. The CF-No basically says, “Is it mission-critical?” In other words, “Will I save money? A lot? Right away? Or will I be able to make more money?” Otherwise, they’re not making investments in software or additional services because this isn’t the time when you do that unless you’re printing money from some other way.
[13:06] How K2’s Virtual Event Filled the Pipeline“We used the virtual event as a way to test whether we could actually drive interest, engagement, response, and more on this topic related to case processes.” @carloscarvajal @K2onK2 #RTU #podcast Click To Tweet
Drew Neisser: Some of this is just really fortuitous on your part, but you were planning to change the focus of the organization. Rather than “What can we do?” it’s, “What do we need to do that really makes a difference?” You got that insight, you’re moving the company forward, COVID strikes, then what?
Carlos Carvajal: COVID strikes and right about the time that we started to get concerned that this is—contrary to someone’s opinion—not going away anytime soon, the first thing we thought of is, we have a major user conference coming up, in-person conference. We wanted to start to preview the strategy at that conference, which was scheduled for early April. In that timeframe, we decided that we need to switch to a virtual format, so that was one of the early things we needed to do. We then only pushed it out two or three weeks. Then we started to focus on the messaging: How do we want to test the messaging? One thing I didn’t mention earlier is that, within this focus on mission-critical processes, there’s an area in the space called “case management” and a whole bunch of use cases had spun off of that.
We used the virtual event as a way to test whether we could actually drive interest, engagement, response, and more on this topic related to case processes. That was at our K2 FastFWD virtual event in late April. With that, that gave us an opportunity to really start working with product, building messaging, all the things around it, and use this as a testbed. It wasn’t expensive to do the virtual format, so we could learn in a more controlled way.
It worked exceptionally well. We basically blew out the numbers of our virtual event. We blew out the target as far as the attendees even for that session. What was interesting, and to the point you raised around mission-critical, we had one of our existing customers that, when they use us as a platform, their spend—without getting into the specifics—let’s just say was under $50,000 a year. They were trying to figure out a way to automate really key processes that would impact their top line.
They weren’t looking at us at first until they actually attended the session that we were testing the messaging on and they went, “Oh, you can help us with that?” That actually led to a 90-day sales cycle. It was actually under 90 days where it was a seven-figure contract, a million dollars plus, which was incredible. That one data point early on, you want to talk about lighting the fire because leads are great, pipeline is better, revenue wins. The fact that that deal closed that fast—and even within that, we had other prospects and customers that showed interest around this specific topic. Much larger deals, and just like you said, a much more strategic, different level of conversation.
One of the key things that we noticed from a marketing perspective is we need to shift the discussion from having an automation platform for IT to more how we’re going to help drive and automate business outcomes for the line of business with the support of IT. Really shifting the marketing message to outcomes with the support of IT, and much, much more.
Drew Neisser: One of the things I think I heard and I want to make a point about is, this was an existing customer who just didn’t know you could do something else. For a lot of companies right now, the survive to thrive strategy really involves not only hanging onto the customer but when there’s an opportunity, it’s either help them use your product in a way that they hadn’t been using it before or give them something else to do. Was this a new product?
Carlos Carvajal: COVID factored into our thinking here from a product offering and strategy point of view. We decided that there’s just a lot of risk with trying to build out some of the new offerings and modules that we needed given the unknowns of COVID. We decided to basically go down an OEM path. This was even earlier in the year, so we did actually have new offerings, but it was actually creatively done through more of an OEM structure than trying to build it from scratch.
Drew Neisser: Explain that a little bit more just in case someone is unfamiliar with what OEM means in this context.
Carlos Carvajal: I’ll be specific because it’s just helpful to understand. In this case, it was a law firm and they were looking for how to improve and automate matter management processes for their lawyers. One of the offerings that we looked at OEM-ing happened to be an application. Not more of a platform tool, but an app, an actual application, specifically designed for case management matters.
One of the use cases was around legal and law firms, so we took that, and we resold it as K2, but then as part of the roadmap, we were doing additional work. What I mean by “white-label OEM” is, it’s a K2 offering. It is something where we’re providing support. We’re actually moving it into our cloud as part of a roadmap and all this other work, but this was an early test. We frankly didn’t expect to get the traction as quick as we did. It was a nice surprise, so we had to work through some things. Basically, it means, instead of building it from scratch, we could leverage someone else’s technology, integrate it with our platform, and then resell it as K2.
Drew Neisser: Got it. That makes sense.
[18:45] Shifting to an App-Centric Approach“It's a transition. You can't just ignore your current business completely. That's part of what you have to just test and learn and iterate on.” @carloscarvajal @K2onK2 #RTU #podcast Click To Tweet
Drew Neisser: One of the things that I heard, and I don’t hear this a lot on an open basis—you used your customer conference FastFWD to test new products in a sense, or at least offerings, new messages, to see if it resonates. Was this something you just presented it out there or was this more individualized or sub-sessions? How’d you do that?
Carlos Carvajal: We did it through a session, to answer your question directly. We had a webcast session, we had 350ish attendees that signed up for it. We did have some prospects attend as well, so it was a mix of customers and prospects, mostly customers. With that webcast, we had a bunch of virtual sessions. That was one thing to see—is this something they’re going to come to us for? But as I mentioned to you earlier, when we analyzed our customer base, we saw that people were doing what we call custom building of case-based solutions on our platform.
The theory here was, instead of them having to build all this themselves, if we could package this up more and provide it more preconfigured so that they don’t have to do the heavy lifting, would they pay more for that so they could get to market faster and all the other benefits of having an application? It wasn’t like we had zero evidence that customers needed this. What we didn’t know is if they’d go in with the app-centric approach versus a platform-centric approach.
Drew Neisser: Again, this is sort of me getting to know your business, but for the listeners’ benefit…your platform enables IT professionals to build apps and to build, integrate, and connect things. Right?
Carlos Carvajal: Right. IT and business operations as well, because there’s low code and no code. Basically, visual ways to build out these processes, integrate with different systems, automate tasks, all those types of things as part of the platform.
Drew Neisser: Is this what used to be called middleware way back when?
Carlos Carvajal: Part of it. I would say the backend integration and the service layer, it’s amazing to me. Middleware, SOA, ESBs, and there is an integration component that’s critical, but there’s more to it on the app side as well.
Drew Neisser: It’s an interesting shift because, suddenly, it’s sort of like, “Here’s a tool kit. Off you go. Here’s the product.” That requires changing from a sales standpoint, a new educational program, a different way of thinking about the business. How important is that right now as you plan and think about K2 moving forward? It is a big shift.
Carlos Carvajal: That’s hard. It is. I don’t want to apply everything has gone perfectly and it’s been perfectly smooth. Those things are some of the challenges we’re still working through. What does the right go-to-market structure look like from a sales perspective? To your point, if you’re selling more of the tooling and the platform at, let’s say, a lower selling price where you’re trying to drive volume, that’s a whole different marketing strategy as far as digital costs, cost of sale, cost of marketing, acquisition costs, all those types of things. And probably more of an inside sales structure as well versus these higher-priced, mission-critical, trying to go C-level or executive—that’s much more of a consultative value sell.
That’s part of the transition we’re going through now. What’s that right mix? One bit of advice is—and I’ve seen this in previous companies where you have to be careful—you never want to swing the pendulum too hard one way or the other. It’s like, “Okay, we closed this one deal. We’re going all in!” No, it’s a transition. You can’t just ignore your current business completely. That’s part of what you have to just test and learn and iterate on.
Drew Neisser: The visual that I had is everybody running to the other side of the boat. The risk, of course, is the boat just capsizing.
Carlos Carvajal: That’s a great way of putting it.
[23:11] Launching K2’s Sub-brand and New, High-Level Messaging“Simplifying transformative automation was really the top line with K2 Nexus.” @carloscarvajal @K2onK2 #RTU #podcast Click To Tweet
Drew Neisser: Fundamentally, we’re thinking about how we become more mission-critical. Part of that was to create some products that were pre-bundled and addressed immediate needs. But I think there’s also the bigger shift in terms of the way you talked about the company or at least thought about it a little bit. Is there a higher-level message that you came to market with as you evolved since you started?
Carlos Carvajal: That’s a great question. We wanted to light a spark. We wanted to excite the employees, get the customer base excited about this. We wanted to excite our customers, our employees, and of course, the market, and prospects. Just from past experience, one option that was on the table was to rebrand the company. There was some internal debate like, “Hey, let’s change the name of the company; let’s rebrand.” You want to talk about making a quick decision when COVID hit? Are we willing to invest that kind of money right now and take that kind of risk? That shifted pretty quickly, but a good middle ground—and I have used this successfully at previous companies—is to launch a new solution brand, so a sub-brand.
We launched something called K2 Nexus. We loved the name Nexus because “nexus” is about connecting things and bringing things together, which really ties to our core strength and competency. When we ask customers, “What do you love about K2? What’s great about K2?” It’s like, “Man, you make it so easy to connect my SharePoint system, my backend systems, and bring my employees together and automate these processes.” And the employees love that too, so they really rallied around the K2 Nexus sub-brand as part of this launch for this mission-critical or strategic focus.
Then, on the messaging side, we went through another initiative there to stop at the top line. What are a lot of companies trying to do right now? They’re really, especially with COVID, trying to figure out: How should we transform how we operate? How do we do things differently? How do we actually use this opportunity to figure out, in many cases, simple things like moving off of paper? I’ve got emails flying around everywhere and everything else, so how do I drive this business transformation?
Where we landed was, ‘We’re going to focus at the top line on transformative automation.” The reason why we chose transformative automation at the top line is because it ties back to the mission-critical. If you’re not thinking of transformative and you’re just wanting to automate some low-level process, sure, you can do that with us. We can help, but we can actually take it a lot further.
Then the second thing with K2 that we wanted to focus on is making it simpler. Not saying it’s easy to do transformative automation, but that’s where our product can really help. It can just simplify the process around driving these mission criticals and automating these processes. Simplifying transformative automation was really the top line with K2 Nexus. And man, that drove a lot of excitement just internally. We started testing the messaging. This has just been in the last few months that we’ve been doing this, so really excited about that right now. Then there’s the whole demand side and everything else that we talk about.
Drew Neisser: What I appreciate—there’s a subtle thing that you said that I want to just remind listeners about: Technology is never simple. Whenever anybody says, “It’s easy, we’re gonna make it simple, then it’s a red flag.” In studying rhetoric recently, I realized that when you call attention to something like that, you’re raising the issue. It’s just interesting to me. I appreciate the fact that, while you wanted to make it simple, you didn’t say, “Oh, it’s simple! It’s a piece of cake. Just pull it out of the box, and bingo!” It turns out like a TV set, which isn’t simple anymore either.
Carlos Carvajal: Yeah. That was important to me personally. I just believe you need to be credible and be authentic with people. Simplifying it is different than saying it’s simple and saying it’s easy.
[28:34] Celebrating Customers with Video Testimonials“Messaging through customers typically tends to drive a higher response, not just at the top of the funnel, but what we realized is the salespeople really rallied around it.” @carloscarvajal @K2onK2 #RTU #podcast Click To Tweet
Drew Neisser: We’ve been talking about business strategy and the role that a CMO plays. You mentioned earlier that you actually came over almost in a bundled deal with the product partner. The result of that partnership was that you were able to reposition the company, developed some new products, and you had communications with lots of your customers getting real-time feedback. Let’s focus on a little execution or something that you did that you think really worked pretty well.
Carlos Carvajal: One of the things that we looked at as far as the messaging and focus, and to drive the message in the market and to be credible about it is—let me just mention one more thing. One of the things that we realized, and I realized early on at K2, and it really excited me, is the number of customers that were willing to tell their story. I was like, “Wow, we have great customers. They love K2. They’re willing to tell their story and we should absolutely tap into that.” Then we put another lens on it, which is, “That’s great. We’ll get as many of those as we can, but let’s prioritize the ones that fit the mission-critical profile so that we can reinforce this message in market.” That’s what we did. Even before the K2 Nexus sub-brand launch, we launched an excellence at work campaign to drive awareness on down, that “Wow, I didn’t know K2 could solve these types of problems.”
Back to the example from a law firm, “You can do this? I didn’t know you could do this.” Let’s get these stories out in market through our customer success. With the excellence at work campaign, for example, we have a customer, Bidvest, in the supply chain side, and they come out and say, “Hey, we’ve automated 70% of our processes with K2. We actually feel like we’ve made incredible progress on this digital transformation front, which everybody talks about.”
Then we had other great customers as big as Microsoft and many others talk about how they actually use K2 to solve these mission-critical problems that we wrapped into this excellence at work campaign. That was a really great way to get the message out. Really strong response rates. Messaging through customers typically tends to drive a higher response, not just at the top of the funnel, but what we realized is the salespeople really rallied around it. Their active prospects, in-pipe opportunities, those kinds of things, they leveraged a lot of the campaign assets and materials directly with their prospects and said, “Hey, look at what other customers like you are doing with K2.” That was just really, I think, a great way to start off this journey around K2 Nexus.
Drew Neisser: There are a couple of things going on that I want to highlight. One is that you never go wrong making your customers look smart. You just don’t. Particularly right now, when everybody is hugging their customers as hard as they can, the last thing you want to do is lose a customer right now.
Certainly, celebrating customers is a good business strategy all the time but particularly now. Did you have any challenges getting your customers to talk? I know a lot of software companies like yours sometimes struggle to get the customers to go on the record because one, it might be a competitive advantage to them or two, they’re just shy or three, whatever. Were there any challenges in that area?
Carlos Carvajal: There were a few challenges. Some brands just were off-limits. We knew that if we try to go to this specific company and ask them, we’re not going to get anywhere. It was one of those fail fast, let’s roll those out really quickly, the ones that we know we are not going to get traction with. The leader of comms and brand, Jean Kondo, was phenomenal at this. She builds incredible relationships with customers. What she did with Microsoft and that partnership—she took it so much further than I thought we’d ever be able to do. I was like, “Wow!” But it’s the quality of the output.
When the customer was seeing the type of work that was coming out, through the social media assets and then especially the video testimonials, that’s part of what we did. It was like, “Look, you can take this internally. You can actually champion your projects, your initiatives, and we’re taking care of all of this for you. We just need some of your time and we need the permission to do it.” Part of it was selling it back within the organization and that worked really well for a lot of these people trying to champion their different initiatives. We did get a little bit of pushback, but I’d say that, overall, it was incredibly successful.
Drew Neisser: Yeah. I watched the Microsoft video yesterday and we’ll link to it in the show notes. How do people discover it? I mean, I can see how the salespeople could do it, but did you put some paid media behind it?
Carlos Carvajal: Yes. We definitely put some paid media behind it. Paid search, paid social, and then we also just basically pushed across all social channels, amplified through our employee base as well to promote, you know, all the pretty traditional tactics around that.
[34:06] Why K2 is Testing Gated Content“I always believe let the data win.” @carloscarvajal @K2onK2 #RTU #podcast Click To Tweet
Drew Neisser: One thing I did notice that I hadn’t seen very often as I was looking on your website, I went to watch a second video. Maybe it was even a third one and I got about 15-30 seconds in, and “Boom!” Can we just talk about that for a minute? Did you need to do that? What’s the story?
Carlos Carvajal: Did we need to do that? No. The story there is, we’re actually in testing mode, so this is good feedback because that is something that we’ve recently introduced. We have some nice video technology and we wanted to basically try out different things. The question is, do we gate some of this content upfront? Or do we basically do a teaser and wait—I think it was 15-30 seconds in—and then…But this is good feedback for me, so thank you.
Drew Neisser: I’m not a big fan of gated content in general. Unless it’s worth paying for, it shouldn’t be gated. It’s my opinion. It’s a simple rule, but if it’s worth paying for, gate it all you want, give a preview and so forth. But otherwise, if that person was interested enough to watch the whole thing, let them watch the whole thing and make a decision.
Typically, also, you’re not watching a video at the beginning of the funnel anyway. You’re already along the way, let them get there. And if you can’t persuade him with the strength of your video, kind of shame on you, in my opinion! And this is me also speaking not only just as a marketer from experience, but also as a consumer of content. It’s just annoying. I get it. Now, all you have to do is say, “Drew, you’re wrong. The numbers show that we get great quality leads as a result of forcing them to do it.” …Here’s your chance!
Carlos Carvajal: Like I said, I don’t think we have the data yet to make that conclusion because we just started some of these newer tests with these forms. But what I will say—this is where it’s always interesting to see the head of demand gen that’s like, “We absolutely need this content gated” versus not. It is a tricky balance.
What I’d prefer to do there is look at things, to your point, like implement more advanced, progressive profiling and things like that, people that have come back. That’s really where we need to get to, but somebody said, “Hey, we have this capability” and I’m all for testing. I always believe let the data win. Let’s try it and see what happens, see what the bounce rate is. And if we get really high abandonment rates as soon as that form comes up, then, yeah, that’ll be very telling.
Drew Neisser: It’d be interesting, but I think the solution is just better sniffing where you can actually figure out who it is anyway. You can retarget them and you can do all those other things to bring them back in a way that didn’t deprive them of the time they were going to spend watching a video of yours, which, by the way, is kind of precious time. “Look, I’ve already committed. I wanted it. I clicked on it. I can’t? Please.” Anyway, that’s just my opinion.
Carlos Carvajal: Sincerely good feedback and I appreciate that.
Drew Neisser: And we’ll find out. What I look forward to is you coming back later at some point, and we’ll correct the record in the podcast notes. It’ll say, “Drew was wrong. Gated worked like crazy. We closed two businesses because those names ended up in the pipeline.”
[37:44] Metrics that Matter: Pipe Generation, Opportunity Creation, Revenue“If you're not seeing pipeline and opportunity being created in this target segment, that's a problem.” @carloscarvajal @K2onK2 #RTU #podcast Click To Tweet
Drew Neisser: Finally, we can wrap up with a little bit of conversation on metrics that matter. You mentioned very early on that there’s nothing like revenue to justify and rationalize a shift in strategy and show that success. Obviously, net new logo is a great metric that matters. Lead capture is probably the worst metric because a lead is not a lead. You’re dealing with a long sales cycle; you’re dealing with lots of other things. A lead is a name you could have bought anyway.
Carlos Carvajal: That’s exactly right.
Drew Neisser: A lead fill, in my opinion, is the lowest form and probably the worst form of metrics. That’s just me, it’s my opinion, but let’s talk about what metrics matter to you besides revenue.
Carlos Carvajal: Pipe generation. Opportunity creation. That really is key, but I have a feeling a lot of CMOs may have run into the same challenge. When you go through this transition where, historically, this was more of a broad, horizontal, any industry, any use case, if you look at the waterfall model and the conversion metrics, typically your lead flow will be higher. Your conversion from lead to opportunity will be lower and then opportunity close varies.
When you shift to more of a focused, “I’m going after a specific targeted set of accounts, specific set of use cases,” just because you’re getting more focused up at the top of the waterfall, your lead counts are going to come down just by the nature of the strategy. But your lead opportunity conversion should go up significantly. Early on, and this kind of drove me crazy, we didn’t have data to go off of.
You just kind of have to put a stake in the ground and say, “Okay, I think this is going to be what it’s going to look like,” and then you kind of ebb and flow from there and you validate or invalidate. To answer your question directly, outside of revenue, it’s pipeline, opportunity creation. If you’re not seeing pipeline and opportunity being created in this target segment, that’s a problem. But I don’t want to just completely ignore the leads in the top of the funnel because those are the leading indicators at the end of the day if that’s going to be a problem or not.
What I told my team is, if we’re crushing it on leads, but we’re not seeing the opportunities come through, that’s a bad day. I’ve seen this happen in other companies going back where marketing is high fiving each other, and it’s like, “Hey, we crushed our lead targets, but things don’t look good down the funnel, but that’s their problem.” It’s like, no, leads don’t pay the bills. Revenue pays the bills at the end of the day, and then work back from there
Drew Neisser: Leads don’t pay the bills. There are so many ways for marketers to manipulate leads.
Carlos Carvajal: Yeah, look at syndication plays and things like that.
Drew Neisser: What’s interesting to me is, you have the ability now, you have a smaller group universe. In theory, ABM can come into play. You can say, “There are only 20 in this group that matter.” Okay, fine. Then how are we going to get to them? It’s interesting.
I’m going to wrap things up here—or attempt to. We started this conversation about teamwork and certainly, in this story, we talked product partnership, which enabled a strategic shift, which enabled a development of a new product. What’s interesting to me is, I’m going to just go broader with partnership and teamwork and thinking about your customers and add that to this mix as a CMO.
If you right now spend 80% of your time thinking about your current customers…I know you’re supposed to be driving revenue, but think about it this way, just for a second. First of all, let’s assume that you have an executive group where you’re an executive sponsor, so you have a direct connection to a certain number of clients whose success is your responsibility. If you don’t have that, I think you should.
Number two, if your customers are going to say good things about you right now, that’s so valuable because everybody’s looking to shed vendors. If you’re the guy that your customer, instead is saying, “Oh, I’m on the fence,” they want to use you more? What a great moment. Whether you’re in the cloud economy where you’re growing or you’re in the survive economy like everybody else, “survive” is hang onto your customers. If you can get your customers to say something great, that’s amazing. I’ve just expanded this notion of teamwork for the CMO, from your employees, your internal counterparts, to your customers.
The fact that, when you do that, you can then celebrate them in your marketing. What that means not only to your future customers, but what it says to your customers: “We care about you enough to create videos that you can use internally.” That’s so awesome! With that, I can get off of my pedestal and just thank Carlos for really some great insights. Thanks for being on the show.
Carlos Carvajal: Hey, thank you. I really enjoyed it. Appreciate it Drew.
Drew Neisser: In the interest of really taking advantage of this rhetoric book that I’m listening to, it’s called Thank You for Arguing: Ask not what the podcast can do for you, but ask what you can do for the podcast. That answer is so simple. Go to your favorite podcast channel and give us a five-star rating and share it today with a friend.
Renegade Thinkers Unite is written and directed by Drew Neisser. Audio Production is by Sam Beck. The show notes are written by Melissa Caffrey. The music is by the amazing Burns Twins and the intro voiceover is Linda Cornelius. To find the transcripts of all episodes like this one, suggest future guests, or learn more about quite possibly the best B2B marketing agency in New York City visit renegade.com. Until next time, keep those Renegade Thinking Caps on and strong.