Lecture: How to Build a B2B SaaS Marketing Program

Earlier this year, I was invited to speak at Northwestern Kellogg to teach MBA students the foundations of B2B SaaS marketing (thank you Scott Levy for the opportunity!).

The following post includes my slides along with an edited transcript or if you prefer, you can view the slide deck below.‍

View Lecture in Slides Format ->

Here's my Lecture on B2B Marketing...

There's a lot of nuance to building a B2B SaaS marketing program, but I hope this presentation gives you a general roadmap for how to approach the challenge. In this talk, i'll cover five core elements of building a program: 

• Brand and Messaging
• Go-to Market Models
• Demand Generation
• Movement Building
• Team Building

The most important thing, the fundamental thing, that you think about when you approach building any business but especially B2B SaaS is the idea of the relationship between your product and your customer. Product market fit.

Depending on which product you choose to build, it ultimately changes the trajectory of your business. When you're thinking about building this foundation, it really comes down to these three elements, your product, your audience, and your market. What's the thing that you sell? What's the unique value you provide? Who are you selling it to? In B2B, this is  both the type of company you sell to, which we'll get into later in the presentation, but also the persona at the company are selling to.

Then the market. Is there an existing market for your product? There's always a market out there, but it's figuring out how you fit in and create a wedge for yourself in the market. Depending on this foundation that you build, you can change the trajectory of your company.

At Lattice, the big product insight that we had early on was that there was this shift from annual performance management, where you have this once a year annual review that everyone dreaded to continuous performance management. That was a trend that was happening early in the market itself at companies and Lattice was software that capitalized on that trend. That's what we came to market with and we sold it to HR leaders.

I think the unique way we wedged ourselves into the market was actually by focusing less on the HR leader themselves but by focusing more on the employee and manager experience. Most HR software companies historically are not that nice to use. I don't know if anyone's used ADP, Performance Management or something like that. Very clunky old school software. It's like your parents software if you will. We came in and rode the consumerization of the enterprise trend. The way you understand these components is simply by talking to customers.

It was amazing to watch our founder Jack and be on the team as we figured this out. I think pretty much the entire way we have built Lattice was by building versions of Lattice, showing it to customers, getting on a Zoom call, a coffee call or coffee meetup or whatever it is and showing them and saying, "Would you buy this? What would it take to buy this?" Then going to build based on their feedback.

Building these constant feedback loops, understanding what actually your audience needs and how you're going to build that into your product is really important. It goes beyond product. This is also really central to marketing. The messaging you use is  a vehicle for you to get your product out there and to explain it to the market and you need to make sure that your messaging and your product are in lock step with each other. The best way to do it is by talking to your customers.

As you're talking to customers, there's three things you're generally looking for and trying to figure out as you're building these foundational elements.

The first is what's your story? What is your company narrative? What's the big insider change that you have in the market and why is it relevant today? Why does it make sense for people to listen to you today and to use your product today?

The second is who you're talking to and who you're selling to. There's a big difference in company sizes. We're going to talk about it in greater detail, but selling to an SMB company is really different from selling to an enterprise 10,000 person company. Selling to an HR persona is really different than selling to a sales or marketing persona. Selling to tech companies is really different than selling to law firms.

As you're building your company and building these foundational elements, it's really essentially you understand the interplay between your story and your audience and but also the message. What are the actual words that you use to talk about yourself? Obviously there's a lot of A/B testing and things you can do to figure that out but the best way, is to talk to customers and then use customer's language back at them. These three things, over time, you start to codify, you start to build brand documentation, it becomes somewhat the foundation of all of your brand efforts.

‍

Then besides the actual brand foundation side of things and the company foundation, I think what's really interesting about SaaS is there's a couple of different business models and corresponding go-to market motions and I wanted to talk about that for a second because it can fundamentally change your business.

‍

This was a slide that actually our founder had shared with me early on and it talks about the five different ways to build $100 million SaaS business and $100 million ARR, annual recurring revenue is the Holy Grail in SaaS to IPO. It's changing a little bit now as companies are staying longer but when you got to $100 million ARR rose typically when you went public.

There's a couple different ways you can go about it. To explain the graph here for a second, the Y-axis is number of customers, the X-axis is your total contract value and there's a couple different ways. You can be a mice hunter and go and get a million customers that pay you a hundred bucks a month. An example of that company might be like Mailchimp. They are a SaaS business that sells directly to SMBs. You could have $1,000 contracts for 100,000 customers. I think that's a rabbit, or a deer hunter. Lattice is the deer size. Or  you can be the whale hunter. Really going after these enterprise customers. An example of that might be something like Workday. These companies that are really focused on just the enterprise.

There's a lot of different ways to build a SaaS business. The thing is that you have to pick one to at least start. It is really hard for you especially if you're getting started from a company focus and marketing messaging focus and from a product development thing to sell both to whales and mice. That is very tough and few companies have ever done that. Usually what happens is, or a typical path is you start in the SMB world and the mice world and start moving up as you grow up as a company. Slack and Twilio are great examples of that where Slack started really bottoms up and today is now selling to much bigger enterprises, IBM just started using Slack.

‍

The size of the company you're selling to is a fundamental element as you start to think about your SaaS business and it changes your marketing motion.

The way it changes your marketing and specifically your demand generation motion ( getting leads). There's a couple of different styles.

You can be freemium which is more bottoms up. This is essentially offering free trials. Slack is the canonical example here.

You could be inside sales which is more transactional. If you have a sales team sitting in your office, getting on Zoom calls, getting on phones. They're doing all of the sales mainly from their computer, or you can have an enterprise sales team that is more strategic and out in the field.

You can see how this maps against that previous graph depending on which business model and your ACV, your average contract value. You want to try and pick one of these different models. Of course there's some hybrids and it can change over time but this is generally what it looks like. As you go in the more freemium side of things it tends to be more inbound driven. People are coming to you. You tend to have higher marketing spend. It's more about your product and sales looks more like a consultant. People are joining free trials, they are signing up and then you're really working to help them get more value out of the product.

As you move to the enterprise sales side, it's a spectrum. There's different mixes depending on your company and what you're uniquely good at. You tend to have somewhat lower marketing spend. You are more reaching out to companies on your own, you tend to do a little bit more account based marketing. So coming up with targeted lists of accounts and companies that you want to go after and the sale gets way more complicated. Instead of convincing typically one person, you have to convince entire departments, and CFOs, and procurement teams, and IT teams to buy your software so it gets a lot more complicated from there.

This is how to think about the inbound outbound mix, which is really important.

A simple framework is that inbound is your website. People coming to you and your website. Like HubSpot they pretty much invented inbound marketing.

Whereas outbound tends to be more sales-led. This is  outbound emails, those annoying emails you might get in your inbox. They actually work. They don't have a super high hit rate but you only need a few of them to work and this is an example of one of our reps did for, I don't know if anyone watched the Mandalorian, but when baby Yoda was part of the zeitgeist we made this little custom gift to catch people's attention.

When thinking about inbound it's more about your website, it's more about digital ads, it's about content marketing and SEO those are the core things. On the outbound side of thing it comes back to that targeted account list, personalized messages, cold emails, sending people direct mail. Historically Lattice's mix has been about 75% inbound and about 25% outbound. Part of that is because we originally started an SMB and we've been moving up market slowly over time. Part of it is because I historically come from a more inbound background so I'm better at that and that's why I knew how to do. But over time, we're actually working to move this mix and it is changing over time. More and more we've been spending more budget and resources in the ABM, cold email, direct mail side of the world and we've obviously staffed up our sales team appropriately.

‍

I wanted to give an example and put some numbers behind what we're talking about. When we think about demand generation it comes down to the funnel. What I'm showing you on the left side of the screen, this is the classic marketing funnel where it goes awareness to consideration to decision to customer. We'll talk a little bit about mapping your demand program against each of those. But this is fundamentally how we think about an inside sales example. On the right, you have the unit economics of how we think about both the funnel and the sales metrics per rep. I'm going to walk you through it. At the top we have the different segments. SMB reps, mid market sales reps, and enterprise sales reps. You can think of these metrics almost like a funnel.

Demos are the top of the funnel. Someone submitting a demo request to us. Then you have the demo to opportunity rate. An opportunity at Lattice we define as somebody in an active buying cycle. They went to our website, submitted a demo request, talk to a sales rep and they're actually interested in potentially buying our product. That's the consideration stage. Then from there, you actually have to close the deal. In SaaS you typically call this New logo bookings. Then ASP is average sale price. Quota is pretty how much revenue you expect a rep to generate in a given month.

You can see how the different numbers and metrics flow through the funnel and how it works on a per rep basis. We expect an SMB rep to generate 10 new deals per month. Each of those deals should be about $5,000 and that'll get them to their $50,000 quota. In mid market we only expect them to generate three deals per month at a $25,000 contract value and then that leads to their $75,000 quota. Then enterprise it's one new logo per month and that should hopefully get them all the way to quota. Very different sales cycles depending which style of rep. You can see it also really impacts marketing. If you are focused on the enterprise business, you need to drive less demos but the contract value needs to be much higher whereas the inverse on the SMB side you need to generate 95 demos to get to about half of the same for enterprise.

We typically segment our business like this because it's so different selling to an SMB versus enterprise company is so different and the types of reps you typically hire are very different. SMB reps can tend to be right out of college, that sort of thing, whereas enterprise reps are a little bit more sophisticated in their career.

I'm going to show you how you can scale this model to $1 million months. These are four different pathways to your million dollar months. You have both the SMB mid-market enterprise pathways, and then the mix. The mix is most likely what you would end up doing and this is what Lattice team generally looks like. You can get a sense of both how many demos you need but also the size of your sales team. In an SMB sales cycle you need way more reps and enterprise as well.

Marketing's job in this world is two things. We need to drive demos. If we are an SMB business, we need to drive 1900 plus demos per month but then we also need to facilitate the closing of 200 deals per month or for an enterprise business needs to be about 10 deals per month. But what realistically happens is that it's somewhere in the middle. We are constantly thinking about how do we drive demand for the enterprise segment, for the mid market segment, for the SMB segment and thinking how we enable the reps and their different sales cycles.

I'm going to talk about how we actually do that. How do we actually get those demos per month and how do we think about that? 

The first thing is that there's no silver bullets. There's no single channel or program that drives all your demand and I spent years looking for one and really hoping to find one, but that's not how it works. I think in some consumer businesses especially e-commerce, it does somewhat work like that or more like that. I think I heard a story of maybe it was a Hubble contacts or somebody like that, where the founders were still running Facebook ads at 100 million ARR plus. Some consumer businesses work like this but most B2B marketing SaaS engine look like what you see on the right here, where it's a crazy mix of different things and it's really a portfolio of marketing programs that are driving demand.

That's how I think about running our marketing team and our program is almost like an investment portfolio where I'm trying to put together enough investment in each of the different channels.

All right. As you're thinking about building this marketing portfolio and all of your different programs. It's really important to consider the buyer's journey the classic funnel.

It's marketing's job to think about this entire journey. Think about it holistically but also to build programs at each stage. This is the classic marketing funnel and some of the different programs we use at each one. Starting from the left the awareness side, we do a lot of thought leadership. We put up a billboard, we do a podcast, we with the community, all of our events, all of our blog, SEO.

These things are really designed to teach you about Lattice, teach you that we exist, teach you that there's this thing called performance management and we can help. People are a really different understanding and their relationship with Lattice. They maybe have never heard of us. They don't even know what we sell. They don't know how to use software. We try and create a lot of different collateral and content that speaks to a variety of audiences and marketing's job, and my job is to change your mind. It's to convince you that you need to use this thing. Content and thought leadership has been really powerful in that because I think one of the ways you change people's mind is simply through education.

That has been huge for us in saying okay, why is continuous performance management important? Why do you need to invest in it as a company? Why do you invest in that today? That's a lot of what our awareness stuff is about. As you move into the consideration phase, it's starting to become a little bit more marketing and sales working together.

The pass off between these stages is really important and complicated especially when both teams are growing but in the consideration phase it becomes more about Lattice the product. In the awareness phase, it's more about the problem we're solving. It's about performance management as a subject matter while the consideration phase it's about how Lattice as software helps you with performance management.

There's a lot of different things we create to do this. The biggest lever is creating the pitch deck and working with the sales team to figure out, okay, when you get on a call with a prospect and somebody clicks that demo button, what do you say next? How do you sell to them? But then there's also all sorts of collateral and different things that we can create to help tell that story, case studies are a really easy example there. But we also do a lot of like dinners. People dinners were really successful for us earlier on.

We basically rent out a really nice restaurant. We did one in Chicago. I'm trying to... Girl & The Goat, is that restaurant? Yeah, we rented it out, we did the thing a Girl & The Goat. I didn't go to that one unfortunately. But basically we rent a nice room at the restaurant and invite people to go. It's an amazing way for you to take this online interaction that's happening on your website and put a real face to a name.

These IRL interactions help to close deals and to nurture relationships in that because B2B SaaS it's both transactional online but it still is relationships. It's building relationships with another company. That's been huge for us.

When it comes to the decision, this is very much sales-led. They're the ones who are responsible. Account executives are closers and our job goes into more of the backseat.

Then it's like sales enablement. How can we support the sales team close those deals? How can we help them make their proposal template look nicer? How can we help them figure out how we can sell against the competitor they're talking to. There's a lot of product marketing work that happens in this decision phase.

Then the customer phase, which I should have looped this funnel but the work we do in the customer phase we do a lot of work to turn our customers into advocates, to speak on our behalf, to speak at our events, create content for us, refer us. We do a lot to try and get them to fall in love with us so that they tell their friends about it, then generates awareness on the other side. This is how we think about structuring our different programs across the funnel. We need to do it all to be successful.

Emails are absolutely essential in B2B SaaS. It's the way you reach out to people. Professionals are on their email all day long. It's your own data. It's first party data targeting ideas like your own data is going to be better than anything Facebook is going to sell you . It really helps you get in touch with people. It's also the still the highest action driving channel. We know that when we send an email we can expect a certain number of clicks, expect a certain number of opens, and that really helps to drive action and drive those ebook downloads or those demos.

Through marketing automation tools like Marketo or Autopilot, we can really track the user journey and score their journey over time. We understand how engaged they are.

Building your CRM database which is like Salesforce is really important. There's  cold inputs like Clearbit and Zoominfo but also warm leads are huge and better. When someone volunteers over their email address that is way more powerful and you have a reason to reach out to them rather than buying a cold lead and the engagement rates are way different and the way you get those warm leads are putting out bait into the world. What I mean in bait is typically content. It is like, here's an awesome ebook for you to download, or here's a webinar to attend, or here's a newsletter you can sign up for, or here's an awesome dinner you can go to Girl & The Goat. It's like you create this bait and these things then you use marketing automation like Marketo to both track what's happening but also to email nurture them over time.

What we always try and do is lead with value. Again, the best way to build your brand and to eventually sell to someone is by teaching them something, and that has been huge. These screenshots you see here are from that interview podcast series I was speaking about before but we built up so much street cred in the HR community by becoming this forum and this platform for HR leaders to come together and share best practices and their perspective and then we take that and share it back to the community and it helps to build our brand presence over time. It helps to... When you help somebody, they might not be ready to buy software today but maybe six months down the line when things change, or maybe when they go to the next job they'll remember you and they'll think of you. That's marketing shop. It's to get them to think of you when the time is right to buy. Always lead with value.

When you think about going up market, you want to run an account based marketing strategy. It starts by figuring out who you want to go after, then it's building that database which we've talked about, then you're running all of these different programs. Email again is huge but you can also take your database. These are for ad targeting and direct mail. But importantly, you really need to build these programs that are for that persona. You have to get inside the psychology of who you're selling to and who you're going after and figure out what would appeal to them.

For us, we know that HR folks love networking, they're friendly people, they love humans that's why they got into HR. We created an experience and things for them to network with each other. It's also a typically very lonely profession. In some ways especially in smaller companies where you might have one HR person or nobody wants to talk to HR which is like the older world stereotype of it. We created experiences for them to connect with each other. Ultimately the best way to convince other peoples to use social proof and to share stories of other successful customers. The more bigger company case studies you have the more likely you are to get your companies to fire product.

Events have been huge for us. It is an amazing way... On the left here's one of our people dinners, on the right is actually our first conference that we did last year. It is an amazing way to again, put a face to a company, to build authentic relationships, to teach people about what we do about the industry and to again provide value. The cool thing is we do all of this for free. It is all free services to people and they really come. 

‍

Billboards have also been huge for us. When people... I don't know if anyone's been to San Francisco and you drive down the 101 and you see all these big tech company billboards and I still remember when I first moved here and that was a thing, I was like, "Oh my God, look at all these legit companies that have billboards. That must be so crazy. I wish I could do that one day."

The trick is you could actually buy a billboard that's fairly cheap for 30 or 50K. You can get a billboard on the 101 and it goes a long way in building that brand awareness and making you feel a lot bigger than you actually are. It's been a huge strategy for us. We're actually supposed to do our first billboards in Chicago right now but unfortunately we had to cancel it because of COVID. 

‍

I think one of the things you can do to really level up your entire program is to lead a movement. Take a stand for something and to bring your persona and the people you go after to this new world and the best companies that do this are like create a category. They create this whole new brand of software and they create ways for their people who use the software to become champions in that movement.

The way you do that is three simple steps. You develop a point of view. What is this stance you have in the world? Then you figure out how you share it, and then repeat it forever. You repeat it until you are so bored with it. For Lattice it was employees don't want this annual review, they want continuous feedback. They want their managers to be a coach. It was also that HR is now strategic. It is no longer like Toby from the office where everyone hates HR. It is rebranded, it is people teams, it is a strategic thing and people strategy is business strategy. Everything we do is about sharing this point of view into the world and we do in a lot of different ways like our eBooks, our webinars, our podcasts, and so on and so forth. It's embedded everything.

The better you get at this and the more inspiring your movement is, it'll change all of the rates in your funnel. It'll make everything better and easier. It's not quite a movement example, but one of my favorite examples of that is if you signed up for a webinar. I was speaking on it versus President Obama was speaking on it. You would 100% sign up for that President Obama webinar every time over me. Tthat same email would way out perform me.

The words you're using, the stance you take can have a dramatic impact on your funnel.

Then you want to create these events in these spaces for your customers to interact, for your people to become champions. The woman on the left here is Katelyn Holloway who was the former VP of people at Reddit, huge champion of ours. We put her on stage, we help make her a star, we help her build her career and then that ultimately also helps us as well to create spaces again for these people to interact with each other. 

The last element of this is that especially in the B2B world, companies want to buy from trusted vendors especially as you go to bigger companies. The best way to do that is by leveraging social proof. Case studies are huge there but also these third party sites like G2 Crowd which has like Yelp for software have been really impactful for us. Getting user reviews and user feedback and building that street cred in the community.

Then the last thing I'll just quickly touch on here is that none of this happens without marketing team and also working with other teams.

As you're thinking about your marketing team, it depends on if you're maybe the first marketing hire when you joined, but here's some general principles of how I think about it is that early on you want to hire more generalists. You want people who can go across different channels. Who can do content marketing and demand gen, who can run ads and stand at a booth. You really want to look for people who have this growth mindset, who are learners because the world is changing and marketing is changing and your business is evolving and that's always important for us.

We've also always tried to have this idea of building an internal agency. We do work with some agencies for video production and things like that. We have two designers on staff. We've tried to hire a lot of people who can create things on their own, marketers who can create, and designers who can create. It allows us to move a lot faster and it allows us to do things a lot cheaper. We also tend to not really hire junior people on the marketing team. We don't have time to really teach people things especially early on at Lattice. You are thrown into the fire and you have to learn by doing it on the job. We tend to hire people who are maybe on their second job or third job if they're more junior.

We do use some agencies but probably more on the freelancer side of things to augment our resources. When you're thinking about the marketing team roles here, I won't read this to you but these are the primary functions that you think about. When I thought about building the marketing team it was like what were my skills. What would compliment my skills, or what did I not want to do anymore? I'm a slow writer, I hired a content marketer first. I did not have the time to stand that all of these conferences and to travel around the country after doing that about a year, then I hired events and then so on and so forth. We slowly built out that team. Until today where we have team leads for each of these and teams behind them as well.

Lastly, it's important to work with other teams. Marketing is obviously external. It's how you're talking to customers but you also are in a lot of ways an internal customer to different teams. The sales team is probably the most important customer and that relationship is really important and that funnel and how you're passing things and I'm measured on pipeline and revenue, so my goals are traditionally tied to the sales team. We work with the people team for employer branding and to attract more people to Lattice. We worked with the CX or Customer Success team to make sure our customers are being supported in the best way for us to grow our business, to have people have a good experience with our product and good services from our team.

Then lastly with the product team figuring out, okay, what are we building next? How do we tell that story? Will it resonate in the market? What other competitors are doing so on and so forth? Marketing really supports all these different teams.

‍

That's it, here's a little recap. Thanks so much for the time, I'm happy to answer any questions you guys have.