In many start-ups there is tremendous pressure to get to market, acquire customers and generate revenue that accelerates each quarter. However, in the quest to g0-to-market quickly, sometimes a company adopts a fire, ready aim approach. Unfortunately, marketing is usually the last function to be engaged and as time is running out smart people can make some bad choices. There are four fundamental marketing mistakes that can result in failure before the game even starts.
Four Fundamental Marketing Mistakes – It’s Simple Math
One of the first questions an organization has to answer is whether the target market is large enough to support the businesses revenue requirements. All too often, organizations find the most optimistic metrics published by an analyst firm about a market and calculate 1% of that total number as revenue and declare victory. This is not a bad start but the addressable market has to then been reduced to the served market and then penetrated over time based upon a technology adoption curve. An organization’s ability to execute is dependent upon many factors but two huge variables are: an organization’s ability to plan, intelligently ramp the Sales team and strategically invest in Marketing. Let me share three examples.
Four Fundamental Marketing Mistakes – 100% Penetration in Year 1?
Bookings targets were established and approved by the board for the fiscal year. In an attempt to provide further clarity, the mandate was to create a 3X pipeline of qualified opportunities. After calculating the average deal size, dividing it by the bookings goal for the year and multiplying it by 3, the number was slightly larger than the served market. In other words, every organization that was targeted was to become a qualified opportunity within the first year. This is one of the key issues with a weak top down planning process. Granted, the organizations targeted were large enterprises and there could be multiple opportunities within each and an organization may purchase and then repurchase (account-based selling). On the other hand, some of those organizations will choose to do nothing (laggards), some will choose to do it in-house, some will choose a competitor’s solution and some will make a buy decision but not in the right timeframe. Regardless of how you cut it, there is no way there was going to be a 3X pipeline with a small target market and this fact should be known way before there is a board discussion on the topic. Resolving this becomes difficult as everyone seems to be too busy. All I can say is that you can spend a little time upfront and deal with these issues head-on or the organization can spend a lot of time after the fact scrambling to recover from not coming close to making the numbers.
Four Fundamental Marketing Mistakes – Hire More Sales People!
Another top down mistake is to simply divide the bookings target for the year by the average quota a rep carries for the year to determine the number of reps needed to make plan. This approach is just flat out wrong on so many levels but I do have to touch upon a few. First, if there is not a single rep that is successful selling in the organization (100% of quota or more) I suggest you get in a convertible, put the top down, fill a suit case full of cash, leave the suit case open and drive down the freeway. The basic principle of “nail it then scale it” applies here very well and a well thought out go-to-market plan is step one. The decision to expand the Sales team is a strategic one and that by definition requires planning and analysis. Is there a sales methodology, a unique selling proposition, an on-boarding program, SE support, Marketing support to generate awareness and build a pipeline, budget, a formal recruiting process, territory plans appropriate for the size of the org, etc.? Or, is it reach out to an array of recruiters, apply a named account model in a immature market, slap together a couple days of training when there are enough new hires to warrant it and hope for the best? Geography, industry, subject matter expertise, solution capabilities, resources, the operating plan, budgets and so many things have to be considered before a decision to hire (in any function) can be made. I am not saying there needs to be a planning team that creates binders for the shelf each year but I am saying that there needs to be a workforce plan that is part of the operating plan.
Four Fundamental Marketing Mistakes – Only Create Qualified Opportunities That Will Close This Quarter!
Marketing is part art and part science. In either case, it does take some time to understand Marketing theories and principles and to efficiently and effectively apply them for maximum results. Not every CEO nor VP Sales has this level of understanding of the Marketing function or the purpose and value of a well-defined, integrated marketing mix (nor should they as this is the job of the VP Marketing). As a result, Marketing leaders get mandates to kill programs (out of context) and are instructed to only focus on generating qualified opportunities that will close in the next 90 days. PR, analyst relations, social media, advertising and all the vast majority of lead generation programs are then banned and all resources shift to to appointment setting and supporting outbound calling initiatives. In the short-term, this may have some success but it is not sustainable, it is expensive and each quarter you will start behind the eight-ball. Providing a balanced marketing attack that includes awareness and interest generating programs, in addition to telemarketing, tele-qualification and supporting inside and direct sales outbound calling efforts is going to pay off in the long-term.
At the End of the Day
Everyone in the organization has the best interest of the company in mind (if not we have another set of issues but let’s assume this to be true). It’s not that people are malicious, it’s that no one knows Marketing like Marketers. Executives tend to be passionate, driven, time constrained and results oriented. Not to mention, they have probably had a bad experience with marketing somewhere along their career. Regardless, it is Marketing’s job to educate the organization and to focus on aligning to the goals and objectives of the company. Resist getting sucked into reacting to tactical directives and requests that result from a lack of a plan or the execution of a plan that will fail. In short, avoid the four fundamental marketing mistakes.
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