This challenge prompts questions about effective growth strategies. In the tough economy of 2023, growing a software startup business is harder than ever. This challenge prompts questions about effective growth strategies. Primer's Co-Founder and CEO, Keith Putnam-Delaney, dives into this on the Startup Success podcast. Read on for his insights on sustaining growth in a depressed market and prioritizing customer-centricity in marketing and sales messages, or listen to the full episode: listen to the complete episode here.
What’s Happening with the Traditional B2B Marketing and Sales Approaches to Generating Growth and Demand?
We’re witnessing a SaaS and startup recession which of course has dramatically impacted sales cycles. But in reality, it finally brings our attention to the structural issues that were true even before the downturn.
Before the downturn, we saw so many startups pop up; an explosion of SaaS. We’re on the downward side of this industrial revolution “bell curve”.
More and more companies have been fighting for the same number of people’s attention and competing fiercely. But the ways companies get discovered by prospective customers have fundamentally changed. Gmail and Outlook have made it much harder to crack the inbox. Same thing with the so-called Cookie Apocalypse and iOS 14 changes. These changes were here to stay before the marker shift and are only being exacerbated by it.
The Problem with Click-Through Rates
Andrew Chen, General Partner at Andreessen Horowitz, coined the term “law of shitty clickthroughs”. He pointed out that whenever something new arrives onto the marketing landscape the initial click-through rate is amazing.
Back in the early 2000s, everybody clicked on banner ads. It was close to a 20% to 30% click-through rate. Now, you’re lucky if it’s 0.1%.
The thing is every channel experiences this dynamic over time. There hasn’t been a new channel in quite some time (ok, well we do have TikTok). CTRs are dropping.
This explains why B2B growth is really hard; tactics and channels tend to diminish the more people use them. What works and doesn’t work is constantly shifting.
Blowing Marketing and Sales Budgets versus Finding a Cost-Efficient Growth Strategy
The solution pre-market correction was to just… keep… spending. Decreasing CTRs weren’t considered a crisis because SaaS companies were awash with capital. The market raciton was to just spend more and more to acquire customers, postponing efficiency-driven growth strategies until they genuinely mattered. But now cost-efficiency has become THE leading issue. With such a drastic change, many B2B marketing and sales people are wrestling with questions like, “What do I do? How do I do things differently?”
Growth Strategies for B2B Marketing and Sales Under Constrained Budget
When your budget is constrained and people are less responsive, every dollar you spend and every resource you deploy has to have more impact. How can you predict and plan where to invest those resources?
For at least the last five years, marketing and sales teams have been focusing on the channel, moving from outbound to LinkedIn to Facebook, TikTok, etc.
Growth teams now need to shift the focus from the channel back to the customer:
- Who are our most valuable customers
- Where are they spending their time?
- What's their path to conversion?
- How do we take that data and build it into a more efficient growth loop?
#1 Data-Driven ICP
Since it always starts with your customers, it begins by not using a fuzzy ICP (Ideal Customer Profile) definition. Companies have to be more and more data-driven.
Look at your highest ACV (Annual Contract Value) customers, back into their attributes and use those attributes to hone your growth strategies. Put your audiences at the center and figure out: Where can I reach them? Where can I engage with them? How do they traditionally convert? Map the attributes of your highest ACV customers to the data points of the channels where you can reach them. What industry does LinkedIn say your best customer falls into? What industry does ZoomInfo say? If you don’t translate your knowledge into the data taxonomy of where you serve ads or how you pull contact emails, your in-channel audiences will be off. You’ll waste spend.
#2 Growth Sprints Approach to Marketing and Sales
Leave room for experimentation. You can’t stop experimenting. You just have to do it in tighter cycles.
That’s the key. Many marketing and sales teams from larger B2B businesses have already adopted growth sprints, and more and more early-stage companies are starting to operate in that vein. As a result, they’re building experimentation muscle, which allows them to get signal faster. It helps them decide when to double down.
If your growth strategy is to develop a quarterly plan, then wait and see and maybe extend it for another quarter – that doesn’t work anymore! The feedback loop has to be a lot shorter and a lot faster.
#3 Increase Your Target Audience Reach Rate
No matter what by narrowing your target audience you’re shrinking your universe and increasing the potential of audience fatigue. This is why it’s critical to go as deep as possible to find every target account and contact that is a fit. This is particularly true for a very traditional channel: cold email. You’ll need to go deeper and more granular into:
- Which B2B data providers work best as a database source for your ICP?
- How can you stack databases on top of each other to increase your coverage amongst your target market?
For example, Apollo will provide you with a certain amount much coverage. If you layer on a LinkedIn scraper, maybe you can get 30% more. Then if you layer on another database you might get some X% more. After awhile you own, at an individual level, 80-90% of your ICP, and they’re reachable via email. That's powerful.
Primer, an orchestration platform for a lot of B2B data source, was born to solve the problem of stacking sources on top of each other. You can enrich your target audience with the selected data attributes from 10+ different data providers, and your match rate on Facebook will immediately go from 10% using only a work email to 40%-60% using personal emails. Facebook becomes a viable channel to reach the very specific set of target accounts and contact you need to focus on for efficient growth.
A lot of later-stage organizations build similar tools for demand generation themselves. Primer’s purpose is to make a platform that is accessible for Series A and Series B startups as well. Or maybe the ones that aren’t Silicon Valley-based, that don’t have teams to make that happen.
Many of our customers are SaaS startups series A to D. Not every company thinks has an in-house growth data engineering team, but that doesn’t mean that their marketing teams don’t recognize the need. They just don’t have the resources. With Primer’s ready-made audience builder, they can identify and target their ICP across almost any B2B marketing and sales channel. If you’d like to check out how game-changing such a growth strategy would be for your specific B2B audience, you can sign up for a demo with one of our growth strategists and get some valuable insights.