The 'CMO Problem' in B2B Software
Small to midsize B2B software CEOs and investors continue to struggle with the 'CMO Problem' and the impact strategic marketing can drive across the entire go-to-market (GTM) motion. It’s not always clear how to best achieve aggressive growth targets using today’s digital-first models. Facing bigger competitors with bigger budgets requires new paradigms, a unified strategy, and more modern methods that only a fraction of companies have figured out how to do well.
I frequently hear from CEOs struggling with marketing and frustrated with their current CMO. One had been through three CMOs in three years but couldn’t figure out why none of them seemed to be able to deliver impact. Another had compensation constraints, so he hired a high-potential product marketer but wondered why they couldn’t get the expected ROI. Another ran through two heads of marketing who both insisted the focus be put on awareness instead of in-quarter deal flow. Others claimed it was a poor cultural fit.
The most common thing I hear is (and I’m kindly paraphrasing), “Our last CMO just wasn’t that good.”
When I dig further to understand the challenges they are having, more often than not, the CMO isn't the problem. The truth is, the CMO can only be successful if they are on the same page with the CEO about three things (1) what success looks like and what the priorities are, (2) how to best apply modern strategic methods in the context of the company’s situation, and (3) a sound strategic marketing plan—which can’t happen without a sound business strategy.
Now let’s talk about the difference between incrementalism in marketing and playing to win and outline some dangerous assumptions that might be holding you back from getting the marketing you want.
Are You Cruising or Racing?
What is your current approach to marketing? I’m not talking about just surviving, doing more things, or shifting small tactics such as buying more digital media, doing more online events, or executing ABM. I’m asking if you have a strategic approach to how you target, what you say, and where you spend your money for the biggest market impact—from generating demand to creating a conversion pipeline to engaging customer advocates who do the selling for you.
Competing in today’s high-velocity world requires you to do more than just putter around. In theory, many CEOs and investors understand this. But focusing mainly on the product and sales motion and using marketing as a nice to have to do a bunch of activities is like having a great boat and a strong crew but not having any sails. If you are cruising, you would just turn on the engine when you needed to, wasting time and a lot of money on diesel. If you are racing to win, everything is thought through and executed with precision, which includes being weight-conscious and super-efficient. Great boats with strong sails and crew, go much faster than a boat under engine.
The great news is that getting the marketing you need and deserve is absolutely within reach. It’s not some elusive formula you stumble upon through trial and error or being lucky to land a good CMO. You may not have to hire for it or spend a whole lot more money than you already do. It’s completely available to you today.
In fact, marketing might be your biggest opportunity and your biggest untapped strategic weapon if you are open to a new perspective and open to doing things differently.
I’ve also seen firsthand how making a few strategic changes in the approach can have a profound impact on results. I’ve seen software businesses navigate through the storms of change and cultural complexities, and as a result, I’ve formed some strong opinions about how to achieve the outcomes everyone wants while avoiding self-inflicted torment and fiscally ridiculous decision-making. If you could crack the code to execute customer-led, accretive marketing, you would be a force to be reckoned with.
Most companies like yours are also struggling with marketing, so if you can nail this, you will have a massive competitive advantage!
Just functioning as a healthy software company is hard enough, but at some point, the time arrives to prepare for a transaction or a major funding round. It takes a monumental effort to prepare for this, not just to clean up the books but to clean out the bilges to get the deal room ready. Executives have to get their story straight to pass the red-face test and produce the right data that somehow rationalizes where they are and why they did what they did. I’ve found these moments to be a lot like a couple trying to hastily anchor their boat in a crowded anchorage—it’s where all the dysfunction and baggage come on deck for the world to see.
Through these transaction experiences, I have seen many CEOs and investors become frustrated about how to deliver the best narrative for growth, ROI, and predictability given what all the data and charts are saying. While there may have been a lot of activities and improvements, it’s often hard to demonstrate how the company can deliver repeatable pipeline or user flow and dependable conversion rates, particularly in today’s dynamic and digital environment where the customer controls the buying cycle and the product is increasingly supposed to be selling itself.
This excerpt is from my new book:
Power of Surge: Five Ways to Supercharge Your B2B Software Business and Unleash Hidden Value.
For more about dangerous assumptions to avoid and how to define the best strategic GTM playbook for your small to midsized B2B software company, check out my best-selling book!
Comments