Welcome to episode sizteen of the SaaS Backwards podcast, where we interview CEOs and CMOs of fast-growing SaaS firms to reveal what they are doing that's working, and lessons learned from things that didn't work as planned.
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Get SaaS KPIs in Order so Marketing can Lead to Higher Revenue with Kazoo HR COM Casey Carey
Casey Carey, CMO, Kazoo HR
Edited for clarity and readability
Host, Ken Lempit:
Welcome to SaaS Backwards, the podcast that helps SaaS CMOs and CEOs to accelerate growth and enhance profitability. We take a look at what's working for growing SaaS companies, leadership decision-making, what did and didn't work and why. Our guest today is Casey Carey, CMO at Kazoo. Hey Casey, welcome to the podcast.
Hi Ken, thank you for having me.
Before we dig in through our topics for the podcast today, tell us a little bit about yourself and the company that you work for.
Sure. A little-known fact about me, I started my career writing software and designing hardware for defense weapons systems. I actually worked on the flight computer on the Peacekeeper missile. Somehow, I found my way into marketing and have spent most of my career in high-tech, high-growth startup companies. But it also includes a four-and-a-half-year stint at Google.
I love marketing. I love the science. I love the data. I love the user psychology, buyer behavior aspects of it, and I love the creative.
All those things are what gets me up every day to do better marketing.
Kazoo is an HR tech platform focused on mid to small enterprise companies.
What we do is we bring together continuous performance management, which includes goals and OKRs (objectives and key results), feedback, check-ins and sync-ups with rewards and recognition and employee engagement surveys.
It’s really putting the entire people first employee experience into a single platform for HR teams.
One of the things we wanted to talk about today was marketing leader decision-making. What are the inputs to decision-making? How are you operating to make strategic and tactical decisions?
I think it's an important point for anyone who aspires to become a more senior marketer, and that is you've got to make the mindset shift from the tactical activity stuff to the more strategic stuff and really thinking about the big picture, how marketing supports ultimately what the company wants to achieve.
Then connecting all the dots for the marketing activities that help support that.
One of the things I learned at Google that became a really important job of a marketing leader (or any leader) is to make decisions.
We have a lot of stuff that we can do. We have very few things that we should do. As a marketing leader, your job is to really figure out that mess and come up with the right decision.
Even something as simple as a framework that I often use with my team has three dimensions.
- What's the level of effort required?
- Who we think the impact of that activity will be?
- Does it actually require unique skill sets of marketing?
Particularly in a lot of startups, you end up wearing a lot of hats.
There's a lot of jobs to be done and stuff will find its way into marketing that probably shouldn't be there.
One of my favorite examples is ordering swag for customers or prospects. It turns out this is not a unique marketing skill and we probably shouldn't spend any of our time on that.
One of my least favorite things to do as well.
There's a good point in there about an organization’s goals.
I think one of the religious issues in marketing is, to whom do we report and for what reason do we exist and how do we measure our success?
Those kind of things frame a lot of success and failure-- might be worth digging in a little bit.
I totally agree. I've seen this a lot and it makes me sad when I see it—when marketing is viewed as a service organization to the company, in that they're doing one-sheeters for sales or they're doing a webinar or the CEO wants a press release and you go down the list of tactics that just come out of nowhere.
Even to some degree, sometimes everyone in the company thinks they're marketers so they have a lot of opinions about marketing.
I think sometimes we fall in this trap of wanting to please everyone and do all the things.
It is a recipe for failure.
You really have to be very tactful and learn how to say no politely.
Acknowledge that's a great idea.
We'll incorporate it into our plans, but ultimately owning the strategy and having a framework and a point of view about what's important, why it's important and what the impact will be as a way to say like, "That doesn't really fit what we're doing right now. Great idea."
Or, "Hey, I think that may be better-suited if we do it this way as part of a bigger thing that we're working on." Or whatever the answer is to that question, right?
Without that point of view, you really get trapped into this activity-based mindset where you're just doing a bunch of stuff, thinking that you're pleasing everyone, which is ultimately not the right answer.
The right answer is you're driving the business, you're driving growth, you're owning pipeline and bookings, and at the end of the day, marketing is a strategic driver of the organization, not a service function.
We call it here the short order chef kind of marketing, where we're asked to do a bunch of things and they're unrelated to any tasty outcome. It's just greasy fries and a burger and it doesn't really elevate the organization or propel it forward.
I'm sure that in every marketer's life, there's the tactical execution that has to happen. People go to trade shows, they need stuff at the show, they need a booth, they need literature, they need whatever they need, but losing sight of the planned impact if it's not a red flag it's sure a yellow flag, right?
Yeah. Absolutely. That's where the hard decisions come in, right?
That's when you get to the executive level, owning those decisions knowing that sometimes you're going to be wrong as part of that, and actually being okay with that and owning when you're wrong. You're not always going to get it right.
You also mentioned a couple of things, but we ran right past it. One was marketing as a service function within the organization and the second was aligning with sales. I don't think you used the “S word”, but aligning with sales to own pipeline. I think that those are two really important things to talk about and I certainly follow CMOs to see how they're doing.
When they last less than a year in the position, my thinking is maybe they haven't aligned with the CEO's objectives and the sales leadership doesn't think they're getting what they need. I think one or both of those things are operating.
Yeah. I think that's a really good observation and it's hard.
I've always had this idealistic mindset that there shouldn’t be a marketing and sales divide in the first place, but the reality on the ground is that it exists and sometimes it's dysfunctional even.
My starting point mentally (and this is what I tell my teams and I set expectations with them) if we don't sell anything, it doesn't matter how good our marketing is.
It actually at the end of the day does not matter.
What we should really care about at the end of the day, is that, yes, sales is being successful.
They're selling stuff.
We're making our numbers, and to some degree being okay with the fact that maybe we're supporting them and they're getting the glory, that's actually okay.
At the same time, having the acumen and business discipline to actually be able to prove your contribution to that, and actually improving that contribution over time.
Currently, we'll probably run about 55% of new bookings ... Not new bookings, total bookings.
This quarter it will be about 75% of net new logo bookings.
We're driving significant portion of the business currently and my goal is to continue to grow that.
That makes a good segue into how we measure success and the business that we're actually in when we're trying to drive opportunity.
A question that I guess we levered, is lead generation dead?
Yeah. I think what I said was I've call BS on lead gen.
I've seen it work. I know it works for people. I know people will die on that hill, but I think for a lot of us, and particularly what I would say is a little bit different world of marketing, particularly in the B2B side, it's really hard to make lead gen work.
Here are a couple of factors to consider.
One is your buyers are significantly more informed by the time they talk to your sales team.
I think Gartner says somewhere between 55-65% of their process is complete before they talk to your sales team.
Interestingly, we got an inbound email last night.
The emails started, "We've done an exhaustive review. Kazoo is in the top three. We would like to schedule a demo and please cover these 10 points." And there you are.
For me personally, this idea of going out and getting a bunch of leads that may or may not be interested in what you do, capture their email addresses by form-gating a bunch of content, sending them a bunch of emails, doing a bunch of outbound calling--seeing if you can berate them into a meeting.
Then at the end of the day, when that meeting happens, you find out there's no project, there's no budget.
They may mildly be interested in what you're doing, but there's no timeline nor do they have any authority.
Just doing that over and over again until you find the one who's like, "Yeah. I've got something going on. Let's get started."
It's hard to make that model work at scale anymore.
We really shifted our mindset about 18 months ago to what I would consider to be a bit of a new strategy for me, even personally, and that is lead gen is not as strategy.
Lead gen is a result of a great marketing strategy and really looking at what activities, what strategies do we have to put in place that ultimately delivers demand to our doorstep? Rather than trying to go out and blindly try and mine for gold in the foothills.
You actually had some metrics on how you've reoriented content marketing. I think the question I posed to you is, well, what does content marketing look like if we're not going for the form fill?
We've been drinking the Kool-Aid now for about nine years. Inbound marketing, drive them to the bottom of the funnel, piece of content and they will be sales-ready by golly. What does it look like if we're not doing that?
You're right. You think about this notion of, "Hey, you downloaded my essential guide to whatever. Somehow that makes you automatically interested in buying what I have to sell."
In most cases, 99% of the cases it's, "No, I actually just wanted to read your guide. I'm not buying anything."
As marketers, we're throwing those leads to sales and sales is sending me notes saying, "Why are sending me crappy leads?"
Our number one objective for content is engagement. We stopped looking at we created a great piece of content, but oh no, it didn't create any MQLs. Shifting our mindsets that we actually don't care. What we really care about is, this is our target audience and that is accounts and personas engaging in our content. When they engage in content, are they engaging in additional content?
Are we able to shape and inform their journey ultimately towards a purchase decision? We ungated everything. We had over 600 pieces of content, random acts of content, there was no strategy behind it. We implemented a very classic hub and spoke model mapped to the buyer journey. We curated the content down about 75 pieces.
Some of that was new. Some of it was refactored. Some of it was good as it was.
Then we ungated all of it and then really put our effort into putting that content in front of our target market and driving engagement.
SEO significantly improved by un-gating all that content.
I think we have three pieces that are currently gated and they tend to be like ROI calculators or survey results or something like that.
You're only gating the highest value content. It's where you've invested a ton to create it and you'd at least like to know who's reading it.
Even more so, I think if we can get their email address, their survey results, what they've put into the impact calculator is very informative for a sales cycle. Even less about the value of the content and more about like, "Hey, if they're consuming this information, it's actually super valuable from a targeting and sales perspective." Kind of use it very selectively, but it's a good point. Last time I looked at domain authority, it was up 32 or 33 points.
We're in the mid-50s now. We're actually above most of our competition for most of the topics we care about. Our organic traffic up 370% over the last couple of years, it was up 50% last quarter, just continues to grow and grow. Interestingly ... And this is really, I think the test of the strategy. We have what we call whale pieces and they're pieces that drive a significant portion of our site traffic.
We probably have six pieces that drive half of our traffic. Really our focus around them is really “how do we create that next piece of content for the people who are reading this?”
Just create that engagement loop. Even though they weren't necessarily the hubs of our strategy, for whatever reasons, they're really popular topics and the content's taken off.
One for example is 25 recognition ideas from employees. That piece drives 20% of our site traffic.
Most of the people reading it will probably never buy our solution, but we're okay with that because the ones who are interested in what we do either will be influenced by those people, or they'll be just part of that engagement journey.
The CTAs that really matter here are a request a meeting or book a demo, right?
Actually, for the mid-funnel content a lot of times we're looking at the next piece of content.
Ultimately, if you get down into a buyer's guide or a competitive comparison or an implementation guide or things that strongly indicate that you're moving into an in-market mindset, then we'll push the demo requests plus pricing or talk to sales, much more aggressively.
Makes a lot of sense. We were talking about this mindset of you don't have unlimited money in a young company. They might've dumped a fair amount of money on you, but it's still not unlimited. Like if you have a recent investment, you have a fair amount of money on an ordinal basis, but you may not on a competitive basis, like in the actual facts of the spend in a category.
So, how do you deal with limited budgets? How do you make those choices?
I'm backing up the truck here a little bit to where we started, but I feel like we've talked about content. We're narrowing our focus. That's one way to deal with a limited budget is to say, "Hey, I'm not going to try and produce humongous amounts of content just because I think I should." What else can we do to out-compete? How can we be smarter marketers in the SaaS space?
That was a great question and we're not going to outspend a lot of our competitors--particularly on the very well-funded VC competitors that we have. A couple of them are actually moving towards IPOs at this point so will have even more money.
We just have to be better marketers.
In some ways that's what you should be doing anyway. Regardless of the budget, you should be a great marketer, but really ... so doing a couple things.
Thinking about ... And it goes back to the leadership and setting priorities and making decisions, really focusing on quality over quantity and really focused on the line of sight towards impact.
For example, one of the things, obviously we worked on the content stuff and that was a big part of what we're doing. The next thing we took on was, hey, if somebody is in market, we want to be the best at capturing that demand and converting it into dollars. Just really focused on making that happen.
You think about simply you got three knobs to turn. You can increase the volume and you can increase the efficiency at which you convert the volume, or you can increase the value of what's converted. Those are the three knobs you get to turn.
Really focusing on the efficiency and then ultimately increasing the value of what you're actually converting.
One of the things we did was looked at our MQL quality.
I think we were at about 20% of MQLs we passed to sales were qualified. 20%. Big analysis around all the disqualification reasons, talking to the salespeople and really just understanding what was going on, and lots of factors.
Then put projects in place to actually mitigate all those factors.
Simple one would be, we were getting support requests through our demo request forms. All right. Let's go fix that. That's an easy one.
But a lot of them were, we didn't support language or the country of origin.
They were too small for our price point. You can go down these reasons why these were being disqualified. Really put the mechanisms in place to some degree let people self-select.
Giving them as much information as possible about pricing, about what types of companies are most successful with our product, what languages we support, what countries we do business in.
Just making all that information available because they're searching for it.
Then ultimately, we're increasing the quality of the hand-raisers. We're at about between 83 and 89% valid MQLs now.
We went from 20% to almost 90% valid MQLs.
The impact's been pretty huge in that I need about three less people working on processing MQLs because the volume is a lot less, but then we stepped down into the rest of the funnel and worked very closely with sales in terms of:
- What's our qualification criteria?
- What can we do to improve the conversion rates?
- Are there areas we can train?
- Is there information we can provide?
Very much a sales enablement function. At the end of the day, for this year, our benchmark MQL to win is seven and a half percent.
Last year it was 5%.
We're currently at actual for this year, year to date are 11%.
We've more than doubled MQL to win rates.
Focused on the impact and quality of the work coming through your organization, it's allowing you to show management, right? Your leadership, and I guess the board that marketing knows what it's doing. That might lead to a longer tenure than average.
The other thing it does, Ken, is it really creates better align with sales, because we by ourselves cannot affect an SQL to win rate.
We can help, but ultimately sales owns that, right?
Really partnering with them to help them be better was a big win.
The thing it allowed us to do is now when we put more on the top, it converts at a much higher rate and we did some other things around ... We actually changed our product positioning.
We're selling bigger deals now. We're actually starting with the big solution out of the gate versus like, "Hey, we've got a bunch of small solutions that you can cobble together." We changed our positioning in the market.
Marketing is not all about lead generation? Is that what you're trying to say here?
Sometimes I think the board and CEO think that's the case, but frankly, like I said earlier, lead generation is the outcome of a really great marketing strategy, and things like positioning are part of that.
I think this gets missed. It's like, "What is the product? How are we pricing and packaging it? Where are we and how are we promoting it?" Right? I mean, we all went to school, the four Ps still live. They don't look like they used to look, but they really do still live. Product management, probably one of the most overlooked parts.
You talked about some knobs you can turn on the pipeline generation, but in terms of being a marketing leader, you come into an existing company not achieving its goals. If you don't look at the product and positioning, you're probably missing big opportunities to change the outcome.
I think it's a really important point. I would say yes, product marketing is an underappreciated role in a lot of companies. Almost to the point of like, if you don't get your positioning and your messaging right, the rest of it's going to be a struggle, frankly. You really have not set yourself up for success if you don't spend the time and effort on that.
We've seen a lot of young companies where the founder is still the head of product marketing. Maybe not by title, but by fiat. I'm just wondering what your take is on when the founder needs to let go of the product.
Yeah. I think I've seen both where they may be more of a technologist or more of a salesperson, so product marketing is not a priority. I would say if I started a company tomorrow, my number one hire in marketing would be a product marketer. Forget demand gen, forget PR, go hire a product marketer out of the gate.
To answer your question, usually a lot of times the founder has amazing insights in what I call the radical buyer.
The radical buyer is the person who has the problem you solve, and when you talk about that problem, they lean forward and nod their head up and down, right? That's your radical buyer. You don't have to convince them. They get it.
Early on in a company, when you're doing product market fit, you're really targeted and focused on identifying those radical buyers and making sure you've got that connection.
Often founders, that's what they founded the company on. They actually understood that. They were probably the person with the problem and decided they're going to go start a company to solve the problem.
Right. That's not uncommon at all.
No, not at all.
At some point that radical buyer is only a fraction of the potential market that you're looking at and you have to do well against that radical buyer, but you also have to have the ability to move beyond that.
Geoffrey Moore talks about the bowling pin analogy, right? That radical buyer's the head pin.
Now I'm going to go for the second and third pin.
It's not the same, but I can use what I learn and leverage that to go for the second and third pin, but I'm actually now expanding my market, expanding the requirements.
My messaging position may change as I do that, et cetera.
Yeah. That's the Crossing the Chasm businesses as well, right? Same life cycle of a company. I just think it's really important as a marketing leader, you need to own the product. If you want to have responsibility for the growth of the business, I think you have to certainly lobby for ownership or co-ownership of the product. If it's your first marketing leadership job, you may not see that as an imperative, but I think it really is one.
I look at it almost as owning the offer mix. You've mentioned the four Ps, right? Hey, the product's important. How we position it in the market is important, how we price it is important. Then ultimately what are our channels to market? Even though I don't own those channels, obviously as a marketer, I'm highly involved in those, whether it's through direct or indirect channels.
Highly engaged in making sure there's alignment and the flow-through and everything that supports that.
You made an inference that I want to bring out because it's actually how we found you. You talked about making use of buyer intent, but you didn't say how you do that. I don't think it's quite the secret sauce anymore, but I want to spend just a couple of minutes on how you guys use buyer intent and what happens next.
Sure. Absolutely. You're right. It's becoming a game-changer, I think particularly for B2B marketers. For us, we set out to do two things.
One was to identify our ideal customer profiles and a lot of companies are doing this now. Basically creating look-alike models. We have one that we built, wasn't as predictive as we thought we would like it to be, but we had that. With that then is, can we predict what buying stage you're in?
As marketers, we've done this for a long time, it was called lead scoring. We were doing that on our own data, our website data, our email click data, things like that, right?
A very limited view of the market in terms of buyer behavior.
Third-party intent data allows us to open the aperture significantly and look at companies that we can predict are in the market that may have never been to our website and may never come to our website, which really opens up a lot of opportunity, but also allows us to really focus.
If you think of this idea of, if I can predict that you're in market, that within the next 90 days you're going to open a purchase activity with a vendor in our space, if I can predict that with reasonable accuracy, and reasonable being probably better than 50%, then I can focus my marketing activities on those accounts. Just for example, for us, within our core TAM we have about 14,000 accounts. Any point in time, about 2,500 are in-market. Meaning they will probably do a deal in the next 90 days, really start a purchase process.
Back to quality over quantity, really focusing on efficiency and being good at what we do is using that model data to activate campaigns across every possible touch point. We activate that data in display, in email, through our outbound teams, through LinkedIn, through Facebook.
If we do a virtual event, we'll bring the reads list in, match it up against our ideal customer profiles and buying stage and saying, "Okay. Here's the 30 accounts that are going to be at this virtual event that we think are currently going to be in-market. Let's go after them."
This is a way to aim tools like ABM as well, right? ABM 1.0, might've been, "Hey, these are the 800 companies I really want to sell to. Now we might know there's only 150 of them who actually care this quarter. Instead of 800, let's focus on 150 or 200 firms and be more effective."
I can give you a very specific example. We actually take this idea and then we create microsegments. One of our microsegments is credit unions. We have 78 credit unions that we think are in market. Last quarter, we reached 74 of them when we drove 28 of them to our website and we opened five opportunities worth about 140K and we spent $1,600 to do that.
I like that.
It works, doesn't it? You know, but it's five ops, right? I've got to do that many times over and over, but that's how I get there. That's how I market smarter.
Well, I think that's a good peak into what a micro funnel looks like, right? A slice of the waterfall, maybe.
Yeah. Part of that strategy is obviously understanding what they care about, creating the content that's going to resonate with them. We have a credit union employee challenge piece. We have a credit union case study. We put together the content that actually it's not just targeting, but it's actually the messaging and content as well.
Just stepping back from the dialogue a bit, we're saying lead generation may be dead and now we're focused on buyer intent and really micro-targeting our ABM. I think back to when I had young kids and they played soccer, and when they were about eight years old, everybody ran after the ball. I feel like that's what marketing and sales do.
We had the predictable revenue model with the young BDRs slogging through the lead gen stuff. Now we have people doing buyer intent and the more people who get smart on that, the more it looks like everybody's doing the same thing. It gets harder, right? The math gets harder.
Well, how do we preempt opportunity generation? How do we not be the eight-year-olds going after the ball? Does marketing revisit something that actually always worked, which was true thought leadership and helping people to understand big things they care about that might reveal the need for something we do rather than trying to just flog our stuff?
I'm wondering if that's playing as well in your marketing or are you not there yet? How are you approaching thought leadership at Kazoo?
It's a really great point. I almost feel like ... And this is true in the B2B world, brand died on the altar of lead gen, right?
We just ran to the other side and went so hard at it that we just forgot about everything else. A lot of companies are still there, you know?
Interestingly, just to make a point, about every six months our board sends out four deck templates and they're like, "Oh, we would like to change the board decks to look like this."
I get why they do it, because they sit on multiple boards so they want all the decks to basically look the same.
I open the PowerPoints and I look at one of the slides is a campaign performance slide.
Not surprising, it's your top campaigns, number of MQLs created, cost per MQL, number of bookings. It is a performance marketing campaign performance update, right?
There's no room for anything other than performance-based marketing within that context. As a leader you're in this awkward position of saying, "It's not really what we're focused on." Could be a career-limiting move. I'm going to have to figure that one out.
To the point and to the question, at the end of the day, thought leadership and brand is how you win.
If you think about it over the long term, building a brand that people know, people respect, your customers love, going back to the conversation around how much research and knowledge your customers are doing before they even contact you, being part of the ecosystem, and that includes being a thought leader, having a present brand, moving the industry forward, doing all those things and being part of that does some amazing things.
One is, it creates demand over time.
You have to spend less dollars to get leads in the house, but even more so, when they get there, you have a preferred position against the competition.
The winners create that, right?
The winners, maybe you're really good at creating demand with their campaigns and stuff, but at the end of the day, the way they win is actually by a super strong brand that delivers on that promise time and time again.
The Edelman in LinkedIn, I don't know if they're still doing it, but for years they did a survey on the C-suite and the impact of thought leadership on vendor selection, price paid, the marginal value of the business. I just think that we're so focused on the math, the marketing math, that we don't look at the business math.
I would agree.
The value of a brand is incredible in terms of those things.
Absolutely. We'll spend this year about 20% of our budget on brand and thought leadership. When we do thought leadership it's sponsoring events, but it's also content. We've got an employee experience manifesto, we've got an employee experience survey. You can assess your company to understand your employee experience. We've got an impact calculator.
We've created a lot of stuff that has nothing to do with our products that help orientate HR teams around putting people first and their experience first that ultimately drives business results.
We'll spend about 60% of our budget by mid-funnel, driving engagement in our content and then we'll spend another 20% on demand capture and demand conversion.
I would guess ... At least the peers I've talked to, they're probably more in the 60% around demand gen and demand capture, right? They're investing more towards the bottom.
It's hard, right? I'll talk to some of my peers and they've talked about, "Hey, I'm going to bury my brand campaigns and my demand budget because I don't want to tell the CEO or the board that I'm actually spending money there." That's the environment we're in sometimes.
I think you made that little vignette of my one slide to the board as my waterfall. That's it. That's marketing. That's pretty indicative of the financial engineer's view of the role of marketing. Maybe there's a call there or a cry for help. Marketing needs to educate the investment community, especially if you're in a VC or PE-backed world, part of your job has to be to educate these people what marketing should be doing to drive the business.
This was a really great conversation. Thank you so much, Casey. Can you tell folks where they can reach your firm and how they can also get in touch with you?
Absolutely. You can find out more about Kazoo at kazoohr.com. Probably the best way if you'd like to get in touch with me is email@example.com or obviously on LinkedIn the ID is Casey Carey. Would love to connect with everyone.
Awesome. Thanks, Casey, for making this a great episode of SaaS Backwards. Thank you for listening. If you'd like to reach me, I'm at linkedin.com/in/kenlempit or firstname.lastname@example.org. Until next time, thanks everyone.
Thanks for listening to the SaaS Backwards podcast brought to you by Austin Lawrence Group. We are a growth marketing agency that helps SaaS firms reduce churn, accelerate sales, and generate demand. Learn more about us at www.austinlawrence.com. You can email Ken Lempit at email@example.com about any SaaS marketing or customer retention subject. We hope you'll subscribe, and thanks again for listening.