Why business software CEOs have a love-hate relationship with marketing
Companies that offer business software solutions — SaaS, custom software and off-the-shelf — all share a similar challenge: Longer sales lead times, intense competition and relatively slow technology refresh rates.
Translation? There are more competitors vying for a smaller number of sales opportunities.
It also means that companies selling business software have to outsmart, outmaneuver and even outspend the competition when it comes to finding and winning more sales opportunities.
Despite this, some CEOs of business software companies, particularly ones with annual revenue under $5 million, struggle to see the value of investing in a robust marketing program needed to bring in enough leads to fuel sales growth.
The reasons for this are complicated, but there is one contributing factor that stands out above the others: It’s not uncommon for CEOs at business software companies to harbor either a distrust of or wariness toward marketing.
CEOs come from a software background where coding is relatively straightforward process. Coding is part mathematical language, part engineering, part architecture. There’s a logic to coding. You write code for a desired function and the code gives a desired result. Admittedly, there is well-written code and poorly-written code, but for the most part code does what you ask of it.
Marketing, on the other hand, is much like life itself. It’s messy, imperfect, ever-changing. For a left-brained and hard-charging CEO used to managing software development teams where sprints generally provide desired outcomes, marketing can seem like a dark art steeped in mysticism and shrouded in secrecy.
While some of marketing is highly measurable and delivers fairly ‘predictable’ results, there are other subsets of marketing (including PR) whose outcomes are not nearly as easy to forecast.
Unable to scale the revenue wall
Not a few of these CEOs undoubtedly built their companies from the ground up through sheer will, software expertise and smart networking. Some may have experienced incredibly rapid growth as they expanded their outreach into their personal network, either geographically or in a particular industry vertical. Marketing often plays a secondary role to this kind of early-stage growth. If it’s used at all, it is often limited to a handful of reinforcing activities like speaking at an annual industry conference, penning a monthly column for a local business publication or Google AdWords campaigns.
Rapid growth, however, is a double-edged sword. If past growth results from the CEO’s direct involvement in nearly the entire sales cycle — a compelling mix of personal charisma and industry expertise goes a long way — then mid stage growth rests on the CEO’s ability to surround him or herself with the right team. In other words, it becomes progressively harder for CEOs of business software companies to scale the business the larger it becomes.
Leading a business software company toward sustainable growth that is less dependent upon a CEO requires a broad mix of business management skills. The native skills a CEO relied upon in the beginning, plus his or her direct involvement in nearly every aspect of running the company, is no longer what a company will need to grow. If the CEO can’t hire and build the proper workflows and business culture that breeds success, then it’s unlikely the business will sustain its past growth for long.
The marketing conundrum
For business software companies to grow past their initial base of customers, they must build a robust marketing program that encompasses a wide variety of activities. Doing that requires a mix of marketing skills and knowledge at all levels of the organization, from the CMO all the way down to the copywriter.
Back to the CEO’s love-hate relationships with marketing. The thing is, it’s not enough to hire an intern or entry-level marketing professional. You can’t just start posting on social media and blogging and then, voila!, you’re now taking care of marketing. A company needs an overarching marketing strategy to ensure that all activities support the same goals. It starts with a thorough understanding of an organization’s market strengths, defining who its primary buyers are, and refining the brand such that it resonates with the greatest number of target buyers possible.
In short, you need big-picture knowledge from the likes of a marketing executive to help discover, design and oversee an effective marketing program. But you also need experts at tactical execution to ensure the plan actually gets implemented effectively. And you need analytical tools to measure the effectiveness of each activity and determine what aspects of the marketing mix need to be tweaked or discarded and replaced.
A CEO with either a distrust of or unfamiliarity with the complexity of marketing will often find it challenging to build a marketing team needed for sustained and profitable growth. Marketing is not something you can do in a single sprint, after all. There’s an unpredictable, even experimental, element to marketing that requires a great deal of patience and willingness to take financial risks. Even the best-constructed, KPI-driven marketing campaigns won’t completely eliminate the need for quick pivots and corresponding ‘learning’ investments.
It can’t be emphasized enough that finding and hiring the right team with the right qualifications is one of the single greatest challenges facing CEOs of smaller business software companies. Compounding that challenge are some daunting hiring trends. The past several years have seen a scarcity of skilled marketing professionals. According to a 2016 survey from Bullhorn, 71% of respondents said that they experienced difficulties finding talent for marketing roles. The talent scarcity is particularly acute in digital marketing, where average annual salaries can be as high as $102,000 for SEO specialists and $74,000 for content marketing specialists according to the most recent marketing salary findings from Indeed.
A path toward sustainable growth
For all the reasons mentioned above, CEOs of fast-growing technology companies have a particular challenge trying to scale. As they sail past hard-to-reach goals like one million and even five million dollars in revenue, they may start to think they they have this ‘growth thing’ figured out. Perhaps with a recent Inc. 5000 listing under their belt and $10 million in revenue in their sights, what could possibly stop them?
Unfortunately that’s usually when their growth hits the wall, or at least a series of speed bumps, and it knocks them out of their groove. They quickly realize that scaling a company to the next level involves a paradigm shift in how the company is run. It means having to build and lead the right team and not rely upon his or her own personal charisma and expertise in the trenches. In this scenario, finding the right marketing and sales team becomes paramount as more leads are required to fuel the level of growth the CEO aspires to.
Because it’s so challenging to build an effective marketing team in the short-term, especially for smaller companies with fewer resources, it’s usually advisable that business software companies lean on the resources of a marketing agency. An experienced marketing agency represents an on-demand resource that can provide a CEO with everything from crafting the high level marketing strategy to deploying tactical marketing activities needed to support a company’s growth objectives.
Fortunately, opting to work with B2B marketing agencies actually makes financial and operational sense for most smaller technology companies. Marketing engagements can last as long (or short) as needed to meet the growth goals of a company. The various marketing services offered are executed by experts in each discipline, which tends to lead to better outcomes compared to when marketing is handled by company staff with less experience.
The good news is that, in fairly short order, CEOs will come to lean more heavily on marketing for attaining their growth objectives. They will come to trust the ability of marketing to stay on top of the latest trends in lead generation. They will listen to marketing’s advice on how to ensure that their brands are positioned well against the competition and respected as a leading provider in their industry. They will learn how to make more rational investments in marketing despite its seeming lack of logic and uncertain future outcomes.
With time and continued revenue growth, CEOs will come to love marketing.