Marketing Strategies that Led to a Billion Dollar Acquisition by Splunk
This week on the Demand Gen Visionaries podcast, we sat down with Tom Butta, CMO of SignalFX, which was recently acquired by Splunk for north of $1 Billion. Prior to joining SignalFx, Tom was Chief Marketing Officer at Sprinklr, where he was responsible for positioning Sprinklr as a vital partner to large enterprises needing to digitally transform around the connected customer. As consultant-in-residence for the market development team at Andreessen Horowitz, Tom also helped define and package the venture capital firm’s points of view about emerging technologies to position itself as the place for executives to learn about the future of technology. Butta has also served as CMO of AppNexus, NICE Systems, PTC, and Red Hat, for which he helped take the company public, expand globally, and establish open source as a viable software platform for modern enterprises.
On this episode of Demand Gen Visionaries, Tom shares the demand generation tactics at the heart of his marketing organization, and strategies that lead to immense value creation and large acquisitions — like putting top priority on the customer experience.
Tune in to Tom's episode and hear how he thinks about marketing pipeline vs sales pipeline, his uncuttable budget items, the power of a well-tuned campaign influence model, and the importance of SEO.
Want to skip ahead to the highlights? Check out these can’t-miss moments.
1:35 The Trust Tree, Tom's Demand Gen Secrets
As people think about hiring B2B CMOs, they tend to put you in different buckets, either being a demand gen expert brand expert, product expert
It’s all about creating interest for your brand, your product, and ultimately customers
A key metric for demand gen, the most important measure, is pipeline creation
At SignalFX, we measured pipeline over the course of 5 quarters and we measured marketing and sales driven pipeline weekly
Following that, it’s how well have you been able to activate that pipeline, and realize that potential from the pipeline. Ultimately, how much new revenue did marketing source, how much new revenue did sales source?
A mistake that a lot of people mistake is overlooking the fact that everyone is looking for new logos and new customers, but what a lot of people forget about is the importance of marketing to your existing customers
“The next best source of revenue are the customers you already have”
The existing customer base is like a franchise, and you need to treat your customers as your first level of communication in everything that you do
Your customers should not learn about the news after the fact, they should learn about it before, like they are special, part of your family
Huge growth in net retention rates was due to our focus on the importance of our customers
6:50 Arranging the Demand Gen Team
Segmenting your database is key to have the right level of communications to your customers
We’re always thinking, is this the right messaging for each audience?
We had someone in marketing responsible for messaging and managing the relationships with our existing customers
It’s often challenging for customers to go on the record, so having someone responsible for that, often called customer marketing, is something we focused on
You have to get the buy in from the individual, the customer on the front lines, they have to see the value and be passionate about your product
The natural instinct for corporate comms departments is to say no, but if you have a track record of doing things in a positive way, and elegant way, and there’s something in it for the company, that’s the key
10:30 Marketing Pipeline vs Sales Pipeline
At SignalFX, marketing ops and sales ops were like yin and yang
When we reported starting each week, we reported off of one dashboard
One of the most important aspects of this was our campaign influence model that showed every touch along the relationship, most notably first touch.
There might be 16 marketing touch points during a deal, but we would not look at this of marketing sourced, but marketing influenced
Regarding the sales and marketing divide over closed-won revenue, that is always where the struggle happens, but if you just look at the data, the data will tell you what actually happened.
As to who gets “credit” we never wanted to overstate marketing sourced pipeline. I never wanted to get into the he-said, she-said debate. Our help is to get us to revenue every way possible.
14:20 The Most Fundamental Elements of Demand Gen
Demand gen is part of a team that doesn't live on its own
It’s reliant upon really good content and the ability to act on every opportunity
Having the right marketing stack with the right levels of intelligence if crucial
We talked about our marketing influence model at the board level
We wanted to be able to predict how investments would turn into revenue
The other thing that’s fundamental, is the website, it’s the home that you’re sending people to and on that property, you need to provide the best possible experience
SEO is obviously key here, because people need to be able to find you
We gave our SEO team revenue targets
17:00 The Power of the Attribution Model
We used Lean Data, a tool that could associate the database of accounts. And create an Account-Based attribution model
Lean Data made it easy for us to be able to see the value
18:30 Growth Marketing and Marketing Ops
Marketing Ops is bigger than the technical ops of demand gen
It also includes the ability for the whole marketing function to understand what’s happening
They have an orientation to look at the data, and understand what the stack should look like and be willing to test new stuff
We worked with closely with sales ops to manage lead scoring
Understanding, as you build out the funnel, is that things won't stop when they enter your funnel
You can see the impact on what you’re doing or what you need to do
It’s marketing ops with a growth orientation
Classifying your database of prospects, and segmenting into categories like “Platinum” or “Gold” or “Silver” is key to understanding the types of customers you’re targeting
My first instincts are that growth marketing should own campaigns. Many organizations have product marketing owning the campaigns because they know the product strategy of the company. But the growth marketing folks need to know when there is information overload and you’re turning people off
22:30 Tom’s Campaign Strategy and Playbook
My uncuttable budget items include, first, search. We had to spend the money to show up and understand the key triggers that are driving demand
Investment in customer marketing is uncuttable, the validation you get from customers in immeasurable
Content creation is uncuttable, you cannot outsource this. We wrote everything and packaged everything up
The product marketing team was responsible for the campaign strategy. However, the digital marketing folks were responsible for getting these into market, and how we’re going to reach them, and what that would look like across channels
26:30 Mistakes People Make in Demand Gen
One common mistake is only going after new logos
Thinking of your customers as the “installed base” is the exact opposite of how I think about our customers. Our customers are our franchise!
The other mistake that people make is thinking about demand gen as “Qualified Leads” as opposed to connections that turn into sales pipeline
You have to make sure that the quality of the pipeline is being activated and turning into revenue
29:00 Tom’s Famous Dust-Up
I’m on all of the forecast calls, so the disputes that we normally would have with sales, you know when sales says “I don’t have enough pipeline from marketing”
This is what our attribution and influence model is so important
It became obvious when that was an excuse from sales because the data made it clear
You have to have the conversation and know the data or else the narrative from sales becomes the truth
31:00 The Importance of the Website Re: Demand Gen
The website needs to convey information quickly and crisply
The content needs to keep people on the site
The navigation needs to help people discover what you to easily
Less is more!
You need to be able to have people find it (SEO)
The content you’re creating needs to be optimized for search engines
Product documentation is important for Google, and it needs to be optimized for search, which proved to be immensely helpful
Sometimes you need to ask your visitors how you’re doing
33:35 Quick Hits with Tom Butta
What’s the one thing I’ve picked up during shelter in place? Walking. I’m in the country in Ireland right now, and we have amazing walks right outside my door
When I was in Palo Alto, I would walk to get coffee easily, but now I can’t do that, so I’ve turned into a barista trying to match that quality I could get in Palo Alto
The benefit of being in Ireland is that it’s incredibly quiet, except for the ocean, the sheep, and the birds. It gives you a great perspective
“Demand gen is a function within a function. It's part of a team, but it does not live on its own. It’s reliant upon really good content. It's reliant upon the ability to act appropriately and quickly on opportunities that it creates.”
“The validation that you get from customers is just... it's just immeasurable.”
“Understand that your home is the place that most people will go to and you need that to be your website. You need to be able to ensure that when they get there, they have the best possible experience, but you also need to be sure that they actually can find you.”
“You go after the new logos exclusively, and you forget that you can actually have great influence over, building relationships with your existing customers. Those customers are our franchise. They give reason for us to exist.”
“My belief (for content) is, it always has to start from within. In terms of turning something over, we did a couple of case studies with external consultants and writers, but for the most part we wrote everything ourselves.”
Ready to hear from more Demand Gen Visionaries? You can find all episodes here.
August 25, 2020
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