One of the most frequent questions we get from B2B software companies - especially those with ambitions for high growth - is how they should structure their marketing team and how our agency fits into their long-term plans. What roles should they hire for? What should they outsource to us? What skills do I need today vs three years from now?
All great questions with unfortunately no one right answer. It’s likely you’re not starting with a completely clean slate - you’ve got internal resources with their own skills and interests. You also have a unique market and go-to-market strategy. Plus, your appetite for investment is going to be a major factor in how you go about building your team.
So rather than provide a direct answer, we like to offer some guiding principles and ideas to consider when deciding how to structure your marketing team.
Guideline 1: Excellent product managers come first
Ensuring you have a strong product manager (or product leader) is essential for effective sales and marketing. In the early stage companies this is usually a founder, then as the company grows and matures a dedicated product leader will bring more focus. Why is that? Well, for one, they are responsible for defining the product vision and strategy. There’s only so much sales and marketing can do to deliver when the overall product strategy is weak. Ultimately, it is the responsibility of the product manager to ensure that the product effectively addresses the needs of the customer and that its problem-solving capabilities are prioritized correctly. If you lack a capable and dedicated product manager or have one who is overburdened with other responsibilities, investing here first will yield significant long-term advantages not only in your sales and marketing efforts, but in the overall success of the company.
Guideline 2: Design the org with these marketing skill sets in mind
During the beginning stages of a business, it can be difficult to decide which tasks should be delegated, outsourced, or ignored, especially when everyone is involved in all aspects of the business. One helpful strategy is to start by identifying the B2B marketing skills that are typically required, as people tend to specialize in these areas:
For a product to succeed, it is crucial that the target market comprehends how it benefits them, solves a problem they have and is unique. This is where product marketing comes into play, working in tandem with product management to establish how to communicate the product's value to the market. It involves delving into buyer personas, pricing strategy, and competitive intelligence. This position becomes particularly vital as new features are introduced to the market. Although it may not require a full-time commitment initially, it is essential to execute product marketing effectively when needed. One thing to note on this skill is that it often takes a lot of depth in your product and industry to get right.
Developing a marketing strategy is one of the first things you need in order to build out a marketing organization. However, strategic thinking can be a difficult skill to identify or assess in an individual, especially in the early stages where you need them to be both an effective strategist and get their hands dirty in various aspects of marketing. More often in the early stages your focus should be testing hypotheses that you can leverage to inform your strategy, leveraging experienced senior advisors to help guide this experimentation before investing in a leader who can set an end-to-end strategy and build the capability to execute on it.
We typically use the term digital marketing when we talk about online campaigns and promotions. Here the focus is on using online channels to promote and sell products or services. This includes website optimization, social media, email marketing, search engine marketing (SEM), search engine optimization (SEO), content marketing, and digital advertising. Digital marketing tactics are often used in demand generation activities. We find the best practitioners have a mix of quantitative skills, technical skills and communication skills. There are a lot of marketing tools out there and a variety of experience is important.
Being able to create valuable, relevant, and consistent content to attract and retain customers is both an art and a science. Individuals that can help you establish and maintain a relationship with your target audience are invaluable - and remarkably hard to find. It doesn’t matter if it’s a blog post, video, whitepapers, or a social media post - you need someone that can create informative, educational, and entertaining content for your prospects. While strong creativity and writing skills are crucial, important skills such as research and strategic thinking are frequently overlooked.
PR & Brand
Public relations (PR) involves creating and nurturing relationships between a company and its stakeholders, which include not only the media but also customers, investors, employees, and prospects. Media relations is a distinct aspect of PR and is often outsourced because of the time and effort required to establish relationships with journalists and media outlets to obtain favorable coverage for the company in the press.
In the realm of brand marketing, PR plays a critical role in shaping how a company is perceived by the public. By working closely with other brand capabilities, such as event management and social media management, PR can help create a cohesive brand image that is consistent across all channels. It is essential to ensure that the face of the company is consistent with its values and message, as this can enhance its reputation and build trust with stakeholders.
Creative and Design
Having a strong creative skillset is essential for all aspects of marketing, especially when it comes to visual design. While some companies may opt for more affordable but mediocre design resources, it's important to recognize the critical role that visual design plays in creating an effective marketing strategy.
A skilled designer can help to create visually appealing content that not only grabs attention but also conveys the intended message effectively. This is crucial in making a lasting impression on the audience and driving engagement.
However, finding a skilled designer can be challenging. It requires a combination of technical expertise, artistic talent, and an understanding of marketing principles. Investing in a talented designer can pay dividends in the long run, as they can help to elevate the company's brand image and enhance its reputation.
Guideline 3: Benchmark Your Sales & Marketing Costs
Determining the appropriate marketing budget is a crucial concern for businesses. While some marketing activities, particularly those in digital marketing, can yield a straightforward return on investment, others are hard to quantify. However, investing in the foundation of a marketing strategy can be just as important for achieving success in measurable outcomes.
To determine an appropriate marketing budget, a common approach is to examine the percentage of revenue typically allocated to marketing by other software companies in the same market. It's important to note that this percentage can vary depending on several factors, such as the specific marketing strategy employed. Thus, it's crucial to consider market-specific guidelines when making these budgeting decisions.
There is no one-size-fits-all answer to the amount a B2B software business should spend on marketing as it can vary depending on various factors such as the industry, target audience, competition, and growth goals. However, a commonly cited rule of thumb for B2B companies is to allocate around 7-8% of their revenue to marketing activities. Based on this guideline, a $10M B2B software business may allocate around $700,000 to $800,000 annually for marketing purposes. It's important to note that this is just a general estimate, and businesses should evaluate their specific needs and adjust their marketing budgets accordingly.
Guideline 4: Determine Your Go-to-Market Strategy
Deciding how you’re going to reach prospects, get them into the marketing funnel and eventually into a sales pipeline is your go-to-market strategy. In general these strategies swing from marketing led (often where the ACV is low and makes sales involvement unaffordable) to sales led (especially for large, complicated deals). Most often it lands somewhere in between. You also need to consider if you’re going to involve partners and lean heavily on indirect sales or partner marketing. No matter your approach, this strategy has major implications on how you’ll want to structure your marketing team. Some common approaches include:
Account Based Marketing
If you can easily identify your most valuable prospects, they number in the hundreds (not thousands) and what you're selling has a high ACV, then an account based marketing approach likely has a place in your go-to-market strategy. Account-based marketing (ABM) is a go-to-market strategy that targets high-value accounts with personalized marketing campaigns to create more impactful engagements and close more deals. You will need good sales prospectors and content marketers to target these accounts.
Does the buyer journey for your prospects mostly occur online? This usually indicates you need a heavy content marketing focus. You’ll need to give your prospects a variety of paths to learn more about your solution online and diverse types of content to consume at different stages of their journey. Optimizing this for B2B prospects and the different buyer personas requires a lot of high quality content. As a result, you’ll want great content marketing and digital marketing expertise to execute on this strategy.
If your target market still reads physical newspapers, loves attending events and maybe even likes to get snail mail, then old school direct marketing needs to be part of your marketing capabilities. Even though this world of marketing has been around for a long time, things in this world change too (especially since COVID) and you'll need someone who is creative and experienced.
If you’re going to leverage partners as resellers or white label your software, you’re going to want to make sure you’re set up to support them. This requires good content, so you’ll want to invest heavily in product marketing and content marketing to ensure they effectively reach your prospects on your behalf.
Guideline 5: Choosing what to outsource
How do you decide what to outsource? If you do outsource, do you use an agency or freelancers? Again, there’s no one right answer here that fits every business and we could dedicate an entire post (or more) to working through this decision.
Ultimately it comes down to building the right core competencies that are needed to drive long-term company results and value. Interestingly, the larger a company is the more likely they are to leverage outside resources, especially for content generation (75% of large companies vs. 37% of small). Get clear on how you would like to manage resources. Internal resources require more hands on management, so if you're short on time, outsourcing may benefit you. Do you already have a strong internal team, but need specialized competencies for your marketing programs? Outsourcing these roles can be help provide your team with specialized skill sets without the added hiring, benefits, and management costs of hiring an internal resource.
Another often overlooked benefit of utilizing outside resources is acquisition leverage. If your goal is to be acquired by a strategic company, being able to transition marketing functions to the acquirer and scale back on marketing resources quickly can add major value.
There's a lot to consider when building out your go-to-market team and for most companies it's often an exercise in trial and error. Even when you've got a clear picture of how you want to build out the team, finding and hiring the right people can be a challenge. So our best advice is to think through these key guidelines, leverage the expertise of agencies where you can and dive in.