[Best of B2B] The 3 Traits of a High-Performing CMO (with Dave Kellogg)

Dasha, remember when Mcheal from Optimizedly won our exit five live AI agent showcase the 2000 custom landing pages. That was really impressive So he's their director of AI innovation and he built them with Optimizedly's agent platform one for every account in an ABM campaign He built them from signals like job postings, press releases and leadership changes. That's like the holy grail of ABM That's why today's sponsor Optimizedly is where I'd point anyone who wants to know what AI agents can do for marketing Their agent platform is built specifically for B2B marketers build your own agents or pull from a directory of 50+ pre-built ones They also launch virtual teammates. These are digital team members that learn over time can join meetings complete tasks support campaigns and keep your website Optimized, why do I need to go to work? Let me get those. Okay, I need one of those Same being asked to look into AI agents, which I know a lot of you listeners are right now go check out Optimizedly Put them at the top of your list and you can go build cool stuff just like McEal did check them out at Optimizedly.com/exit5 Hey quick shout out to Webflow who is also sponsoring today's episode their team actually ran one of the highest rated workshops at Drive this year Which is our big annual conference people raved about that one guy their chief evangelist really knows aio And you shared a ton of advice on turning your website into an ongoing revenue driver And that matters a lot right now right AI is cutting into organic traffic. I don't go to Google and search anymore I'm talking to my AI agents all day long So AI is cutting into organic traffic and buyers just like you and me are using AI to make purchase decisions about 95% of the time Webflow they're a great team to follow on this more than 300,000 brands can you believe that build on their platform It helps you get discovered in AI search build fully custom sites without a developer govern your content and see how agents read it all in one place and they just launched Webflow campaigns agents help you write a campaign brief from your brand system then generate on brand landing pages and matching ads together check it out at webflow.com/exit-5 And make your website your biggest growth engine in 2027 that's webflow.com/exit-5 All right look everywhere you look online right now everyone's telling you the new way to do marketing because of AI And I think because of that there's so much perceived change and innovation and speed and technology and AI and agents in marketing right now I think we've forgotten a little bit about the timeless lessons in marketing just like life There's a bunch of timeless principles that kind of always work Whether I'm reading a book from 1925 about advertising and copywriting that still applies today Or if I'm doing an interview with someone here on our podcast I'm just reminded all the time about how it's easy to open up LinkedIn and feel like you're behind Or feel like you need to chase the newest tool tactic or channel And so we want to profile some of the more timeless lessons here on our exit-5 podcast right Everybody in BDB is chasing what's new new channels new tools new playbooks with the fundamentals Haven't changed some marketing lessons never go out of style And that's why we handpicked this episode for you in your ears We're blessing this is one of the greatest hits of the exit-5 podcast whenever all time most played episodes And here's this one for you. I hope this is a dose of timeless marketing that you need to ground yourself today Okay, this is long awaited. I got an intro to you from my friend Tom Wentworth who I guess you're an advisor And a company of his the company did well or something like that. He said he should go on your podcast So I am glad you're here. I posted about this I'm gonna give you the microphone in a minute because I want you to introduce yourself and give your background But I just want to I posted about you coming on this podcast in the exit-5 community Recently and the reaction was somebody wrote oh my god for real another personal best blog ever I read it all the time someone another said oh shit You're talking to the goat another person said huge fan of Dave Kellogg another one said great guests And everyone that said pump so we haven't even done the interview yet And I know this is gonna be one of the most popular episodes of all time so Dave Kellogg Thank you for taking the time out to come on the exit-5 podcast I've been a secret admirer your blog has saved me in advance of many board meetings and Marketing leadership meetings over the year and I know I'm not alone in that so I'm glad to have you on well It's awesome. Thanks for having me here and Now I hate playing into high expectations, right? It's a good marketer. I like to keep expectations low But seems like we can't do that in this case All right, so for people who aren't super familiar with you and your story Give me the condensed overview of who you are and what your career path has been you've been CEO You've been CMO you have a unique perspective on things, but how do you tell us and Just with the caveat that majority of this audience is gonna be in your wheelhouse B2B SaaS marketers and execs Okay, so I'll do the quick chronological telling because I think it gives you the context So self-taught programmer math and geophysics major of Berkeley wandered into the software business because I knew how to program Started in technical support at a database company. So telling people how to write SQL queries Watch that company get thumped by Oracle and everyone said we were losing because the sales and marketing So like well, what sales marketing? So so I got interested in sales marketing moved over to competitive analysis Then product marketing got an MBA on nights and weekends ran marketing at one startup ran marketing at business objects On kind of an epic run from 30 million in revenue to billion in revenue One of the charm I had at CEO. So I ran a quiet back company called mark logic For six years from zero to 80 million in revenue and then did a year at Salesforce as GM of service cloud and then Was CEO of host analytics the financial planning company took that from 8 million to 50 million AR and sold it Along the way, but right of the blog for nearly 20 years at this point And I've sat at about 10 different boards of directors So I like to position myself as having three views kind of 10 years of the CMO seat 10 years in the CEO seat and 10 years in the 10 kind of combined years in the director's seat Awesome important tangent just for me out of curiosity before we get into the good stuff Tell me about your the origin of your blog you got into the blog 20 years ago before all this stuff happened Like what got you into blogging? Yeah, so at the time I was CEO of mark logic And we sold an XML database system to two communities. I say spies and publishers We'll talk about the spies, but the publishers used us for content repurposing and they were under threat by the internet by the web And by the new coming generation of publishing blogging was part of that So I actually started the blog as an effort to kind of walk in my customers footsteps So I could kind of comment intelligently on new media that was threatening old media. So that's how it started I was originally called the mark logic CEO blog and then one day I was wandering The halls at Sequoia and Mike Moritz looked up to me and said oh the Kell blog And I went oh, that's a good name and since my wife is French and I've lived in France From a francophone Kell blog is actually a homophone for what a blog in French So it's kind of funny, but in any case that's the story. I love it. Do you think you'll continue to blog or is one they can we just create like a Dave Kellogg Chat GPT program and someone can just write this on your behalf and you can go retire somewhere So I played around with that and I didn't do very well because I'm not very good at prompting But I had a friend who's using chat GPT-4 And he puts a more time into it and it still don't feel like I'm out of business But but I I had this crazy question which is what if Dave Kellogg talked to Kurt Vonnegut? What would they talk about? I just wanted to see what it would do And my friend actually prompted it enough so it was a pretty interesting conversation It's up there as a blog comment on a blog post But I think I'm safe for now. I don't know for how many years more but but for now we're okay. I love that All right, so you have these three you've had an amazing career impressive run across CEO CMO Start off as a programmer Today we're gonna talk mostly to CMOs and so a lot of people listen this podcast want to be Either they are CMOs now and they're listening because it's just the part of their routine and staying sharp Or they want to become a CMO today and I'm curious to hear your perspective about What makes a great CMO and I know that is a that's a vague question But I I'm trying not to lead the witness here. Just as somebody who comes at it from this angle and cares about revenue And things about things from the CEO level Tell me about a what is a world-class CMO look like to you? Yes, great question So I want to give you a four-part answer. I think one is I write about a lot. It's a great partner to sales So I would say You know, it was literally like 1987. I was at a marketing all hands meeting and our CMO said marketing's job is to make sales easier And I like reductionist little pithy maxims. So I was like, oh, that's good. I like that I want to stick with that big sales easier thing And I basically rode that maximum to CMOness and a successful career as a CMO So I always said the other way to look at it is I worked at a really small startup once and in the the VP of sales made a t-shirt that said code seller get out of the way Which kind of Frames the mission of marketing right? It's like I've worked at small startups if you have 10% startup. You're not going to have any marketing right? People build the product and people sell in the product So if you could have derived marketing from first principles It says we got to make this stuff easier to sell and there's a whole host of ways of doing that some of which are super strategic Like in putting on product strategy or ideal customer profile or distribution strategy Some of which are super tactical like x-curricular trade show really well and finding the right leads, right? So but but you You can derive it all from making sales easier. So the first to me is we've got a partner of sales, the second actually I'm going to reduce the answer to three things, to be a dispassionate analyst. I don't know how to say it, but just to show up with the data and say, our stage two to close is five percent. I can tell you industry benchmarks, they run more 15 to 20 for this company in this space at this time with these opportunities. I don't know if five is bad or good. Does strike me as particularly good, frankly, but I do know what it does to my marketing funnel, which is if you're only going to close five percent of these, I need to generate a huge number of them, and it's going to cost us a lot of money. So because I'm trying to put a very difficult issue on the table, right? Because the wrong way didn't that example to say, well, sales can't sell anything, right? Sales can't close. I'm not the problem. I hit my salgill and sales can't sell. And that doesn't help anybody, right? So I think the art of the dispassionate observer or the anchor man, the dispassionate analyst, really, not observer, or what you might call the anchor man or the anchor person on TV. Hey, I don't make the news. I just tell you about it, right? Like we've got a 5% state student closed rate. Maybe, by the way, sales ops could do that for me. But we need to talk about it dispassionally and kind of remove the emotion and say, how do we want to do better? Do we think five is good enough? Benchmark would suggest it's not. If you think it is great, but otherwise, how do we do better? And leading those conversations is super important. I'm giving you a simple example, but it could be marketing channel analysis. It could be sales pipeline sourcing analysis. These issues get hot fast. So first thing is partner with sales, second kind of dispassionate analyst. And the third is a partner to the CEO, which actually might be redundant to the second. But I have to assume in the stay and age that the CEO comes from a product background. So they understand neither sales nor marketing, really. And I need to explain it to them. And I need to lead them to understand what it is we do in marketing and how we work with sales. All right, this is great. I take a lot of notes during these and I come back to different things. There's lots of things that I want to come back to already. I also love that you gave us the rule of threes on the fly. We have a great memorable list. What makes a great CMO? We have great partner sales, dispassionate analyst and a partner to the CEO. I want to talk about each one of these for a second. So on being a great partner to sales. First of all, I love that you said this line in 1987, marketing's job is to make sales easier because we now live in an era where somebody like me, I was born in 1987 and I get to go to LinkedIn now and I get to write that pithy line. Marketing's job is to make sales easier and everyone comments like, oh my god, this is amazing. But Dave Kellogg is there in 1987 taking this from a different CEO at the time. So there's just another example of how everything that's new is old that it always comes back to the first principle of marketing's job is to make sales easier. On this concept of being a great partner to sales. When you say it like that, I'm like, sounds obvious. Great. But so many of the comments that I see in the XF5 community or even in my career, various, I was a CMO twice and had different levels of relationships with the sales partners. Why do you think there is such a disconnect between, it's not as easy as this and it's often times like so the sales leader is not ready to be like, yes, Dave Kellogg's here as CMO. I can't wait to partner with him. There often is a disconnect and my perspective is it often comes down to misalign metrics and incentives. But why is it harder to be a great partner to sales than we can say quickly in a pithy way on this podcast? But when you get inside of a company, it doesn't always work that way. - So look, it's a great point. And a not terribly well-known thing is in 2020, I actually did a nine month, almost 11 month, nine or 10 month interim CMO gig. So after the last time I was a CMO was 2004, right? So you might think, oh, Dave's a little dated on this stuff. He's been a CEO and board member since. But I actually sat in a chair for almost a year in 2020. And the first thing I did was bomb the sales, right? At some point the CEO was yelling at me like, why are you and Tim so aligned on everything? It's like, have you ever read my blog? Like I'm doing exactly what I said I would do, right? Which is to interlock with sales and we kind of speak with one voice. So, but to answer your question, I think there's a couple of reasons why it's hard. One is just an experience, not a lot of sales and marketing people kind of bond themselves together and approach the CEO as a, we're one person. Another old movie reference, but all the president's men, when word and birdsteen, their editor started calling them woodsteed, right? They were one conceptual person. That's what I want the VPSL's and the VPM marketing to be, right? Woodsteed. So it's hard to do, but a lot of people have an experience with it. So one is to just see if people have an experience very much, takes two to tango. They don't necessarily know how to dance, right? That's one. The next reason is trust. There's been a lot of marketing people to know to say the right thing, but they don't actually do it, right? And sales people are like super high EQ. So if you're kind of bluffing them or bsing them or kind of pretending or kind of bowing to them, yeah, we want to help sales flag, but off-running big branding campaigns or doing stuff that marketing likes to do as opposed to what sales is asked for, they're going to look at you and go, big hat, no cattle, right? I mean, you talk a good game, but when you place your chips on the table, when you spend marketing money, when you hire people, I don't see it. I don't see the alignment that you're talking about. And the last would be, it is often the CEO's fault. I mean, I have worked with companies, you know, just to pick a very old, old example that's shockingly still happens today, but the CMO is going, I got all the sequels or sales, whatever you want to count, go marketing, we're awesome. And sales hates them, thinks they're not the right leads, not closing them, right? That still happens. So I was talking to a company and I literally looked at the CEO and was like, you know whose fault this is? 'Cause I had all three of them in the room. And I look at it, grab a mirror, pal. (laughing) It's your fault because you're telling the marketing person that you want them to be alive with sales, but you're not measuring them on opportunities or revenue, right? You're measuring them on sales or sequels. Shame on you, right? So definitely part of it. - The CMO has a boss. And if the boss is a CEO, just like any other part of the org that the boss has goals and benchmarks and comp based on those things. And so if my comp plan is based on the me generating a bunch of SQLs, like then my boss, the CEO, is gonna think I'm doing a good job. I was gonna follow up this question with like, seems to come back to metrics, right? Which is like, do we have a shared view of like company goal? What is sales-owned, what is marketing-owned? I think it's hard and part of the disconnect in B2B SaaS is there's a blurry line between like what sales is responsible for and what marketing is responsible for. So the metrics kind of make it a bit messy. What have you found to be the best, simplest, like unifying metric? Is it marketing-owned opportunities? - Yeah, so two things. One, on the prior point, I'm gonna give some risky advice, which sometimes works. I'm not gonna claim this always works 'cause sometimes it's a no-in situation. But if you're a CMO and the CEO says to go right and the CRO says to go left, what do you do? And the answer to me is go left. And it may sound crazy, but I've seen enough CMOs die on the other hill 'cause the instinct is to go right. Hey, the CEO told me to go right, I'm going right, the CEO will have my back. Sales will be unhappy, but the CEO will take care of me. And that doesn't work 'cause what happens is if the CEO is not aligned with sales and you do what the CEO wants, it'll work for a while. You'll be their favorite employee for a few months, but sales will be increasingly complaining about what you're doing to the point where sales is coming for your head to the CEO. And the CEO will go, okay, sorry, we'll get rid of them. So I know it doesn't work. I mean, look, there are exceptions of this, but in general, I say go left. Here's the counter derivation. If you go left and work with sales and actually help the company hit the number, first there's no problem 'cause we're hitting our number 'cause we're working together. And second sales will have my back. If the CEO goes, I can't stand the CMO and never does what I want, you go, the sales will be like, whoa, whoa, whoa, no, they're doing exactly what I want. So I think it's a really hard situation for a CMO, but I think you need to understand if you're in a subtle misalignment 'cause these things aren't as simple as left and right, they tend to be subtle, but if you're in one, step one, get the three of them together and say, I feel misaligned. In fact, I once had a direct report telling me, he goes, do you know why the asteroid belt exists? And I go, I don't know why. He goes, there used to be a planet between Jupiter and Mars, but it got torn apart by gravity. I don't know if that's true. That's what I feel like right now. I'm an asteroid belt. You guys are tearing me to bits. I love this advice. I love, love, love this advice because it is not traditional, but it's like, I just love simple, very clear advice. Like, it's like, when you go to the doctor, I don't like when your doctor's like, well, you could do this and you could do that and you could take that notebook, tell me what to do and I think what you just gave people is an actual recipe of something to do, which is if you zoom all the way out, if you hit the revenue number, almost everything is gonna be fine. - Revenue curious, all-known ailments, as they say, right? So totally, it's counterintuitive, which is why I belabor it. Now, to answer your question about metrics, I personally think the right way to measure marketing and enterprise B2B SaaS when it comes to the demand generation part of marketing is stage two opportunity count, believe it or not. Not pipeline dollars, not stage one opportunities, but what I call stage two opportunities, actually looked at by an AE and accepted. Because at some point, sales needs to be accountable. Right, sales doesn't get to play the game of they were low quality, which is that they're low quality, why'd you accept it, right? So to me, you get, what I call the marketing is the stage two manufacturing facility and sales is the stage two. to closing facility and if sales is accepted in an opportunity, they need to be willing to be held accountable for a close rate of somewhere between, in my opinion, 15 and 25% of those opportunities. But what I'm trying to do is get rid of the finger pointing. And the most obvious finger pointing place is, oh, they hit their number, but they were low quality. And we solve that through the acceptance process. If it's low quality, reject it. And if you're rejecting a lot, we're going to challenge you on that. So stage and the other just to be quick, I don't like pipeline dollars because it's too skewable. What what either encourages you to placeholder values early in the sales cycle or marketing connection, miss their goals significantly, but one million dollar optee can't offset that. So I actually prefer count. Yep. And it seems like something that can't just be done in a spreadsheet or in a Salesforce dashboard, it seems to be that to have this, you need to be sales leadership and marketing leadership need to be like actively working on this together. On a week by week basis and talking about these things. And so it's not just like I'm looking at some report of what was accepted or not. We're going to have a conversation about this criteria because things will ebb and flow. Sometimes marketing will be doing a great job and sometimes they will not. And sometimes sales will be doing a great job. And so you have to have that kind of weekly rhythm of like, if you're reviewing stage two opportunities, is it a sales issue? Is it a marketing issue? It has to be this, it has to be kind of the shared relationship. Do you have a rough way of how you like to actually make this real? Like how do you enforce this? How do you build alignment? Do you meet on it weekly? What's the process? So I think the right answer is to have sales and marketing leadership meet weekly to discuss handoffs because that handoff point is critical. Right. Like once it's a stage two and sales has accepted it, they're pretty much accountable for closing it. So the marketing conversation is how can I help? Right. Hey, I've noticed after the demo, the conversion rate is low. You want a new demo, right? Do you do? Right. Notice we get stuck on financial viability. So he wants to build an ROI model. Right. I can help you all the way to the closed deal and thereafter. But it's there's a difference between I'm your helper, kind of writing shotgun and I'm driving, which is in the high funnel, the tofu, right. I'm driving. So to me, the handoff point is important because I switch roles. So I thought I don't have any role down funnel. It says I switched the shotgun and up funnel. I think the answer is the handoff point matters enormously because it's just so hard. I don't know how to say it. But what can go wrong at the handoff point? Hey, we can get in and dated. Right. Where we just we go to a big trade show and have a ton of leads and we get behind. Right. Now we're not calling people back and we need help. What else can happen? There's what I call a floating bar, which is starving reps tend to accept low quality opportunities and reps who already have 15, 17, 20 opportunities tend to reject good ones. So we need to be watching, right, because you know, God didn't declare that we were going to generate optis in the exact distribution needed by sales. Let alone the right number. But basically what I'm coming down to is distribution, right, because after we run all the marketing and after we hit our opti per quarter goal, who knows if the Chicago sales rep has enough opportunities. Or the New York one is carrying 34 and can't possibly call them all back. And the Chicago rep has seven and is working on two total non starters, because it's better to work on something and work on nothing. Right. And that's why it has to be so close. And we need obviously we watched that rejection rate, because you get a lot of information on that. But you also listen to gone calls, chorus, Germany, whatever your tool is. Just go listen. So to me, it's like a weekly meeting where we just down talk about the handoffs. It's the same thing I do with partners, where we have a weekly meeting to say, okay, or services, sorry services and partners. But where we say this opportunity needs services to do we want our team to do it or partners to do it. And opportunity by opportunity, you can just go through the pipeline. And some essentially do the same thing at the handoff point, because I agree with you. The answer's not in the spreadsheet here. The answer's on the ground. And it's it's not in the averages, really. And the spreadsheets 10% of the averages quick break for zoom webinars. This is the platform behind the world famous exit five live. Someone on LinkedIn just said, I compare all other webinars against exit five live. Now, how good is that? So good. I want to print that out. Send it to my mom, put it on my fridge. We just want to make something that's worth showing up for even a webinar, especially a webinar. But don't you dare call the webinar even though I break my own rule and do that all the time. It's a live session. Our team puts over seven hours a week into each one of these choosing the topic, the prep calls, building the run a show and making it valuable and engaging. Zoom webinars is a big part of how we pull it off. We average 1500 plus registrants for session, hundreds of people show up live and the chat goes off. Yeah, the last time we have a new high water market, 527 people live for an hour with us zoom does registration emails, polls, analytics and all lives in one place. So running a polished session every two weeks isn't a scramble. At showtime, our team swears by zooms production studio. They preset every scene and push each one live on cue, clean transition, zero chaos, at least that anyone can see. Just please do not look at our internal slack. All the caps lock in there. Don't share that that's our pro level webinar production powered by zoom. Check it out zoom.com slash exit five learn more about zoom and all the webinars and all their products there and come see it live. We do these basically every week now. Go and check them out. It's called exit five live and learn more about zoom at zoom.com slash exit five. All right, if you're at a B2B tech company spending over $50,000 a month on paid media compound growth marketing wants to give you two free sessions to build out your 2027 plan. Free? Okay, I'm listening. What do you get? I know free is usually too good to be true, but check this out in the first session. They're going to learn your business. And in the second, they will deliver you a custom plan. So you'd know how to split demand capture and creation, which channels drive the best ROI and where you're reporting has gaps. And look, I trust them with it. I've hired CGM twice. They're one of the best agencies I've worked with back in my day as a head of marketing twice. Well, I've hired plenty of agencies as a VP of marketing. And that is rare. I'm more than just a thought later, Dash. You should know that. So CGM helps high growth, cybersecurity and enterprise software companies show up earlier in the buying journey with full funnel paid media, AEO and a dedicated GTM engineering team. Oh, and a former VP of marketing started it. So they actually get B2B. That's right. John was one of us back in the day. So check it out. You can go book your 2027 planning session right now at compound growth marketing.com slash exit five. Link in the show notes. And then you can. That's a great framework to then go and present a united front to the rest of the team. And here's what we're doing. This is the revenue team. Okay, number two on your list of what makes a great CMO is the art of being a dispassionate analyst. And I love this and go back to the example that you talked about. And having a 5% close rate. I do think it is. I've made this mistake. Many people I talked to we instantly go into defensive mode. Right. Well, I'm going to I'm going to present to leadership team about why we're behind on this number. And here's all the excuses and reasons. But what you said when you position this way being the dispassionant analyst, you made me think of this, which is an important lesson that I've had to remind myself of. You as the CMO, you often have to cook the dish. You have to make this amazing meal, but you don't own all the ingredients. You know, you don't control sales. You don't control product. You don't control the market or the roadmap or this partner or that partner. And so I think when you can take the lens of being a dispassionant analyst, you're then presenting more as the hey, this is I'm the manager of this portfolio. And I I want to rally the company and I want to get your help. It's like when you go in there with on the defensive of like, here's why we're at this number. And here's here's all these 15 excuses. I just would love to hear you talk about that perspective a little bit more. Yeah, super. Look, I think I developed this perspective because I'll tell you why I developed. It's an interesting story. There's a long time ago, I was a business object. We ran the company on geographic PNLs and we'd have this problem where the French were pretty unaggressive. So they plan to grow 30% and grow at 32. And the Italians were really aggressive. They plan to grow at 70% and grow at 65. And every meeting the French were heroes and the Italians were zeros, right? Because the French are making plan and the Italians are missing plan. Despite the fact the Italian absolute growth rate is twice that of the French. And these are not the actual numbers, but highlighted to dramatize the idea. And I want this is messed up. I mean, I understand that making plans important, but the Italians are growing twice as fast as the French. And we're kind of giving metals to the French and kind of, you know, dissing the Italians. What are we going to do about this? So I created a local market share chart at the time you could actually just kind of map. I mapped our growth to our competitors growth in each of those countries. And basically you take your revenue and divide by divide everyone's revenue by your revenue. So your line is always flat. And then anybody who's coming up as gaining relative share anyone who's coming down is losing relative share. So I call it the relative market share chart. I would just be the dispassion and observer. I didn't have to give a speech about gaming plan performance or plan negotiation or all the stuff that I actually thought was happening. That like, wow, the French are better negotiators because the negotiator really low plan and are well-intentioned Italians are terrible negotiators. So instead I just put the data up the dispassion that's where I got the dispassion from because that's a very unpleasant thing to tell a management team everyone celebrating because most of the people made their numbers. You know, like folks, we might be making our numbers, but we're losing relative market share on three countries. And you can just see it right there. So what do we want to do about it? And I think, well, I say the dispassion and analyst is I just present the fact. I never say why and I never say what to do about it. I present the fact and say, do we think this is a problem yes or no? And then once you get agreement on a problem, somebody goes, what come market share? do to solve it. Let's take a different example now. Say if that stage 2 to close rate, that's too low. Do we agree that 5% is too low? Yes or no? Because if we don't agree it's a problem, no point in fixing it. And then if we agree it's too low, the dispassionate person, well, what can marketing do to fix that? 15 things. And there is no right answer. The right answer is the one I agreed to with the CRO period. That's the right answer. So if you take that point of view that it says we basically are going to be a dispassionate analyst, I'm going to present facts. We're going to agree that some things we don't want to fix and some things we do. And it's a good marketing person. You've got a thousand tricks in your back. So there is no right answer. The right answer is the one that I agree with my CRO to go execute. And that is super powerful. And that's what keeps you alive. Because that's going to avoid the blame game. The funny thing you said at the start is I tend to go offensive. You tend to go defensive. Right. My natural tendency is like losing market share, which makes everybody mad at me. Your tendency, like many CMOs to be defensive because we get beat up so much. Right. And the right answer is to be right there in the middle. Well, I think what you said there is really important, which is like you got to have the perspective of like, hey, look, I'm the dispassionate analyst. I got 15 ideas of how we can go about this. And I just think a lot of people, or maybe this is just this comes with wisdom over over the years. But I think like for me as like a first time marketing leader, I felt like, oh my gosh, we're behind on this number. And everyone's going to hate me for it. And I'm going to lose my job when like when you go to that bag of tricks, like what's in that bag of tricks is actually not just marketing tactics. It's never just like, oh, let's do a webinar. Let's change the homepage. It's like, oh, it goes deeper than that. It's like, maybe we need to change our ICP. Maybe we need to try this offer. Maybe we need to tweak this product. It's like, it's very much rarely just on you as the marketer. And this is why I was interested in talking to you today. Just your perspective as a CEO, like you almost have to think like a CEO where yes, your title is CMO, but you're not just looking into like what levers does marketing have? You need to be the change agent across the company, whether that's influencing sales, influencing product and the mistake I made was always trying to like put all that pressure on myself and thinking like, yeah, maybe if we go send six more emails right now, we're going to get to our number. But rarely rarely that's the case when you're like trying to tackle an issue like 5% close rate. Yeah. Look, I mean, so yes. And to me, that's the beauty of this model is I don't feel any pressure to go tell everyone the answer because I think what you were doing as a first time CMO was there's a problem. I need to figure out the answer and I need to sell everybody on my answer. And that's a recipe to get yourself in trouble. Frankly, I just want to show up and say can we agree there's a problem. And if you want to solve it, I have 15 ways. And by the way, the better a marketer, you are the more tools that are in your bag. I don't just have a hammer. I've got 17 different tools. All the ones you mentioned, we could change the product, we could change the ICP, we can do sales and sales tools, sales training, sales enablement. We could change who we're generating leads from. I can fix this 18 ways to Sunday. The right answer is let me and the CRO go offline to agree. I'm going to lay out all the different things I can do and what sounds good to them and me. We'll come back next week with a proposal. That's how you stay aligned to sales. It's how you take the pressure off yourself. It's how you don't get defensive. Beautiful. And the last one is partner with the CEO, which I think is closely related to number one. And there's a hundred other things I want to ask you. So I'm going to jump right a bit. I have some specific questions I got for you, but I want to ask a broad one. And this is for you specifically one of the, so I run this community of 3500 marketers. I'll pay to be in it. It's a professional group of B2B marketers in between the podcast and the community. I get a lot of questions. One of the number one questions I get about marketing is benchmarks. People want benchmarks, Dave. They want to know the ratio of this to that of sales people to marketing people of pipeline to spend, you know, of all these different things. And I was saving this to ask you because you've had a lot of perspective on this over the years on, on your blog. Do we need benchmarks? First of all, and why do marketers obsess over benchmarks? Then let's talk about some of the most helpful ones if you have any. So yes, I believe marketers need benchmarks. I believe we always need to use benchmarks. I mean, the things that go wrong with benchmarks are when you don't slice them correctly, right? So you're comparing yourself to public companies when you're not. Or a common, another one more subtle would be you're comparing yourself to different size companies. So you're a $5 billion company benchmarking on $80 billion companies. Another one is different track companies. So you're a $20 million low growth PE company optimizing from profitability and an EBITDA driven exit in three to five years versus a venture backed IPO class company. And a lot of these benchmarks don't separate these. And you know, it might even be a founder bootstrap company. If you look at some benchmarks, they're actually mixing. And they rarely let you cut it this way, or they'll cut by size, but literally you have to go look at the sample and go, there's founder own bootstrap companies. They're 20 years old in here growing it, you know, $20 million and growing a 10%. There's PE companies that are maybe focusing on EBITDA more than growth right now. And there's VC companies that are all moonshots, and they're all blended together in a random waiting, right? So yes, we need benchmarks, but we always need to understand what we're looking at. And always kind of almost be skeptical about what we're looking at. And it's applicable to us and how we slice it. I think we like benchmarks, because we get asked questions by sales and finance. And I think we use them partly as a defense spec. I think partly, good faith we want to know how we're doing. Like, how do I compare to other people? I used to use, I'm never going to remember their names now, but one got bought by Forester, one bought by Gartner with serious decisions and the other one. Yeah, I would use them for it, like, you know, let's topo. Yeah, thank you. Topo and serious decisions. I used to use them a lot. There's a one called Optics Engine, which is more financial benchmarks, but some stuff. There's the Pacific Crest study, which is more company level metrics. There's Revops squared, which is more company level metrics. But yes, I try to use benchmarks, because I want to know how I'm doing. B, I'm going to get asked, right, by finance and or by sales. So I like benchmarks, firstly, but I'm never kind of a slave to benchmarks. I don't rule the benchmarks or I don't want to myself get ruled by benchmarks. You know, it's like average family is 2.2 kids. So honey, let's go try and have 2.2 kids, right? Can't do it, right? Doesn't even make sense to try and do it. So we need to be thoughtful in our approach to benchmarks. But I think they're very important. So the other thing you didn't talk about when it comes down to data is to me, just market research. So I'm a big believer that people today are pretty good about using benchmarks. They're very good about using internal systems data. But we've almost forgotten about market research. And back in the day, when I was first in marketing, you didn't have a CRM system. So you couldn't actually do all this internal analysis. So you do market research to look at your funnel and just do the, you know, hey, have you ever heard of this company? Have you ever considered buying them? Did you ever try buying them? Did you buy them? Why or why not? All right, that needs to be a market research exercise, not a reporting exercise, Office CRM. And I still think you should do that to complement your CRM analysis, because CRM, remember, only shows you the people you found. And what about all the people, especially if you're a startup who never found you? What about that vast majority of people who never heard of you? They're completely omitted from your analysis, because you're not looking at them. So that's my view. Yes, on benchmarks, yes, on internal reporting. And yes, yes, on market research. And the market research example, are you talking about actually hiring some type of market research firm or finding way to do it on your own? Yeah, proprietary studies typically cost 20 to 50k, right? But if you're of any size that that's not a huge percentage of your marketing budget, and you can, let me just say the kind of things I would ask in such a survey. First, I would do a quantitative part where I'm trying to look at the funnel, right, to get me and my top competitors and do awareness interest consideration purchase, roughly repurchase. Oh, wait, wait, pause on that for a second. Yeah, I thought, I love that because I feel like that's the perfect medicine. That's the perfect way to figure out what you should go and do, right? How many times do we just go and do marketing to all stages of the funnel, but you go and do this research and like, well, nobody even knows you exist compared to these five competitors. And so, oh, well, that's going to tell us what our marketing should look like over the next three, six months first. Sometimes we just, there's too many things to do. We don't know what to focus on. I love that. Or the counter, which is the one I actually started doing this for. Nobody's ever heard of us, right? If I had a dollar for every time the sales leader told me that nobody's ever heard of us, right? I have an island somewhere. And when you read the study, right, both sides of it, you run the, and by the way, your C or M isn't going to tell you about awareness, right? So you have to run this kind of study to say, if I listen to sales, and this is what I talk about partnering with sales, I'm not a doormat. They used to call this tough love when you had like, you know, teenagers in trouble, you'd give them tough love. This way I view the CRO, right? Okay, you're asking me for more awareness, but I'm going to go do some homework and come back and try and convince you it's not what you want because our awareness is actually fine. What's actually hurting us is our reputation or our consideration or we're not making the long list or whatever it is. So yes, I look at the funnel. I would look at buyer pain points, right? One of the agent questions of marketing is what are the best pain points for us to go market around? I'd have a list of 15 pains, 10 pains that we can solve and rank order them. And then when I say, hey, I want to run the webinar themed on my last company. I'd say mistakes in board decks, board deck preparation, sales would be like, well, I'm not so sure. I go, well, I ran some research and it says, this is it. And I might even research my customers and say, what do you use this for? Like, hey, so number one use case on a customer base and it's a super high pain point amongst prospects. Let's go market on this, right? There's a bunch of other things you can go survey, but it's that sort of stuff that you're not going to find in the internal reporting. Just using myself as the example in this, I think the first time marketing leader in me would be like, I was, no way I'm going going to take 20, 50 grand. and spend it on a research firm. Like, we'll figure that out on our own. But now as I'm hearing this back and replaying my lessons and losses over the years on my head, I'm like, well, actually, no, that would be an incredible investment because I'm basically trading you 50 grand to have like the right playbook to go and generate millions of dollars in pipeline. And I just think that that's such a better way of thinking of it versus me trying to justify. Well, what's the ROI and that spend gonna be? The ROI is gonna be figuring out our whole freaking revenue strategy. - Revenue strategy. - Absolutely. And if you're really good, I mean, to me, I always said, look, I'm spending 5% of the budget or whatever to make sure the other 95 is spent more wisely. That's one way to look at it. The real marketing gorilla marketer asks 10 questions they can turn into white paper on the back of it. So I get an asset out of as well. I get a bunch of questions I'm gonna use from my marketing planning. But I also get, you know, state of the CFO priorities and financial planning. And based on these 10 questions, and now I've got a white paper in a webinar so I can have it all. I love that 5% to get security on the 95%. I think that actually answers my benchmark question too, which is if I can answer this for you, it seems like if you can carve out the budget to do it and sign up for a service. And I don't even know who does this today, whether it's a partner or a forest or a serious decision should ever, but it sounds like it's worth it to tap into one of those to get access to some of those benchmarks and guardrails, whether it's for headcount, budgeting, forecasting, different types of ratios. - Yeah, I think so, look, I would always try and do it at not terribly large scale, because in the end you're spending 20, 30, 40, 50K. Hopefully, maybe 50 these day and age, especially with garden and forest, they're owning them. But you're getting data that's hard to get somewhere else. And the alternative is a lot of Google searching and a lot of networking and friends, where you can waste a lot of time trying to get those numbers and they'll be less credible anyway. 'Cause you're gonna say, well, what's a good MQL to S1 conversion rate? And you're gonna go, well, according to my five friends who I asked to 10%, and it's not as compelling. So, in my mind, it's worth having a data. I always think about exactly that balance who talked about, I must be willing to spend something to make sure the other, I used to call it measurement too, 'cause the other question is how much do you measure programs spend on that? And I'd be happy with the 1090 ratio, frankly. So you can probably afford it earlier than you think. And it'll make your life. It was glad to watch you go, hey, wait a minute. When I was a CEO, well, this might have been a really good idea. And it would have been, yeah, think of all the meetings. - And when you just said 1090 on programs there, you mean like you're spending 10% on something that's good. - To guide the other 90, yeah, either the measure, to benchmark, to try and give you some idea. 'Cause a lot of marketers are so proud they spend 100, zero. But it's like, well, how do you know you spend the 100 right? And you can say, well, maybe testing, but if you're able to be testing your own hypotheses, you're not gonna find out. If the number one buyer paying point was something completely different for what you're able to be testing, you're not gonna find it. So here's a listener question, this is from Tom Wentworth himself. He says, ask him how much CMOs need to know about SaaS metrics versus how much of that should come from the CFO or FPNA? - Look, I'll tell you a story one time. I have a very distinctive point of view on this issue, but one time I business objects, an investor was in, and they were, everyone was sick. Nobody could make the meeting. And it was somebody who owned like a million shares of the company, and I was the only guy available. And it was like, finally or something, you know, big institutional money. And they wanted to meet and said, well, the only guy who got available is the CMO. So you're gonna meet them. And I did the meeting, and the guy kept asking me all these questions, and I knew all the answers. And at some point the guy was like, are you C-O-O or C-R-O or C-M-O? And I'm like, no, I'm C-M-O. And I obviously always remember that meeting 'cause he was quite surprised, and I was C-M-O, and I knew all those numbers. I think the C-M-O should know a lot about SaaS metrics, and just the answer is it would be great if you could fill in for your CFO on an investor-relation call. That would be the bar I'd set. Could you actually, if needed, in a pinch, fill in for the CFO on an analyst-relations call or investor-relations call? And it means you're gonna have to be pretty fluent in the numbers of the business. And I think it's only good for this good 'cause now you'll understand, I don't know how to scribe it, but a lot of the SaaS metrics, they help you tune your car engine, right? They're not just about making investors happy and wanna buy the stock. In fact, I do a blog post on this called the Investors Versus Operator Perspective on Metrics, and I think you should take the operator perspective 'cause you're an operator. It's helpful to understand the investor one. But, and it will lead you to different metrics, like investors like CAC Payback Period. Operators, to me, it's less applicable 'cause like, well, which part of it's broken? There's three parts of it. And I don't know which one to fix. If you tell me, if you tell me it's 36 months, I'm not gonna buy your stock and I don't care why, right? But if you tell me it's 36 months and my job is to fix it, I need to know where you're spending too much sales, much of marketing, there's some crypto smarts in too low, what's breaking the ratio. So yeah, and so long story short, I think knowing those numbers report, I'll give you one other story. So when I went to Salesforce, I worked for a guy who worked for Benny Off, and once a while I'd go to Benny Off's staff meeting, filling in for my boss. And I would spend like an hour memorizing a spreadsheet of numbers 'cause I think in kind of numbers-driven cultures, you need to have all this stuff in your head. There's somebody ask you what's the service cloud pipe on in France and you don't know the answer. I would argue that's like a career ending move at Salesforce, right, in certain other companies. Like they're not gonna ask you 15 questions, you're gonna get asked one out of the blue in a segue, and you need to know it. And I like those cultures 'cause it means people are on top of the numbers and they understand what's happening with their business. So I like that as kind of an ante. 'Cause if you don't know all these numbers, I don't know how you're making decisions, right? I kind of believe in guided intuition, whereas if I steep myself in the context, and I actually know what's happening, and I can play 20 questions around numbers to demonstrate that to you, and then say, look, my sense is we should go this way. 'Cause I believe my brain is somehow kind of synthesizing all that and helping me get the right answer, maybe in a way that's not easy for me to articulate. So that's why I like it. But yeah, I'm big believe in running by the numbers, making your team run by the numbers, yeah. - I love how you got to that by having to be in that meeting and learning all those things. And it's almost like a training, I don't even know if it's like a training, but if you have that as your baseline, and then you can go put your CMO hat on, you're definitely gonna be a better business partner, you're gonna be more effective. Shoot, I'm seeing this now in running my own business. I look at the P&L differently than I did when I was at a company because it's all coming from my credit card and my money, and I think having that understanding just forces you to do something different. So how would you go, if you're listening to this, you're like, man, that's a great idea. I need to go learn more about the numbers in this business. How would you go approach that? Do you go knock on the CFO's door, send an email, how do you get in there? - So I think, I mean, look, I'll start with a plug. There's a number of bloggers, including myself, who talk about metrics, right? There's a number of kind of personalities. I call them on Twitter. Only CFO is a CFO on a guy named CJ Gustafson is one. The SaaS CFO is another, Ray Reich is another. There's kind of a little metric SaaS community out there. If you follow those people on the links they point you to, that's how I'd start out. The SaaS CFO even offers a training class, I think. So you can go take class on SaaS metrics from him. So I think I just want to try and get fluent in the subject matter. If I'm at a larger company, I would ask the CFO to send me financial analyst reports. So sell side analysts write reports up on companies. And if you compete with one of those companies, or you're going to be one of those companies one day, or you're one already, Lord knows, get those reports. They don't often mail them to CMOs and marketing people, but make friends, if it's a big company with the investor relations person, or they had a finance or the CFO, because the day you can read one of those and understand every word, you will have graduated, right? And lots of people can't understand every word, because they're going to talk about guides, and RPO, and Billings, and they're going to talk about all this stuff is going to sound pretty far into you. But that is the language that the investors are looking at. This will be like a quick hit section. I'm going to try to get as much in as I can. This is from an Exit Five member. What's your data? He writes a lot about metrics and the explosion and martec, what's your take on brand? - I think short answer is brand is for later, right? Like the best way to build a brand is to start up is go sell some software, and when we get to $50 or $100 million, call me back, and then we can talk about brand. - I love that, I love it. - Okay, and there, next question. What's your perspective on category creation? - I think it's less important than it used to be. I think in the old days, the goal, the dream, was to make a category, have Gartner, print a quad, and then go lead it. Now, I don't think people care as much about categories. - Well, I can't even name the category for some of the more popular packages I like, right? - What's your perspective on lead gen versus demand gen? - I like demand gen, I'm not even sure why. I think leads are a little tainted 'cause they're so far up funnel. You can argue demands even higher, but I would have just terminology watch, I use demand gen, not even sure why. - What role do you think chat GPT and these AI tools are gonna have in B2B SaaS the next five years? - I think two roles, one, content generation and two search. They're gonna change search, obviously we'll do the second one first, but all the work we do on SEO, and I'm not even sure how to do it yet, like I don't know how to SEO for chat GPT, like how do you get it, imagine the chat GPT search engine, there must be a way. - Meaning like how do you make sure that you show up in chat GPT? - Searchers and ults, yeah, yeah, absolutely, right? Just like we, you know, if somebody types in your category and in today, you wanna be above the fold, like what happens when you say chat GPT show me three finished planning and budgeting systems? It's gonna name three, the question is how did it get there, and how do you get yourself on that list? So I think it's gonna change the whole world of SEO on the demand gen side, the web is kind of our number one tool for generating demand. So it's a huge change on the demand gen side, and then operationally it's obviously a great tool for generating SDR males, generating content, et cetera. So I think it's gonna change the content generation business And it's going to change really the way. - Debt to Man Generation Business. - All right, Dave Kellogg, I could have interviewed you for three hours. If you listened, I took a bunch of notes. I'm gonna write these up. This will be in our podcast, but this is fantastic. Go to KellBlog.com. K-E-L-L-B-L-O-G.com. You can also follow Dave on Twitter, KellBlog. And I think one of the things that you said there is great and I'm gonna try to extrapolate a lesson from that, which is about learning SaaS metrics. And if you wanna go deeper on that, I love the mental model of finding one or two people in the space and just reading. Don't worry about following 10 and 15 different perspectives. Find one or two people and you've been that for me. And so I think people can continue to follow you. But I just appreciate all the knowledge that you've put out there. If you wanna go more on any of these topics, go and check out Dave's stuff and make sure you tell him that you enjoyed this interview on Exit Five. Dave Kellogg, thank you so much for doing this. - Thanks for having me. (upbeat music) (upbeat music) - Exit. (upbeat music) - The best marketing leaders have a strong agency are two backing them up. And Convertive is one I'd put on that list, especially if AEO is a priority for you right now. - It definitely is and a good one is a lifesaver. They bring fresh creative angles and go deep on specialties like AEO when your team's short on bandwidth. - If you're shopping for a BDB agency, check out Convertive. They help enterprise marketing and ops leaders grow revenue across the business. - Who do they work with? - They work with legit companies like DocuSign, DataBank, and Constructor. And they build on the search work that you're already doing, optimizing your site. So more buyers find you and turn it into pipeline. In this month, exit five listeners get a free AEO search snapshot. They'll run your buyers real questions through Google and AI tools, show how you stack up against competitors and tell you what's worth fixing. - So if you're building your AEO strategy for 2027, start here, go and check out Convertive.com/exit5. That's Convertive.com/exit5 and you can see the link in the show notes.