The 20% Rule for B2B Marketing Success with Rob Karel

How do you get your message out there? Used to be a direct mail and then it was email and then it was social media. Now it's like, take your pick. It's so there's so much noise out there. How do you get heard? There's a reason for tracking things that are qualifiable because you wanna know if it was a worthy investment, but you have to balance. It did help the business in the end. That's always an important question. I always refer back to it, right? The Wise Ones is a community-driven podcast which has leading operators, subject matter experts, founders and VCs interview each other to reveal insights into how they built and scale their products, businesses, software and how they brought their ideas to life. - All right, welcome everyone. Welcome Rob. Happy to have Rob join the podcast, with Weisley. Rob has been a veteran marketer for over two decades in various senior marketing positions in the valley, in the tech business. Just delighted to have him over with us. Rob, we'd love for you to introduce yourself to the audience and get them to know you and then we can go and deep dive into what you found interesting in your career. - That sounds great, thanks for having me. And yeah, so my name's Rob Carroll. I've been in B2B tech a number of different roles over the past 30 years, you know, deep expertise in data management sector. But yeah, most recently I've been in a lot of senior marketing roles and recently joined precisely as their SVP and marketing. - Brilliant, welcome again Rob. So let's start from the very beginning, right? You've seen the marketing landscape evolve. You know, you worked at large companies, you worked at startups, you worked from outside company that advising them into their positioning and segmentation and GTM. What have you seen evolve over the last couple of decades but the biggest change that you've seen. And because a lot of the listeners I'm assuming of this podcast will be startups, investors, you know, founders who are looking at some problem statements that they'd like to solve and I'm sure something that you've come across is something that's in a resonated with people who are listening in. So we'd love for you to just give a quick overview of some of the things that you've done and then we can go deep dive into a few of those. - Sure, you know, I think something has changed and some things have remained the same. So, you know, remains the same. You need to determine product market fit. You need to determine who you're selling to. You need to understand, you know, how you're unique and differentiated and what kind of unique value or you're gonna offer that your target customers aren't gonna get from anywhere else or from what they're doing already today and maintaining the status quo. Things that change are really the channels of communication, the volume of communication that's being received by customers. So, you know, how do you get your message out there? You know, it was used to be a direct mail and then it was email and then it was social media. Now it's like, you know, take your pick. And so that's the thing that changes most often are really the techniques to engage with your target audience. Whereas the best practices of creating a solid position and good messaging and try to get folks attention and try to take them through a buyer journey, that's been firmed up, but it really hasn't changed, you know, folks have a problem. They look for a solution, they buy a solution. - Now, after the, you know, I'm just going to resonate with my experience at Twitter, where, you know, Twitter was a slightly different form of communication. It had its own syntax and no own limitation. But what something I found that resonated across any platform is the art of storytelling. And, you know, a buyer journey is nothing, but the art of storytelling and you know, solving someone's problem by convincing that you have the solution at the right price obviously for them. But let's put a couple of vectors. A, have you seen the art of storytelling change, especially when it comes to B to B? And two, do you see a difference between how you communicate your value up to your ICP, which is the idle customer profile for those who might be unfamiliar with some of the acronyms that we'll ban to about. When you're targeting and talking to SMBs, versus when you're talking to large enterprise customers. - Yeah, now it's a really good question. And, you know, the key parts of the story about, we recognize you have a problem. We want to provide recommendations on how to solve that problem and let's talk. That doesn't change, but when you actually talk about an SMB audience versus a large enterprise, large enterprise sales cycle for B to B, it could go anywhere for months to a year or two. And you're likely telling a story to multiple people, multiple personas. There's not usually a single decision maker. You're having to, you know, decision by committee and you have to pass different hoops of, you know, validation from budget holders to IT and security, to end users to finally decision makers. Whereas an SMB sales cycle and, you know, buyer journey is usually much more compact, you know, you usually get to one or two decision makers if at all. And, you know, maybe it's a single decision maker. And depending on the cost and the size of the business, theoretically, you might be able to close a deal within a week, you might go straight to demo. You get to the deal, whereas an enterprise, you have to set up and even just get into their short list. So the complexity of the deal is usually much greater. The size of the deals are usually much greater, which means the amount of messaging and the number of chapters in the story, if you will, will likely be greater for an enterprise deal. Whereas SMB, it could be a little more succinct. Wisely is an AI-powered knowledge platform that helps experts organize, scale, and monetize their knowledge. Hit subscribe and follow our podcast so we can bring you the best guests and create meaningful conversations. - Oh, no, spot on that. And I see that with my experience in the last couple of roles that I've been doing right now with the startup that targets large enterprise. The one before this, where I was targeting largely SMBs, but this is where the conundrum is for me. So I'll look after each SaaS companies for a while now. And if you look at any large public business as company, let's take example snowflake, right? You know, snowflake, large enterprise customer base blah, blah, blah. Actually, just about a third of their ARR comes from enterprise. Over half of them is actually smaller businesses SMBs and not even mid market. Now, when you have such a dichotomy of playbook where you are targeting large enterprises, which is your main focus because that's where the larger ACV and the check sizes are, but your engine is humming largely because of the SMBs that are coming in. How do you create an org where you have to talk to both constituents at the same time? Your value prop may be similar, but your narrative may be different and over there as you outlined, you have a committee to sell to with the longest man of time in the enterprise side. And you have probably a single decision maker with a lower value of contract and a much shorter sales cycle. Can these two co-edges within the same stocked up or the same company? Can you have people doing both roles? That absolutely. And you know, I'd say most of the companies I've worked with have had SMB mid-market attention versus enterprise attention. And what usually involves is it's not just a marketing question. It's a sales org question as well. You know, usually have enterprise or strategic sales teams that focus on the larger enterprise. And you might have an SMB or a mid-market sales team. And the enablement, so sales enablement is something that product marketing doesn't own. They at least are massively contributing to it. You have different types of training and different levels of qualification and objection handling, et cetera, for an SMB type of target and an enterprise target. So there's different go-to-market motions. It might be more bottom-up versus top-down in terms of who are you trying to influence? You might be looking for a C level or VP level at an enterprise. You might be looking for more of a grassroots practitioner influencer at the SMB level. It depends on your product, obviously. But you can have multiple motions. It's all a part of the same story and continuum. But your entry point might be different. And you know, it might be your inside sales or BDR team that's really doing the outreach for SMB. Because those are maybe more even transactional sales cycles. Like maybe you could actually swipe a credit card for some of these and actually self-precure on a marketplace, like AWS or something, as opposed to dealing with a sales team at all. So it's different business models. And it adds a whole lot of complexity. But when you get to the size of a snowflake, you can afford to make investments for both, because they're both valuable. Let's take an example of a Zoom, for instance. Our first thought of Zoom is the free product that we all use. When there is a premium product, if we use on a credit card, which is SMB or individual owners. And then you have the enterprise version of Zoom, which they are selling to large, even selling to large tail coars, for example. So Zoom spans from an individual customer who's using it for free to a large enterprise, the largest enterprise in the world, and large tail coarser buying Zoom licenses. I can understand from a GTM perspective, from a sales, you have a velocity team that is doing BDR and disclosing this on credit cards. Then you have the large sales enterprise sales team, which is the standard A, A, account manager, as you know technical account manager. So you have that that motion there. Let's go backwards, backward integration to the marketing team now. How does that team look like? When you start up, I can understand when you're a large company like Snowflake, you can afford to have two probably different marketing teams. Or should you have, I mean, in fact, I don't even know. Snowflake have two different marketing teams to cater to different motions or should be the same team. And let's, and the second question is, now let's take the role of that you're a start of founder. You have, you know, your series A or a pre-series A founder. You are seeing traction on your SaaS product. You have some enterprise customers. You're seeing a lot of SMD walkings. How do you structure your GTM more from a marketing and demand in perspective than the sales closure part? Yeah. And, you know, I don't know the full history of Zoom, but I could guarantee you without knowing anything. They didn't start selling to every one of these consumer all the way to our gender prize day one. They had a focus and they had to build some groundswell of adoption and interest. And then we're able to, as they grew when we're able to gain revenue, you able to reinvest into the business to expand their opportunities. So that's how a founder has to think. Is where do I focus first? And then there's lots of adjacent markets I can continue to expand to. So when you're thinking about what your organization looks like, it really starts with, you know, you'll start small for whatever your initial ideal customer profile is. So let's assume that maybe it's mid-market. Maybe that's the one that's, it has some money, but it's not the complexity of an enterprise. And then, you know, COVID hits and then suddenly there's a massive consumer opportunity and let's make sure it's available first. But they were seven of the consumers beforehand, but maybe it exploded as did enterprise because they had a remote worker. So suddenly they are investing in all because the opportunity across all business and consumer was huge. So, you know, do you have separate, it's the same product per say. There's different years and levels of functionality. But it's not like you have, you know, a conglomerate here that's got lots of different tools. It's the same core video conferencing, video communication, or as their latest branding is, does communication, software. The key is you don't need different marketing departments. You do need specialization within marketing. Makes sense. I completely concur with that. Now, let's go even once I've even before that, when you are actually doing category creation, let's say you're a startup and you're thinking of, I mean, every startup founder believes that they are opening up a new power, part of the business that nobody's thought through. I'm a category creator and you know, from experience, very few are actually category creation startups. But let's live in the Nirvana for a second. You've worked it and here I want to double click on some of your experiences. You work at vertex a small startup with 25 people. You've worked at Informatica, thousands of employees. How do you approach category creation differently between a small startup versus a large Informatica? What does that space in between look like? Like, when you're a founder, what should you think of? What should you prioritize? People, processes, budgets, GTMs, channels, all versus Informatica objes, let's say they have a positive time, but they don't have a positive time. They can do everything. They have budgets and people and resources. So how would you frame that? No, it's a great question. And it's like the first question you ask is, should I create a category? Or do I jump into an existing category? But it's not binary. The third option, which Informatica did for quite a while before it came to its latest category, is let's redefine through significant marketing and thought leadership. But the old category was. So Informatica was a data integration vendor for many years. Moving data from point A to point B with different technologies. And they were the leader for many years, top right corner of all the analyst evaluations for data integration. They could have said, let's create a new category, because we've got into the data quality space, so the master data space and all these other security space. But they said, no, we're just going to keep changing the definition of data integration, so we can stay a leader. Until the point where that wasn't sustainable anymore, people were now confused about what we did. So then they were on the enterprise cloud data management space. But my new company, precisely similarly, they've recently defined their category as data integrity. And they've got integration and quality and governance, et cetera, a master data manager as well. And the thing about a new category, you can create a new category. But one, there's extra effort and investment to educate the market I want you're talking about. But the more important thing, and you kind of think about what are some of the mistakes founders make when they try to create a new category, there's no such thing as a category of one. You need competition in that category. So by creating a new category, you have to own the fact that you need to bring your competitors along for the ride. And if you're lucky, your competitor, some competitors, and maybe other industry analysts and folks that maybe are influencing the market, will adopt or at least start acknowledging this is a category. Because you could market a category all you want. But if you don't have other participants, it's marketing. It's not a category. It's sad as far. And I like the reflexes that say, you need your competition to subsidize your marketing in your GTN. Because you can't be the only one going to market and Tom Toming something which you think is brand new. And nobody else talks about it. Then you are basically lost in the a big mistake is I'm the only product in this brand new category. What that means is I've created something that you've never considered. You've never tried to budget. You've never prioritized. Like you don't want to create a category that's not that right. So you got to you got to bring the market with you. I'm completely spot on this. All right. Let's go to the most easy old question and marketing, right? The top of the final brand, bottom of the final performance marketing like Demand Gen, right? Always this tug push and pull. What should you do first? How do you prioritize? Should you create a brand then go into performance or I'm a hungry startup founder. I have very limited time and even more limited capital. I just want every dollar to give me a higher than one dollar return on investment. And then my VC saying, Hey, what about that CAC2LTV ratio? One is to three. That's the that's the benchmark. I've said for you, which is obviously in my opinion, all fake. But this this this tug and pull affair of brand creation versus performance and Demand Gen, how do you what framework would you help? You know, a startup founder should apply when they're thinking about it. You know, you worked at Vertex again. I said, you know, you had, it's a very specific product to you know, 3D visualization for manufacturing companies. Like your ICPs is within a fortune 100 or 500 like just within that. You've been doing print ads, TV ads, super bowl ads like all of that doesn't make sense. I guess not, but I'm just trying to make a broader point. Do you even I mean, would that buy or click on a Google ad and buy a product? Probably not. So how do you prioritize? What framework would you apply? Yeah, no, I think another common mistake or incorrect assumption is that brand brand is not part of Demand Gen. In order to create demand, your target customers need to know you exist. Right. So it's an extension. It's a continuum. It's not an if or or. Now in terms of what level of investment you make like, you know, Vertex is an example of my last company. You know, had a few incredibly large incredibly happy customers that really thought the world and just kept investing in their solutions. It was amazing. But if they weren't a customer, they most didn't even know Vertex existed. So what's more important? And because it's a smaller startup, we were looking for high volume transactions like to your point targeting like, you know, global fortune, 200, 500 size companies, you know, they only needed to bring in a couple a year to explode because these were big deals. These were large customers. So brand awareness was a lot more important to saying, can we get people intrigued about what's so different and what's so unique and get some conversations and get a right to sales? It doesn't need to be a marketing engine because getting that awareness and it could be thought leadership, it could be content, it could be events. There's still things you do. But an event doesn't always have to be about pipeline. It could be about we're here. And then obviously depending on your business objectives, you do need pipeline as you continue to scale and grow. And depending on your type of business, you may need dozens of leads or you may need tens of thousands of leads. And you know, so depending on the investment you have on brand versus true lead generation. So demand gen is awareness plus lead generation. in my view. - No, and I'll give you an anecdotal experience of mine. In my previous soul at Wattie, where I was heading B2B SaaS companies focused on SMDs globally, you know, we should have both brand and performance marketing campaign. And you would think, you know what, this market is not doing very well for me in performance. So my leads are not great. And I reduce my brand spends there. I said, you know what, just cut off the brand spent for the market, that's just do basic performance marketing. But what we saw was the performance marketing are a completely plummeted. So it is not either or, and I think that's the mistake. I guess there is, it doesn't have to be 50-50, but there is some balance that you will have to play with given your ICP and the ACV your servicing, right? If it's a $200 a month licensing product, you probably have to do a bit more performance and a bit less brand, but you cannot not do brand because they don't know you exist, they don't buy you, right? Nobody buys an unknown product. And the vice versa, when you're selling to large enterprises, you probably have to err on the side of talk leadership brand building. It's more adook as see, right? Because they don't want to click on the performance and add in buy up, what up? Sorry, you want to do something? - Yeah, no, you're 100% right. And it's like, you kind of think about it there. The brand starts much higher as your company grows in matures. You can somewhat offset it, like put it this way, Apple and Microsoft still spend a lot on brand because they have limitless funds, but it's not trying to get people aware that they exist. It's trying to explain why they're still valuable. So their brand investments are different than early stage of companies and trying to explain who we are and what we do. Their brand investments are more of why are we still relevant and why do you want to stick with us? So it still continues, but the purpose may shift. - Weisley is an AI powered knowledge platform that helps experts organize, scale, and monetize their knowledge. - One of the questions I get asked a lot because I also am advising a few startups, including Weisley at tip, on messaging, right? How do you, I would say validate your messaging before you actually roll it out? Because one is go to the drawing board, have a few of us in the room and you know, ID, I didn't say, this is what we should be talking about. This is a product positioning, this is a brand messaging, this is our messaging. But the minute you do your first campaign, you see nothing, you just click it, this is just nothing, right? So what frameworks have you applied to validate that so that there is a higher chance of success rather than finding the street telling you this is not? - Yeah, no, and I actually had a really cool experience when I was at Informatica, it was there when Informatica went from a public company to a private company and they went through a complete rebrand of the business. And I was responsible for redefining the story, the Informatica story. And to come up with that new messaging, you know, we built, you know, we had a messaging rubric of like, okay, what's the market position, what's the corporate position, what's the platform and product positioning, et cetera. We have the different layers, what's our differentiators. But I personally interviewed over 100 customers, partners, and employees and analysts. Asking them some scripted questions about what they think of us, what is it they think of, and I would test certain messages with them and get their candid feedback, you know, they would say, you know, I'd say we're laser focused on data, you know, a customer would tell me, what are you from the 1980s, you know, laser focused? So, you know, this was valuable kind of back and forth and what I was asking for, you know, really raw candid feedback. And I would iterate it every single conversation would evolve. And after those hundreds of so conversations, I had not just a framework of a story, and but also feedback and a summary of that feedback to our leadership team that really said, this is what people think about. And they think this is credible, you know, defensible, valuable, and unique. And that was really what needed to be done. It wasn't a, I was in a dark room, drafting something and threw it over a wall 'cause you could fall flat in its face. You don't know if you don't talk to people. And so I talk to the people that were most important to us. - Yeah, and I think it's one of the things I've seen that people do the least is doctor, their own customers, and especially to for founders, 'cause the outsourcing to somebody in sales, I'm like, no, you need to be as close to your customers as a sales team, it's because the minute you create that distance, your ear is not on the ground anymore. And you're creating strategies from second hand information, which is not the right, probably the most optimal thing to do. - Yeah, and it's harder for a startup, right? Like when you're a founder, you don't have customers yet. You know, so when you're not talking to customers, you're talking to people that you would like to be your customer and may never get as your customer, but I'd still value your opinion. You know, you have to just have those conversations and not sell them. The goal of that conversation is not to sell them. It's to learn them. And you know, sometimes you gotta take the sales side off. - Now let's switch cracks a bit more on the people side of this, right? So you worked, I just said, you worked at large in small companies both. How, let's say you're a startup founder, you're a ACV's about, you're making about 10 to 20 K a year from a customer. And you know, you like you're a mid market enterprise play. Let's say moment market. How do you structure your marketing team? How do you, who do you hire first? Is it a growth marketer? Is it a brand marketer? Is it somebody who does events pretty well? Is somebody who writes a lot of thought leadership blogs? Like how do you prioritize your first few marketing hires? What's the KPI that you give them that they need to laser focus on? Laser focus is just mentioned. And you know, and then you can set the ball rolling and you start expanding the team. But what are the first few things as a founder you do for your marketing team? - Yeah, and obviously the, my old, you know, analyst had on the answer is always gonna be a depends 'cause it depends on what type of business you're in and you know, what are your goals? So, you know, as I mentioned, if you have a expensive, you know, product that's gonna be a longer sales cycle, you know, you really might need to focus on less leads in more content to really serve the sales cycle. And the sales person is probably the founders, right? So, how are you gonna build awareness and get the website clear? So, when people are doing that back channel research on their own, there's something for them to see that'll explain some things clearly. So, you're really looking at someone that may have more of a product marketing background. That's, you know, really understands how to tell the story, create content. But if you're maybe a high transactional sort of low price, high volume requirements in order to get this business going, get the flywheel going, you might need someone that's got a little bit more of that, you know, digital marketing experience perhaps or digital events that really is like, you need to just shake as many hands as possible and get in as many social feeds as possible and it might be that type of need. So, it's not a given who you start with, what you're really looking for are generalists. Because early on, there's not gonna be a big marketing budget. Right. We're gonna have, you know, all stage series A, B and even C sometimes goes to R&D and sales. So, what it comes down to is, you know, what can you do, what's free? You know, what type of marketing is free? Like, you know, about leadership's free. If you're the thought leader, just don't hire someone, right? You know, briefing analysts is free. Doing strategy days with analysts and getting inquiries are not free. But in other words, there's things that you can do without spending program dollars or having to have excessive headcount to start building awareness and to start driving these things. And then you make, you know, very strategic few investments into is there a single pivotal event that is going to both provide that brand awareness and some leads and other investments. And then as you grow, then you could start figuring out where you specialize. No, I can't disagree with that. I'm at a startup call, a naval X and the Chief Revenue Office of that. And one of the first constraints I put to a marketing team is, you have zero budget going forward. And I want you to increase the number of qualified leaders in the pipeline. Or you're one of those CROs, I get it. Okay. We're a small startup. We're not funded yet. So I have to live with the constraints I've been given with. So the minute we put those constraints, no, even in the previous role, I cut the marketing budget by half and we saw the quality of leads go up on a Q1Q basis. I'm like, so the more you had, the more you were throwing at things you were, which are unnecessary, right? Because if I just keep giving you more money, you will just keep finding more things to do with that money, which might not be the most optimal spin. You mentioned KPI is earlier. And I think what you're kind of referring to is, you know, I think any marketing leader that thinks you'll get more leads with less investments, probably would have some words and some bitty. I'm not discounting that. I mean, I've sold marketing budgets to CROs in the past at Twitter. So I know exactly what that side of the reaction is. But I think you're right that if you don't measure your marketing investments, the right way and for the right business level goals, not marketing goals, business level goals, then you might just be doing more experimentation and less ROI. So I'm a fan from a marketing standpoint is like 80% of your budget should be at things that are directly measurable where you have very clear idea of the value you're getting from those investments, but have that 20% for good experimentation because don't assume the marketing activity that worked last year is going to work next year. So you need to always be experimenting so you can pivot when suddenly a channel that was your best. It's all. Yeah. No, let me exemplify what I was saying. So what we will see was the budget increased to fold. The body of leads number of leads actually went fourfold, but the number of qualified leads went down by half. So basically on if you look at the dashboard properly, you're like, okay, I spend more money. I've got a lot more leads, but almost all those leads are crap because they are actually trash. And so my number of qualified leads actually fell down on a month or month basis. So I'm like, what are we spending money on? So the incremental spend actually got us lesser ROI than it was getting before. So that's when you have to put those metrics at work and say, you know what, something is not working. Let me just start paying down the budget. And the minute we start putting those constraints back, the number of leads started falling, but the number of qualified leads and fuels started going up. So you were focused more on the right channels than, you know, spending on anything and everything because you're optimized on those right channels anyways. And you're right. I think there always should be room for experimentation because your one channel may work this month or this quarter may not necessarily fire because sometimes the competition comes in hogs that that channel. And you were like, okay, I can't compete with them here. The keywords are just too expensive. So I need to have an alternative story. Yeah. And by the way, as a marketer, the most important metric is conversion. You can't celebrate pipeline or you can't even celebrate qualified leads. You all get paid on a revenue, not in the pipeline. Right. There's a reason for tracking things that are qualifiable because you want to know if it was a worthy investment, but you have to balance. And that's always an important question. I always refer back to, right? Rob, on those wise words, let me ask you the final question. What is the wisest advice you've ever received in your life? It was from like, when I was interviewing to be an analyst at Faris to research, one of the analysts who's become really good friend and mentor to me. I asked him, like, who am I to be an analyst? Because people are expecting analysts to be able to predict what's going to happen next. And I didn't feel any confidence, big imposter syndrome of like, is this something that I could even do? And he told me something which was incredibly impactful. He said, if you're not wrong at least 20% of the time, you're not trying hard enough. And what that is is one, as an analyst, you're trying to challenge the status quo. You don't have to be right. You just want to have people question if what they're doing today should be what they do forever. But then as just a leader, it says, take risks. And don't assume that every risk is going to pay off. But if you don't take those risks, it's definitely not going to pay off. So it was really important for me just to internalize that. On those wise words, I hope those who are listening in found actually 80% of what we said was right. So thanks for listening and everyone on behalf of Rock, Coral. This is me, Arvindavaj Al Saini. Thanks so much everyone.