How to Invest in Customer Marketing: The 10+10 Framework

I want to spend a lot of time in the coming year on SaaStr on Customer Marketing.  While the concept may sound old hat to those that have been in the software business for a long time, in SaaS in particular, very little tools, processes, and software are applied to marketing to customers after they are closed.

Over the last 5 years, we’ve all started to turn Customer Success into a science and a key discipline in SaaS.  But Customer Success in many ways has been defined as an extension of Sales.  Sales closes, and hands off to CS.  While that’s chronologically accurate in most cases, really CS’s cousin should be Customer Marketing.  If you do it right, you can keep your customers for 10+ years.  Or even longer.  And like retention, a marketing journey should also begin again once a customer closes.

Customer Marketing is similar to Demand Gen, but with very different end goals — retention and net account growth.  The playbook is similar, but not the same, and needs different content, marketing, and ultimately, staffing:

  • Field events.  These should be just as much about retaining customers and growing accounts.  What % goes to retention, and what % to lead gen?  You can wing it in the early days, but you gotta pick after that.
  • Webinars and similar.  Webinars are an underrated asset.  Done regularly and right, they are great way to authentically interact with groups.  Do a weekly webinar on something.  But what % should be for prospects, and what % for retaining and enhancing existing customers?
  • Drip marketing.  You’ve probably set up automated campaigns to your pipeline now.  But what about your customer base?  Are you sending them thoughtful content every week or two designed to help them get more out of the product?  If so, is it any good?  When was it last updated?  I bet you don’t even know.
  • Whitepapers and static content.  I bet this is all about ROI calculators and stuff.  But how are you helping spread adoption and engagement?  How good is your onboarding content?  I bet more effort went into the latest case studies to support sales.
  • Podcasts, blogs and video content.  Podcasts are everywhere today.  But it’s hard to get distribution on podcasts and blogs for your nichey-vendor content.  They may not generate many leads.  But you know who will read and listen?  Your top customers.  The ones that are responsible for your app, day-in and day-out.
  • Etc. etc.  As you can see, almost every part of the demand gen toolkit can be repurposed for customer marketing.

What should you do?  Well one big challenge is resource contention.  Your marketing team will get a ton of pressure to generate leads.  To help create pipeline.  To help sales grow, grow, grow.  And that pressure is good.  But lead gen also has clear quantitative goals, e.g. grow leads 110% this year.  More on that here.  If you don’t come up with clear quantitative goals for Customer Marketing, it will never get enough attention.

So while these rules and guidelines aren’t perfect, and need to be tweaked over time, from say $2m to $30m in ARR, you can probably use the 10+10 Rule:

  • 10% of your Revenue Up For Renewal should be invested in customer marketing.  Yes, that may seem like a lot at first.  But it’s a lot less than you are likely spending to acquire those customers.  That’s probably 20%-30% or your first year ACV or more.  You’ve gotta spend a decent fraction in retention, or you aren’t doing it right.  and
  • 10% of your Targeted Account Expansion $$ should be invested in customer marketing.  If you want to grow say $2m of your existing base to $3m this year … that’s $1m in growth. Consider allocating $100k to customer marketing to help “close” that upsell.   Don’t just leave it in the hands of Customer Success, Account Management, and Sales.

Depending on how your business runs, this may be a lot of money, and a lot of change.  You can tweak the 10%+10% numbers.  But ultimately, if Second Order Revenue drives a huge amount of your growth (40%+) and you’re not followng the 10+10 program … you are probably concentrating much too much of your marketing dollars on getting folks into the funnel.  Rather than making sure they are Customers for Decades.

We’ll also talk a lot about Customer Marketing at the 2019 SaaStr Annual.  See you there!

Published on August 18, 2018

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