Research on early-stage strengths and weaknesses

We’ve conducted due diligence audits for over 50 B2B SaaS marketing functions.?

Over time, we’ve seen some patterns emerge, but the connections were anecdotal. So, we decided to make it a little more scientific.

I want to share some early results from our formalized?marketing audit. I hope it helps you benchmark your current progress and (more importantly) avoid missteps in your own SaaS journey.

If you just want the stats, skip to the headline “Early quantitative results.” Otherwise, read on for some background on the method. In summary:

• Website, content marketing capabilities, brand/design, and SEO are the focus areas that help most companies break into the first degree of product-market fit.
• Account-based marketing, marketing infrastructure (tech stack), paid advertising, and the marketing team capabilities are the most neglected areas on the road to PMF. These usually must be improved to unlock the next growth segment beyond PMF.
• For context on how we score each category, listen to this episode of the?B2B SaaS Marketing Snacks podcast.
• For more resources on improving each function, skip to the bottom of this newsletter.

The background

We work with early-stage B2B software founders and CEOs to build their marketing functions from the ground up. We design and execute their go-to-market strategies over 6–12 months.

But before we build anything new, our team audits each company’s sales and marketing engines to benchmark their previous and current marketing performance. We do this for three reasons:

1. It’s impossible to know where to aim if you’re unsure where your launch point is or what kind of ammunition you already have.
2. Sometimes, putting additional resources where you’re already strong can create wins faster than backfilling the weaknesses. While you’ll eventually need to?address those gaps, accelerating your existing momentum is sometimes better than starting from scratch.
3. Certain pieces of a sales & marketing engine are non-negotiable. To scale beyond a certain point, you’ll have to install a few systems that don’t immediately impact revenue. But if you know which pieces are missing, you can build a long-term plan that prioritizes the right things at the right time.

The method

Recently, we standardized this due diligence exercise into a?formal process. It’s now the very first thing we do for all of our full-service clients.

First, our Fractional CMOs use a 95-point checklist of questions, analyses, and considerations to assess each function.?

Our marketing specialists dive into specific areas like CRM data, content, SEO, paid search, positioning, messaging, website, & competitive research.

Then we put it all together on a scorecard with the first outline of a go-to-market strategy. Here’s a sample of?some of the questions we address.

We assess companies across 15 core competencies. Each area is scored on a scale from 0–5, with a potential overall score of 75 points:

1. Go-to-market strategy strength
2. Product-market fit
3. Marketing infrastructure (tech stack)
4. Account-based marketing (ABM)
5. Content marketing capabilities
6. Content archive
7. Demand generation
8. Sales & marketing alignment
9. Product marketing
10. Brand & design
11. Search engine optimization (SEO)
12. Paid advertising
13. Marketing team roles
14. Website
15. Positioning & messaging

Early quantitative results

If you’d prefer to listen, Stijn and I discuss these findings in the most recent?episode of B2B SaaS Marketing Snacks.?

Eight companies have been assessed since we standardized our audit. Companies are generally between the MVP and PMF growth stages (from our T2D3 growth stage model). This is mostly a function of the service we provide at Kalungi.

The highest performing areas are:

• Website
• Content marketing capabilities
• Brand/design
• Search engine optimization (SEO)

To be clear, the websites and content marketing we audit aren’t in amazing shape—but they’re often?enough?to support a pipeline from one or two channels.

To get to product-market fit, companies need to build at least one channel that delivers consistent results. The first channel is often referrals (which is why?testimonials are your best friend?early on).

We get excited when we see companies with content marketing capabilities. A technical founder or SME steeped in the problem your product solves is a gold mine.

You may be familiar with how much?we advocate for founder-led content. This is one of the biggest growth levers we pull for our full-service partners.

Companies with the most growth potential have founders or subject matter experts who are intimately familiar with customer problems and communicate an understanding of those problems. Tapping into that capability is challenging—and building an inbound engine without tapping into that capability is even harder.?

While this is something we’ve felt, it’s also backed by recent data. In a recent?2022 B2B buyers survey, 84% of B2B buyers said a winning vendor’s content had a significant impact on their buying decisions.?

And the top-five reasons winning vendors were selected over the others considered were because the winner:?

• Demonstrated a stronger knowledge of our company and its needs (68%)
• Provided higher-quality content (62%)
• Demonstrated a stronger knowledge of the solution area and the business landscape (59%)
• Provided a better mix of content to help us through each stage of our research and decision-making process (59%)
• Provided content that made it easier to show ROI and/or build a business case for the purchase (52%)

This is why we support content creation so much. When it's done properly, it's so much more than just fuel for organic search. If you’re curious about how you can start content marketing on your own, I’d recommend?this quick guide.

The lowest performing areas were:

• Account-based marketing
• Marketing infrastructure (tech stack)
• Paid advertising
• Marketing team capabilities

This list of poor-performing areas didn’t surprise us—it’s consistent with most companies when we start work with them.

These four areas are often neglected on the scrappy journey a company takes to get its first customers. They are also some of the hardest to get ‘right’ without help from someone who has 'done it' before.

But, once you start getting customers that pay and stay, these are the functions that will unlock your next segment of growth.

And it’s extremely difficult to exit the product-market fit stage (milestones below) without buttoning up these categories.

All four are key components in achieving the focus of the T2D3 growth stage.?

• Improved customer retention requires a tech stack that supports product telemetry, upsells, cross-sells, and attribution to tell you which channels are most effective.
• Increased demand means two things: 1) dialing up existing channels, and 2) building new ones (Account-based marketing, organic content, and paid advertising) to diversify your funnel.
• The right marketing team to build, support, and fine-tune the above.

If you’re not sure where to start, here are a few resources to help you in each of the lowest performing areas identified in our audits:

• Account-based marketing:?A starter guide to building your account based marketing function
• Marketing infrastructure:?Picking one CRM and sticking with it
• Paid advertising:?Top paid strategies in 2022
• Marketing team:?How to structure and hire your first marketing team
• Marketing audit:?How to audit your marketing function?

Cheers,?

Mike

P.S. If you enjoy this newsletter, I'd appreciate you forwarding it to someone else who might as well. If you're one of those recipients, you can?join the newsletter?here.

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