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Marketing 402 for Engineers: Diagnostics & Troubleshooting

by AneelDecember 31st, 2019

Too Long; Didn't Read

Every product or company goes through a similar set of steps on the path to success. For every stage of going to market, there’s a stereotypical set of problems you’ll encounter. In this post, we'll survey these issues and the vectors by which you might debug them. The most normal way to deal with every perceived marketing issue is to isolate it to optimize performance of that stage and try to try to optimize that stage. At the top of the funnel, that's increasing the absolute number of leads or whatever else. At every following stage, increasing the conversion rate from the following stage to the next stage, it's about increasing conversion rates.

Companies Mentioned

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Programming notes: this post is n in a series of indeterminate length on GTM topics mainly for startup people, mainly leadership, mainly coming from non-GTM backgrounds. There’s a list at the end.

Stereotypical Problems

Diminishing Returns

Sales or marketing strategy and tactics lose efficacy or stop working altogether. You’ve hit saturation, you’re running out of the supply of leads in a particular channel (or in the world!) for what you do, there’s too much competition piling money into a particular tactic, etc.

Leaky Funnel

The absolute numbers at the top of the funnel are a bit disjoint from the customers you’re getting out of the bottom of the funnel. Your spend on lead generation tactics like AdWords have terrible, or unpredictable, returns.

Market Saturation

You’ve hit the limit of how much of any market you can acquire because of present demand, competition, product limitation, or some combination thereof.

Competition

There are sufficient competitors that even if you’re the dominant player, you’re hitting limits in market expansion without significantly ramping spend in the form of undercutting competitors. This is effectively the same as market saturation (for you!).

Product Development Bottlenecks

Your pace of development has become the limit to customer acquisition, account expansion, and competitive takeout. It may even be causing churn as customers leave for products that are moving faster.

Friction

You are hard to do business with. There’s no place to put in credit card info. Expansion requires a sales conversation. Changes to basic billing info require support tickets, you’re just mean to people, etc. This manifests as leakiness before purchase and churn after purchase.

Whales

This is an odd one and I can’t figure out where it goes, so here you are.

You’ve had one or a few big customers who are steadily turning your company into an outsourced engineering team as they dominate all your product decisions and warp how you’re doing sales and marketing because you think they are the canonical customer.

This is not so much a GTM problem as it is a fact (big customer!) that has a completely irrational impact on your behavior. The revenue that comes from this kind of customer can exact a terrible price.

You’ve been warned.

Value Proposition Limits

Expected account expansion in Land and Expand GTM models does not occur, usually a function of saturation within an account or lagging product dev or failing theories of value

Atypical Problems

Too Many Leads

You can’t process or service people who are interested in talking to you, or doing a free trial, or signing up, etc., fast enough

Too Many Customers

You can’t provide adequate on boarding or service for all the paying users of your product.

Too Much Load

You can’t provide sufficient performance or the experience of your product is degrading as more customers are onboard.

Debugging Vectors

Whole GTM

Do you have the correct go to market?

If you’ve been approaching the market from the perspective of doing direct outreach to senior buyers with custom, paid POCs and high-touch handholding from engineers or other staff — do you need to start focusing on making things easier and more self-service (and self-finding) from end to end?

Whole Funnel

Is the funnel not operating the way you expected? It might not be the funnel you thought it was.

You might have thought you had separate self-service and sales-led funnels, but it turns out AEs are cannibalizing the self-service funnel because big name logos show up there. So the second or third stage of the self-service funnel is also the first or second stage of the sales-led funnel.

By Funnel Stage

Are enough people who sign up for a free trial actually using the product? Do enough people who use the product actually check out pricing? Do enough people who check out pricing actually become customers?

The most normal way to deal with every perceived marketing issue is to isolate it to a funnel stage and try to optimize performance of that funnel stage. At the very top of the funnel, that’s increasing the absolute number of leads or impressions or whatever. At every following stage, it’s about increasing the conversion rate from the previous stage or to the next stage.

In this view, a paying customer in any subscription or subject-to-renewal service, is in also in a funnel stage. It just happen s to be the one before renewal/expansion.

By GTM Function

Another way to look at things is from a functional perspective. Top of funnel problems are demand gen problems — and often also product marketing problems in the form of positioning or messaging or personas — and those specific strategies or tactics need attention.

Mid funnel problems are product marketing or growth or product or sales problems.

Bottom of the funnel problems are product marketing — in the form of packaging and pricing and sales enablement — or sales problems. In self-service, they’re usually product marketing and product or growth problems, since the product/app and website do all the selling.

Debugging Tactics

Throw Resources At It

Put more money into lead gen. Put more SDRs on qualification and meeting setting. Put more reps in sales. Create more sales assets. Give deeper discounts.

Change Tactics

AdWords is working less well. Add Twitter Ads and LinkedIn Ads and Instagram Ads.

Typically you’ll add additional tactics instead of wholesale decommissioning and replacing anything.

Change Strategy

Go from bottoms-up self-service to having sales people who email or call into specific accounts.

Typically you won’t abandon your original strategy, but just expand it.

Replace GTM

On rare occasion, you will discover you were totally wrong about your entire approach to the market and will throw it out.

A common version of this is people who thought they would have a channel business but discovered it was much better to go direct to customers. Or vice versa.

Replace People

Often people who are good at a particular strategy or tactic are not good at others. So if you change things, you will sometimes also have to change people. Many companies don’t even bother attempting to change anything. They just change people first and let the new people change strategy or tactics to new things.

Flail

This is what happens when there’s no model for GTM and no structured way of looking at the business. Anything or everything will be changed over and over again. Effectively, rolling dice. And the dice will keep getting rolled until something seems to work.

TMTOWTDI

There is always more than one way to do it. Any mix of the above approaches may work in any given case without any predictable rhyme or reason.

It’s s complex system made up of founders, staff, investors, prospects, customers, competitors, the product, and the rate of learning and change of each of those things. There are egos and emotions and data and philosophies.

The real question is how do you know if anything is working?

If you don’t, it doesn’t really matter what you do because anything you do is indistinguishable from flailing.

To Those With PMF Much Is Forgiven* **

The better the fit between your product, your market, and macro trends, the less anything else matters. You can completely fail at sales and marketing and customers will still break down your doors to throw money at you, because you’ve so deeply met a need right now.

That’s a rocket ship.

It is extremely rare.

*Or to those with a warchest

**Eventually time catches us all

PMF Reality

For most startup products, what you find is that they solve a niche problem for a niche audience. And for everyone else, it’s a nice-to-have but not a need-to-have.

A certain person or org or team has experienced a particular kind of pain and/or has a particular ethos which makes them regard your product as a need-to-have. But that is totally path dependent on the specific experiences of that person or team. This is impossible to plan for or demand gen against.

The economics will make this tough for a VC-backed business in the long run, unless you can charge a hell of a lot for it. Or, unless you can charge so little that it’s worth paying for the nice-to-have.