Break the B2B marketing vicious cycle
Use this one pushback to help you finally break the cycle
Raise your hand if this post from Liam hits a little too close to home for you
🙋♂️
And so the endless marketing spiral begins yet again, unless we choose to break the cycle.
Before you jump in and say “yes” because of the assumption that a larger TAM = better marketing results for you, let’s break down why the above scenario unfolds into a vicious cycle every time:
Larger TAM ≠ better results
Yes, a larger TAM means you get more “at bats”, but that’s operating under the assumption that you have the resources to get in front of them at the level required to drive pipeline and revenue.
Showing up once or twice to this new market isn’t even scratching the surface, it’s like going to the gym only once and then wondering why 3 weeks later you aren’t seeing any results.
And it boils down to one thing.
Resource management
For simplicity, let’s say resources include your budget and your team headcount/hours in a day.
Budget
Let’s say you have $100. You’re currently maxing out that $100 budget on your audience, knowing you haven’t even hit the point of diminishing returns.
Then you find out that leadership wants you to expand to include another vertical/region/segment/etc. This might mean your audience doubles, triples, or even quadruples in size.
Let’s do the math on this:
At $100, let’s say you were previously reaching a relatively healthy 75% of your audience before this expansion request came in.
And let’s say your audience just doubled in size.
You now have $50 to use on your existing audience, so you’ll only be able to get in front of 38% of that audience moving forward.
*NOTE number 1 for your leadership team: you should expect to see pipeline/revenue from this audience to be 50% of what it was previously as a result*
Now you have $50 to apply towards the new, unproven audience, and are expected to grow pipeline + revenue from it while digging out of the larger pipeline/revenue hole that was just created.
And that new audience will also only be funded to allow your brand to get in front of 38% of them.
Not loving these odds so far…
Headcount/Hours in a day
Most marketing teams run lean. How few people can we employ across multiple marketing disciplines to accomplish business growth? (insert job description of the unicorn marketer who can do everything here 😅)
Assuming your organization operates this way, your team is likely somewhere between 85-100% of their capacity. So if you want to 2-3x your TAM coverage, how do you expect to accomplish that 2-3x coverage when you know your team is nearly maxed out?
What happens if you say yes?
Leadership needs to make a decision here. Your resources are your resources. And based on the request, you have two routes you can take:
Route 1 = you split your resources in half and apply that to each market
Route 2 = you apply your total resources to both markets
The result?
In the first route, you’re forced to spread your resources thin across the markets. You reduce your existing coverage in a market you’d been doing well in. You add new, likely inadequate, resources to the new market.
In the second route, your resources you apply all of your resources into a “merged” market so you can be more fluid with budget, headcount, etc. across the markets. But since you’re still applying that same initial amount of resources that you had in your initial market to a “new market” that’s doubled in size, your resources aren’t able to penetrate enough to make a big impact.
Instead, break the cycle with this reframe
Hone in ONLY on your top 1-2 markets/verticals/regions/segments and demonstrate the impact that you can make there.
Then when your leadership wants to expand to other verticals/regions/segments, tell them you're happy to, but in order to do this, you need to educate them that this is only possible with ADDITIVE resources (budget, headcount, etc.).
If they push back on this, you need to illustrate the impact of pulling resources AWAY from already working + proven verticals/regions/segments and how the results there will be negatively impacted.
So in the initial example above where you previously had a $100 budget and a team supporting one market, show how much pipeline and revenue your efforts were driving. Then show the impact on that market when you’re forced to split it in half. If you’re lucky, it’ll only be a linearly correlated impact to pipeline + revenue, but don’t be surprised if it takes a larger hit than that.
As you can see, because you’re pulling away from a proven revenue stream and adding to an unproven revenue stream that also isn’t optimized, you’re not just trying to add a revenue stream to your existing base. You’ve lowered the base you’re trying to grow off of with a revenue stream that may or may not be better to pursue.
And you can do this with one phrase…
“This needs to be treated as an experiment”
We need to test, validate, and map out the impact of this to our current revenue stream from marketing.
We need to apply additive resources to this so we:
Avoid decreasing our current revenue contribution
Give the experiment the appropriate resources (time + money) to be properly run to understand if we should pursue this market
This is the missing piece I’ve seen time and time again that allows this vicious cycle to continue if unaddressed.
It’s time to break the cycle.
One LinkedIn post I bookmarked this week
Kyle Coleman is a master when it comes to investor/board decks, and his latest one only continues to solidify this statement.
It’s a beautifully crafted narrative that takes you down a path:
Recognition of a problem, positioned in an emotional way
The poor outcomes that have come as a result
Noting the desire for a better way
Pointing out the root cause + translation of it to things investors/the board cares about
Giving a specific name to the problem (GTM Bloat)
Lead-in to a solution
Giving a specific name to the solution (GTM AI)
The outcome of using the solution (eliminate GTM Bloat, achieve GTM Velocity)
Listing out the positive benefits of adopting the new solution
Coming back around to the poor outcomes shared initially and how those are now fixed/better
One podcast episode I enjoyed this week
Welp, I’m human.
I didn’t listen to any podcasts this past week.
Had family visiting for part of the week. Little one picked up a bug for a few days. And any remaining free time I had I either wanted complete silence so my brain could “breathe” or I tossed on some music to simply enjoy that.
So stay tuned next Saturday as I’m sure I’ll have one then. Already have a list queued up that I’m excited to get into.
For anyone interested, here’s a playlist I add to with some of my favorite podcast episodes:
See you next Saturday,
Sam