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How to Grow Efficiently and Manage Customer Acquisition Costs: Q&A with Veteran CMO Debora Tomlin
Oct 24, 2022
Debora is a veteran CMO and go-to-market leader – formerly CMO at Symantec, NortonLifeLock, CSAA, USAA Insurance Company. She is currently an advisor to Blumberg Capital portfolio companies and a board director at LiveRamp and Weave (NYSE: WEAV).
In today’s economic environment, it’s no longer acceptable to grow at all costs. The emphasis is now on cash efficiency and growth.
Throughout Deb Tomlin’s career, she’s been passionate about helping companies grow quickly, efficiently, and keep customers delighted for life. She started her career in financial services, not technology, and given that high growth always had to be balanced with efficiency and risk management, you could say she’s been training for this macro environment for a while!
In this Q&A, Deb shares insights for go-to-market leaders navigating this challenging economic environment. According to Deb, it’s back to basics and managing customer acquisition costs (CAC) with precision and ruthlessness by gaining small efficiencies everywhere.
Q: What B2B marketing KPI is outdated? What should SaaS marketers focus on instead?
Deb: While I love a good marketing funnel for metrics and measurement of efficiency (CAC), the concept of the CMO as only accountable for MQLs and CROs/Sales only accountable SQLs is obsolete. Instead, focus on the value chain aspect of the funnel and bookings efficiency measured by CAC and Sales Efficiency Ratios. It’s imperative to work in close collaboration with sales, finance, and product to jointly manage the funnel to target segments, test account based marketing, ensure product/market fit and be ready to pivot at any point in the funnel if something isn’t working.
In a nutshell, managing one metric or KPI in isolation is a recipe for high CAC. For B2B, I’m very interested in Account Based Marketing and how to think about efficient use of dollars to target the companies you first had in mind when you identified the problem you wanted to solve. And, I start at a high level with the first question being “What’s your GTM (go-to-market) strategy at a high level and tell me more about your target customer and selling motion?”
Q: What is an overlooked skill or characteristic that high-growth companies should prioritize for marketing hires?
Deb: There are two attributes for marketing hires that are often overlooked and those are 1) ability to partner and 2) relentless curiosity. The typical high-growth marketing hire is intelligent, data/fact based, creative, ambitious and loves a challenge. The classic “doer” personality.
I posit that the two additional skills of partnership and curiosity would be invaluable to managing efficient growth.
Why the ability to partner? Well, the whole idea of thinking through your go-to-market as a value chain sum of parts vs. individual contributors. Relentless curiosity? It’s that drive to take things apart and put them back together to gain even a small competitive advantage, a small efficiency in marketing expense, or a way to delight a customer. You could also say “life long learner” in lieu of curiosity – the desire to learn new marketing tactics, to want to understand the customer just a little bit better, or to search for new tools or partners who can help. In this macro environment, these attributes are so important!
Q: Blumberg Capital was the first investor in industry leaders such as Braze and DoubleVerify – both which serve marketers. Hundreds of marketing solutions have probably come across your desk over your career. What should martech startups not miss in their pitch deck?
Deb: I love this question. When I first started working in technology, even big public companies, I noticed that value propositions – B2B & B2C alike – were typically presented with generalities, jargon, and trying to razzle-dazzle on features vs. what this could do to solve my problem.
In pitches I want to see clear and simple language, benefits, and use cases of how the company could help me be the “hero” with customers or in the C-suite to deliver value. Identify my problem and solve it and don’t forget the “SO WHAT!”. Please quantify it because I’ll have to if I want to fund it as many more expenses today require CFO and perhaps CEO sign-off.
In the absence of this clarity, your marketing dollars won’t be as efficient as a sales person would never get to me (any C level) without it. Also without this clarity, my buying behavior comes mostly from my teammates doing the research to show the cost/benefit, recommendations from fellow marketers, or consulting firms.
I’ve seen this similar pattern in investor-backed start ups, too, though I have to say that Blumberg Capital has so much experience working with marketers that they instill this into their coaching and guidance to founders. I think it’s a big differentiator.
Q: How should marketers and other go-to-market leaders factor data into their strategies?
Deb: Data is king, queen, the entire royal family!
It’s been said before, but it’s important so I’ll say it again – data is a differentiator that will define winners and losers. Data is not just the responsibility for one part of an organization but everyone must be data proficient. Why? Data makes your value chain a loop vs. linear and that’s a huge advantage. Whether it’s developing product/market fit, defining the buying cycle, targeting segments, choosing marketing channels, metrics and measurement of marketing spend, or making sales teams more efficient, etc. data is the key.
If you’re not a data head, don’t despair. There are many companies out there in this data collaboration and enablement space that are making it easy to use your own data, collaborate with others, and really use it day to day without having to go through IT or data science. Two I know well – LiveRamp and Nexla. LiveRamp allows a company to identify targets, reach them in the most efficient channels, and measure effectiveness – all in a privacy-safe way – so that customers’ rights and privacy are upheld. Nexla is democratizing data architecture by making data ingestion, usage, and collaboration easy enough so that anyone in a company, not just the data scientists, can become data owners and users of data sets.
So much more to say here, but go check out both companies. Be curious – you won’t regret it.
Q: Is PLG (product led growth) or PQL (product qualified leads) a better model?
Deb: Either PLG or sales-led models aren’t necessarily better than the other, but a choice depending on what you decide as your go-to-market strategy accounting for the complexity of your product.
PLG is appealing because it’s less expensive than spending money on marketing, lead generation and a sales force, but less expensive might not always be better.
PLG tends to work the best if you have a simple vs. complex product. If you have a simple product and can generate leads by social networks, other word of mouth or other organic means by offering a free teaser (land) and converting them to a paid user in a relatively short amount of time (expand), then go for it.
Many products aren’t that fortunate and require a more complex sales cycle. There is always room to adopt some of the uber-efficient tactics of the PLG model, though, and you should do it – think demos, offering cost/benefit analysis for free, checklist comparing to competitors, etc.
It’s my experience that having an exceptionally clear, compelling and self service website is a must in any model. Spend time and money on content, demos, use cases, etc. upfront. Think of your own buying process – don’t you always check a company’s website or do you prefer to research and transact on your terms, if possible.
A few closing words of advice:
Managing customer acquisition costs with precision and ruthlessness is part art and science, test and control, metrics and measurement. Deb believes organizations must either develop the skills in-house or partner with others (in the martech space) to help with tools.
Don’t despair – there’s still room for experimentation and risk-taking that can pay big dividends if teams get the bulk of marketing spend to work efficiently.
Thanks for your time and guidance, Deb!
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