Jason Myers: Welcome to SaaS Backwards, a podcast that helps CEOs and CMOs to accelerate growth and enhance profitability. Our guest today is our very own Ken Lempit, who normally hosts the show. He's also the president and chief business builder here at Austin Lawrence Group. And if you've been listening for a while, you know that every once in a while we like to flip the script and talk about what we're hearing about SaaS companies and where they're struggling to be capitally efficient in their go-to-market motion. So Ken, welcome to the podcast.
Ken Lempit: Well, the script is truly flipped and I'm pleased to be a guest on our podcast. Thanks so much.
Jason Myers: You bet. So we've been hearing a lot lately, both in our own clients and from some of the guests that we have on the podcast about the struggles around advertising. So I thought that was a great topic to kind of start with today. But what are you hearing? What are you seeing?
Ken Lempit: Well, it is a great topic. And I think what we're hearing is that kind of even beyond or writ large beyond advertising is that capital efficiency and go to market is important as it's harder and harder to raise funds. In fact, one of our former guests, Brian Burns, resurfaced one of his I think a little more than year old videos on unicorns crying, like, can you hear the unicorns cry as it's tougher to raise money than it used to be. And now we have to get about the business of selling. And there's clearly no more important channel to facilitate sales. than the paid advertising that our SaaS clients and prospects are doing. So I think it's a great topic for the podcast. And in fact, we're also hosting a roundtable with CMOs and CROs on the capital efficiency topic. on August 8th, I think that's Thursday, August 8th in New York City. And if that's a topic that's interesting to a listener and you're a CMO, CRO, or CEO in SaaS, please check out our LinkedIn pages and find that event and come register. So capital efficiency and advertising, they kind of go together. Probably the biggest budget item that any of our clients or prospects have after salaries and possibly even eclipsing salaries is their paid promotion, their paid advertising budget. So making this work, work effectively and holistically across a prospect journey, I think is probably one of the most important topics for SaaS marketers and go-to-market people today.
Jason Myers: So where do you see companies getting into trouble when it comes to media spend, just in your own observations?
Ken Lempit: Well, I'm going to take the opportunity to answer a slightly different question, but then I'll get to that one. So I think that it's really tempting and it's obvious to focus on the internals of the performance of these platforms. And they're very complicated and so it requires some mastery. And it seems like that's the most important place to focus. And what I'd say is the first thing to focus on, if we're looking at trying to diagnose the trouble in AdLan, is what is the prospect experience? And so that's sort of at the end of the whole journey between, you know, beginning with identifying your total addressable market and ICP and who we want to speak to, the messaging, what the problems are, creative that we're going to use to go after that, generate interest, the platforms themselves, where we're going to place our messages, the advertising spend. But when you get to it, and you're trying to figure out the problems, I say start with the prospect experience. what's happening on the web properties or other places you're driving traffic to, because you're already driving some traffic. Most likely somebody's thought about all these other things, but the place where a lot of the investment can break down is actually on our own web properties, our landing pages, our homepage, our website, the larger website, the third party places we send people, like if we're using Zoom webinars and we're using their sign up pages, and also the experience that prospects have when the SDRs or AEs are doing follow-up to people that have been willing to give up their credentials to get to an asset. So the first place I think people get in trouble is the one they have the most control over, and that's their own landing pages, optimizing these landing pages, We had the, I guess, the CEO of Spiralize on a few weeks ago on the podcast, probably about like nine weeks ago. Really enlightening. You know, if you're not optimizing your landing page experience, running multiple A, B tests to get the most out of the traffic you drive there, if you're not enabling your sales reps with training and resources, emphasis on the training. These people have to know how to respond to people in today's world who do give up their email address or more for a resource so as not to turn them off. So that's the first place to look. Training and resources for sales, as well as that, the landing pages. When we get into the internals, I think where the biggest trouble we've seen, and we're very active on three kinds of platforms. So we're involved with Google pay-per-click at a pretty significant budget level, LinkedIn, doing a lot of LinkedIn work. to get in front of a more tightly defined audience, as well as programmatic platforms. So three places where our listeners are likely pretty active. When you look at Google, there's a lot of opportunity to waste the budget. And I think this comes out in a few ways. You can either be in front of audiences that aren't relevant. So being really careful with, and this is kind of getting into the weeds a bit, but, you know, is your keyword strategy your match on your keyword? Is it exact? Is it a phrase match or is it broad? And there's arguments to be made that sometimes you do want a broad match on a keyword or set of keywords. But there's an area where you're allowing the machine to spend your money more rapidly, which is what Google would like. And the question you really have to ask yourself and monitor is, am I sending spurious traffic to my destinations for those ads and getting traffic and even clicks that aren't of value? We took on a new client recently spending about $500,000 a year on Google pay-per-click. And a little bit of research with their marketing analysts turned out that they had 40% spam form fills. 40%. So they wasted $200,000 on an annual basis of their budget. They wasted $200,000 on an annualized basis just because of fraudulent clicks, spam clicks. That wasn't the only place they were wasting money. So that was directly attributable to the audience expansion features on the Google platform. broad match and broad match being the major contributor to that. So we need to make sure we're spending money where we should be spending it. And there are some things that'll trip you up on Google. That's probably number one. Number two is using performance max, not judicious way. You have to really be careful with the expansion there as well. I'd say that's probably a good guideline on any of these platforms. audience expansion has to be really monitored closely. It can run away from you and your budget can be quickly depleted. So maybe that's the biggest tip coming out of here. This part of the conversation is monitoring the effectiveness of any audience expansion opportunities that you're taking advantage of on these platforms. That probably is true of all of them, probably most so on LinkedIn as well. You know, it's one of the number one, number one places you can waste your money is audience expansion on LinkedIn.
Jason Myers: You talk about a holistic view of advertising. What does that mean? Explain that a little bit further.
Ken Lempit: Well, I mean, we're working to build a model that our clients and prospects can use to understand where advertising touches, because it touches across the business. And how to view all the elements that go into successful advertising, because it's not just in platform. And again, it's really tempting to focus on the platform and say, that's where I need to optimize. So kind of across the board, we want to agree on a problem worth solving. We want to have an understanding of our prospects that's deep enough that when we build messaging, they're saying, yeah, that's the problem I want to talk about. One of our clients recently said to us, I've got three problems I'm working on this quarter. And if you're not talking to me about one of those three problems, you're not talking to me. And I think a lot of our prospects in B2B, especially with software as a service, we're like a hammer looking for the nail and everybody looks like a nail to us. So we need to make sure we're communicating about a problem that we can solve, that our prospects agree is worth solving. We then need to have reasonable and valuable objectives that advertising can solve. So if we're not clear on what the goalposts are, we're not going to be able to socialize our results in a way that's going to allow us to renew the budget. Ultimately, advertising is a conversation that ends up in the CFO's office. And if we aren't clear on our objectives and we don't have objectives that are worth getting to, but also possibly achievable, then we're going to have bad CFO conversations in the near future. And then we need to have a budget that we can work with and that we are authorized to spend and we're not going to have to defend over and over again in a short timeframe. So is it like a quarterly or half year budget that's pretty much sacrosanct so we as marketers can go do our business of putting the ads out there, iterating and optimizing our performance. So that's sort of the overarching stuff. Then there's five areas that really matter. First of all, who are we trying to reach out to? What are the people that should be seeing our message? What's our TAM, the whole market that we might address, solid understanding of our ICP, and for enterprise software sales, which is where we specialize, what are the roles of people on the buying committee? Have to really understand that well. Then the next place we look is to the creative. We want to make sure if we've interviewed those people, understand them well, that we have solid messaging, messaging that talks to that problem worth solving and reaches them kind of where they live in their own mindset. Remember that client, if you're not talking to me about one of the three problems I'm trying to solve this quarter, you're not talking to me. Then what's our posture? What's our creative platform? Are we going to be fun, interesting, risky, conservative? Like if we're doing banking software, money is never funny. But if we're doing project management software, we can probably go out on a limb a little bit. And one of our prior guests, Melissa Rosenthal, who used to be the CMO at ClickUp, did a great job of doing very creative advertising to drive brand awareness and grow revenue. And then engagement, how do we get people to engage with our assets? We have to have great stuff that people are going to want to get to and use. So the creative has to create, creative has to engender a response from people that's going to do something of value to the organization. We like to say what's of value to the organization ultimately is meaningful conversations. You may have other measures that are important as well. But that's really important, that notion of meaningful conversations or meaningful sales conversations. So once we have our people well understood, we've got our creative ready to go, then we have to be looking at the channel. Where are we going to put this messaging out? And that's that platform. Is it Google search? Is it LinkedIn? Is it meta? Are we going to be on programmatic and do ABM? as well as be on LinkedIn, kind of come at people in a surround sound way. You have to be looking at multiple channels. They're not all the same. They don't offer the same opportunities. When you're on Google, you're much further down the funnel, a little harder to sell thought leadership on paid search and a little more frustrating from a financial standpoint. So pick your channel. implement the strategies there in a way that's clear and measurable. One of the big mistakes we see people do, especially on Google, is all their campaigns look alike, even though they're called different things. So you might have a brand campaign, a competitor campaign, and direct phrase match of the things you sell, And we've seen people mix those all up so that you can't actually do any analysis. So make sure your campaigns are well structured from a hierarchical standpoint. So that's where is our message going to be? And then in enterprise sale, where are they in the journey and what are we trying to communicate? Are they problem aware or not? If they're not problem aware, that's a thought leadership exercise and that promotion is going to be different than if someone is trying to find the solutions, they're problem aware and they're looking for solutions, or they're down at the bottom of the funnel and they're ready to make choices. If we're not already in there, we have to find a way to get ourselves in. And that bottom of the funnel, that advertising looks very different than trying to sell a big idea. And then where we started the podcast, I think it's really important to look at outcomes or the why. And A concept I'd really like to start socializing is prospect experience. What's happening to them after the click? Are they going to a resource or landing page or homepage or some experience that's consistent with what we offered them in the advertising? A big fall off occurs if I click on an ad and I'm not getting the experience that I thought I was. So from just a destination standpoint, that's one of the first things we can do to optimize an outcome and also have optimized landing pages based on our own test, A-B test until you're tired of A-B testing and then do it some more. The other part of the experience that I think for the prospect experience that I think is so important is how do we train our SDRs and account executives? What sales enablement tools do we give them? What resources do we give them to follow up that interest that is something the prospect will want to receive, phone calls they'll want to get, emails they'll look forward to. This is really hard, but really important. And if we want to ultimately attribute pipeline to all of the stuff we've done to make advertising work, to get somebody to come to a landing page or some other web resident property, or to make a phone call, we really have to focus on the sales team and make sure they have everything they need to be successful so that we can get to them. the real thing, which is return on investment. So that was a really long answer to a short question. I think that sort of paints the picture of how we view advertising in a more holistic way.
Jason Myers: I mean, you mentioned the surround sound concept on LinkedIn. What have you found with our clients specifically has been working on LinkedIn? Because it is a little bit different of a channel. It's not as much of an intent channel as say Google, more of an opportunity for thought leadership and potentially problem awareness. But what have you found?
Ken Lempit: Well, I think that LinkedIn, it's totally different than the other channels. Unlike Google pay-per-click, we can get very specific about individuals we want to put ads in front of. We can either do it by literally individual, like we can upload a CRM list and only advertise to those people. Or we can organize our audience by the companies they're at, the kind of titles they hold, the groups they participate in. There's lots of ways that we can kind of narrow the scope, narrow the site, narrow the target. And that creates great opportunity that doesn't exist elsewhere to stratify the messaging. So if we're speaking to the C-suite, and when I say speaking, I mean advertising to the C-suite, we can then provide them with resources that are appropriate to their role which is one of the things we talked about in that model, like in the people part of that model, you know, the buying committee has, especially enterprise software might have five, eight, 10, 12 people. So we can stratify our messaging very effectively and the resources we offer. But what we do see pretty consistently is that especially when people manage this property in-house is they don't do the work to really drill down using the tools available on the platform. And I'm sure there are in-house teams that are doing great jobs, but when they come to us, they've got a problem. They have a problem to solve, and that is that they're not seeing ROI from their advertising. And when we look on their LinkedIn, I'd say that's the problem we see is not utilizing the great targeting potential of the platform or misusing it, putting people into the mix that don't belong. As far as surround sound, the way we use that with LinkedIn is also to marry it up to tools like their email platform and as well programmatic. So we can get on three channels at minimum with our prospects. We can, let's say we're trying to present thought leadership around a topic that would help drive interest to the category of software. We can show that asset on LinkedIn. Let's say it's only to chief financial officers trying to make a financial sale. We can target those same individuals in an ABM audience, either right on a demand side platform like StackAdapt, which is one of the ones we use, or you can use a much more expensive platform like a Sixth Sense, Terminus, or Demandbase. to target those people with advertising across the open web, and then also reach out to them via marketing emails. So that's like three. And then the fourth would be strategic account targeting from the sales team, the SDR team, trying to get that resource in front of prospects, you know, doing outreach on LinkedIn. I think that's a primary channel for that outreach, should be the primary channel for almost everybody. their own individually curated emails, and don't forget to pick up the phone. If your sales team is not picking up the phone, you're missing a big opportunity. Your competitors certainly are doing their very best to reach people by phone, and that's probably the last part of Surround Sound, and maybe the most important.
Jason Myers: With all the algorithmic changes on all the platforms, really, do you think advertising is going to become more necessary consideration in the overall marketing budget for B2B SaaS?
Ken Lempit: Well, I mean, it's sort of the algorithm gives and the algorithm takes away, right? I think we're in the great takeaway stage of these algorithms. And what we're talking about is when we used to put up content on LinkedIn, if we put a video up, it might be pretty easy to generate 1,000 views of that video. Today, it's 10% to 20% is a reasonable target for organic posts. Obviously, this depends on the size of your network. But not entirely as, I mean, these algorithms really are trying not to give away too much for free. And it's their balancing act, right? They want to have enough content there that people keep returning and visiting and posting. but they want to encourage us as sellers to pay for the privilege. So I'd say across the board, all of these platforms, LinkedIn, Google Organic for sure, and the meta properties, they are throttling their free traffic that they give to content creators to keep them encouraged to produce the content, but not give them enough of a free ride that they don't pay. So that's where we're all suffering from that. And I think the biggest, most obvious place that's happening is actually on Google search engine results. It's become super hard to compete for organic traffic on Google search. And that's by design. They don't want to give it away. They want to keep people on the Google platform or drive traffic to people who are paying for the associated keywords. And you can see that in your search. Your search engine result pages, sometimes the whole first page is all their AI summary or paid ads. So I think we're getting to the point where we might almost say SEO is dead between the behavior of Google on search engine results pages and the lazy marketers who are using AI to further add to the content wasteland out there. I'd say that we have an environment where, you know, you're going to have to pay to get in front of people on all these platforms. That's probably no more egregious than it is on Google. You know, there's a there's a reason that Google's facing not one but two antitrust lawsuits on its advertising as well as its search business.
Jason Myers: So how do you go about diagnosing problems in your current campaigns and media spend in general?
Ken Lempit: Well, everybody's situation is different. You know, I think that it's an interesting question in that, you know, we're putting together an audit offer for prospective clients of the agency. And I think one of the things we've come to realize is that you don't know what's kind of in the box until you open it. So I think that maybe the best way is to go back to our five boxes and ask yourself, are we sure of who we should be sending messages to? Do we really know our ICP well and our buying committee? I think you can start there. Look at the messaging. We see such weak messaging in SaaS land. And if we're going to get agreement on a problem to solve, we have to have messaging that compels people to recognize that we're on the same page as them and we have to stop them. They're bombarded by so many thousands of messages a day. So I think the messaging work has to be done. Then look at the internals. Are you making some obvious mistakes? I think we've elaborated some of them here. If your trends are down, that's an external indicator that things have changed. either in what you're doing or the underlying performance of the platforms you're on. And that's a place to look. And again, we could probably publish a list of 20 things to look for on each of these platforms. That might be a nice piece of content for us to build. But you have to use these platforms according to their strengths and avoid the potholes that we've talked about. And you have to budget enough that you can drive a result. So I think you have to have an open mind and look across the five areas. Again, if I was starting a new engagement, if we are, we're always going to look at the experience of the prospect first. We need to know what's happening and can we, without changing anything, improve the ROI from these campaigns, and often we can. That's sort of a recap answer in a way.
Jason Myers: You mentioned earlier some of the problems that companies get into when they're managing this internally. Where are some of the problems that you're seeing like with external agencies right now with kind of the same problem?
Ken Lempit: I think one of the things we haven't talked about in terms of internal teams that I just want to touch on before we look at external agencies is that if performance is getting poorer over time, there's a temptation for internal teams to not bring the bad news. And that can really fester. You end up with really toxic behaviors in the workplace, especially when a lot of money's on the line. When you're spending half a million or a million on one channel and maybe three or four million altogether, there's a great temptation to cover your tracks and not admit where you're having problems. So CMOs, directors of demand generation, VPs of demand generation, you have to be willing to look under the covers of these systems, kind of hand in hand with your digital marketers and make sure that each platform is being optimized. And you have to be willing to drill down. That's an important message. It's probably the same with an external agency. It's really, this is like one of those things that's sort of like the burning bag of poop and I'd like to get it off my desk. And I'm going to hire an agency, and they're going to do it, and they're my throat to choke. My feeling is that, sure, you can hire agencies like ours to take care of this problem for you, but it doesn't absolve you of the responsibility of being on weekly calls with this agency. What are we seeing in terms of performance? What improvements are we making? Where are we trimming our investments? I just think that we have to be willing to dig deeper. And just because you hire an agency, it doesn't mean you don't have responsibility for the outcome. It might allow you to dodge a bullet when you change agencies. You can change an agency and call it their fault. But I think savvy operators, the seasoned SaaS founders, seasoned SaaS leaders, probably are looking for greater responsibility on their internal teams, even if they've outsourced the media strategy and creative work. You can't absolve yourself of the responsibility to know what's happening under the covers in these platforms. You should be almost willing and able to answer any question a CFO might have, even like, Walking down the hall, you get tapped on the shoulder, hey, how's it going on Google? You ought to be able to have a good answer for that. What are you doing to optimize the outcomes? While we were doing this podcast, I just saw an email from one of our clients to the head of sales and marketing, effectively the CRO of one of our clients saying, hey, we 13 out of 26 or 29 leads this week. We're out of ICP and we're going to adjust our keywords. to make that less of a problem. So on Google, where we can't target by ICP directly, we have different problems. So we have to try and get our search words, search terms, and our search behavior and the offers we make as targeted as possible so that we only get leads from the right people in an optimized way.
Jason Myers: All right, well, that sounds like a good place to land the episode. Thanks a lot for an insightful episode. If people want to find you, how do they do that?
Ken Lempit: It's easy to find me on LinkedIn slash in slash Ken Lempit. Our agency website is AustinLawrence.com. That's with a W. And if you'd like, we have a free checklist for self-assessment of your advertising function. You can reach out to Jason directly at jm at AustinLawrence.com and he'll get that right out to you.
Jason Myers: Absolutely. We'll put that in the show notes as well. Fantastic.
Ken Lempit: And next week, we'll have another industry expert here on the podcast. And if you haven't subscribed to the podcast, please do so wherever podcasts are distributed. And Jason, thanks so much for teeing up all those softballs. I really appreciate it. Likewise.
