By Abby Sorensen, Executive Editor
Andrus Purde knows firsthand how to scale SaaS marketing teams. Purde is the founder of Outfunnel, and was previously the head of marketing at Pipedrive and a product marketing manager at Skype. During his tenure at Pipedrive, he built a marketing team of more than 20 people and was along for the ride as the company grew from zero to more than 50,000 paying customers.
I recently tuned in to a webcast with Purde hosted by the Business of Software conference, where he elaborated on his talk from the 2017 European event about the four stages of growth for SaaS marketing teams. Those four stages go from begging customers to try your software during beta phase, to developing channels and generating leads, to staffing up in order to run those channels, to putting marketing in full-go mode so you can expand to new customers, verticals, and regions.
Aside from talking about the four stages of scaling SaaS marketing teams, here are more SaaS marketing tips from his Purde’s webcast:
- The phases don’t replace each phase; rather they build on each other. For example, the early feedback you get from customers in phase one should continue forever – you can’t replace customer contact with a singular focus on building channels.
- As you’re doing the day to day marketing work, no one tells you when one phase is over. It’s “blindingly” obvious in hindsight, but it’s easy to stay stuck. Be sure to zoom out and evaluate if your marketing team’s goals are on the right path.
- Sometimes SaaS marketing boils down to being at the right place at the right time. Purde isn’t taking his learnings from Pipedrive and using it as a playbook for his current venture. For example, SmartBear scaled on the back of Google AdWords. The automation, development and monitoring tools software company was founded in 1999. Back then AdWords were cents on the dollar, but running the exactly same activities today would be cost prohibitive.
- The best learning for a SaaS marketer per minute, by a ratio of ten to one, is to have conversations with marketers at other companies who are doing the same thing as you are. You don’t necessarily need to reach out to your competitors, just peers at other SaaS companies who can provide benchmarks.
- There is no magic ratio to determine what you should spend on marketing. For example, Salesforce invested nearly 60 percent of revenue in to marketing and sales last year, and that’s neither right nor wrong for your software company.
- Some marketing channels are so specific that you need just one full-time person at first. When Purde left Pipedrive, the team still didn’t even have a full-time person for referrals, because it was on autopilot. However, content, SEO, and paid channels are very different. You can’t scale paid channels if you don’t have at least one person per channel (ex. one for AdWords, one for social media, etc.).
- When it comes to deciding on marketing KPIs, the fewer the better. During a SaaS company’s early stages, focus should be on trials and sign ups. Then you can evolve to new paying customers by source. Later on, Pipedrive added engagement metrics and started tracking revenue by channel. Purde explained, “In SaaS you have many people sign up, look at the product, and never come back. So we looked at second week login and other engagement metrics.” Purde noted his team never worried much about overall traffic; rather their metrics focused on business results.
- Not all marketing activities need to be perfect, or even perfectly aligned with your overall strategy. For example, Purde described running an AppSumo campaign at a ridiculous discount (in the ballpark of 75 percent). This naturally attracted price sensitive customers, who are typically not good long-term customers. However, the point of the exercise was to find early adopters, to scale internationally, and to raise awareness of the product – not to find a plethora of very sticky customers.
- There is a downside to marketing automation. The endless amount of options makes it easy to spam a lot and “over automate” marketing. Purde said this isn’t necessarily the fault of marketers – it’s just the way the tools are designed. Now it’s harder to do marketing that isn’t spamming because it means going back to manual hours that those tools eliminated for your marketing team.
- Marketing leaders need to get proper hiring training before starting to scale a team. When you scale to the point where you start to bring on several new marketing people each month and you’re looking at upwards of 10 interviews per week, then that interview training will be worth its weight in gold. In the application process, Purde suggests an open ended question such as, “Why do you think you are the best person for the job?” Candidates will likely skip this if they are just mass-sending a resume. Often the most passionate and serious candidates will take the time to provide a thoughtful answer.
To view a replay of Purdue’s original talk or an on-demand version of the webcast, and to see his original slide deck from the Business of Software Europe in 2017, please visit http://businessofsoftware.org/2017/12/the-evolution-of-a-saas-marketing-team-andrus-purde-pipedrive-bos-europe-2017/
The next Business of Software conferences will take place May 22-23 in London and October 1-3 in Boston. For details visit http://businessofsoftware.org/.