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This week we're digging deeper on something that we introduced back in this episode: Software has eaten marketing, now what?
It's the data-driven demand generation bowtie!
The bowtie is our answer to the evolution of the sales funnel. It accounts for the lifetime value of a SaaS customer, and the way that a data-driven approach means that marketing, sales, and customer success are all revenue sources, and the sales funnel isn't the end of the customer lifecycle.
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Adam Kerpelman:
So I was sitting down to stretch yesterday and I popped the TV on just I'm staying in like a vacation home, basically. So cable boxes everywhere, which I'm not used to anymore because I live a life of streaming. Sat down and turned it on. BBC America was on and the Next Generation was playing. So I was like, "I'm going to just leave this." But I had to watch commercials for the first time in a long time. And it's like, oh, there's just this thing where like, it's Tuesday night at 7:00 PM. And you can tell exactly the demographic they think is watching, which I am not. It was all ads clearly targeted at older than 50 females. It was like shampoo ads. There was a Depends commercial or two, and all the rest of it was pharmaceuticals for conditions that I just haven't aged into yet.
Brian Jones:
Yeah. I was going to say any time I'm watching network TV with, or like broadcast cable. I don't even know what you call it. Right. With a cable box. It's all pharmaceutical ads.
Adam Kerpelman:
The data-driven point though, there is like that's a giant bulk of advertising. And then we want to talk about why the digital like platforms came in and dominated, it's because I don't need to watch that stuff yet. And they don't know. So they're just like, "We're going to take a wild stab at who's watching the Next Generation at 7:30 on a Tuesday on BBC America." They're probably not totally wrong, but
Brian Jones:
They certainly wasted capital there.
Adam Kerpelman:
Right?
Brian Jones:
This is why when you go to HBO, it aggressively asks you who is watching and makes you set up multiple accounts for all your household members.
Adam Kerpelman:
That's not just.
Brian Jones:
Because marketers desperately want DTV. Connected TV.
Adam Kerpelman:
That's not just because they want to personalize the experience for me? That's not [inaudible 00:01:57].
Brian Jones:
If that was the goal, all of the streaming software would work better. Because it's all junk.
Adam Kerpelman:
Hey, it's the data-driven marketer sponsored by net wise. I'm Adam.
Brian Jones:
And I'm Brian.
Adam Kerpelman:
Welcome back for another hang in the data lab. So I feel like I should apologize up front on this one. I'm in a town at 7,000 feet. So I will probably sound winded most of this episode and I'm holding my mic, which means it may very well get dropped. And if Brian is busy saying something interesting, I'm still going to put it in, even though it clunks about.
Brian Jones:
Clunk.
Adam Kerpelman:
So how you doing, man?
Brian Jones:
I still want you to say "Welcome to the database," at the beginning. I think data labs is more appropriate, but database like.
Adam Kerpelman:
Well, right, because.
Brian Jones:
It'll make people think a little more.
Adam Kerpelman:
Data. Yeah. The problem there is.
Brian Jones:
Welcome to the database.
Adam Kerpelman:
Is it really clearly needs to be the data base, like the base where the data lives, not just a database. I don't want to hang out at a database.
Brian Jones:
How about the data basement?
Adam Kerpelman:
It's just a spreadsheet with infinite layers, ew.
Brian Jones:
Data basement?
Adam Kerpelman:
Data basement. There you go. I like that one. Cool. So I think this week we're going to do our first sort of like callback episode. We had something that came up a few episodes ago and in fact, we did a chart with it that has kept coming up in conversations since then. So we felt like we should flesh it out a little. You want to kick off with what that is?
Brian Jones:
Yeah. I should have dressed appropriately. It's this concept that we still don't quite have a final name for, but we've been calling like the data-driven bow tie or the demand gen bow tie.
Adam Kerpelman:
Something. Data driven growth bow tie.
Brian Jones:
Yeah. It's a visual model to kind of replace the idea of a sales funnel and it's so if you picture a traditional sales funnel, although you usually see them top down as opposed to side to side, but if you put it side to side and think of it, a funnel on its side and then make it a bow tie shape instead. Right. That's that's what we're talking about.
Adam Kerpelman:
Right. We'll run the graphic again with this, with this episode, but so you mean you should've worn a bow tie.
Brian Jones:
I should have worn a bow tie, correct. And two bow ties prep for the future. If we were going off Back to the Future to style choices for this millennium.
Adam Kerpelman:
But that was two neck ties. Is there room for two bow ties? I suppose if you oriented them vertically.
Brian Jones:
You flip them vertically. Yeah.
Adam Kerpelman:
Exactly. Now we're tying.
Brian Jones:
And it fits really well with the twisting of the funnel and the
Adam Kerpelman:
Right. Right.
Brian Jones:
Nailing it.
Adam Kerpelman:
So then the place to start is like what, which you already alluded to, it's sales funnel, but what does the bow tie idea replace, I guess. Or I guess maybe it's to intro it a little bit and then we'll jump back to where it replaced. The graphic we ran the chart with an episode that we kind of ended just barely at the idea of the bow tie. And then that got us into like, "Oh, we're going to go make this chart." But it really is sort of, it's meant to be a representation of the multiplying effect that you have when marketing and sales and all of those and anything else related to demand generation sort of lumps together into what we would call the demand gen department.
Adam Kerpelman:
And that even includes, and this is what we got to at the end of that episode, which I'll link to in the show notes. What we got to there was a conversation about how once you have marketing plus sales plus customer success, all working together, you kind of have this amplification effect so it looks like a funnel. Starts big, get smaller, but then also gets bigger on the other side and you get your bow tie. Right. So yeah, I guess. What's the idea of like, what does it replace or what's a sort of a representation of, I guess, the real way to say it would be, it includes the sales funnel, but it just sort of expands on. Right?
Brian Jones:
Yeah. That's the right. It has consumed the sales funnel. And I want to be clear. Because I think a lot of terms that are used in the marketing space are interpreted differently by everyone kind of by nature of being marketers we're constantly branding things and naming things. And then they get shifted and changed and rebranded and renamed. So not everyone means the same thing when they say stuff. I've been using demand gen recently on purpose a little differently than I think other people do to just mean everything that you're trying to do with modern marketing, which is generate demand. We're no longer like pushing stuff. You want to like pull people in. You want them to be finding you and demanding, right? You want them coming to you. So and I think that's across the board, right?
Brian Jones:
It's in everything you're doing as a business. And that's specifically relevant here where we're talking about kind of changing the mindset of the sales funnel and including a broader swath of the company, right? Here, we're talking about marketing sales, which is kind of the traditional sales funnel. We still call it sales funnel. But really marketing kind of used to be at the top, fill the sales funnel. But now marketing, like we talked about in that previous episode is taking over steps, coming down the funnel, right? And now I'm just smushing up customer success. The concept of this whole other area that supports the business and helps grow business, right? That's no longer a cost center, I think is what we talked about before. Your customer support is the old brand name for what was a cost center. Now we've rebranded it customer success. And now it's a profit center.
Adam Kerpelman:
Right. And maybe it's a goofy like millennial concept or something. And we're just snowflakes, but like the idea that customer support matters and happy customers matter, doesn't seem to be that counterintuitive to me. But if you look at the traditional department structures inside of a company, they kind of treat it that way. Like, "We have all these customers and now we got to keep them happy. And that costs us money." Like SAS changes that because that it gets to be called demand gen is super intuitive in sort of a funny way.
Adam Kerpelman:
Where it's almost like, "Why did we trend so far away from thinking of it that way?" Because it's literally called supply and demand economics. Like that's market economics, it's all supply and demand. Like sales is about demand. Marketing is about demand. And then you're talking about a SAS product, which is subscription based. You also need sustained demand out of your customers or else you have what's called churn, right? Like you have attrition, and people fall off being customers, and now you're not getting value from them every month anymore. So the idea that's somehow not demand seems silly.
Brian Jones:
Totally. Well we've got a simpler business model. And I think a more traditional business and kind of more old fashioned, right. Is just sell a thing. And then you're kind of done. The smart sales team, right? There's the standard comment of like, who's your best customer? Or like, "Who's your best future customer?" It's a customer you already have. Right. That's sort of the smart angle there.
Brian Jones:
And that's what feeds into this, right? It's why you're seeing so many businesses, especially in tech, because it makes sense. But you're seeing this in more developed economies. You're seeing more businesses transfer into services like IBM, right. Used to be buy a computer from me. Now they're all services, right? So this is a bigger macro trend in finance and economies globally, right? But the micro trend that you're seeing for any individual business, especially one that's a services company, especially one that's a software as a services company, you see this transition to, we need sustained demand.
Brian Jones:
Like you said, that's a really good way to put it. And so you, all of a sudden have, if you start to merge these pieces and you think of them as a cooperative, right. Marketing is filling the funnel from the top and then qualifying, qualifying, focusing, focusing, driving the funnel shape right down to here are the people that are relevant. They're in market right now. They're worth putting a sales person on. You hit the inflection point right there in the middle of the sales process now. Right? And now a salesperson says, great. You've you've given me a person. They're interested in something. Then it's the sales. All of a sudden the funnel changes shape again, it starts to expand. A good sales person gets in there and says, "Hey, I see you're interested in this thing. I bet you're also interested in these things and these things."
Brian Jones:
And "Hey, let me get some other people at your company because I bet they'd be interested in these other things." So your funnel shifts there, right? And this should be in every sales funnel actually, right? It's not, don't just sell the thing they came in asking for, but then you tack on customer success and that long-term sustained demand. And the funnel just starts to expand again. And conceptually it's a little different, because I think a lot of people think of sales funnels as numbers, like numbers of customers or numbers of companies that are in your funnel. In your CRM.
Brian Jones:
And this is thinking of it sort of like that too, but also more in a pipeline sense, like in total dollar value, right? In both cases, you're driving it down as you focus, but then opportunities explode again, right? Long-term sustained demand growth within a company, more usage of your products, your services, as that company grows and expands, right? If you're a valued supplier companies buy things to help themselves grow. So if you're bringing value, your customers are going to grow and then your pipeline's going to grow. It's all a really interesting exploration of economics.
Adam Kerpelman:
Well, and I think part of what's the data-driven aspect of it is that it, the data, once you pull off. This is what we got to at the end of the other episode, once you pull this all together with the data, as the core layer for everyone, it also starts to sort of quantify aspects of the marketing side. That used to be the intangibles, right. It used to like there's marketing strategy, but then there was branding and branding was all about how do we look to the customer and then how does that make them feel? And then that kind of stuff. And then the idea is ultimately that you build loyalty for that brand and they trust your brand. And then the value of the brand is all this kind of stuff, right?
Adam Kerpelman:
That's amplified by a good customer experience. And ultimately there's answers for the marketers. And I said this last time, and I'll keep saying it again, like one of my greatest lessons as a marketer was when someone literally sat me down and said like, "Stop hanging out with the creatives at lunch. Like, I know that that's fun, but go hang out with the sales team and listen to the questions that the customers are asking them." And that's how you that's how you understand what messaging to put in to answer the questions, right? Once you get all of this stuff working synergistically as much as I hate to use corporate buzz term, but like sales knows and can quantify the questions that prospective customers are asking you that you do or don't have answers for. And the customers will always ask them in weird ways that you don't imagine, right?
Adam Kerpelman:
So that becomes data stream coming in from sales. And, and sometimes it's more quantified than others. And then out of customer success and customer support, you have the ongoing needs and questions of the existing customers who you also want to have happy, but also you get the stories about how it's working and the successes and things like that, where sometimes it's this emergent thing, where do they go? We didn't expect this, but people have been telling us that they're using the software for this. And it's great.
Adam Kerpelman:
And then the marketing team gets to go, "Oh, that's a good idea. Let's start telling people that they can do that." And then maybe they never even knew and everybody else can go, "Oh, that's brilliant also." And then like, it all filters down. And like the only disservice the bow tie analogy is that there kind of needs to be like a circle around it also to represent the feedback loop that this all creates, that is where the sales funnel way of looking at it fails because sales funnel ends at deal closed.
Adam Kerpelman:
And so then it's not really a representation of modern growth, like methodology or thought around modern growth strategies because it doesn't represent all of that sort of feedback. I mean, yeah, there's a little bit of like, "Sales should talk to marketing, blah, blah, blah." But mostly sales is like, "Get those leads, I want to close deals." But I guess that's the part that I think, again, it's exciting.
Adam Kerpelman:
And I said this in the last episode, I mean, shit. I said it in the highest sentence, like it feels almost comically like kumbaya, because what it turns into is actually everyone who has an interest in the ongoing demand for our product now has to work together because you put this data at the core where it's like, we got net promoter score over here. We have feature requests over here and we have the success of marketing campaigns over here, and they're all quantified and I'll put in a place where you can go, "Oh, here's an interesting trend."
Brian Jones:
Well when you have a mental model of the sales funnel, and I want to normalize that when you have a mental model of like demand gen that stops at a deal closed or thinks of things as individual deals, you miss out on a lot of the opportunity, especially in B2B marketing, which is where our products, service marketers. You miss out on all of the digital foundation that you just built for your demand gen or for your marketing, because you can use it again after the deal's closed.
Brian Jones:
And I'll give an example. We're software as a service product, we're data as a service, more specifically, but same concept, right? A website you can go to. We want users at companies with seats in our platform. They pay monthly subscription rates. And so it benefits us to have more people at a company using our platform. So just because we sold our platform to somebody at a target company, say we sell it to two people at their marketing department, but their marketing department's 500 people, it's a big company. We want to keep running ads to their entire marketing department. And in fact, maybe we want everyone who's a customer at our business, and this is one of our strategies. We want to be exposing them to our brand forever.
Brian Jones:
So everyone in the marketing department at every current customer of ours sees our branding because we're out there promoting, "Hey, your company's already using this, check it out." Like what a powerful way to be in front of someone and show them, you already have this available. And then you get to drive adoption, you get to drive upsell, you get to drive stickiness of your product. And all of that is post sale. It's post traditional sales funnel, but it's the best way to continue to grow a product pipeline.
Adam Kerpelman:
Right? Well, and that gets to the interesting part that's maybe more resonant for anyone who turned in for a data-driven marketing podcast, but like, it really, this is sort of what they mean when they talk about inbound marketing, but it's also missing a piece in my estimation of like what we're dealing with for the modern marketing here, which is exciting. The reason I get fired up is because before I was a marketer, I was content creator. And, before that I've always been, I was like literally a swim coach. Like I have the educator brain. I love a situation where baseline marketing is educating someone who didn't know about your product, about it and how they can use it.
Adam Kerpelman:
But there's this other loop now, which is helping customer success, then kick back to, can you say, "Oh, you can also use it this way." "Oh, your company's already using our product." But here's this department that maybe they didn't think so, they never told you, you could use it. But it's become sort of very much a pitch for what Netwise does, but there's a reason we're excited about it. You know, other people at the company might be able to use that for a different thing.
Adam Kerpelman:
And I'm in a cool position as a marketer, where if I can identify that opportunity from internal data based on existing customers, then I can go put together a project where what I'm pitching is a webinar to teach a different department inside of your company, how they can use our data without needing a data science, like how they can use our tool to do cool data science things without the data science team, instead of just writing more ad copy to like try to suck more people into the funnel I'm instead going well, I'm going to grow the knot of the bow tie or whatever we want to call it, like, because by essentially educating existing customers in an interesting way.
Adam Kerpelman:
And then I can see where if you don't think of things in terms of the bow tie, you might have a superior who would say to somebody like me, "That's not marketing, stay in your lane, that's customer success." But then if customer success, isn't prime to think about this the right way. Then ultimately you're leaving that possible demand on the table.
Brian Jones:
There's a reason why I think we, you and me, when we're talking about this stuff are so, I'm continually seeing my thinking move towards marketing as consuming all this stuff, or at least to make it a non-confrontational concept, the concept of marketing, of modern digital marketing. And I do kind of mean mostly digital gets to be an umbrella over all these things, because it's there to support. You can do all of these things because of those capabilities. And so you see that as this, as this progresses, everyone's familiar with a SAS based business model now, right? I learned about your company. I learned about your products. I decide I need it. And I don't ever talk to anyone. I just sign up with a credit card and start using a system. And now I'm a customer.
Brian Jones:
So I may never talk to somebody. You might upsell me. I might be a customer for 20 years. It might be thousands of dollars a month that's on a corporate credit card for big B2B products. And there is no traditional steps there, right? These are all modern concepts, right? Even, I mean, websites aren't that old, most companies didn't have websites even 10 years ago. Right. So, and in fact, I would argue, most companies still don't have websites actually, if you look at our data, that'd be an interesting one to examine.
Adam Kerpelman:
Remember when you had to call to order a pizza? I haven't done that in so long and it's so nice, but that was how it was when we were in college, you had to call up and somebody would go, "Yeah, what do you want?"
Brian Jones:
I remember calling the library with my mom to answer questions. Hey, we were talking about something and don't know the answer. And a librarian would look it up for you. It was a tremendous service and to be a public service. Anyway, different topic, different podcasts.
Adam Kerpelman:
So ultimately, the interesting thing I think with the demand gen bow tie, that is, again, always exciting, is like, we're not ultimately having to teach people about a new idea. I think it's just taking these pieces that already exist within most companies. And starting to try to explain that data-driven marketing is actually ultimately about demand gen, which is ultimately actually about all of these different units within a company talking to one another with sort of data at the core, and ultimately like being able to run tests and stuff, right. I mean, even within customer success, you can ultimately get to that place of does our net promoter score go up if we do more tutorial webinars once a week, twice a week, things like that that you wouldn't usually think of as marketing.
Adam Kerpelman:
But the reason that I think we call the podcast Data Driven Marketer and not demand gen something, something for one has a little bit to do with us, looking at the keyword space and deciding the marketer was a riper playground? There's like 10 different nondescript demand gen podcasts already, but also I think what, the way you always say it is like, I think this is a valuable way of framing this in the bow tie conversation. It turns out that the marketers have the intangible aspect of this skill set in a way that ends up, like you said, it's this umbrella thing. And, it's almost hard to talk about because I'm not trying to present my skillset as like the superior one or something.
Adam Kerpelman:
Like all of the other pieces of this have things that I can't do. I can't do what sales does. I know. I've tanked whole startups because I thought I could. And I just can't do it. And same with customer success. Although I've never gotten to the point of being able to tank a startup because I was bad at customer success, but ultimately the job of the marketer has always been, "Okay we just discovered a thing now, how do we go tell everyone about it?"
Adam Kerpelman:
And so I think the reason you end up with that particular umbrella is because customer success, sales, they all go and discover things either from the data or from their conversations or whatever. And then the next step is "Okay, how do we strategize that into demand and ultimately go out there and tell everyone about it." Right? So I think maybe it really comes down to the marketing department is probably the best suited to drive an initiative, to think in a bow tie way instead of a funnel way at a company like to drive that forward.
Adam Kerpelman:
And so the marketers hopefully listening to this at their companies are probably the best suited to say, "Hey, is it okay if I start setting up meetings with these guys and these guys that I don't usually, and then I'm going to come to you with a pitch, with the thing that's going to generate value that you might not traditionally think of as marketing?" But like they're uniquely equipped to do that pitch piece because it gets to that part of like, you need a story, you need the media, you need the channel that it's going to go through. Even if that channel is just internal email from customer success to our existing customers. Right?
Adam Kerpelman:
But then again, when you start to look at multi-channel marketing and the targeting that kind of products like Netwise will let you do it just turns into this amplifying, really interesting snowball thing. Because it's not just about emailing your existing customers. It's about emailing lookalike. It's about contacting and targeting lookalike audiences that are similar to your existing customers. And like, how would you describe that one, exactly, traditionally, because I just had to dip into the existing customer data set in order to quantify a thing on the other side of the funnel that just doesn't fit into that funnel mindset of thinking, "Where do we find the new people? I guess at 7:30 on a Tuesday watching the Next Generation on BBC America."
Brian Jones:
You're touching on a really good topic for another episode, which is how to extract this information, how to work with these other teams, how these teams work together. And, but specifically as a marketer, how do you engage with your sales team and your customer success team? And what does your sales team need to be enabled with to extract this intelligence in a way that's meaningful for the marketer? Because there's sort of a translation step in there that's very, very challenging to do. And it's because both people are thinking differently right now. They have very, very different jobs. So that's a great topic for another episode we should definitely do.
Adam Kerpelman:
Yeah. And then ultimately I think that'll be a good guest one. We'll bring somebody in from sales either at Netwise or another company, but there's a lot of interesting stuff to talk about there because when you're talking about rolling out new ways of thinking and that kind of stuff, there are interesting aspects that are like core to the data-driven conversation, but they come down to, how can you make data out of a process that has traditionally not been data heavy? And some of that's hard. Some of that's hard to human level stuff. Like you have to have sales to learn the value of recording certain things that they're not really used to recording. Because they're used to just kind of having conversations and then [crosstalk 00:28:20] whether it became a deal or not.
Brian Jones:
In the actual bow, right? The part that makes tying about tie difficult, that's where sales sits. That is the hardest part of the job, right? There's a reason that wasn't automated first, right? We automated the top of funnel first. That was where marketers came in and we had Google revolutionize the space and we have digitized information, but that human part, right? Where you're interfacing with customers, where you're talking about the business model and the pricing model and usage patterns and processes at those companies and how you fit in. That's so complicated. And to synthesize that into pure data is virtually impossible. We're not there yet. But to convert that into useful information to then drive intelligent marketing decisions that can then be tested and executed on with a data-driven mindset. That's where we sit.
Adam Kerpelman:
So that's what we're here for to continue to talk about this stuff. One little, ideally less than a half hour chunk at a time. So if you did this one, if you want to hang around for future conversations like that. Like. Subscribe. Whatever button does that kind of thing, wherever you're listening to this. Do that, that would be great. A review would be even better. This has been the data driven marketer. I'm Adam.
Brian Jones:
I'm Brian. Take it easy everybody.
Adam Kerpelman:
Forgot to say this is sponsored by Netwise.
Brian Jones:
Sponsored by Netwise. This is sponsored by Netwise. We're sponsored by Netwise.