Welcome to episode thirty-seven of the SaaS Backwards podcast, where we interview CEOs and CMOs of fast-growing SaaS firms to reveal what they are doing that's working, and lessons learned from things that didn't work as planned. 

You can listen to the full episode directly below via Spotify, or visit SaaS Backwards on Buzzsprout or wherever you listen to podcasts.

A clean slate for demand generation

With MJ Peters, VP of Marketing for CoLab Software

Edited for clarity and readability 

Ken Lempit:
Welcome to SaaS Backwards, a podcast that helps SaaS CMOs and CEOs to accelerate growth and enhance profitability. Our guest today is MJ Peters, Vice President of Marketing at CoLab Software, a SaaS that helps engineers work better together. Hey, MJ, before we get started, please tell us a little bit about yourself and the company.

MJ Peters:
My name is MJ Peters. I am VP Marketing at CoLab. Before working at CoLab, I worked at Refine Labs, which is an agency that works primarily with series B, C and D venture-funded SaaS companies. And then before that, I spent about six years in product and marketing leadership roles in Halma, which is a European equivalent of a Fortune 100 company, a FTSE 100 company based out of the UK.

Ken Lempit:
I think we should give a shout out to Chris Walker at Refine Labs, right? Because boy, is he just hitting it every time. He does a great job and I love his content. So we'll give him a shout out.

MJ Peters:
Yeah. I met Chris when I was 22 years old and I remember thinking even back then, wow, this is the smartest guy in the room and turns out I was right. So there you go.

Ken Lempit:
Yeah. I think it's worth a shout out and listeners here should seek out his content because there's a lot of value there. Talking a little bit about CoLab, before we get too deep into the topics we agreed, maybe you could sort of tell us about the company, what it does, and sort of how you found them when you joined.

MJ Peters:
Yeah. So CoLab makes software primarily for mechanical engineering teams working on mechanically complex products. There is a big challenge in that space around giving people feedback and reviews on the engineering work that they would typically perform in a computer-aided design software. They're making a 3S model, this is something they're eventually going to build on the production floor, but lots of engineers need to collaborate and give each other feedback before locking that design in.

Unfortunately, where the design happens, it's all on a desktop of a computer, and so we don't get all the cloud-based collaboration that we have in like software engineering or graphic design.

CoLab is trying to bridge that gap for mechanical engineering teams. I found the company because I was networked in with the CEO and our content marketer on LinkedIn. But, for me, it was a sweet spot where I get to leverage my background in industrial and manufacturing, as well as all the experience I gained in B2B SaaS working at Refine Labs.

Ken Lempit:
That's great. And so what was the situation when you joined them? What were your diagnostics as a marketing person when you came in the door?

MJ Peters:
CoLab raised a series A round in November. So the company is transitioning from just having found product market fit into that scaleup phase that you shift into after that. So there were really two things to focus on from a marketing perspective.

The first is product marketing and I use the term product marketing quite liberally. This is positioning its messaging. In our case, it is category creation. And then there's also demand gen. So to put it succinctly, how does marketing start putting points on the board?

Those were my two main things I came in and focused on when I started about four and a half months ago.

Ken Lempit:
So it's still pretty fresh. That's awesome. You mentioned that you had to formalize the lead generation function there. Can you talk a little bit about what you found between lead generation and demand gen, and where this company was?

MJ Peters:
CoLab is committed to building demand generation and not necessarily doing what Chris Walker would tell you to not do, which is build lead generation first and then get in a situation where you have to pivot your whole marketing engine into demand generation.

CoLab has the advantage of being small still, so we’re going to build a demand gen first marketing model from the start. And what that means is the two things that marketing is measuring are SQLs (Sales Qualified Leads) and SAOs (Sales Accepted Opportunities) as opposed to anything farther up the funnel, like an MQL or content download or something of that nature.

When it comes to putting those foundational pieces in place for a demand gen program, really what had to happen was closing the execution gap between the plan and what the company at a high level wanted to get out into the marketplace from a messaging perspective and what the marketing team was working on every day.

That can be surprisingly hard to do, right?

You got to connect the dots all the way from strategy down to execution. So that's really where I've been focused in terms of demand gen as well as, of course, putting all the systems in place to be able to measure and track success.

Ken Lempit:
That's interesting. In a conversation I had earlier today, a person in a similar role to yours was saying that her CRM was not helpful in tracking these demand gen KPIs. How are you guys doing that?

MJ Peters:
I think our CRM, or in our case, our MAP (marketing automation platform) is helpful in tracking demand gen KPIs, but you do have to set it up right. I only recently started getting very useful data from our CRM because I had to put some time in to set it up correctly and then map it over to our CRM Salesforce and make sure that the two-way data sync was giving us good, clean data.

On occasion, you do have to work with the sales team because some of the data points that you're going to want to track, if you are a revenue-oriented marketer, need to be manually input by the sales team. So, that's not just sales data anymore. It becomes marketing data as well. So, that's one place where there might be a gap driving my CRM isn't helpful for me.

And then I think the last issue is just sometimes you don't have enough data in there for it to be very useful, which is what was happening with us, right? Until you're getting at least 10, 15 SQLs at a minimum every month and your dataset has four data points in it, so how useful is that really?

Ken Lempit:
Sure. What is the marketing automation in place with you guys?

MJ Peters:
HubSpot.

Ken Lempit:
So the HubSpot-Salesforce integration is working and you are able to get the data back to HubSpot to tell you what you need to know.

MJ Peters:
Yeah. Interestingly, HubSpot feeds useful data into Salesforce too. Before we were on Pardot and I had never really used Pardot, so I didn't really give it a chance to be fair. But we didn't really have that tight connection between marketing and sales, where you have the history of the source that the contact came from, when they converted, and where they said they found us.

That’s just that self-reported attribution--the “how did you hear about us” field. From there, what are all the pages that they looked at on the website? And then Salesforce will eventually take over when that becomes an opportunity, but there's a lot of rich contact data that tends to live in the MAP, and not the CRM. And we really weren't gathering that. So I think it's equally important to set up your MAP and your CRM correctly from the beginning.

Ken Lempit:
Makes a lot of sense. Let's talk a little bit about category creation here. So I guess people don't have solution awareness, right? They don't know that there's something out there for them. Is that what you've found?

MJ Peters:
Yeah. So there's certainly problem awareness. I talked a little bit about how engineers are designing in tools that live on their desktop and they don't get the benefit of collaborating. The way they feel that is they're up late at night, trying to take screenshots of models and dropping into PowerPoints, and then they're getting comments back and forth on PowerPoints, and then you lose track of the revisions, blah, blah, blah.

So there's certainly problem awareness, but lots of people have tried to solve this problem in lots of different ways and nothing has really stuck. We’re hoping to create the category that becomes a more permanent solution.

Ken Lempit:
And so you're integrating with tools they already use to give them that collaboration overlay. Is that a good way to say it?

MJ Peters:
Yeah. So they use computer-aided design as what I would call their system of execution. That's where they're doing the work. And then they're using product lifecycle management as their system of record. So think of that as like the Salesforce of a manufacturing company where that's the source of truth that your quality, engineering, supply chain, and manufacturing teams are all going to be working off of.
But then what is your system of engagement where you're actually collaborating and giving feedback on the work that was done in that system of execution? That's where the vacuum is in this marketplace.

Ken Lempit:
So does that triumvirate make sense to the engineering managers who would be prospects for you?

MJ Peters:
That is my job to make that make sense.

Ken Lempit:
Fair enough. And when we talked, you said that messaging was a big part of what you saw was necessary here. And you gave me your three-tiered model in the pre-call, want to walk us through that and the messaging that was missing at CoLab?

MJ Peters:
Sure. We use a very basic messaging pyramid. At the top of the pyramid, you have your brand messaging, you have messaging about your category. Basically, this is the “why the company exists” and the big shift in the world that you're describing that bred the need for your company to start and grow.

In the middle of the pyramid, you will have functional and emotional benefits. This is like the “what's in it for me” for the person at the operational level, that's going to buy your product.

And oftentimes this is where you get into the meat and potatoes of what's the ROI, which is commonly a question that people ask when they don't understand what your product is supposed to do. And then at the bottom of the pyramid, you have features, attributes, things about the product.

When I came to CoLab, I noticed that there wasn't a ton of messaging that was living in that middle part of the pyramid, because we needed another round of product marketing research to happen, where we really dug deep into the customer's specific business processes.

A lot of times functional benefits map directly to specific business processes. And if you, as a marketer, don't have a deep understanding of your customer and their business processes, it's hard to create functional and emotional benefit messaging that resonates. What you'll see is teams, i.e. sales teams, marketing teams, comms teams, jumping directly from that top of the pyramid, like brand category creation messaging right down to the features and attributes messaging at the bottom of the pyramid. And that leaves a gap for the customer where they feel confused. And it will often show up as what's the ROI.

Ken Lempit:
Yeah. I want to go right at that because ROI is often a key kind of lead gen tool, right? We've got the Forrester Total Economic Impact Report that people pay north of six figures to get generated as a lead generation tool ultimately. So I just want to understand, you feel like if people jump right to what's the ROI, they're not necessarily understanding what's really in it for them?

MJ Peters:
Yeah. I do think what's the ROI is a question that prospects sometimes ask to get you to leave them alone. They think, “I'm going to put this person on the spot. They're not going to have a good answer to the ROI question, and then they will realize that I'm not a good fit for this product.”

I think that's where that question comes from a lot of the time, especially when it comes up early in the sales process. If it comes up late in the sales process, then usually it comes in the form of the prospect asking you to help them prove the ROI. That's a different form of that question.

I think the question you must ask yourself if you're in a sales process: is this person asking me what's the ROI because they want to partner with me or because they want to get me to leave them alone?

Ken Lempit:
So that's a nice insight for folks and I think we've all experienced that, but maybe we haven't heard it said as clearly, that it's indicative that as marketers--we haven't dug in enough, right?

MJ Peters:
Yeah. It's especially critical in a market like the one I'm in, but in a market, like if you're marketing to the finance team or you're marketing to developers, where you as a marketer do not do their job or a job that is immediately adjacent to their job, you will often lack an understanding of what their job even entails day to day. If you're a marketer marketing to other marketers or to sales people, you kind of have an inherent understanding of what they're doing every day. So if you're not in that situation, then you do have to be a little bit more diligent about your research.

Ken Lempit:
So I think there's a corollary maybe here also that if you have some good understanding of the people who will be using your product and what their difficulties and frustrations, what their aspirations for frustrations are, then you can message things to them that are work effectiveness benefits as opposed to just cost saving.

MJ Peters:
Definitely. And I think coming back to that whole what's the ROI conversation, effectiveness tends to be a lot easier to build an ROI around than efficiency because efficiency always has a ceiling, right? You can only make something 20, 30, 40% more efficient, but you can make something 100, 200, 300% more effective.

Ken Lempit:
Sure. Makes a lot of sense. Also, it can be just more enjoyable to do the job in a fully remote work environment, which so many of us find ourselves in now, finding new ways to be connected, I think. It may be a soft benefit, but it's really valuable.

MJ Peters:
Yeah. We get people talking about that a lot. I think the world of building mechanical products and mechanical engineering has been slower to shift remote than other parts of the workforce, but people are aware of it. It feels like it's coming. People think it's really important to retain talent by offering that as an option and people are concerned about, hey, how are we going to adjust to this new way of working?

Ken Lempit:
Awesome. So let's move on. We were talking in our prep session about how you see yourself moving the go-to-market forward and how you're going to get in front of the customers that you think will matter to you. Could you talk a little bit about your choices in media and how you're reaching out to potential customers?

MJ Peters:
I think it's important if you have a small marketing team to not try to go after too many channels at once. That’s a principle that following here from the beginning. The channels that I'm choosing now are not to say that other channels are not worth pursuing. It's just that we've got to focus on just a few things and get them right and expand to other things as the marketing team grows bigger.

Early on, we have some SEO, some paid search, a lot of LinkedIn, and then we have a sales development team, and then we have our CEO's organic LinkedIn. And I would say that those are really our five primary channels that we're running right now.

Ken Lempit:
And when you say advertising on LinkedIn, what does that look like? What are your expectations in terms of outcomes there?

MJ Peters:
We run a lot of what I call in-feed storytelling. So this is a principal my friend, Chris Walker talks about quite a bit.

• Can you share that messaging?
• Can you share that perspective?
• Can you tell a complete story inside the feed without somebody having to click to go to a website?

And the reason that you do that is because the click-through rate on LinkedIn is about half a percent, which means that if you're not marketing at all in the feed, then you're missing the opportunity to market to 99.5% of people. So it's a challenging thing to do. You have to take static image or a little carousel and really try to tell the story of quite a complex product.

As a result of that, we're iterating very fast on creatives.

We are kind of starting with our product marketing messaging, that middle of the pyramid messaging that we worked on right away when I came in, that was based on customer research. Then we translate that into a bunch of different variations of copy, different variations of visuals. And then we usually run a thematic campaign tied back to, again, a business process.

We'll do this for two weeks at a time. Primarily we're looking at click-through rate as the leading indicator. And then we will look at inbound SQLs, inbound SAOs as a lagging indicator.

Right now, the focus is on fast experimentation because we need to figure out which messages resonate best with the market, which use cases get people interested as opposed to other use cases where maybe the interest is not that high.

Right now, we have a looming fear of a recession. So, for example, one of the use cases that seems to be working well for us is cost reduction. How can you design cost out of your products? That's a good hook right now. We’re doing a lot of testing.

And once we get the lagging indicators around SAOs and cost for SAO in a place where we feel confident, then that is when we will scale up spend on that channel.

Ken Lempit:
And what do those creative units look like? Just so in case people don't know, I think it's fair to try and share that a little bit.

MJ Peters:
Yeah. It's a square image. Static image is probably our biggest type of creative that we do. Usually it has five or six words in the image itself. That's really as much text as you want to use. And then sometimes you can do a visual from the product, or sometimes you do a little bit more of an abstract visual. So something we've done recently, obviously our product is around collaboration and making it more effective and fast and streamlined. So the alternative being like emailing endlessly back and forth.

MJ Peters:
So we kind of used the imagery that you might see in like a cluttered email box of people going back and forth on the same topic again and again and again, like same subject line again and again and again, we kind of use that as a background image to our headline and that's been working pretty well for us. So really, I think what I've learned the most over the last eight weeks of this rapid experimentation is the visual, if you can get it right, unlocks a lot of results. I was pretty fixated on the copy in that ad at the beginning and copy matters, but if you can be creative with the visual, it unlocks another level of performance.

Ken Lempit:
And you mentioned that you are using some paid search. Is this a category with active search?

MJ Peters:
I wouldn't say it's a category with active search, so our paid search strategy is branded. We do a little bit of what I would call redirecting demand onto our product.

While nobody is actively searching for our category, which is Design Engagement System yet, that is a goal of mine to create more search traffic for that term, there are people searching for something that would imply that they have the problem we can solve, or that they're looking for an alternative to their current toolset because they are finding that their current toolset has a specific gap.

It'll be like PLM, which is a toolset that they have and which we're not aiming to replace collaboration, right?

Clearly, they like their toolset, but they're having a collaboration gap. If we can redirect the demand for, "I don't know what I'm looking for, but it's something around PLM and collaboration," onto our product and educate them around design engagement system, that's kind of how we're trying to use paid search.

Ken Lempit:
Makes sense. I think it was an unusual situation that you came into where the leadership in the organization understood demand generation. How did they come about that understanding and what were they thinking?

MJ Peters:
They follow Refine Labs and Chris Walker on LinkedIn. So, that had a big influence on their thinking. And then we have a really smart guy on our board who works at one of the VCs that led the last round. He comes from the fundamental, product marketing, positioning messaging background.

So between the way Chris Walker talks about demand gen and how being too quantitative can really lead you astray and our advisor on the board who really values customer research, positioning messaging, getting all of that right, that's kind of how the worldview of marketing at CoLab was shaped. It was a big reason that I was really excited to join the team.

Ken Lempit:
I think it's really interesting and a fair number of the people we speak with are either new in the job or are about to go on the hunt. I think there's some opportunity maybe for folks as they're looking for their next career move to make sure they ask those kinds of questions. Too many marketing leaders we know get stuck right on the hamster wheel of lead generation. It's like they come in and it's 11 fingers needed to plug the dike. And I just wonder how common that's going to be that people have this demand gen mindset in leadership. Honestly, I haven't heard it too often. I don't know what your experience is with that.

MJ Peters:
Yeah. I think I am very fortunate to have found a company that was already totally onboard with the demand gen mindset. I think there's another category of companies out there that don't know really what they're looking for, but they're open-minded. The right marketing leader could also come into a company like that, that's open-minded and influence that team to adopt more of the demand gen focus.
It’s about understanding where you're at, do you have a company that's all about lead gen? Do you have a company that's not quite sure if we're open-minded, or do you have a company that's demand gen focused?

And know that if you're not about lead gen, you should avoid a lead gen focus company. If you are going into a company that's open-minded, just know that you're going to have to influence people and it will probably slow you down and just set expectations appropriately there. But I do think it's quite possible to make a huge impact at one of those companies that's kind of in the middle.

Ken Lempit:
You touched on this early in the conversation about whether you entertain lead generation while you're trying to build your demand gen world. Could you just sort of expand on that? Because it's a theme that comes up pretty frequently for us.

MJ Peters:
Yeah. So I'm in a fortunate position because we're really just building everything for the first time. And so we have the opportunity to build just 100% demand gen from scratch. Not everybody is necessarily in that position. So if you're coming into a company that has raised series C funding and is already spending $250,000 per month, most of that is on lead gen, then it's a little bit terrifying to say, we're going to shut off the $250K per month because you probably are getting some opportunities from that.
And so if you can't replace that next month with demand gen, which it takes some time to build this thing, so you're probably not going to be able to, then it's hard to justify shutting the whole thing off.
The leaders that come into a situation that's more like that really have this delicate balancing act that they have to figure out.

Alice de Courcy at Cognism has spoken a lot about how she made that shift, but it was a delicate operation that I believe took her many months to achieve.

I think it points to the great opportunity you have if you have a blank canvas, like we did at CoLab to really build a 100% demand and focused engine from the beginning. Now, if you are doing that from the beginning, as I said, it takes some time. So you're going to have to endure three, four, five months of pretty light inbound because demand gen happens more slowly than lead gen, because you're measuring lagging metrics, not leading metrics. And so you have to have the stomach for that. You have to set expectations appropriately.

Ken Lempit:
Yeah. We're not just calling everybody who clicks on an email or downloads an ebook, a lead, right? We're just pursuing them very differently. In fact, why don't we talk a little bit about that motion? So if I'm in your target space and I do engage with some of your content, what does my experience look like after that? Because you're not going to send an SDR to call me within five minutes of my download, right?

MJ Peters:
Yeah. So we do have SDRs. So they might serendipitously call you within five minutes of you downloading something, but it wasn't because we told them to. What you would probably have happen is, at this point, if you're an engineering leader, you may have seen something like 10 or 12 different CoLab campaigns.

Maybe you didn't see all of them. Maybe you only saw some of them. Maybe you clicked on one of them, right?

But by the sixth or the seventh campaign, we'd be hoping that you're starting to recognize patterns. Maybe you've thought about this while you're walking your dog. Maybe your boss has come up to you and said, "Hey, our CEO in the recent shareholder meeting said that we need to cut our time to market from 24 months to 16 months. You got any ideas about how we can do that?

And because you've seen our messaging repeatedly, you say, "You know what? I see a company that's talking a lot about that. Maybe I'll come and reach out to CoLab." So by the time they reach out to CoLab, they've done like 55, 60% of their buying process.

What we're seeing quite often is you'll have an inbound meeting booked from somebody who's done a lot of research already. And on their first call with the sales rep, it goes straight to sales accepted opportunity.

Whereas with the sales development source leads, sometimes you're having multiple meetings before it's accepted into the pipeline, because you need to align on what are we doing here. Do we have a shared goal? Do we understand your pain?

Whereas the inbound person's going to come to you with pain, with a goal, they're going to share it. They're going to be more proactive and that's going to be a high velocity deal.

Ken Lempit:
So how long do you think it takes to really get to a cruising altitude on demand gen in this space? What is your estimate?

MJ Peters:
A lot of people will say two sales cycles. Our sales cycle is like five months and it's been about four and a half and we are starting to see a little bit of acceleration. So I'm hoping that we can buck the trend and pull it in faster than two sales cycles. But I would say no shorter than one sales cycle to really educate people and start seeing these inbounds that are converting from meeting booked to SAO in a single call.

Ken Lempit:
I want to move on to one last topic with you, which is how you're structuring your resources. Because I know that you have some in-house resources, but you mentioned it's a small team. How do you make the decisions on what you're going to outsource and what kind of functions are you outsourcing?

MJ Peters:
So anything that requires close proximity to the customer, I believe needs to be in-house and anything that relies more heavily on best practice or technical expertise or competency with the tech stack, I think you can outsource.

For me, product marketing must be in house. Content, I think is a lot better in house. SEO for that reason, because my approach to SEO is quite content driven, I think it should be in house. But we are having an agency, for example, from paid media, LinkedIn for us, Paid Search, we work quite closely with our agency. They do the creative, which I think you could make an argument that should be in house, but we work hand in hand with them and they do a good job for us.

My team right now has a digital marketing manager who owns the website, SEO Marketing Ops. We have a content marketer who does all of our writing, including the SEO writing. And then we have a brand designer and then I do the product marketing as well as sitting in the VP Marketing seat. At some point we'll probably get a product marketer in here. And then our agency is a small shop that focuses on paid search, paid social, and creative specifically for paid social.

Ken Lempit:
Interesting. And was that a change from what they had before or did you pick up pieces that they already had?

MJ Peters:
When I joined the company, they had the digital marketer in place. He was occupying more of a marketing generalist role, but digital marketing was definitely his strength. So moving him where he could focus more on that role was one of the moves I made early on.

The content marketer is doing a very similar role that she was doing before, and there was no product marketer on the team. So that's why I became the product marketer.

And then I brought a brand designer in before they were kind of splitting a designer between the product design team and the marketing design duties, which is tough from an accountability perspective. They had evaluated a couple agencies, but they weren't actively using anybody. So I brought one in that I know and trust.

Ken Lempit:
And was there an adequate budget in place for what you need to achieve or did you need to make a case and negotiate for a budget?

MJ Peters:
There was a pretty adequate budget in place I will say. So at the beginning I had a 12-month budget. I wasn’t spending my first three, four months a monthly rate that would be equal to that annual budget divided by 12. I'm spending below that with the idea being once we prove some things out, you need enough budget to experiment with, but once you prove some things out, then in the back half of the year, you spend at a higher rate because you're spending against programs that you've proven to be effective on a small scale.

Ken Lempit:
I love that idea. And actually if you get to a point where you're showing good results on less than your prorated spend, you can really turn it on as you know what to do.

MJ Peters:
Yep, exactly.

Ken Lempit:
Sounds pretty smart. We should check in with you in about six months and see how things are going.

MJ Peters:
Yes. I hope they're going really well and I'm sure I'll learn a bunch more things between now and that.

Ken Lempit:
Well, MJ, thanks so very much for being on the podcast. If people want to reach out to you with any questions, how can they best connect with you?

MJ Peters:
You can find me on LinkedIn, MJ Peters, and I am also on Twitter with slightly more unfiltered takes.

Ken Lempit:
Awesome. People want to reach out to me on LinkedIn, it's LinkedIn/in/KenLempit. And if you haven't subscribed yet to the podcast, please do so wherever you get your favorite podcasts. Thanks again, MJ, this was a great episode. Appreciate your time.

MJ Peters:
Thank you, Ken, for having me.

Thanks for listening to the SaaS Backwards podcast brought to you by Austin Lawrence Group. We are a growth marketing agency that helps SaaS firms reduce churn, accelerate sales, and generate demand. Learn more about us at www.austinlawrence.com. You can email Ken Lempit at kl@austinlawrence.com about any SaaS marketing or customer retention subject. We hope you'll subscribe, and thanks again for listening.