Episode’s topic: Customer Marketing: What is it and Why It’s Important
In this episode, host Shahin Hoda chats with Steve Gershik, Advisory Board Member of Sales Lead Management Association (SLMA), about customer marketing and why B2B marketers need to double down on it.
During the conversation, Steve discusses the increasing need to drive loyalty and how customer marketing can play a significant role to achieve it. He also advises marketers to work with customer success teams and focus on delivering business value to justify their investments in customer marketing initiatives.
This episode’s guest:
Steve Gershik, Advisory Board Member at Sales Lead Management Association (SLMA)
Steve Gershik is a marketing executive and board advisor, based out of California. He was the first Chief Marketing Officer for inRiver, a Swedish e-commerce software provider. Before joining inRiver, Steve founded Koyne Marketing, a customer marketing and advisory firm. He has also worked in several global companies such as Eloqua, SiriusDecisions and 28 Marketing at Vice-President and C-level positions.
Connect with him on LinkedIn
- [02:16] Everything that happens after the sale is customer marketing.
- [02:46] There is a funnel beyond the funnel that marketers need to keep in mind.
- [05:38] Companies should make their customers successful for driving loyalty.
- [06:25] We glorify the hunt but forget about nurturing.
- [08:22] Start customer marketing with an audit of post-acquisition marketing effort.
- [10:20] The right organisation structure for successful customer marketing.
- [13:37] How to go about making a business case for customer marketing?
- [16:30] Extend the customer journey map to get the success team’s attention.
- [18:41] Marketers must demonstrate business value while spinning up new disciplines such as customer marketing.
- [20:24] Think about how customers can be made happy.
- [23:02] Advice for B2B marketers.
- [24:14] The exciting thing about B2B space – something new to learn every day.
Resources mentioned on this episode:
- About inRiver
- About the Sales Lead Management Association
- About xGrowth
- John Miller’s profile – Influencer quoted by Shahin and Steve
- 80% of the revenue is generated after the Initial sale
- Lincoln Murphy’s profile – Influencer in the customer success space followed by Steve
- Seth Godin’s profile- Influencer in the marketing space followed by Steve
- Never lose a customer again – Shahin’s recommended reading
- Made to stick – Steve’s recommended reading
- Tomas Tunguz – Influencer followed by Steve
- Byron Deeter – Influencer followed by Steve
- Bessemer Venture Partners- Organisation followed by Steve
- Salesforce.com- Organisation followed by Steve
- xGrowth’s guide to Account-Based Marketing (ABM)
About the Growth Colony Podcast
On this podcast, you'll be hearing from B2B founders, CMOs, marketing & sales leaders about their successes, failures, what is working for them today in the B2B marketing world and everything in between.
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Episode Full Transcript:
[00:15] Shahin Hoda Hello, everyone. Welcome to another episode. I'm Shahin Hoda with xGrowth and today I'm talking to Steve Gershik and experienced SAS CMO, Growth Marketing Consultant, Advisory Board Member at Sales Lead Management Association about what is customer marketing? And why should B2B marketers double down on it. On that note, Steve, thanks for joining us.
[00:37] Steve Gershik Well, thanks for inviting me, it's great to be here with you.
[00:39] Shahin Hoda It's an absolute pleasure. You know, I'm really excited to have this chat and get your input on that on the subject of customer marketing, because of your rich background. I mean, you know, for those who might not know, you were the VP of Marketing at Eloqua, Forrester and SiriusDecisions and a number of startups with super successful exits. Let's dive in. Let's talk about it. Let's talk about, you know, why is customer marketing something that marketers should pay more attention to?
[01:09] Steve Gershik Well, you know, after 20 years of focusing on the funnel, that was the first thing I learned about technology marketing was, it's all about net new customer acquisition, that marketing needs to prove itself within the organisation as not being just a cost centre. It's got to be a revenue centre. And so there's been a lot that's been written and that I thought about, and wrote about and practice around aligning sales and marketing. And a lot of companies are really good at creating these funnels, these demand Gen funnels.
[01:47] Steve Gershik And what I realised is particularly in SAS over the last 20 years, where recurring revenue is imperative because most companies spend first-year revenue from a net new customer on the acquisition, that there's got to be something more, there's got to be something that contributes intrinsically, to building out profit margin in the organisation and to building the reputation of the company. And increasingly, I came to a conclusion that is, everything that happens after the sale is customer marketing.
[02:21] Steve Gershik Those goals, those methods, those outcomes that are, you know, poorly defined, that oftentimes sales is not engaged with because after the deal closes, it's handed off to a customer success organisation. And so oftentimes, it's thought of as important, but not quite as important as sales. So my mission is really, to help marketers understand that there's this whole funnel, beyond the funnel, there's this funnel that really begins once the contract is signed, and somebody becomes a customer, or marketing can make a demonstrable contribution.
[02:58] Shahin Hoda Yeah, it's so true. I mean, I think even recently, it's becoming more and more important, as you talked about, where I think John Miller from Demandbase talks about it, right? Where he talks about, hey, 80% of the revenue comes after the purchase now, as opposed to before where I don't know, Oracle would go and sign a $20 million deal. And that, you know, most of that is locked-in already. Now, that doesn't happen anymore. You know, a lot of the SAS organisation that 80% of that is gonna come after a customer signs a deal, and it potentially could not come through.
[03:34] Steve Gershik And you know, and if you're lucky, it is 80%. But a lot of times, what we see is that not enough attention is placed on customer success, and customer loyalty, and customer advocacy. And helping customers reach the goals that they had, that they articulated to you during the sales cycle, with a set of common, scalable practices, the way that we have scalable practices in the area of demand gen. I mean, John and I are both veterans of that top of the funnel demand gen world and I think it's time to sort of turn our attention towards using some of those tools that we built over the past two decades, to help make sure that customers are successful. And in turn, our firms are successful by reaching their desired goals.
[04:29] Shahin Hoda Let's talk about that. Let's, well, I mean, actually, I want to ask you, why do you think that's not such a big focus at the moment? Why is it becoming important now?
[04:42] Steve Gershik Well, now, you know, in particular, in the time that we're having this conversation, you know, companies are going to be going through tremendous turmoil as the economy has ruptured over the last year, and nobody knows exactly what's going to happen in the future. Just reading a survey that said that marketers, in particular, see the economic recovery in this V shape, right? So that it's gone down, and then it's gonna come straight back up. And I think more pragmatic people are thinking, with a lot of uncertainty comes people insecure with their financial decisions, it's going to make it much harder to sell and companies are going to be cutting expenses.
[05:58] Steve Gershik And they're going to be cutting expenses primarily through consulting and technology, and eventually, people and that is going to have an impact on the worldwide economy. So right now, we need to embrace our customers, bring them closer, show that we're invested in them more than we want their money, we want their loyalty. And the way that we will earn their loyalty is by making them successful in whatever they were trying to achieve when they bought from us.
[05:58] Shahin Hoda You think this has something to do also with nurturing customers is not as sexy as landing new customers? I mean, you know, it's the hunt, right? The hunt is always exciting. And then you land it, land the customer, it might not sound as exciting, do you think that has anything to do with it?
[06:16] Steve Gershik I think that is the best, most succinct way. I've heard that idea put in, in a long time. It is because we've glorified the hunt, the salesperson, the hero that goes out there and bags the huge enterprise account, brings it back and everybody rings, a gong or a bell, and celebrates. And a lot of companies don't do that when a customer renews or when a customer buys something more, or a customer says something flattering about you on a review site that will ultimately get you more customers over the course of time.
[06:58] Steve Gershik So it's like sales is hunting, winning new territory and customer marketing or customer success is really about tending to and cultivating that conquered territory. new customer acquisition is really about establishing trust, making a promise. And customer marketing is really about deepening that trust, and delivering on that promise, and so on. Yeah, I've heard sales described as hard rock mining. And so extending that metaphor, I think that patient cultivation is really about customer success. It's about taking the people who have taken a professional risk, and personal risk by buying from you and making sure that you deliver on the promise to them and make them happy and successful at whatever they wanted to achieve when they bought from you.
[07:56] Shahin Hoda Okay, let's get a little bit practical. So let's say, I'm a marketer in an organisation, and I've been focused on the acquisition until now. And now I want to extend marketing's capability and marketing's influence into customer retention into customer marketing account expansion, so on and so forth. Where should I start?
[08:23] Steve Gershik So you should start by doing one thing, which will help you to set up your strategy for the future. And that is to do an audit of your existing post-acquisition marketing efforts. So what do you do after the contract is signed? How involved are you in onboarding programs? In making sure that customers get oriented to your product or to your services, and know what to expect from you. And conversely, you articulate what their specific goals are with your product so that there's no ambiguity about what they're looking for, in this audit, look at how you're doing in product marketing, or cross-sells or upsells, education, reference and advocate management.
[09:10] Steve Gershik So once you have an accurate picture of what you, where you are. Now, then you can take a look at some of the revenue implications, or the reputation implications, the retention implications that you might achieve by implementing some of these customer marketing practices as a way to make the business case for investment in organisations. You know, one of my friends at Forrester says most organisations they talked to are completely under-invested in customer marketing, and now more than ever, those investments need to be made or customers may turn, you may lose those customers and that has broad long-term implications for your business.
[09:54] Shahin Hoda Yeah, and I'm gonna come back to that and you're right. It's just so under-invested. I'm reading the book, never lose a customer again. I don't know if you've come across that book and it just blows my mind when he talks about how under-invested just like you said under-invested customer retention is and how much we spend on acquisition and not on retention.
[10:17] Shahin Hoda Now, in your experience, what are you know, what kind of structures have you seen that really excel in customer retention in companies, right? So, is there, is it when customer success reports into marketing, customer success has, you know, different metrics? Are there certain roles that the organisation creates that people are responsible for certain things that really bolsters and makes retention, a success? Have you seen trends when we're working with clients or different organisations?
[10:54] Steve Gershik Successful companies that I've worked with, and, and be a part of have marketers tied to post-acquisition customer marketing activities. So just like, you've got product marketers, or sales enablement, in some organisations, tied to the sales team responsible for bringing in net new logos, and managing that pre funnel that that famous funnel that we, that we all talk about.
[11:23] Steve Gershik There are organisations that have tied marketing to the customer success people, the account management people, the technical support people and customer success organisations that have a set of predefined marketing activities and marketers, organisations that tie marketers to customer success tend to be better at onboarding, better at articulating the value post-sale to remind customers of why they bought in the first place, and give them the tools they need in order to be successful.
[11:57] Steve Gershik So then they can come back with some of the traditional marketing asks like references and testimonials, and to have people in marketing specifically tasked with things that happen after the sale is much more likely to engender a successful customer marketing program, then to peel off a bit of time, or the least successful I've seen is to make customer success people do their own marketing.
[12:26] Shahin Hoda Good luck with that. That's a hard battle.
[13:23] Shahin Hoda Okay, so we talked about the audit, right? We talked about, well, we actually right now we spoke about structuring the marketing and customer success and all that stuff properly, then doing an audit, where would I go from there?
[13:39] Steve Gershik Yeah, so I think in order to make the business case to the organisation to invest in it, right, because this is still a new discipline certainly within SAS. Any companies that rely upon recurring revenue, need to be orienting their thinking around this retention, expansion and growth, churn reduction, and making sure that customers are getting the value that they expected. So making the business case is the next step. And it's really nailing down what in a firm could expect from investing in customer marketing.
[14:18] Steve Gershik And so that's everything from customer acquisition costs should go down. customer lifetime value should go up to key business metrics. Customer references should increase customer referrals should increase, a churn should go down. Annual contract value should go up with acts of advocacy on the part of customers. So writing reviews, which is becoming so important these days, online reviews, or social media engagement, or speaking on behalf of your firm at trade shows, events, webinars to the media, all of those things can be improved. And should be articulated as part of a business case.
[15:03] Shahin Hoda Right. Okay. Okay, that makes sense. And those are I mean, it definitely sounds like those are some of the key KPIs marketers should be looking at when making their case to the business. Tell me a little bit about the work that customer success needs to do with marketing, right? And how that relationship is going to look like? I've noticed in a lot of organisations that we work with that sometimes marketing doesn't even talk to customer success, right?
[15:34] Shahin Hoda That's like, it kind of goes through marketing. And marketing does a little bit of work with sales, especially with larger accounts. And then sales takes that on, and maybe it's like a, like an AE that owns that account. And the AE works maybe with customer success and that's pretty much it. How should marketers start working with customer success?
[15:57] Steve Gershik Marketers have this framework, this contemporary framework, it's in discussion a lot, and leading companies tend to have a fairly good idea of the customer journey. But with the way they think about the customer journey, it really ends with the close of the deal and the ringing of the bell. And so you've already got this inside your organisation, it's easy to engage with your customer success people and say, hey, look, we're leaving out the most important part of the customer journey.
[16:30] Shahin Hoda We've mapped out the customer journey before the deal is signed because that tends to be what we care about, what our salespeople care about, what we care about. But what the customer cares about is after they've handed over their money to you, are they going to achieve their desired outcome? And so by framing it in that way, and going to customer success, and saying, let us extend this customer journey map, all the way through from onboarding and the first use to measure time to, you know, first value, with the product, all the way through to acts of advocacy.
[17:10] Steve Gershik So customers are acting as your de facto salespeople, on your behalf, sometimes even unasked, bringing deals to you that can get their attention. And then by laying out what marketing can offer in terms of storytelling, customer understanding structures and frameworks that you've put in place around customer acquisition, that then can be applied to customer retention, and growth, customer education. You'll find that you've got willing partners in there if you approach them because they're often starved for ways to engage with customers and marketing can be a very helpful partner in doing that.
[17:54] Shahin Hoda Right. I see. I see. As marketing embarks on this kind of journey, what are some of the pitfalls a marketer should look for, right? Because I see that quite a lot. I mean, we, we kind of specialize in ABM, and they're definitely, you know, someone when embarking on ABM, there are definitely pitfalls that they have to be very careful of, because things could go wrong. Is there anything that you can think of the marketers should be aware of when they're starting to dig deeper into customer marketing?
[18:24] Steve Gershik Back then sales had no idea that marketing was something other than the arts and crafts department, actually, John Miller was the first person I have referred to marketing as, you know, as perceived as the arts and crafts department. And you know, demonstrating real business value is vitally important, especially when you're trying to spin up a new marketing discipline within an organisation.
[18:50] Steve Gershik I've been at startup companies, where the perception was that marketing was advertising and PR and that as long as you know, we got executives placed in articles and mentioned in the newspaper, that was perfectly fine. And it wasn't necessarily measured on tangible business metrics.
[19:10] Steve Gershik That is, even more, the case in customer marketing where these disciplines are not well-understood, or taught, as much as demand generation is, or inbound marketing has been, or now ABM is, or conversational marketing using chatbots is. Now a lot of that is really focused on top of the funnel. And so there's a lot of internal education and alignment and selling that needs to go on even before you implement this important customer program.
[19:40] Shahin Hoda Yeah, because it's really a change management element isn't there at the start,
[19:44] Steve Gershik Change is hard and when people's perceptions are rocked about what marketing is and what it does. I mean, we talk in the marketing industry about customer experience and journey management and a joined-up brand experience. from end to end, but so few companies are really good at doing it. And one of the keys to doing it well is to get internal alignment, through talking about what the benefits are and what the improvement is going to be to firm performance.
[20:15] Shahin Hoda Gotcha. Steve, if our listeners could only do one thing after listening to this interview, what would you want them to do?
[20:24] Steve Gershik Yeah, think about how you can make your customers happy. I like to start at the bottom, or the desired outcome and work my way up from there. So you know, typically when I work in an organisation or coming to a new company, I start at the bottom of their funnel, if I'm helping them with demand generation their sales funnel. Start with the close of the deal and work my way up from there.
[20:49] Steve Gershik So I would advise that you start with your desired outcome. Whatever you want from your customers, you want to sell them more, you want a higher customer SAT score, higher NPS score, you want to get more customer references, and more referrals, whatever your desired outcomes are, articulate those. And then you can work your way up to the sets of activities, tactics, and measurements that will help work towards those desired outcomes.
[21:17] Shahin Hoda Love it. Love it, Steve. Look, before we wrap up, I definitely have a couple of rapid questions on asked you. But before we wrap up, is there anything else on customer success that you think I didn't cover and it's important for us to talk about?
[21:31] Steve Gershik That's my favourite podcast question. And I never think about it for myself. Well, the conversation but I always ask,
[21:40] Shahin Hoda You got to ask Steve. You got to ask to see what's the, you can't leave anything on the table?
[21:45] Steve Gershik Yeah. And now I feel compelled to come up with an answer. I will do this. I don't often remember to do this but I will do this here on your show. One of the very best thought leaders, consultants that I follow in the area of customer success is a guy named Lincoln Murphy, who I met through a company he was at earlier in his career called Gain Sight. And I would suggest that you pick up a controversial guy, very smart guy in the era of customer success, not a marketer, but a very knowledgeable and experienced customer success guy. I would Google him and check out some of the writings that he's made because he certainly influenced me as a marketer.
[22:28] Shahin Hoda Fantastic. Well, you've already answered one of the rapid questions. So let's do this. Let's do this. All right. The first question that I have for you is, so let's try to keep this as short as possible. What is one resource book, blog, podcast talk, whatever it is, that fundamentally changed the way you look, and you work and live?
[22:48] Steve Gershik Fantastic. Made to Stick by Chip and Dan Heath, it's a great book on how to tell compelling stories.
[22:56] Shahin Hoda That's a good book. Actually, that's very true. If you could give only one advice to B2B marketers, what would it be?
[23:03] Steve Gershik Read something new every day. Read outside of your discipline, you will be amazed at how quickly you can synthesise information that doesn't seem connected to what you do every day, to what you do every day.
[23:14] Shahin Hoda What are the influences that you follow in the marketing space? I think you already answered this one.
[23:20] Steve Gershik Yeah, well, there's a ton, Seth Godin, for sure, just for inspiration, and for knowledge and insight. I follow a lot of the venture capitalist. So Tunguz is a famous SaaS investor, I follow a lot of his work. Byron Deeter, who's on the board of Eloqua, at Bessemer does a lot of great thought leadership. And gee, I am always closely tracking what some of these leading companies like Salesforce are doing in their marketing, because they've got a lot of great ideas.
[23:54] Shahin Hoda Just to make sure that the team can capture it for the show notes What was the name of the VC person? Tom?
[24:01] Steve Gershik Tom Tungz, T-U-N-G-Z. I guess I spell his last name.
[24:06] Shahin Hoda Gotcha. We'll find him. And then the last one is, what's something that excites you about B2B today?
[24:14] Steve Gershik Oh, I love that this is still a growing and learning discipline. Like it's not, finances is interesting and vital and important. I don't think there are as many innovations in that area of the firm as there are in marketing today. And that's what really excites me. There's always something new to learn. And that means there's always something new to teach.
[24:36] Shahin Hoda Steve, I really appreciate you coming on the podcast. I really enjoyed this conversation. I think the audience is going to get a lot out of it. And we'll put a lot of these comments and links in the show notes. But thanks a lot for jumping on.
[24:53] Steve Gershik I appreciate your thoughtful questions. It's great joining you.
[24:55] Shahin Hoda My pleasure. Take care