Paris Childress is a passionate digital marketing expert who has dedicated his career to helping businesses succeed in the online world. He's the founder and CEO of Hop Online, a performance marketing agency that specializes in serving SaaS (Software as a Service) companies. Originally from New Orleans, Paris moved to Bulgaria in 2005 and established his agency there in 2009. He has a wealth of experience in paid search, paid social, SEO, and content marketing, and he's continually exploring new ways to help businesses grow sustainably and profitably.
Attention, seasoned digital marketers!
The marketing landscape is in a monumental shift. Imagine a world where data science integrates seamlessly into your strategies, as third-party cookies make way for first-party data.
To stay ahead, we invite you on a a peak into the future of B2B SaaS marketing. To create a strong brand preference that powers growth entrepreneurial marketers need to build a brand bias that accelerates success.
Join Leanne and Paris on Markigy as they discuss how to:
For sustainable business growth, companies must adopt a customer-centric approach that puts the customer at the center of the buying journey. This involves integrating marketing and sales into a single growth function that leverages data insights to drive customer acquisition and retention.
Embrace data science, leverage first-party data, and stay ahead of the curve with the guidance of Paris Childress. It's time to propel your marketing strategies to new heights and achieve remarkable results.
The actionable takeaways mentioned in this episode include:
To learn more about the science of Marketing strategy and the art of business, subscribe to Markigy with Leanne Dow-Weimer.
This episode was produced and brought to you by Reignite Media.
[00:00:00] Leanne: Good morning. My name is Leanne [00:00:05] and we're here on the Markigy Podcast. Joined with Paris Childress, who is [00:00:10] a performance marketing agency founder. He is a podcast host [00:00:15] at Googler and just incredibly talented. Thank you so much for joining me [00:00:20] today. Uh, will you tell us a little bit about.
[00:00:23] Paris: Sure. Thanks for having me on, [00:00:25] Leanne.
My name is Paris and I'm a founder and CEO of a [00:00:30] digital marketing agency called Hop Online, and we've been around since 2009. [00:00:35] We're based in Bulgaria and I'm not Bulgarian. I'm originally from the US from [00:00:40] New Orleans, but I came out here in 2005 and then a few years after. [00:00:45] Launched an agency here and we primarily serve SaaS, [00:00:50] software as a service businesses with, uh, pro with performance marketing.
So things [00:00:55] like, uh, paid search, paid social, s e o content marketing. And [00:01:00] we've got an amazing team. Mostly Bulgarian, but a few other non Bulgarian. [00:01:05] And personally, I've been passionate about marketing and digital marketing my whole [00:01:10] career and I always love to, to talk shop.
[00:01:14] Leanne: Great. Well, [00:01:15] thank you so much for, for joining me.
Uh, so since you're in the, [00:01:20] the paid kind of acquisition mostly area, what do you think the [00:01:25] biggest, we're just gonna start off strong, right? What are the biggest obstacles that [00:01:30] SAaS have right now, um, in order to acquire customer acquisition in [00:01:35] this channel or these channels?
[00:01:37] Paris: Mm-hmm. Well, first, if we look at the [00:01:40] macroeconomic environment, it's much more challenging now for SaaS [00:01:45] companies to raise money at the valuations that they were getting a [00:01:50] year to two years ago, especially during the pandemic.
So there is a lot more [00:01:55] pressure, uh, from. Investors and owners [00:02:00] to, uh, there's no more growth at all costs, like it was. So that means that [00:02:05] acquisition marketing now for SaaS companies has to be much more accountable, and it has to be, [00:02:10] it has to show profitability and sustainability. So [00:02:15] this is something that's, that's new.
And then the SaaS model itself being a recurring revenue [00:02:20] model that's based on subscription-based revenue. That's als, that also presents a challenge for [00:02:25] acquisition marketing. It's not always clear how much you can [00:02:30] afford to pay to acquire a new customer because you don't know the future [00:02:35] value and the future revenue streams from that customer, cuz you have churn rates [00:02:40] and lots of other stuff.
You have different pricing and upsell opportunities that may or [00:02:45] may not happen over the lifespan of that customer and. It's [00:02:50] very difficult to know how much of your acquisition budget you're wasting on [00:02:55] low quality acquisitions that might churn very early or might never be upsold. [00:03:00] And you might also be missing opportunities to acquire high value [00:03:05] customers for the same reason.
So you've got micro, uh, you've got the macroeconomic [00:03:10] challenges of, uh, SaaS companies needing to prove more and. [00:03:15] Of sustainability and profitability with acquisition marketing. And then the mi, the, the [00:03:20] model itself, uh, presents challenges for identifying the, the true cac, [00:03:25] the, the CAC ceiling, so to speak.
[00:03:27] Leanne: Yeah, absolutely. And you [00:03:30] know, when you, when we talk about how there's more pressure to be efficient with [00:03:35] money, uh, one of the first things that come to mind is just that there's kind of [00:03:40] almost different brackets of founders, right? There's the like, really like [00:03:45] business savvy, like, you know, Uh, [00:03:50] serial entrepreneurs almost.
And then there's people that are, are, or [00:03:55] organizations that are maybe less, um, that are more [00:04:00] focused on the dream. Would you say instead of the, the, [00:04:05] you know, the profit and loss statement, um, mm-hmm. [00:04:10] That's just kind of my personal interpretation to me. I was never [00:04:15] great with, you know, spending money to spend money.
I'm, I got, I'm very like [00:04:20] scrappy found founder. Mm-hmm. Like startup kind of mentality where every dollar [00:04:25] accounts, if it was my money, how would I spend it? But um, that also limits like the [00:04:30] cool stuff you could do. So yeah, hopefully people are able to find a balance. [00:04:35]
[00:04:35] Paris: Yeah, well, the dream of being a unicorn [00:04:40] is unmistakably, tantalizing, let's say, [00:04:45] because not many people in in this world can achieve that.
[00:04:50] And, and chasing that oftentimes could lead to maybe not the [00:04:55] best, um, long-term decisions for the business. But [00:05:00] there, there is a, a good chunk, especially of SaaS startups that if they. [00:05:05] Entering a new space, creating a new category, they're getting a lot of investor interest, and the [00:05:10] valuations are based on their revenue or revenue multiple.
Then those [00:05:15] founders, they want to exit and become maybe billionaires, and [00:05:20] that means that they've got to grow revenue as fast and furiously as possible no [00:05:25] matter what. And if the investors are valuing them, valuing them on that revenue, [00:05:30] um, that might not lead to the best. Decisions on profitability and sustainability, [00:05:35] but, um, they might be saying, Hey, in, in five years, five to 10 years, [00:05:40] um, we're out.
And that's, that's what we need to get to.
[00:05:43] Leanne: Fair enough. The, it's not my [00:05:45] problem. Problem. Um, mm-hmm. So, you [00:05:50] know, while we're talking about just how the macroeconomics have changed in, in [00:05:55] kind of the different, almost like overarching strategies to how people [00:06:00] present or, or look at their businesses. You know, what, how have the [00:06:05] fundamentals in the B2B SaaS marketing, like how has that changed for [00:06:10] agencies and for, for the organizations that.[00:06:15]
[00:06:15] Paris: I think more and more there is an emphasis on identifying, calculating [00:06:20] and predicting lifetime value. Because unlike with [00:06:25] e-commerce, uh, where you have a transaction and you, you can have a pretty concrete return on ad spend based at [00:06:30] the transactional level with sas. You, uh, you need, you [00:06:35] really need to be building out cohort.
To determine lifetime value, to [00:06:40] calculate lifetime value, because that is the, the metric that really proves that you have [00:06:45] a sustainable business if you can grow and if you can retain customers over several [00:06:50] years and build a loyal base of customers are willing to keep paying those subscription [00:06:55] fees and also have some upsell pathways for them.
That's the key [00:07:00] for, uh, I think for a sustainable B2B SaaS business. And now in this, in this macro [00:07:05] environment. LTV as a KPI is becoming more and [00:07:10] more critical even for investors. And I, I think [00:07:15] also when we go back to the conversation around customer acquisition cost, a lot of investors [00:07:20] now are requiring.
Companies to try to maintain a [00:07:25] ratio of between L T V and cac and, and the most common one that we [00:07:30] see is, is three to one. That which means that you should be [00:07:35] acquiring no more than about one third of what your projected L T V is for that [00:07:40] customer. I, I think that's a much more responsible way to [00:07:45] grow, uh, other than, than simply pumping up revenue as fast as possible because [00:07:50] that ensures that you are growing profitably and sustainably.
[00:07:54] Leanne: [00:07:55] Yeah, and you could even argue that that supports the, you know, product market fit. Right? Because [00:08:00] if you don't have a great fit, then your ratios are just gonna be all wonky and [00:08:05] you're just, you're gonna churn people like crazy.
[00:08:08] Paris: Yeah. And Leanne, there's [00:08:10] another challenge too, that if you're one or two years in to a new SaaS business, [00:08:15] Well, you haven't had, even your, even your newest cu, well, I'm sorry, your [00:08:20] oldest or your, some of your first customers haven't aged long enough to really determine [00:08:25] what is lifetime value, because maybe you're only in a year two.
And then the average life, [00:08:30] life, uh, would be five years or something. And so there you also need to [00:08:35] substitute something and, and in some cases that would. Annual contract value, let's say, [00:08:40] and and investors that are investing in really early stage stage startups [00:08:45] that won't have access to reliable L T V data, they need [00:08:50] to fall back on something else.
And I think that that is annual contract value in most cases.
[00:08:54] Leanne: [00:08:55] Yeah, agreed. Because, you know, and even ones that, that had to pivot sharply [00:09:00] during Covid, you know, their previous L T V may not be relevant anymore and it could [00:09:05] lead them astray if they were, you know, um, and some of it has rebound by this [00:09:10] point.
You know, uh, what comes to mind would be like, uh, events, [00:09:15] uh, event marketing, right? Because there was that boom of online [00:09:20] digital events and now people are very eager to go back to in-person. [00:09:25] And so their, their whole bell curve is, [00:09:30] is quite, yeah, quite disrupted. Um, [00:09:35] so. When, when we talk about coming up with these [00:09:40] metrics and the measurability and, you know, the, the length of the organization's [00:09:45] history definitely impacts that, but also their ability to figure it out.
In the [00:09:50] past I've worked with companies that were, the ones that I typically work with are not [00:09:55] the more mature ones. They're the starter outers, and. Are struggling to just [00:10:00] get things organized to make sure that they're measuring [00:10:05] accurately these things. Um, now they may, [00:10:10] where I'm trying to get to with this is that, [00:10:15] Because earlier on, like maybe you're building out the, the correct [00:10:20] workflows in the C R M or making sure you're cleaning clean out data.
But when we start [00:10:25] to talk about data is that some of these organizations are too early to [00:10:30] even have their own interior data functions. And so one [00:10:35] of the things that you brought up in our conversation outside of this was, you know, the role that data science [00:10:40] plays in all of this. Mm-hmm. Could you talk a little bit about.
[00:10:43] Paris: Absolutely. I think we're [00:10:45] now entering a phase of marketing where data science will become more and more [00:10:50] integrated into marketing because what data science can do, [00:10:55] well, l let's put this in context. Um, third party cookies for, for [00:11:00] those who are not aware, th they're due to be phased out by Google and, and, and Chrome [00:11:05] sometime next year.
And, and Google has made this announcement and has pushed that date out a couple of [00:11:10] times. I'm relatively sure at this point that they've got to deliver on [00:11:15] that next year in the absence of third party cookies, first party data, [00:11:20] which means that this is the data fully controlled by the brand or the marketer.
That's the data that [00:11:25] will have to fill in the gaps that are left by, in the absence of third party cookies. So [00:11:30] companies will need to leverage their first party data and put that data to. For marketing, [00:11:35] and I think that a lot of companies aren't even fully prepared for that, for that near future. [00:11:40] So what does that practically mean and how does data science fit in?
Well, if you could, let's [00:11:45] say, if you can use data science and things like machine learning on that first [00:11:50] party data, you can do a lot of interesting things. And I'll give you an example, something that we're working on. [00:11:55] Which is that we are taking, uh, clients' first party data and [00:12:00] we're, we're running machine learning modeling on that data to try to predict the lifetime value, the [00:12:05] l t v in around a seven day window around the [00:12:10] acquisition.
So take for example, a SaaS company that funnels people into a free [00:12:15] trial or a free. Product-led growth motion, and in those first seven [00:12:20] days, there's a lot of data that we can capture when we acquire that new customer. And then there's [00:12:25] also data that we can observe around their behavior and their use of the product.[00:12:30]
So believe it or not, even in those few days, there's a treasure trove of first party data. [00:12:35] That can be put to use, that can be modeled with machine learning and data science in order [00:12:40] to predict lifetime value with a pretty high degree of accuracy. And I'm talking about [00:12:45] 90 plus percent accuracy. Now, why is that important and what can you do with it?
Well, then you [00:12:50] can take that predicted L T V, and you can feed it back to Google Ads, which [00:12:55] in some cases, that's one major acquisition channel in the form of an [00:13:00] offline. So what you're doing is you're creating your own conversion event [00:13:05] using this predicted L T V, and then you're telling Google Now, instead of [00:13:10] getting me X number of leads at this fixed price, I want you to maximize the [00:13:15] value.
Or I want you to give me a three to one ratio or a 300% target ROAS [00:13:20] return on ad spend. Against those predicted values that I'm sending back to you. [00:13:25] And that is not only is that gonna be a fair substitute for a third [00:13:30] party cookies being gone, I think that's gonna be a whole level higher [00:13:35] than the efficiency.
And, uh, and the return ca the, [00:13:40] the potential returns that you could get from third party cookies. I think it's gonna be a game changer. [00:13:45] And we're still in relatively early stages with. But that's one example. [00:13:50] And there's lots of other examples of what you can do with, with that data, but a lot of it has to [00:13:55] do with data science, really.
And that's not something that [00:14:00] I, I'm not a by, by nature, by a trade. I'm not a data scientist, but I, I do know [00:14:05] what it can do. And I do think that data scientists are gonna move from the [00:14:10] traditional roles of being connected with finance or other parts of the business to, to, to start [00:14:15] working with marketing and first party data.
[00:14:18] Leanne: Absolutely. Um, I couldn't agree [00:14:20] stronger with that. I think that one thing that we're gonna see in the future is that, um, [00:14:25] as. People in the cohort as marketing professionals move [00:14:30] up the ranks is we're gonna see a requirement for the technical capabilities to [00:14:35] understand what data science can do, what an API can do, what, you know, [00:14:40] understand the nuts and bolts of it in a much more sophisticated manner.
Um, [00:14:45] and, and that's one, one bet that I'm hedging. You know, I've spent some time dedicated to [00:14:50] learning more data science and more data analytics. [00:14:55] It's just such a useful, um, and necessary thing to understand as [00:15:00] you progress towards leadership. If your C m O doesn't understand [00:15:05] how, like, what the capabilities are, they may miss an opportunity to ask for it.
[00:15:09] Paris: [00:15:10] Um, absolutely. Even at a, at a simpler level, Leanne, if, if you're a B2B SaaS [00:15:15] company that you think maybe we don't have the size, the ad spend or the, the, the [00:15:20] sheer volume of data to do real data science work. Even [00:15:25] at a minimum, you should be connecting your C R M data to your marketing platforms. [00:15:30] You should be sending tho that data so that you can really tear down that silo the wall [00:15:35] between marketing and sales.
And you can make marketing accountable for driving sales pipeline [00:15:40] by having flowing your CRM data into platforms like Google Ads. [00:15:45] And even that, that's in some way it's still kind of connected to data [00:15:50] science because Google's own bidding algorithms are driven by data science [00:15:55] and machine learning. And when you give better quality data to those algorithms, they [00:16:00] will in return, they'll give you better results.
And that's, that's also backed by data [00:16:05] science.
[00:16:06] Leanne: Yeah, absolutely. I agree a thousand percent that you have to [00:16:10] work the algorithm instead of letting it work. Because [00:16:15] it'll, we, we know it will. Um-huh. If, if given the [00:16:20] opportunity, Google, this large corporation would more than be more than happy to [00:16:25] waste your ad spend.
And I and I to a degree, right. Only enough [00:16:30] to, to annoy you, but not make you quit. Um,
[00:16:33] Paris: yeah. Yeah. [00:16:35] You know, the old 10 years ago being a a, a total [00:16:40] badass Google Ads expert meant that you were great at working inside of the platform. You [00:16:45] could build out, you could do amazing keyword research. You could, um, you could build [00:16:50] out a great structure.
You could. You could really [00:16:55] engineer success inside of the platform based on the tools and everything that's inside of Google [00:17:00] Ads. Well, today, that's not really the case. I think the badass Google Ads expert [00:17:05] is the person who can creatively bring the best quality data from outside of the [00:17:10] platform into the platform.
So it's not really about optimization [00:17:15] inside of the platform, it's about the quality. External data that you can bring in and [00:17:20] feed into the algorithm and let the algorithm now do the work.
[00:17:24] Leanne: Yeah, [00:17:25] absolutely. Um, you know, trying to silo [00:17:30] different channels from the rest of the funnel and the rest of your data is, is a [00:17:35] mistake that if you can avoid it, you should.
Uh, there, you know, the little [00:17:40] asterisk is there's definitely industries where you can't always [00:17:45] climb over that. Right. So, and that's, thankfully B2B [00:17:50] SaaS has more opportunity to connect, to attribute accurately [00:17:55] from what sources their revenues come from, which is hugely important. Mm-hmm. But there are [00:18:00] definitely industries with private information where you can't, you can't [00:18:05] always get that one-to-one attribution.
Like this person did this and then now Yeah, they're en [00:18:10] closed, um, in. Personal and grinds my gears because I [00:18:15] encounter it and yeah. Uh, it's, it's rough, um, when you're in that [00:18:20] situation.
[00:18:21] Paris: Yeah. Well, yeah, you, you touched on another big theme [00:18:25] here and a big challenge that is not only has it not been solved, but it's about to get much [00:18:30] harder after third party cookies, which is attribution.[00:18:35]
Uh, I know that there are a lot of, a lot of software tools out there that, that try to solve [00:18:40] this problem, and some, some of them do a good job of helping you get a better understanding of it, but I [00:18:45] still don't believe any piece of software starting from Google Analytics and all the other [00:18:50] soft attribution software tools can really show you a true [00:18:55] attribution picture.
And there's this concept of dark social that's getting more and more buzz. [00:19:00] I, I think that also when tracking third party cookie tracking finally is phased [00:19:05] out entirely, um, whatever, whatever attribution [00:19:10] abilities exist today are gonna be gone. And we're really gonna go back [00:19:15] to being real marketers and having to, uh, trust that we need to [00:19:20] invest at every stage of the customer journey and the, and the funnel.
And [00:19:25] there, there are some ways that you can get like a qualitative [00:19:30] attribution. And some of that is, is simply by asking, asking the [00:19:35] customer, um, are you aware of our podcast? Uh, are you a frequent reader of our blog? Or, how did [00:19:40] you even hear about us asking these things in surveys or asking them in a acqui, the, [00:19:45] in a signup form or something like that.
That even that qualitative attribution [00:19:50] done with a large enough sample size can give you an indication that, wow. Okay. Um, [00:19:55] this big investment we've made in long, in running this podcast or in [00:20:00] producing high quality blog posts, uh, every day or whatever it may be. [00:20:05] Or, or these events, things like that. Um, that really is making a [00:20:10] difference because people are saying that that's how they have discovered us.
And if it, if it wasn't for that initial discovery, they [00:20:15] wouldn't have started going down that journey, which eventually led them to buy from us, maybe through a paid search [00:20:20] click or something like that. But, um, I think that more and more we're [00:20:25] gonna have to trust in our intuition, uh, for [00:20:30] attribution. And that's, that's also gonna be, I think that's gonna be even.[00:20:35]
More pronounced, let's say, in the post third party cookie world. [00:20:40] Absolutely.
[00:20:40] Leanne: We talk a lot about attribution on this podcast, um, because [00:20:45] that's part of the science of it, right? That's where you, you jump from the creative to [00:20:50] the, the hard numbers, um, is with, you know, obviously calculating [00:20:55] customer lifetime value and a attribution and, you know, the, the efficiency and efficiency [00:21:00] ratio in CAC and all that.
Now, so [00:21:05] that w that kind of helps a segue into when is this [00:21:10] strategy that you know of using data science to calculate the C T V? [00:21:15] When is this strategy maybe not quite the right fit?
[00:21:19] Paris: Sure, yeah, [00:21:20] good question. I think it's, it, it's, it's the right fit [00:21:25] only for companies that have, uh, let's say relatively mature [00:21:30] c.
That have a good handle on their customer lifetime [00:21:35] value. So that means probably at minimum four, five plus [00:21:40] years of L T V cohort-based L T V analysis that groups [00:21:45] users most often by time-based cohorts and. So [00:21:50] the first, I, I think the first condition where this wouldn't work is if you were a brand new startup, [00:21:55] or maybe you're in year, year one, year two, where your customers have not aged [00:22:00] long enough for you to have a good handle on lifetime value.
The second is simply the [00:22:05] amount, the, the raw amount of data. And, and we get asked this a lot, what would be the minimum amount [00:22:10] of data needed to make this solution work? Well, what Google needs is, [00:22:15] Google says they need at least 30 conversions per month. But um, I'm not sure [00:22:20] if you're still there, Leanne.
Cuz I lost your, your video. Are you still with me? [00:22:25]
[00:22:25] Leanne: Yes. I was trying to hide from the, the lights coming in my window. Okay. Apologies. [00:22:30]
[00:22:30] Paris: So, um, Google, Google states that value-based [00:22:35] bidding can work with as little as 30 conversions per month. I don't [00:22:40] believe that's, that's, uh, enough. For, for this PLT V, this [00:22:45] predictive L t v, to really work.
This is more, this, this needs, I think, [00:22:50] conversion volumes greater than a hundred or maybe even in the hundreds per month. [00:22:55] And that means depending on what the cost per conversion is, this could mean significant ad spend. [00:23:00] So also this solution isn't a great fit if, if you're still [00:23:05] strapped with a marketing budget that's say, I don't know, low five [00:23:10] figures per month.
I think it does require significant ad [00:23:15] spend to, to produce a significant volume of conversions and to, [00:23:20] and with a, with a critical, massive data to supply the algorithm with. [00:23:25] And of course, the more data and, and the faster that, that Google [00:23:30] can ingest that data, the better it's gonna work.
[00:23:34] Leanne: Yeah, [00:23:35] absolutely.
Yeah. I mean it's, it's always a struggle when, um, [00:23:40] When ad spend isn't enough to get [00:23:45] learning to get enough results or to, to really have some, some meat [00:23:50] there to mm-hmm. To what you're trying to figure out.
[00:23:53] Paris: Um, yeah. And this is, [00:23:55] this is another challenge, Leanne, for people that want to, people that are getting [00:24:00] started and maybe they're trying to still nail the product market fit.
Um, I, I believe that [00:24:05] five to 10 years ago, you could do that with Google Ads. At a small scale you could. [00:24:10] Maybe you could get away with spending a few thousand per month and you could get, you could get some [00:24:15] real value from that and you could make it work at a small scale. Unfortunately, I, [00:24:20] I don't really believe that's true anymore because small players are [00:24:25] entering into auctions with big players that are outspending them, [00:24:30] tend to one 50 to one, a hundred to one.
And when you outspend [00:24:35] someone at that massive. And it's all about algorithms now [00:24:40] instead of, you know, human engineering in the platforms, then the data, the data [00:24:45] advantage that you have by outspending a small competitor is too great to overcome. [00:24:50] And so Google ads and P c a paid search is often [00:24:55] not the best place to start.
If you're trying to to prove product market fit, you're most [00:25:00] likely better off. Trying to invest in your brand really, and [00:25:05] build a community and grow your organic traffic with SEO and with content marketing, [00:25:10] and invest heavily into social media. Maybe launch a podcast, do [00:25:15] events, those kind of things.
Because I do think while the payback is [00:25:20] sometimes longer, six to 12 plus months, um, if you enter the, [00:25:25] if you enter the Shark Tank of ppc, And you're, and you're going into [00:25:30] auctions brand new against entrenched competitors who have been there for years, who have years of [00:25:35] historical data behind them and outspend you 50 to one, uh, you'll, you'll [00:25:40] be destroyed and you'll, you'll simply waste, even if it's a few thousand or a few, a few tens of [00:25:45] thousands, that that'll be totally wasted.
And that's another challenge for, for these early stage [00:25:50] companies because if you, you don't have a data advantage, you're too early on to, to be able to [00:25:55] use that. To have enough of it. And in the absence of that, I think you have to invest [00:26:00] in building your brand.
[00:26:02] Leanne: Yeah, absolutely. It's, it's that fine line between [00:26:05] sales led growth and, you know, marketing led growth.
Um, and [00:26:10] where mm-hmm. That can, that can balance out, um, [00:26:15] It's always so hard when you're, when, when you're an early stage startup, but also, you know, I [00:26:20] think that this can be applicable what you just said to even mature st like [00:26:25] organizations that maybe are adding a functionality or, you know, [00:26:30] they're, they're entering a new space as like an an additional offering.[00:26:35]
And they could be, you know, like maybe even [00:26:40] middle-ish. Mm-hmm. And maybe they're trying to go upmarket or, you know, there's, there's a lot of [00:26:45] scenarios where they may not have the data that, that they really need. Mm. [00:26:50] Um, Yeah. Or just leverage.
[00:26:53] Paris: I think. I think another [00:26:55] distinction that is very important here is if, if you're building a new company or you're in an early stage, [00:27:00] are you in the so-called red ocean where you're, you're [00:27:05] entering a very well established category.
With, with already maybe one or [00:27:10] two gorillas and a lot of established brands, and your goal is to do something [00:27:15] uniquely better and carve out, carve out a market share for yourself. It might be [00:27:20] small, but still significant if it's a huge category like c r m. If that's your [00:27:25] approach, then, um, that, that's, that's a whole different marketing [00:27:30] strategy really, because then I think your, your goal is, You [00:27:35] can't really go into those PPC auctions and compete.
Um, [00:27:40] it it's gonna be too expensive. Those big players are, are, have too much data and too much ad [00:27:45] spend. And so there you're, you're, you're communicating how you're taking [00:27:50] a problem that people are aware of in an existing category, and you're telling them how you can solve [00:27:55] it better or more uniquely. The other scenario would be this so-called the blue [00:28:00] ocean, where you are really innovating and you're creating a new [00:28:05] category.
So you're solving a problem that still most people don't even know they have yet. [00:28:10] And there it's, it's, it's, uh, it's not about saying that you've got a better mouse trap, but it's [00:28:15] about convincing the people that they have a problem that they might not be aware of, or that the small [00:28:20] problem that they think they have is actually bigger and costing them more money than they thought.[00:28:25]
And there it's, um, I'd say still it's challenging to [00:28:30] go in with PPC there because nobody's searching. If, if people don't [00:28:35] perceive the problem that you solve, then they're not searching for a solution. So the [00:28:40] only alternative there is to move to adjacent search intent, where people are looking [00:28:45] for something kind of similar.
There's a problem that is maybe a few [00:28:50] degrees off of the problem that you solve, and you can still get people's a. And get them to click through. [00:28:55] But when you're bidding on adjacent intent, you're not really solving, [00:29:00] you're not really answering the questions and solving the problems of the searcher. And often you are gonna also, I [00:29:05] think, waste a lot of PPC spend doing that too.
So in both scenarios, really [00:29:10] your best first move is to focus on building a brand and communicating [00:29:15] either that I've got a, I've got a better mouse trap than anything. And [00:29:20] or if, if it's blue ocean that hey, there's a problem that a lot of you have that you, [00:29:25] you're not really aware of and this is how much it's costing you and, and, and [00:29:30] convincing people of that problem.
And then later if, if it's blue ocean, um, [00:29:35] if it, if somebody else jumps in and, and there is a real category that's created and you're the one [00:29:40] blazing the trail. Then, then you've gotta start sprinting because then you need to win the [00:29:45] category. If it's gonna be a Coke and Pepsi five years out and you've gotta be [00:29:50] Coke or Pepsi, then, then you might have to spend like mad.
And, and that's when investors will [00:29:55] come in and, and pour tons of money into it and say that this new [00:30:00] category that you have created is winnable and it's gonna be worth X billion in a [00:30:05] few years. And we're willing to invest now to make sure that you're the. And you have to do [00:30:10] whatever it takes. And there, it might not mean that you have to be profitable all the way to get there.
You have to [00:30:15] win the category so that in five years time you're sitting on top of that category and then you can reap, [00:30:20] reap the profits once it has developed
[00:30:23] Leanne: or even still exist, [00:30:25] right? Because there's always gonna be someone with more money that can, um, come in, try. [00:30:30] Try to observe you,
[00:30:32] Paris: right? Which is why that you need [00:30:35] to be building a brand from day one.
If, if you start, I I, the, the best example I [00:30:40] can think of here is click up. In the first few years of clicks click ups existence, [00:30:45] they spent very, very little on paid search. Now, today, they're spending, uh, they're [00:30:50] spending millions on paid search, but in the early days, they were doing this all [00:30:55] organically and they were building their brand, and they were doing things differently.[00:31:00]
And this paid off for them because they were getting, in the first few years, they were getting maybe [00:31:05] 80 plus percent of their acquisitions from non-paid channels. The reason I know [00:31:10] this is because I interviewed, um, the, this, the, who's the now c o o, of click up, [00:31:15] uh, uh, maybe a year or so ago on my podcast.
And he, and he [00:31:20] told, told me about this, this journey and when. When you build up such a [00:31:25] strong base, which is based on your brand and building communities, and you get [00:31:30] a big percentage of your acquisitions coming from organic or from non-paid channels, then when you [00:31:35] later lay on layer on paid on top of that your blended cac, meaning your [00:31:40] total cost of acquisition, taking into account how much you're paying for pay channels [00:31:45] and, and how much it's affecting your overall acquisition, your blended [00:31:50] CAC is much, much lower, and that lower blended CAC becomes.
Serious competitive [00:31:55] advantage against your other competitors that come in right away and put all of their, [00:32:00] uh, acquisition into into paid search.
[00:32:03] Leanne: Absolutely. I love it. [00:32:05] Um, and I think what, what this does is also show your expertise in the area, right? [00:32:10] Because it would be really easy for someone who is, uh, you know, [00:32:15] uh, acquires their own customers in performance marketing to, to explain times [00:32:20] when it's not the right fit.
Um, because it's not always. And I think that [00:32:25] that lends to your credibility, to be honest. Um, yeah.
[00:32:28] Paris: It's hard for us now [00:32:30] to tell clients. That PPC is not gonna work for you right now cuz [00:32:35] everybody still believes that the first thing that you do, the first serious thing you do when you're [00:32:40] ready to start spending is, is Google Ads paid search.
Because [00:32:45] obviously this is going to the bottom of the funnel with the highest intent and that's where you [00:32:50] start because that's where the, the quickest return is in theory. Yes, that's [00:32:55] true in practice though, and we're finding this out the hard way a [00:33:00] lot. In practice? Not necessarily, because if you go [00:33:05] in with a, with a small budget into a shark tank, you'll be eaten alive.[00:33:10]
Yeah. And if you go, also, if you also go in to paid search [00:33:15] trying to create a new category where nobody's looking for what you do and [00:33:20] all you can do is bid on adjacent search terms, also, you'll probably [00:33:25] struggle a lot. So, I think paid search [00:33:30] really comes into the picture best when you have established a very strong foundation [00:33:35] around organic and around your brand, and then you layer on top paid search, [00:33:40] starting with pit bidding on your own brand name, which should have a pretty significant search demand [00:33:45] by that point.
[00:33:46] Leanne: Yeah, I couldn't agree more because, you know, it's, it's [00:33:50] also about what happens after the click, right? You know, if you don't. The rest of [00:33:55] it to support what you're advertising in these channels, then [00:34:00] it's just gonna fall flat. Like you're just not gonna get the returns. And if you haven't spent the time in developing [00:34:05] brand throughout the funnel, uh, demand throughout the funnel, all of these things where you're answering these [00:34:10] unmet needs, uh, if you leave gaps there, then it, [00:34:15] you, you might get a click, but is it gonna turn into revenue?
Yeah. And [00:34:20] that's, if it's not turning into revenue, why
[00:34:22] Paris: are you doing it? If if the [00:34:25] paid click is the first time that that user ever sees your brand, then you're doing it the wrong [00:34:30] way.
[00:34:31] Leanne: Yeah. I just, it leaves me speechless. I'm [00:34:35] like, oh yeah, that's, that's definitely the wrong way. Um, marketing heresy, if it were, [00:34:40]
[00:34:40] Paris: uh, if you get that pay click in and there's already some familiarity, [00:34:45] your conversion rate's gonna be much higher and.
There's, there's [00:34:50] this brand bias that's already built in. So what you wanna do is you want your paid clicks to come with brand [00:34:55] bias. Yeah. Because that means that you will have much higher conversion rates, which, which result [00:35:00] in all the great things around better quality scores and lower cost per [00:35:05] click and higher impression share.
All those great things fall into place. But if [00:35:10] that, and if that first paid click comes in ice cold, and that's the first time they ever [00:35:15] see or have heard of. That's because you haven't done anything else to get your brand out [00:35:20] there. Most likely you're playing in the bottom tier of conversion [00:35:25] rates. And even if that person converts, they're most likely not gonna be your, the low loyal [00:35:30] customer, the high L t v customer that you want to get over over time.[00:35:35]
[00:35:35] Leanne: Yeah. Um, not to be cliche, but you kind of do get what you pay for in that [00:35:40] situation. Um, and, and you know, like, We could, we could [00:35:45] go down this whole rabbit hole of branding, um, because it's one of my, my favorite [00:35:50] things. But, um, let's, let's kind of think about in the future of [00:35:55] marketing, like where, where do you think the future of marketing is and where do you think it should [00:36:00] be going?
[00:36:04] Paris: Yeah, [00:36:05] the, that's a, that's a loaded question. Um, the future of marketing, I think [00:36:10] that, Really the, the future of marketing is gonna be [00:36:15] a, a scenario where there is no longer, [00:36:20] uh, a dividing line or a distinction between marketing and [00:36:25] sales. I think it's all gonna be growth. So I think that the line between marketing and [00:36:30] sales, which is already blurry, blurry and getting blurrier by the year will eventually [00:36:35] dissolve.
And marketing and sales will all, will both be absorbed into. [00:36:40] And what does that mean? It means that marketing functions of today are [00:36:45] all gonna become more and more accountable for, for revenue growth [00:36:50] and marketing teams will collaborate more with sales teams. And I [00:36:55] think that's great actually. Um, I still see, and we work [00:37:00] with organizations where there's still a very traditional structure where marketing's job [00:37:05] is to deliver leads to sales.
And then they're done. And sales job is to [00:37:10] take those leads and close them and win them. And I think that, that those, that [00:37:15] separation of church and state, those days are numbered. I think so the, the future of [00:37:20] marketing is gonna be, I'd say an in integration, full integration of [00:37:25] marketing and sales absorbed into, into a growth.
Function [00:37:30] where all the data from sales is freely flowing into marketing. All of [00:37:35] marketing's data is also flowing into sales for, for mutual benefit of both. [00:37:40] And this is built around the c r M by the way. So you look at HubSpot, great [00:37:45] example. Um, it is, it started as a marketing automation platform. They added the [00:37:50] crm.
Now they pretty much have everything there, but if you look at that, what's [00:37:55] now probably the, the most popular. Crm, especially for small businesses and SaaS [00:38:00] businesses that already really exemplifies what we're talking about here. There isn't [00:38:05] really a division between sales and marketing. It's one journey.
It starts within [00:38:10] maybe with early touchpoints and a marketing qualified lead, and then it eventually turns into a [00:38:15] closed deal. But there is no one dividing line where suddenly marketing [00:38:20] is handing something over to sales. Cuz marketing is marketing is seeing that [00:38:25] pipeline all the way through to closed revenue.
And sales is seeing that pipeline all the way backwards to the [00:38:30] first touchpoint and they're both helping each other.
[00:38:33] Leanne: Yeah, absolutely. I mean, [00:38:35] so much comes to mind, you know, like, uh, platforms like Gong help demonstrate [00:38:40] this. Um, and even you could even argue that marketing [00:38:45] goes all the way through to like customer success and in [00:38:50] evangelism and, you know, getting.
Continuing to [00:38:55] support getting that L T V and that lower churn. Um mm-hmm. I, [00:39:00] I, some of my best friends are in sales and whenever I've worked [00:39:05] with, I've worked with so many sales directors and, you know, I [00:39:10] really honestly think that you're right. The, the partnership between sales and marketing [00:39:15] needs to be blurred.
There needs to be a frequent exchange of information and [00:39:20] instead of it be internal like infighting, it needs to be, [00:39:25] you know, a much more community framework of including [00:39:30] sales, including the customer, including ops and, and, and not that we all need [00:39:35] to like braid each other's hair and sing Kumbaya, but we, we do need to all.[00:39:40]
Aligned, um, in order to get the best results for [00:39:45] everybody. And, and I think that's part of the shift away from the hard sales practices of [00:39:50] mm-hmm. Uh, you know, the frequently mentioned car dealerships and [00:39:55] into this consultative kind of, Future or [00:40:00] actually contemporary experience where people want to have access to [00:40:05] information.
They don't want gatekeepers, they want, they, they want to feel [00:40:10] respected throughout the process. Yeah. Um, but that's [00:40:15] also my, my human-centric, customer-centric p pov on marketing and sales is [00:40:20] that you just don't be an asshole. Um, you know, kind of the [00:40:25] bottom line. Now we're, we're kind of wrapping up on [00:40:30] time, but if someone wanted to continue this conversation one-to-one with you, what's the best [00:40:35] way for them to, to connect?
[00:40:39] Paris: LinkedIn [00:40:40] is the best way. Yeah. I practically live in LinkedIn these days. I think a lot [00:40:45] of us do. So you can search for me by my name Paris Childress, [00:40:50] or Hop Online as our agency. I have a podcast called Paris Talks Marketing. [00:40:55] Any of those routes will take you to me in some form, and let's connect there and, and, uh, start a [00:41:00] conversation.
[00:41:01] Leanne: Awesome. Well, I appreciate you joining me this morning and sharing all of [00:41:05] your amazing insights. Um, you know, for the Markigy podcast, always look [00:41:10] us up. Uh, remember to like, subscribe, connect, all those things. [00:41:15] And if anyone has any questions, I would love to hear your feedback. [00:41:20] Thank you so much for joining
[00:41:21] Paris: us.
Thank you for having me, Leanne. Have a great day. Thanks.[00:41:25]