Most B2B products require a middleman to explain their use. That’s why they use traditional long-term B2B marketing methods such as conferences, roadshows, and demonstrations. Methods that are less measurable than direct marketing and their return on investment (ROI) is slow at best.
monday.com was founded with the goal of creating a self-explanatory B2B product geared for direct marketing. When this episode’s guest Rotem Shay, Head of Performance Marketing, joined the company in 2014, their monthly budget was $30,000. Their latest marketing budget in 2020 is around 12 million, so they must be doing something right.
Looking for Direction with Direct Marketing
For growing companies, customer acquisition is one of their greatest expenses. If a company’s time to return on investment is two years, on their marketing, they might not survive the interim. If it takes two years to acquire the customers to cover an ad’s expense, it’s not only inefficient, but wasteful marketing will consume your company’s budget. How can B2B companies use direct marketing to acquire users in both a cost and time-efficient manner?
Creating Direct Marketing Fit
Traditional B2B marketing is like looking for a needle in the haystack. B2B marketers search for a few decision-makers who can implement the product for the whole company. Direct marketing converts anyone into the product’s champion, growing the product’s implementation from the bottom up, one team at a time.
Can anyone champion a change in the workplace and generate a network effect?
monday.com’s first advertising outlet was Facebook. How can a SaaS company make ads engaging to draw attention and clicks? Moreover, even once users do click onto their landing page, their products must be intuitive enough to instantly portray value so that customers feel compelled to try it. Most SaaS companies offer a free trial period and only make a sale when this period is over. At monday.com, their trial period is two weeks but waiting that long to judge ad’s effectiveness is incredibly wasteful. You pay for online marketing by the click, the longer you wait to fine-tune an ad the more money you lose.
Can SaaS companies generate measurable data without waiting for the “final” results and improve live marketing campaigns?
Rotem joined us to answer all our questions.
Ten(s) Across the Board?
The Marketing team has ten members and an increasing monthly budget for October of 2018 of $4.5 million to spread across, Facebook, Youtube, Google, Instagram, and many more. How can so few people maintain and distribute such a large budget?
Take a chance on me Direct Response Marketing
The founder’s decision to advertise on Facebook raised plenty of eyebrows. They took the chance and were rewarded with a strong click-through rate. Not all experiments are successful but the company encourages employees, and you, to take chances and try new things. Sometimes they work out, and sometimes you’re beaten and bruised from the fall. The trick is to learn from the process.
Insanity was famously defined as “doing the same thing over and over again and expecting a different result.” The marketing team’s KPI was set to doubling the company’s new paying accounts every month, shattering the illusion that the company can rely on industry best practices or do the same thing and expect new results. To further encourage risk-taking, 40% of the marketing’s budget is devoted to experiments. The rest is allocated for maintaining best practices and is called the ‘core budget.’
Try TROI Something Different with Direct Marketing
ROI is important, but the founders believe TROI (time of return investment) is crucial. TROI identifies which direct marketing channels allows you to reinvest your marketing budget in the same fiscal year, leaving the rest of your budget untouched.
They defined the TROI for core advertising methods as 6-7 months. Within these loose guidelines falls whatever best practices the Marketing team chooses to meet these goals, creating steady growth. As the general marketing budget increases so does the core budget.
Experiments are not held by the same “cash boomerang” standard. If an experiment immediately covers its expense within 6-7 months, it proves that the Marketing team isn’t being bold enough. The experiment budget is for taking risks. It pushes the Marketing team to try new channels, marketing methods or campaigns, to attract more customers. They track their results, and when a new method consistently pays for itself within 6-7 months it becomes a core practice.
The 6-7 month TROI is one goal for the entire marketing team. Therefore, if one channel isn’t working, part of their budget might be passed along while they continue to experiment. The Marketing team is one team, sharing a common goal enforces unity and encourages cross-channel collaboration. Budget flexibility and their experiments ensure monday.com‘s marketing budget is never identically allocated.
BigBrain, Bigger Results
To set and make these KPIs, the Marketing team uses BigBrain, to collect the data generated by all online advertisements. With machine learning, there is no longer a need to wait for the end of free trials to find out the percentage of converted paying customers. Within a few hours, BigBrain knows (before the customer) if customers will purchase the product based on their engagement level allowing the Marketing team to fine-tune their ads seamlessly.
When Rotem joined the company, BigBrain was still small, so he was able to help its development and integration with Facebook, Google, YouTube, Instagram to best suit the Marketing team’s needs. BigBrain continuously crunches the numbers so they can focus on “real” marketing work. Not only that, but time-consuming processes that could just be done once a day is now a click away.
When you dive into something new, sometimes you hit the ground running, and sometimes you stumble. Their “final final final draft” campaign on Instagram sprinted beyond their expectations.
Designers shared the ad as a relatable joke that led to traffic and paying customers . It reflected a common problem and connected customers to how the product could prevent that situation.
monday.com also stumbled many times, including their ad which compared their product to the game Tetris. Like many missteps, the Tetris campaign didn’t start out looking like a mistake. Customers’ response was phenomenal, signups skyrocketed, and there were slaps on the backs all around.
The team increased the campaign’s budget, and it took over their monthly campaign while BigBrain continued to call it a great success.
Then the final results started coming in, and the Marketing team saw that the converted customers were opening smaller accounts than usual.
They ran full speed ahead but realized in the end that they crashed and burned half a million dollars on this campaign. The Tetris ad led Rotem and the whole team to recreate marketing guidelines:
1. Always include the words “software, app, or tool” so customers can’t mistake the product for a game
2. Make it clear that the product is for teams and can be used differently amongst different groups
3. Show an image of the product, so customers know what to expect when they sign up. They now also ask new customers if they are using the product for personal use, to improve account size predictions.
To never forget the “Tetris” mistakes, the lessons they learned, and to further encourage risk-taking the Marketing made “Tetris stickers” to put on their computers.
Working Together Towards Better Solutions
The company doesn’t believe in growing their marketing budget by 10% a month. Instead, they’re increasing their budget by 18% to $5.5 million next month. Sometimes they even double it. Even in Las Vegas, “double or nothing” raises a few eyebrows; at monday.com it raises helping hands. Together with the R&D team, the Marketing team focuses on how to automate processes to save time and allow ten people to do the work of many more.
Their product is used in 200 verticals and has endless use cases across industries. Each vertical requires a unique landing page reflecting the product’s relevant use cases for a productive ad. Every new landing page had to be created by the R&D team.
They had to because the R&D team created the landing page generator. This tool allows the Marketing team to create unique landing pages for every search term in its core and experimental budgets. They can change images, font, locations of text at will, 24/7/365; developer not included.
Always Asking for Directions
At the time of the original podcast’s recording, the marketing budget stood at $4.5 million and would nearly double in months. This creates the challenge of successfully expanding core practices that guarantee a 6-7 TROI while discovering experiments and future core practices.
At the same time, direct marketing forces the Marketing team to continually refresh how they market the product based on customers’ interests. The Marketing team’s core practices today are not what they were six months ago and today’s experiments might be tomorrow’s core practices. Direct marketing keeps Rotem and the Marketing team on their toes, but they wouldn’t have it any other way.
Tips for Starting Your Direct Marketing Campaign
- Only use channels with measurable data; otherwise, you won’t know their value. Instincts are great, but data is king in direct response marketing.
- The entire team should share one common goal. This promotes teamwork both by brainstorming ideas and with their budgets
- In direct response marketing, you work hard all-time the time and fail often. What you learn from every mistake will dictate your success.
- Set ambitious and near-impossible goals. It will push your team to make the impossible possible.