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In This Episode You’ll Learn:
- What companies are doing in light of COVID [02:20]
- Where SaaS budgets are going with marketing cuts [04:53]
- Obvious products vs.non-obvious products [06:06]
- Changes company messaging during COVID [10:52]
- How companies can help their customers [12:10]
- Attracting customers with value and empathy vs. manipulation and fear [13:54]
- Lower CPCs [17:38]
- Opportunities for long-term growth [20:45]
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Links Mentioned in This Episode:
Transcript:
Sid Barath: And, and, you know, going back to what Warren Buffett once said, you've gotta be fearful when others are greedy and greedy when others are fearful. And I think now's a good time to be greedy and on ads because it's a very good short term sort of marketing strategy. and if the numbers work in your favor, which they probably might now with the cost going down, then you might as well put $1 and get $3 back.
[00:00:23] Max: What's up everybody. Welcome to the Growth Collective podcast. I'm your host Max Ade. And today we're sitting down with B2B marketing expert, Sid Barath. He's one of the incredible B2B marketers in the Growth Collective network. And he's worked with tons of SaaS companies on their growth strategy. This is an episode that we recorded way back feels like a long time ago at the beginning of theCOVID-19 crisis. And at the time brands were running scared.
[00:00:54] Everyone was pausing, their marketing and Sid was telling everybody to keep playing off offense during these tough times. And that was advice that that is definitely stood the test of time sitting here a few months later. We had a really interesting conversation.
[00:01:10] I think you're really gonna enjoy it. Let's get into it.
[00:01:15] Sid, welcome.
[00:01:16] Sid Barath: Thanks so much, Max. How you doing?
[00:01:18] Max: Doing good.
[00:01:19] Sid Barath: So excited to be in the podcast. Yeah.
[00:01:22] Max: Where, so I guess to start, tell us about your quarantine situation you've got going on.
[00:01:28] Sid Barath: So I'm up in Vancouver here. cause you know, I've spent a lot of time in San Francisco as well, working with a ton of these SaaS companies, but now with the border being shot, I'm cooped up here in Vancouver, but I'm still doing a lot of my work online, obviously.
[00:01:39] It's a good thing about the tech business is that it's all online. Vancouver is I, it's not as bad as what I'm hearing about SF.It's not like a full lock down, it's just a sort of like essential businesses are open people still going out, but, you know, it's, it's still, it feels normal, but not extremely normal.
[00:01:59] You know (laughs)
[00:02:00] Max: I totally get it. I actually got out of San Francisco. I'm in Atlanta right now.Pretty similar situation still feels like everything's closed, but a little more space to move around.
[00:02:12] So tell us a little bit about what you're seeing, with SaaS companies right now, what are they doing marketing wise?
[00:02:19] What are they doing business wise?
[00:02:20] Sid Barath: You know, across the board for most of the companies that I'm seeing, they are sort of cutting down on marketing spending. So one example is a company, it's a procurement software company. I don't want to name names and stuff because, you know, obviously it impacts like the workers and stuff, but one company, it's a procurement software that allows businesses to manage the things that they purchase for running the business, you spend all of that kind of stuff.
[00:02:49] They had to lay off a few people from the marketing department and cut down on some of the marketing spending. Right. another software that Kate district government, the board of directors suggested that they lay off the entire marketing and sales team and focus just on, on product and supporting the existing customers.
[00:03:06] And see these aren't like, you know, isolated cases they are across the board companies. The first thing that they do in situations like these where demand is lower, they feel like it's harder to make sales, their revenues are going down. The first thing they do is cut their costs and the biggest cost usually is a marketing team.
[00:03:25] Right. So that's the first to go, But I have a different theory on that. I have, like, I don't think that's the best idea for most companies. And I do think that our alternatives, and, yeah, we can discuss that in this podcast.
[00:03:37] Max: Yeah.I woke up this morning. I was checking my LinkedIn feed and almost every post was essentially an announcement from a founder or an owner or an executive that they had to do layoffs. I saw some big names: Hilton laid off a lot of staff, as you can imagine, being in the travel space. Just these huge companies are just having to slash costs, like you said, and it seems like the prevailing wisdom in Silicon Valley is to cut deep and cut early.
[00:04:10] And so, you know, let's, let's hope that this is sort of a one time, preventative wave of layoffs, and that this doesn't drag on and start to impact even more people as we go on. But how are you seeing that impact the way SaaS companies approach hiring, and then how they're approaching their marketing in the wake of not having a marketing team?
[00:04:32] Sid Barath: Yeah, I mean, like. Most of them are just like, they're not hiring at all. They're either laying off their marketing staff, cutting salaries for the remaining few employees, or just like limiting marketing budget in general. and then I think what they're doing right now is just basically focusing on everything else, which is the product, building a product, supporting their existing customers.
[00:04:53] Right. So it's sort of like on, on defense, you know, like instead of trying to get more customers, they're trying to protect the customers that they already have and make sure that those customers don't jump. So all the focus is going there, all the budget and management money is going there.
[00:05:08] Max: Interesting.
[00:05:08] So are you seeing them make similar cuts on the sales side or it's just on the marketing side and they're redirecting those sales resources to their existing accounts.
[00:05:18] Sid Barath: I'm seeing similar costs on the sales side. Yeah. Typically. You know, like a more established SaaS business has a separate customer support/customer success department.
[00:05:27] And so the salespeople are outside of that and they also get, let go of, there are no new leads coming in from the marketing team.
[00:05:34] Max: It makes sense. So let's dive, I guess then into that's what people are doing, their, their slashing, their marketing budgets. We're seeing these paid channels. For example, CPCs are down 50%.
[00:05:47] You know, we're seeing this, I'm seeing personally this influx in freelance marketers, because everyone's getting laid off from their full time marketing gigs. So we know that this is happening kind of across the board, but what do you think people should be doing? How do you think people should be approaching this maybe in a more offensive way?
[00:06:06] Sid Barath: Yeah, so I think the, the, the idea here is, is this concept that I'm sort of developing is, the idea of, an obvious product and a non-obvious product. And it's very situation based, right. So the context right now is this global pandemic, right? And the first order consequences of this global pandemic is that people have to start working from home and social distancing.
[00:06:26] Right? And so the obvious product in this global pandemic are products like Zoom, products like Slack that allow you to communicate. You have video, we have chat that allow you to coordinate your resources remotely, that allow you to do virtual stand ups that allow you to like, you know, manage projects virtually, right?
[00:06:46] These become the obvious products and obviously for Zoom and Slack. They're getting new customers you saw. I don't know if you saw Stewart Butterfield's Twitter thread the other day, maybe like a week or two ago where he spoke about how many new millions of users we have got on Zoom. Obviously the stock has just been rising and rising.
[00:07:04] Max: I heard they went from a 10 million daily actives in December to 200 million.
[00:07:10] Sid Barath: Yeah.
[00:07:11] Max: Daily actives in March. That's just incredible.
[00:07:13] Sid Barath: And so obviously like zoom, Slack, and these other obvious products don't need to lay off marketers. They probably need to hire more marketers and expand. Right.So if you happen to be an obvious product, good for you, you're like, you know, you're solid, you're set. Your goal, continue marketing, maybe do more marketing.
[00:07:28] Right. But for everything else, they fall mostly into this bucket of non obvious. Right. And the non-obvious bucket is basically. The products that serve the second and third order effects of what's happening right now. So the second order effect of everyone working from home is that you are local businesses, your barbers, your, you know, your barbershops, your restaurants, your yoga studios, your gyms, they're all getting shutdown.
[00:07:52] No one is going there. So second order effect is our delivery apps. Those start to rise because people are delivering food home because the restaurants closed, online live classes. So, online class platform like Thinkific, for example, that is a, a secondary product that serves that secondary second order effect.
[00:08:10] Right? These products are, what I call non-obvious because they're not immediately obvious that they will succeed in this kind of environment, but because of the second order effects, they are succeeding.
[00:08:22] Third order effects that people are getting laid off, their spending is going down.
[00:08:26] The products that serve of those kinds of problems or solve those kinds of problems are automation products. So your email marketing software, it becomes a third order or a product that's a third order effect. So that's also a non, non obvious product. The companies that I mentioned earlier, the government software?
[00:08:44] That is a non obvious product because. As people are getting laid off unemployment claims start going up. And as those go up, people are interacting with the government a lot more. And so the government needs to be more efficient in how they do work. And so they need a software to help them do that.
[00:09:01] And so that's where the government software comes in. Same thing for the spend management and the procurement software I mentioned earlier. Again, a lot of companies are having to cut down on spending, so they need to figured out where the spending is going and manage that better. You need a software to do that.
[00:09:14] So your product is very likely, if it's not a non obvious product, a non obvious product that solves some piece of the second or third order effects of what's happening right now. You just don't know it yet because it's not obvious. So what you need to do in this case is not just cut, spending across the board, stop marketing.
[00:09:32] It is to figure out where you can focus your marketing efforts. Like who needs this product more now than ever? Because if you are a procurement software, there are some companies that need your software now more than ever to buy the assessment. If you're a government software that are government agencies that need your software now more than ever to be more efficient with the way they interact with citizens.
[00:09:54] If you're an email marketing software, there are people who need yourself right now, more than ever to communicate and automate the marketing.
[00:10:01] Max: Right.
[00:10:01] Sid Barath: So your, your job now as a non obvious company, and as a marketing team in an OB non-obvious company or product, is to figure out who those people are, who need your product even more now because of the circumstances and to switch your marketing to them.
[00:10:16] So that requires customer research where you try to understand who are these people, where are they, what are their problems right now? What are they searching for online? Where are they online? Then you have to try to figure it out. What kind of marketing resonates with them?
[00:10:28] What messaging you may even have to pivot some of your marketing and messaging. So I was talking to a friend who works at Lululemon. A lot of the Lululemon marketing is all about, you know, outdoorsy stuff, go outside! Wear these yoga pants! Or whatever, and now they have to scrap all of that and change the messaging.
[00:10:44] Every page, every product. And you're spending a lot of money to switch the copy around, to say "best yoga pants for working out at home."
[00:10:52] Max: I think you bring up a really interesting point, which is that your normal marketing messages now in many ways are tone deaf. If you haven't updated your sales outreach copy, if you haven't updated some of your advertisements, that worked perfectly well for a long time before this, is very possible that they come across as tone deaf. So the Lululemon is a great example. Is there, anything that you've seen from these SaaS companies that's working well in terms of adjusting their messaging?
[00:11:21] Sid Barath: Yeah. So, one example is ConvertKit email marketing software for, for creatives.
[00:11:29] So if you're a blogger, if you are a YouTuber or you're creating content online, if you're a podcaster. You need email marketing to sort of, you know, collect leads and then to promote your content to those leads. So ConvertKit is a software specifically for that niche group of people. And of course it's a non-obvious product.
[00:11:45] So what they, what they've done is they've changed their marketing from simply just like, you know, "Hey, buy our software and communicate with their users" to more of, "Hey, we are going to support you as a creator during this period of hardship". Created this thing called the creators fund, which is basically they've put together money from a few people into one big fund and they're giving out money to creators to use the platform so that they can support them during a period of hardship.
[00:12:10] So it's, it's, it's this combination of like, you know, you're changing your messaging, to the new reality right now, but you're all, it's like, it's also a bit of like, you know, social value and additional value to support people during this tough time. So when the times get better, obviously these people that you supported are going to be even more with you.
[00:12:25] Max: I love the that example, because it's a, it's a genuine effort to help people.Right. And, and you've seen a lot of companies doing that. I know WeFunder, for example, they just launched a, a, basically a themed accelerator for companies that, are addressing something to do with COVID. At the same time I've gotten connection requests on LinkedIn lately that are using the crisis in their messaging, but not in a very authentic way. Any thoughts there on what brands need to do to make sure that it's being received well?
[00:13:01] Sid Barath: Yeah,I absolutely hated when people do that, use a crisis to sort of profit here. And, and I think the, the sort of distinction here is that yes, you should belike continuing to market your products and your services during a crisis.
[00:13:15]But don't use the crisis as sort of like a formal tactic, you know, like a lot of these, a lot of marketers have in today's online marketing world, a lot of them have come from this kind of like Russell Brunson, School of Marketing, or the ClickFunnels school, which is all about shady, you know, "buy now!" tactics.
[00:13:38] Right. "You will get a discount" or, and so what they're doing is you're using the COVID as "oh, my God, you know, business are shutting down, get it now before, you know, things are too late." So don't do that. Absolutely. Do not use that as a, and, and try to pull on the feel strings of people instead.
[00:13:54] Instead of trying to manipulate people into scaring them and getting them, getting your product, you really want them to want to want your product. And so like, one thing is obviously go to the people who already want your product and just show them that you have this product. But for people who don't yet who need your product, but don't yet know that they should get it.
[00:14:11] You, you kind of just want to show them the benefits of the product and the value, and how you can have them versus how,How you could pull on the feel strings, you know.
[00:14:21] Max: It feels like a good time to solidify longterm relationships with your existing customers as well. By empathizing right with what's going on.
[00:14:34] I -I've received a few very genuine notes from, from companies that I'm a customer of that have done a good job of that. Do you see SaaS companies doing that? Or what other tactics are you seeing SaaS companies using during this time with their existing customers?
[00:14:50] Sid Barath: Absolutely.One example is Gorgias, which is a customer support software for eCommerce stores.
[00:14:56] So what I just find out what is that. A lot of the companies that use them, which are eCommerce stores have been seeing declines in sales. So their revenues have been going down, but the amount of customer support that the customer requests you're handling is still staying the same. So they're still putting in the same effort to support their own customers, the shoppers, but the revenues are going down.
[00:15:18] So, so what Gorgias has decided to do is provide six months free off their platform for these retailers to use, while their revenues are down so that they can continue to support their customers and their shoppers without, you know, having to, Cancel and make, do with inferior software.
[00:15:39] Max: And this is existing customers, right?
[00:15:41] They're giving these six months too. I love that.
[00:15:45] Sid Barath: So it's basically supporting it. You've been with us for awhile. You know, you've been using a software, you love it, but now you're in a moment of crisis and we get that. We understand that. So we've been to like give you six months of free.
[00:15:57] Max: That that to me is just such a win, win.
[00:16:00] And, from the company and the client's perspective, I know Google is doing something similar with their advertisers that have been with them, I think for the last year and a half or so, they're going to give them free ad credits to help them get through the time. I know Hangouts is, or Google Meets been been free and there's a number of other tools there.
[00:16:20] It's like, Hey, you know what, we're just not going to charge for, for awhile. And I think that's a good balance between, you know, what is obviously a longterm self-serving thing and what's what will actually help their customers because they are going to, to drum up a lot of loyalty. They're also going to drum up or they're going to, they're going to reduce churn longterm.
[00:16:41] And they're probably gonna get some referrals in there as well.
[00:16:45] Sid Barath: Yeah, exactly. Yeah. And what I like about the way Gorgias is going, going about this is, you know, they don't using this as a, as a, as a marketing play and going,Hey, look how awesome we are we're giving them six months free. They're not making a big hue and cry about it on PR and stuff.
[00:16:57] This was specifically within the other customer group. The only reason I know it is was because I was, I had done some consulting for them. So I'm within that sort of like a communications field and I'm in the, kind of like the private Facebook group for the customers.
[00:17:10] Max: So it's a weird time. There's your... typically, when I talk to customers, they're considering a number of different acquisition channels or they're using a number of different acquisition channels.
[00:17:21] Is there any, any that stand out to you right now talking about SaaS companies in particular as a good opportunity, either a good short term opportunity or a good longterm opportunity that people should be looking at.
[00:17:38] Sid Barath: Absolutely. I, I mean like, like you mentioned earlier, CPCs and the cost for ads, down across the board.
[00:17:45] Everyone has just decided to cut down on marketing and they just stopped, ads are the easiest thing to go and, and, and, you know, going back to what Warren Buffett once said, you gotta be fearful when others are greedy and greedy when others are fearful. And I think now is a good time to be greedy and on ads because it's, A: very good short term sort of marketing strategy.
[00:18:04] And if the numbers work in your favor, which they probably might now with the cost going down, then you might as well put $1 into get $3 back. And so over there, the way I would see it, like again is going back to the concept of obvious and non-obvious, if you are, if you are a non obvious product, obviously just put more money into ads.
[00:18:21] If you are non-obvious you kind of want to change who you're targeting with your ads. So you want to like figure out exactly who are the companies that really need your product right now, and then shift the targeting to that. And then you need to figure out the messaging for that as well. So, I would say you know, for example, let's go with, let's go with the government software. So instead of just broadly targeting government agencies, you kind of want to target the government agencies who are looking for things like, how do I, how do we, be more efficient with our, with citizens?
[00:18:51] How do we provide the services for our citizens when there's a huge demand. How do we make sure that the wait times for citizens, especially in this period have not increased dramatically? So, one thing I've been suggesting is, you know, putting out content that sort of speaks specifically to this kind of, problem point that government agencies are now facing because of the crisis.
[00:19:13] And then from that content sort of taking them through that customer journey, into sign up for the product, do a demo, that kind of thing. So it's a shift of the marketing messaging from previously. It was mostly around, you know, digitizing their business, the government agency and, and automating things to now be more efficient and faster when doing it.
[00:19:33] Max: Yeah. It's interesting too. I mean, depending on the, the problem that is now relevant, and it needs to be solved for, you could have a situation where you're able to produce content on some SERPs that are not, not so competitive, which probably wasn't the case for, for what your initial positioning was when you're going up against all your competition.
[00:19:57] So you've got ads, ads. I agree. I think it's a great opportunity to get into that game. If you have the cashflow. You do have to be a business that can monetize those leads or, or drive those sales profitably. But if you have the cash and the ability to do that, it's a great time. Content sounds sounds great as well.
[00:20:17] How about in, in terms of the longterm, you know what I've heard a few companies tell me is that because they know they can't turn a great profit in the short term or sales are down or conversion rates are down or whatever it is that instead of focusing on those things that they're gonna take this time to invest in things that normally would have been longer term priorities. Have you seen anything like that? Do you see any opportunities in that space?
[00:20:45] Sid Barath: Yeah,I'm actually, I'm seeing, well, I'm seeing a lot of agencies start doing this. I'd like, so agencies are seeing less demand in their customers, in companies who will want to hire them to do marketing work.
[00:20:54] And so now they're focusing on kind of like the longterm building the brand. So promoting, creating more content. And what I'd say for that is the longterm stuff is yeah. You know, SEO start to focus on content and trying to rank for certain terms, but also create evergreen content.
[00:21:09] So content could be, you could be creating content that's very sort of timely right now. So to speak about the corona virus and "Hey, how are you doing in the pandemic." But of course it's, it's very short term and it's not timely once this crisis goes away. Whenever it is, I don't know, two months, three years...
[00:21:25] Max: Hopefully soon,
[00:21:26] Sid Barath: Three decades...
[00:21:27] Max: I mean, apparently, we're, we're going to open the churches for Easter this, this month. So, you know, we'll see.
[00:21:35] Sid Barath: I mean , you know, create focus and creating a longterm evergreen content that would apply not just to this period, but also to a period of, of good times, next year or a couple of years.
[00:21:47] Max: That's a really good point where we're doing that for Growth Collective, where we had, we had some SEO content that we were gonna, we're going to do eventually, but we weren't investing in it. But it's kind of a fundamentals, you know, it's not content that's, about a particular topic. It's just really core SEO content that we knew we needed to make.
[00:22:06] And so we're focusing a little bit more on that and a little bit less on outbound sales outreach, just for, for the reasons you just described.
[00:22:16] So what is the one tip that you would give to any SaaS company during this time?
[00:22:23] Sid Barath: My one tip is for you to understand that if you are a non obvious product to figure out exactly who are the customers, the companies that need you now more than ever, because they are out there.
[00:22:36] And just because from your traditional customer personas, you're not seeing a lot of demand. You're seeing lower sales from that group. Doesn't mean that it's necessarily true across the board. There's a different group out there that needs your products to go figure out who that is and market to those people instead.
[00:22:54] Max: That's great advice.
[00:22:56] Sid Barath: I wanted to add one more thing about, kind of some of the marketing stack, because we discussed ads and consequences for the short term, but partnerships is another good one, like partnering up with other companies that serve, serve similar target audiences. And sort of helping each other as well.
[00:23:13]So by combining your resources, you can, you can definitely get a larger audience as well. So the the Convertkit creators fund, for example, is one example of that because they, they are putting in their own money into this fund, but they're also partnering up with other folks to help them with that, creating that fund and distributing the fund out to other creators.
[00:23:31]Thinkific, which is an online course platform has been doing this series of online summits. Where they partner up with other influencers and they sort of promote, you know, how to create an online course and that kind of stuff. So, partnerships that are really good, good sort of way to do it.
[00:23:45] And especially now one thing I like doing a lot is webinars and, and sort of online summits. And, now that everyone's working from home and now that, you know, online events are the new normal instead of physical events, this is a good time for you to start doing things like partner webinars and, online summits.
[00:24:03] Max: I couldn't agree more. I think this is the best time to strike partnerships. It's just the, across the board, every type of partnership, because everyone is looking for an edge right now everyone's looking to survive. You know, I think a month ago people had their own business was doing well in a lot of cases.
[00:24:27] The economy was really hot, had been hot for a while. But now you've got everybody kind of looking around and making sure that they're, they're opening every door. And so it is definitely the right time for partnerships. Partnerships like the one just as you described on the marketing side, but also it's a great time to go get supply partnerships.
[00:24:46]You know, you could be an eCom store that wanted to add really a new brand to your, to your marketing mix or whatnot. Or you wanted to, you know, you're a SaaS company and you wanted to strike an affiliate deal with something someone who offers this offers a similar product, or a tangentially related one to the same audience.
[00:25:03] This is the time to do that because everyone needs customers right now, everyone needs business. So that's great advice.
[00:25:11] Sid Barath: Absolutely.Yeah. And another thing is, you know, there's that I've been looking at theseI'm online market places. I'm starting to see a lot more SaaS companies sell small SaaS sort of tools start to sell their businesses because obviously it's tough times and this could be a good, another good acquisition channel is you acquire some of these smaller companies again, back to what Warren Buffet said:be greedy when others are fearful, acquire some of these other companies acquire their customers and integrate them into your overarching, platform.This could be a good time for you to just increase the size of your business.
[00:25:45] Max: Yeah.I mean, this is definitely a moment of have and have nots, right?
[00:25:50] I mean, the companies that have cashflow, or a stockpile of cash, they just raised, you've got your pick. You've got your pick of talent, companies that you were thinking about acquiring, like you're mentioning to come at a much lower price point and, Yeah, it's an interesting time for cert, certain companies may have timed this, this w w w what do we, what do we call it?
[00:26:10] It's like a game of musical chairs. Right? They got, you got super lucky happened to raise at the right time, or, you know, just, just had good fundamentals and now they're in prime position to take advantage of the situation.
[00:26:22] Sid Barath: Yep.Exactly.
[00:26:23] Max: All right. Well, Sid, thanks for joining. This has been great.
[00:26:27] Sid Barath: Yeah.
[00:26:27] Thank you so much for having me Max. And, so I'm glad we could do this
[00:26:32] Max: Samehere.
[00:26:36] Thanks everybody for listening to today's episode, just a reminder that you can hire Sid to help you with your B2B lead generation efforts right now at growthcollective.com. He's one of hundreds of incredible pre-vetted freelance marketers in the network.
[00:26:55] And we will actually hand match you with the people who we think are the best fit for your business.
[00:27:00] Today's episode was produced and edited by my wonderful brother-in-law David Reinike and it's a new podcast.
[00:27:08] We don't have any reviews or likes or subscribes. So show some love on your favorite podcast app.
[00:27:14] We'll see you next time.
