Marketing · Marketing Strategy

Sales or Marketing: What more important when you're trying to gain intial traction?

Anonymous

Last updated on September 7th, 2018

We’re a healthcare SaaS vendor with a very specific diagnostic solution used in the context of diabetes care. Our target audience is primary care physicians and medical groups in the US. We allow them to generate some additional recurring reimbursement revenues and to meet certain quality metrics that offer further financial incentives.


We’re a small, non-VC funded / bootstrapped company of 8 people. As CEO, I handle all marketing and sales. I have 25+ years’ experience so I’m no beginner. On the marketing front we’re doing the usual stuff: writing content (white papers, case studies, blog…), email marketing, marketing automation, SEO, social… That said, the investments in marketing have been somewhat limited and a bit sporadic largely because of our limited resources.


I’m at a point where I’m questioning whether we should double down on marketing OR hire an experienced, full-time sales executive. We’ve tried commission-based 1099 reps but it hasn’t worked out. We're not in a partner-friendly business so a channel model isn't the way to go. An experienced sales exec who knows the market will likely cost us an $80K base, maybe more and will expect a $150K+ total comp package. What we do is not inherently complex, but it is a bit of a nuanced sale to get customer buy-in.We also have a couple of direct competitors that are bigger and more established than us. If I go the sales exec route, I have nothing left over to do much in terms of marketing.


There are some specific things we can do from a marketing / lead gen perspective but it will take a commitment of at least $100K to do it properly and consistently. I can handle all the inbound leads and close the deals. The challenge for us is in getting in the door, creating visibility and generating demand. If I hire a sales exec, they would likely have some contacts they can call on but the reality is that I’m going to need someone who is willing to roll up their sleeves and do some aggressive outbound sales development. Selling to physicians is one of the toughest things in sales. The more senior ones don’t seem to want to do much in the way of prospecting and want leads given to them. If all your money goes to their salary, then you can’t generate leads.


Another approach I’m thinking of is hiring someone in a more inside sales capacity. I can probably get someone for under $50K base who would do some tele-prospecting using a very specific healthcare contact database we’d purchase, follow up on campaigns, help with trade events, etc…


Any thoughts and suggestions?


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Response to Akinduro:


Like any company, our goal is to generate sales opportunities and to build pipeline. I need more leads of better quality. Closing them is something I'm good at. We're a new entrant in the US market so we're not known. We need to create awareness and increase our visibility among the target market. With our current resources, the array of things we can do is limited. In the last year, we spent about $20K on marketing. This included an overhaul of our web site, developing content, doing some email marketing, implementing some basic MA tools and a bit of SEO. We tried some paid search but it was disappointing. In parallel to this, I do lots of highly targeted outreach (cold calls, emails, LinkedIn InMails...). Each account needs to be researched and it's very time-consuming. We have also increased our traffic to about 500 uniques a month. Doesn't sound like a lot of traffic but what we do is very niche and one customer can represent $50K ARR. I don't need many customers to grow at a decent pace.


As a result of these efforts, we have generated some inbound leads of varying quality. Some were looking specifically for a solution like ours while others were casual inquiries and tire-kickers. This has generated sales opportunities and we closed a couple while losing a few to our competitors primarily because they have more street cred that us at the moment. In January we did an eblast to about 1500 healthcare execs for a white paper. That list was of questionable quality but it still generated about 150 downloads and I followed up on the good ones.


Uncovering who the KDMs are in healthcare is very challenging, especially physician execs. They are notoriously difficulty to reach. I'd like to purchase a highly specialized healthcare database by Definitive Healthcare (Google them). This has all the contact info I need plus a lot of other account-level insights that help targeting. This system is not cheap...I need 2 modules at $15K/year a pop. I'd also like to attend a few upcoming trade events. That's $8-10K each. In addition to that I'd like to do more email marketing (using that DH database platform) with new content, do some webinars... All this adds up. A rough estimate is that this will cost at least $100K over the next 12 months.


So my question boils down to this: do I hire a seasoned sales exec and have almost nothing left over for marketing? Do I hire a more junior inside sales person and do as much marketing as I can afford? Or, do I invest the whole wad on marketing and I play the role of sales exec to handle the in-bound leads that will result?


Is our problem clear now?


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Response to Dane Madsen


This varies on what problem you solve for yor natural market and how you do it. If you use 'me-too-but-less-expensive' messaging, you have to go for volume (more lead gen).

- We only have about 3 competitors. Our solution better than 2 of them and as good as 1 of them. So yeah it's a bit of a me too situation but so are a lot of companies. In many segments there are a ton of competitors and many do fine. The market is large enough for multiple players in our space.


With this question "So my question boils down to this: do I hire a seasoned sales exec and have almost nothing left over for marketing?" should we infer that 100% of all your previous content and lead gen has zero value to a new person with different skills and fresh eyes and excitement?

- We have built some brand equity in the last year. So the tools and collateral we developed are indeed valuable to a sales exec. I continue to nurture the leads in our MA system. But to drive more leads, we need to do more activities that accomplish the desired results. These activities and tools cost money.


Referencing this statement "...That list was of questionable quality but it still generated about 150 downloads and I followed up on the good ones." should you really assume that you were the only person that can deduce value in the leads you did get? Was a 10% CTA bad for your industry? I have been in B2B where 2% would have been mind blowing.

- Yes. I can look at a lead and determine if they are a good prospect for us. Our white paper was gated so I see who downloaded it. If I see that someone from Kaiser Permanente in relevant role, I will follow up with them. In any event, just about all leads save for competitors snooping on us were followed up. In our case 1% CTA can be tremendous as the value of 1 customer can repr3esent a lot of money.


Perhaps you should be looking for an outside investor that sees what you have created, how you have data to support your growth, and is interested in funding both sales and marketing.

- We tried to raise VC but were not successful. This was largely due to not having traction in the US. They like our business but want to see us get to $1M ARR and were not there yet (we're almost half way). Fundamentally, this is the problem I'm trying to solve. How do you gain traction with limited resources?


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Response # 2 to Akinduro


Thanks for you input. Last fall we did such an overhaul to our marketing. It's far from perfect because we don't have the resources to do much more than what we've done. That doesn't means we can't improve and do more creative things. Healthcare in general and physicians in particular are one of the most difficult markets to sell into.


I'm no fan of "static lists". They're mostly junk. That's what I like about that Definitive Healthcare database. The contact data is dynamically updated and it has all the relevant roles we need to target.


Happy to take this convo to inbox and I'd be curious to hear what you have to say if I show you what we've done.

Akinduro Rotimi Cofounder & CEO | Seeking a CTO

September 6th, 2018

You're making your questions difficult to answer. As an exec with over 20years experience in sales/marketing, I feel you should be able to more succinctly identify your problem.


That said, I opine that you need give some little more insight into your past marketing effort before one can provide some thoughts. Where exactly are you having difficulty in your marketing efforts presently? Generating leads? Qualifying leads, lead bounce? Or closing sales? If you can generate constant and growing inbound leads, and you can close same as you mentioned, then you need no sales exec now, judging from your financial capacity. Hiring a sales exec will cost you more than the salary as you need help in generating leads. Sales execs needs support.


Then you mentioned that you've been doing some inbound marketing tactics including social. Have you embraced social selling professionally? That may help in your case.


On your last approach, if you're confident he database you bought is right for you, doing some cold calling may help too. People argue that cold calling is dead, but in my experience, if used rightly and with social media as a support tool to qualify and research your leads, it might help you.


Good luck.

Dane Madsen Organizational and Operational Strategy Consultant

Last updated on September 6th, 2018

This varies on what problem you solve for yor natural market and how you do it. If you use 'me-too-but-less-expensive' messaging, you have to go for volume (more lead gen). If instead you use the 'we-are-better-because-we-solve-this-issue' then you can be more focused (more skilled sales). Either way, you have to have a salesperson; the question is, is it 1) you, 2) a rookie, or 3) a pro. If cash flow is your concern, you need to decide is you are more valuable as a sales person, a marketing lead-gen person, or as CEO.


With this question "So my question boils down to this: do I hire a seasoned sales exec and have almost nothing left over for marketing?" should we infer that 100% of all your previous content and lead gen has zero value to a new person with different skills and fresh eyes and excitement?


Referencing this statement "...That list was of questionable quality but it still generated about 150 downloads and I followed up on the good ones." should you really assume that you were the only person that can deduce value in the leads you did get? Was a 10% CTA bad for your industry? I have been in B2B where 2% would have been mind blowing.


Perhaps you should be looking for an outside investor that sees what you have created, how you have data to support your growth, and is interested in funding both sales and marketing.

Akinduro Rotimi Cofounder & CEO | Seeking a CTO

September 7th, 2018

If I were in your shoes, I would drop the idea of hiring a sales exec. You appear not to have a luxury of that now judging by your financial. Then, as someone pointed out, you are addressing a super niche vertical, and that has a toll on the type and number of leads you generate and the conversion rate.


That said, I opine what you need is an overhaul of your marketing. Both in design and implementation.


Don't follow a one size fit all strategy. Writing 1 or 2 lead magnates and expecting it to bring in all the leads is not reasonable. Be creative with your content. Any type of content could make a lead magnate, not necessarily a white paper. Sometimes I write a blog post and make an audio version of it. People who prefers to have the audio downloaded for future use do download. And that joins my funnel. I'm saying that to show that any material could be gate as lead magnet. But crave for quality content too.


Then be aware that email marketing using a bought email list is not a wise idea. I see it as mere spamming these people inbox and expecting something good thereof. It is rather annoying to have emails from someone I never opt to receive stuff from.


Overall, overhaul your marketing, especially your content marketing drive. From all you've said, lead volume is what is important to you. Thereafter, you can work to reduce your bounce rate and rejection.


If u care for an outside view of your marketing you may inbox me. Let us jointly audit your marketing strategy. Your website, your email messaging and all that. I'm not asking for a fee.


If u care for an outside view of your marketing you may inbox. tation.

Jason Thayer Startup Growth | Sales Performance | Tech Entrepreneur | Dad

September 26th, 2018

Hello anonymous,


You mentioned your search for VCs was unsuccessful. I agree a VC would want you a little further along. The goal would be to get to $40k MRR and then talk to them. In the meantime a little friends and family or angel funding could help.


And depending on a few specific details about your product and target I may have some ideas that could work right away. You seem to have market fit, but you lack quality leads.


I'd be happy to discuss, if you are still interested.


Regards,

Jason

jason@jwt.ventures

Raghu Ranjolkar Strategic Marketing Consultant

Last updated on September 19th, 2018

Hello Everyone,


Pardon me to break-in here, from the ongoing discussion here I understand, Some Value Innovation can make a difference.


Value is always in the eyes of the customer, and not understanding your potential customers means you cannot possibly know what they value. You should know how they behave and how they might react to your offer.


Great marketing makes the sales job more efficient, more predictable. Great sales programs capitalize and convert on great marketing.


It feels good to be useful, right?


Content marketing can be a uniquely rewarding discipline for this very reason, because content is extremely flexible in how it can serve businesses.


Create High-Value Unique Content (generate qualified leads on your own)


Don’t ask for the sale if you haven’t added value first. The good thing is that we live in a time in which there are many ways online to add value. You can publish free blog posts, do podcast interviews, publish articles on large publications, host free Facebook Live Q&A’s, host free webinars, make YouTube videos and add free value posts on social media.


When you release valuable content that helps your potential customer before they ever spent a dime with you, not only will they buy, but they’ll become raving fans. Raving fans tend to bring in new customers.


A business lives or dies based on its marketing and promotions. You can’t promote your business and premium offerings only when you feel like it. You need to map a real, strategic plan. You should know what you’re going to promote, when you’ll promote it, what tools you’ll use and the steps you need to take each promotion cycle.


And of course, it’s simple and cost effective.

Jason Thayer Startup Growth | Sales Performance | Tech Entrepreneur | Dad

September 21st, 2018

Greetings! There's a lot going on in this great discussion. I'll avoid duplicating any advice here or glossing over the detail and just say I'd be very interested in discussing your issue. I've been recently involved with a few projects that share a bit of what you are contemplating now.


Feel free to connect with me on LinkedIn or email me at jason@jwt.ventures or PM me if you are interested.


Regards,

Jason


Asfandiyar Sultangali communication

October 1st, 2018

MArketing, in nowadays many apps. Most of them have profit by advertising. It's very big reason to choose marketing.