How should your B2B tech startup spend its marketing budget?
Published: 2020-04-29 23:00:50

It’s the eternal question every B2B tech start-up marketing leader, founder and investor wants to know: what’s the right formula for marketing success? Getting this equation right means faster growth, higher valuations, and less risk; while getting it wrong wastes precious capital and can severely jeopardize success.

The reason this seemingly simple question is so hard to answer is that marketing works differently than other functional areas like sales, accounting or engineering. A marketing leader with a history of demonstrated success in other start-ups won’t be successful if their skills, experiences and programs are not aligned with the company’s unique go-to-market strategy.

For example, a marketer who was successful at a company operating as a market disruptor targeting IT buyers with complex buying cycles will have to employ dramatically different strategies at a company creating a new category selling into a DevOps-focused, land-and-expand model. The methodologies employed are different, the skills required are different, the program spending areas are different, and the measures to understand success are different.

The right marketing formula then, is based on the dynamics defined by each company’s unique situation, and likewise good marketers are flexible, with the skills to understand and adapt to the formula needed to achieve success in their unique market circumstances.

Here are some of the basic go-to-market dimensions where the company and marketing leadership need to have clear answers:

1. What is your go to market strategy? Is your opportunity about disrupting an existing market with a better product or service, or is it creating a new category for a solution that is yet to be defined? The primary marketing focus of the former is to take market share from competitors by clearly defining product differences; while the primary focus for the latter is to create a whole new market by building awareness of the pain or problem itself. Each requires different skills (product marketing vs corporate marketing) and different tactics (product comparisons vs thought leadership) with entirely different routes to success.

2. Who are your target customers? Are you able to clearly identify segments within your target market that tend to have higher deal values, lower churn potential and/or shorter sales cycles? For example, these segments could be based on industry, size, geography, complementary or enabling technologies, specific use cases, or triggering events like acquisitions or changes in leadership. Or, is your target market broader, with a very long tail of smaller accounts and a more transactional buying process? Of course, the skills required and program spending would be dramatically different depending upon your answer. The more you can define your highest value segments and the higher the value of the associated deals; the more targeted (account based), tailored and qualitative your marketing should become. However, more broad and transactional dynamics require just the opposite: widely dispersed, low-touch programs based on strong content, PR, advertising and paid search.

3. How do they buy? Are the keys to success in your sales process driven by engagements with the end user of your product; starting with a small initial transaction and then expanding (land & expand)? Or is it more of a top-down sale starting with an economic buyer and then gaining adoption from the users? Once again, the requirements for each are radically different. The more user oriented or “bottom-up” sales approach is typically driven by compelling, hands-on product experiences (product led) while guiding (not selling) the user to a clear understanding of the advantages offered by your product. Whereas the “top-down” route usually requires guiding your buyers expertly through each stage of their buying processes with dynamic and personalized content, building trust along the way and ultimately enabling them to build strong business cases to change.

The table below summarizes some of these key marketing differences based on a few common go-to-market dynamics:






















The most common reason marketing fails in B2B tech start-ups is not due to hiring unqualified marketing leaders or under-spending according to industry norms. Rather, it is the lack of understanding of the dramatic differences in the requirements needed for success based on each company’s unique go-to-market dynamics. When a highly qualified, but inflexible marketing leader blindly implements the same approach that was successful at their last company the result will almost surely be disastrous.

Conversely, the best marketing leaders will understand their organization’s unique opportunity based on the dimensions outlined above, and adapt their strategies to match the opportunity.

If there were one formula for marketing success in every company, our jobs would be much more straightforward and reliable. But then, where would the fun in that be?