Welcome to episode 42 of B2B, SaaS Marketing Snacks. My name is Mike, and I work on product here at Kalungi. As always, I'm with Stijn Hendrikse, who is a multi-time CMO, CEO, founder, and the ex-product marketing leader for Office 365 at Microsoft. Today, we're sharing some early results from an exercise that we do with all of our full-service clients at the beginning of our time together at Kalungi, where our team digs into all the crevices, the nooks and crannies of their business to benchmark the state of their sales and marketing functions, and then create the foundation for the go-to-market strategy that we execute over the next six to 12 months. We use a scorecard to quantify the strength of each different category of their business. And in this episode, we wanted to share some of the actual numbers, the averages from those audits that we've done so far in hopes that it might help you kind of see some of the blind spots in your own company's journey, or at least see if you can benchmark against some of the companies that we've looked at so far.
So we share each category, the strengths, the strongest categories and the weakest categories, and then also some generalized numbers in terms of annual recurring revenue, a CV headcount, number of customers of the clients that are involved in that dataset. Before we get into it, I want to share one more tool that we've made available over at T2D3 Pro, specifically for marketing leaders and early-stage founders of SaaS companies. It's called the Playbook, and it's the exact step-by-step foundation that we use as the base for our own engagements at Kalungi. It takes the big-picture strategy that T2D3 teaches and turns it into really tactical brass tacks.
It's really like a step-by-step instruction guide with templates for creating and documenting your go-to-market strategy, building your inbound marketing edge, and setting up your tech stack. It's designed for HubSpot right now and building your account-based marketing function, all the things that you would want to do when building a marketing function for your company. So you can get it over at t2d3.pro/playbook. You can get it on its own or as part of the T2D3 masterclass that we launched last month, which is the curriculum that all of our associates, CMOs, our marketing leaders, are trained on at Kalungi. So if you're interested in checking it out again, t2d3.pro/playbook. Okay, cool. Enough of that. Really appreciate you choosing to spend your time with us. Let's get into it. Okay. So I wanted to do something a little bit different on this episode.
I wanted to share some, I guess you could call it independent research that we've done through our work at Kalungi. So just I guess to set the scene, Kalungi is outsourced is an outsourced marketing agency for B2B SaaS companies under 10 million ARR. And what Kalungi does is we work with companies that generally have not focused on marketing in the past, but have found some sort of traction in their products and are kind of working towards product market fit after MVP. So what we do is we have a complete team of marketing specialists, including a marketing leader who will get inserted into the leadership team of our clients and with the leadership team set the go-to-market strategy and design that entire thing. And then we have an agency side that actually goes and executes on the go-to-market strategy for anywhere from six to 12 months.
And then the goal at the end of that process is that we actually hire the first full-time marketing lead for our clients and help them build that function for every one of our clients. We actually do a complete audit at the very beginning of our engagement just to get to set, set a baseline for where we're starting from. We look at a bunch of different components to see just what's in place, what's missing, what's in good shape, what's not, what exists, what doesn't. So there are 15 kind of main components that we look at, and at some point we decided since we're doing this for every client, it makes sense to just kind of standardize it so that over time we can kind of get a sense for what the patterns are and we make it consistent between every client. So we did that and since we have kind of formalized that process, we've had about eight clients go through the complete audits and we wanted to share some of the early findings from those audits.
We've got two more in the pipeline right now, so I'll add that back into the mix into these results. And if you're interested in seeing a more detailed breakdown, if you subscribe to the T2D3 Insights newsletter at T2D3 Pro, we'll share this on there and eventually turn it into an article that you can check out. But it should be interesting, I think, for a lot of early-stage B2B SaaS founders to kind of see there are definitely some patterns that are emerging when it comes to the things that, when it comes to the things that are lagging or in not as good shape that we tend to see from a lot of these companies. So I wanted to talk about that really briefly.
Yeah, that's super interesting. I think you can do all kinds of free audits online, an audit of your online presence for your website when you go to mar, or you can do some kind of audit of your content. But you guys have developed, which is kind of a multi-week process, including interviews and surveys and really turning also the data upside down that you get from a client. It's a really thorough, complete checklist. And I think you touched over a hundred, I think, items that you verify. So I'm really looking forward to what you found, Mike. Where do things jump off the chart?
Cool. Okay. So there's 15 general kind of areas that we assess, and to your point, there's within each of those areas, there's sometimes four to six sub-components that we look at and we collect a bunch of data through surveys just to see, to verify does this exist? And then if there is something that exists, our team will actually dig into it. We'll have one of our team specialists, let's say if it's for reviewing content marketing, we'll have one of our content marketing leaders dive into the actual content, look at all the blogs, look at the strategy, and do an assessment of where that sits right now. So the 15 categories that we have are go-to-market product, market fit, marketing infrastructure, which is kind of this, it's your tech stack, your plumbing, so to speak, account-based marketing, content marketing. We do a complete content audit, which is a separate category on its own.
So we look at what kind of content exists in our checklist of things that we think you should have. We look at demand generation, sales and marketing alignments, product marketing, brand and design, search engine optimization, paid advertising, marketing team roles. So we look at all of the roles that we think an early-stage software company needs to fill, and then which of those skill sets are actually filled by your existing team? We look at the website, and then the last one is positioning and messaging from all of that. We usually have the associate CMO actually come up with a set of recommendations based on the findings that then get presented to the client. So I brought these together, and each of these sections is scored out of five points. So in total, there are 75 points possible. And generally, on average, the companies that we work with are at a starting point of about 32 points. And there are a couple of clear patterns that have started to emerge, which is really interesting, the areas that companies tend to lack.
Before you reveal that, where do they do well, Mike?
What do they do well? Okay, good question. The things that are generally in the best shape are the top three categories are product, market fit, content marketing, brand, and website. So product market fit, you're looking at things like, do they have referenceable customers? How is their customer attention? What's the logo churn look like? And generally, that kind of checks out because you need to have some kind of momentum in order
To, that's often a function of where they are in revenue that they're engaging with the Kalungi team.
Yep, exactly. So that's one of them: content marketing, which is around having an industry subject matter expert on your team. Do you have a content calendar? Do you have content that addresses top, middle, bottom funnel, frequently asked questions, content, inventory, products, updates, things like that. And then brand, which looks at, do you have brand guidelines in place, consistent imagery, colors, fonts, product mockups, things like that. And then, oh, sorry, go ahead.
More like the communication in the visuals of your brand.
Yep, exactly.
Stijn:
Not the positioning because that's a separate category,
Correct, correct. And then websites, which looks at just the basic technical components of your website. So do you have an S SS L certificate? Is your site speed decent for desktop and mobile S E O errors? Do you have good backlinks? Do you have GDPR or CCPA installed if you work with European or California markets, cookies, those types of things. And again, a function of the stage that companies that tend to work with us are at, because you usually need some kind of website to generate,
And these five areas are in great shape, good shape compared to the others. They're not in an absolute sense in good shape. Right?
Yes, that's correct. So the average scores across those that I just listed are 3.4, 2.9, 2.6, and 2.9 out of five. Correct. So in relation to the others, they're relatively good, but they're still not great.
Okay. So let's cut into the watermelon. So these were the green, what's the red that's bleeding underneath?
Yeah, so the red is interesting. There's one that is consistent across every single audit that gets a zero or one, which is ABM, which is the existence of an account-based marketing function. The second one is MarTech, and that is the, again, it's your plumbing, it's the existence of here. I'll read off the, do you have your CRM as a single source of truth? Is there funnel attribution in place? Do you have things like automated nurture campaigns? Is AB testing being used? Do you have automated reporting? Do you have any kind of marketing dashboard that looks at things that we talked about in our previous podcast episode, which is about what are the three buckets that leads the...
Sources of your revenue?
Yeah, exactly. Can you attribute leads or contacts or revenue to specific channels or activities or campaigns.
And all these, this is a hard part to hit because the data has to be correct, right?
Yeah.
It's probably pretty easy to find things that are just not completely correct.
Yeah. Well, what's interesting, this one specifically ties into a couple of other topics that we have on the docket for the podcast, which is in order to make this one disappoints me the most, it's the one where I wish people would, I think, give a lot of attention to, and it doesn't need to be...it's hard. It's very hard. And a lot of people don't really know where to start. You need maybe often someone that's technical in order to set things up for you properly.
The hardest people to hire often as well, right? That skillset.
Absolutely. And it often requires, it almost always, actually, let me walk that back. It almost always requires somebody to continually manage it and keep it up to date. And when I say that, I mean, in order to have accurate attribution, every time you add a campaign or shift something around or change the definition of a lifecycle stage or something like that, things have to change within your CRM to reflect that. And if you don't have somebody who understands all those components, it can pretty quickly get messy and out of touch. So that's the biggest one that I think is really interesting to me. And it's one of the important ones, because if you can't attribute leads or contacts to specific channels, it's really difficult to make decisions about where you should put your time and effort from both the marketing and sales perspective. We were talking about in the board meeting, the, I dunno,
The data has to be accurate, right? Your credibility as a CEO...
A hundred percent, you need to know where things are coming from in order to feel good that if you put another dollar in this channel, it's going to return X amount of...
Or even that you know your business.
Yeah, sure. A hundred percent.
Can we come back, because this is such a big topic, I just don't want to lose the first one you mentioned of ABM. And I wanted to share, I think with the listeners, this is of course, the fact that we even measured this as part of the audit is because we care about it. And I think, Mike, what we found in the last many years that we've been working together and as we started Kalungi together, and that if you're an early-stage company and you are sometimes making a market, you're creating a category that just doing inbound marketing and having great product marketing and product-led growth may not be enough. You may need to go knock on some doors. And account-based marketing is of course not always equivalent of outbound marketing, but usually they're related, doing great account-based marketing with a certain list of target accounts, et cetera, is usually a good foundation to actually go reach out with outbound means and turn it into an outbound program.
And I think the fact that you have this in your audit and that it scores low is probably for two reasons. One, we think most early-stage companies need to think about account-based marketing because it helps you make your category, create your, get your beach hat customers, get those ideal prospects, and go find the ones that are really a good fit. And second, that it is usually not the first priority for most companies when they hire their first marketing team members. Things like inbound, getting your website going, getting HubSpot implemented are the natural first things to do. So the fact that we find ABM to be a low-scoring element is probably also a function of it's maybe not seen by every early-stage company as something they need to spend energy on early on.
Either that or it's not sophisticated. I think a lot of people will put in just email blasts and then think that they're kind of checking that box when in reality you're not really doing a lot, you're kind of landing in spam in boxes, and if you're not doing the right things, if anything, you're hurting your brand more than you're helping it in a lot of cases. So that's another component that we've seen as well. Someone will just have like, yes, we send out emails via constant contact, we buy lists, and that to us is not really a very sophisticated account-based marketing.
Also another episode we need to do, but when we think of ABM Mike, for the listeners, getting a list and reaching out to people is just step one. There's so many, you need to have relevant content, otherwise you're really just spamming people. But if you do a really good effort to make sure you're reaching the right people who you think are a really good fit with very high-quality content, with good intentions, and you cultivate those relationships over time, because by definition, when you reach out to someone who didn't ask for you, they're not going to be ready to buy. So you need to be ready for a multistep repeating outreach that could take months, right? Cultivation is what we sometimes call it. And a lot of these efforts are just not set up like that. So marketing technology, ABM, what else scores low, Mike?
Paid search is the next lowest, which is anything to do with, well, it's really paid campaigns. So it's Google pay-per-click or display ads or LinkedIn, Facebook, Instagram, any kind of paid media advertising. And that's usually a function of not having somebody in-house to run it. Sometimes you'll have somebody who has an agency that runs it, but it's not very closely monitored, and the people who are managing it for the company don't always know what to look for. And so a lot of agencies can get away with just, we are running $5,000 worth of ads. But because, again, you don't have the CRM to attribute and really understand the value of that, there's not a lot of value generation that's happening there.
And then the next one, which is interesting, is the marketing roles. And so again, marketing roles looks at each of the different skill components that we think should exist on a marketing team of an early-stage software company. And then it tries to place the skill sets of your existing team into those kinds of buckets to say, do you have on your current team, even if they're not dedicated roles, do you have people to fill these requirements? So we look at marketing, leadership, product marketing, content, demand gen and digital, and then creative. And oftentimes, that is very low. So you'll have maybe someone to fill the marketing leadership gap, and that's oftentimes the CEO is kind of doing marketing on the side of their desk, or they do have a head of marketing, but really that person is like a unicorn has 500 jobs. Yeah, exactly. Who's doing everything? And so they partially fill each of the boxes, but that often scores low. I think, again, that's another function of the stage at which people tend to engage us. And I think one of the pain points that we solve for, which is we can pretty quickly fill all those gaps with our team
Without needing to hire full-time people.
Exactly. Yeah.
What is the role that, do you have that data in front of you? What's the set of skills that are usually lacking or...
Not the specific set of skills that are usually lacking? I would need to click into that. I could look, but yeah, no, I don't know the exact reference to that. It'd be interesting. I'll try to pull that out though for the next one. And then the fifth worst scoring component is, I think one of the ones that we're most passionate about, which is positioning and positioning considers your public-facing messaging about how you stack up against your competition. Do you take a stand for a specific niche? Are you kind of saying that you are just a generic solution?
So how unique is your tagline? How special is your value proposition?
Right. Is it succinct? Is it buyer-centric? Instead of talking about yourself, is your messaging aligned with who you say your ICP and personas are? Is it simple? Do you have a lot of jargon? Does it make sense for people that don't necessarily maybe understand your market? And does it fit with, is there some kind of semblance of a brand voice? Right? That's what we look at there. So yeah, those are the five kind of worst-performing components of the marketing audit, which is kind of interesting. And just I guess to set a frame of reference too. So the median annual recurring revenue of the companies that we've assessed so far is 3.6 million, so 3.6 million ARR. That's kind of the median of the companies that we've looked at. And the median ACV is $5,300, so that's a $5,300 deal size per year.
And what's the average?
The average is 7.6 million ARR. So it's skewed up by a couple of large companies, larger companies, and then the ACV average is $10,700.
Got it. And that makes sense because we just get more inquiries from smaller companies earlier who need help.
And so average headcount is 66, median is 25, and average customers, so this is paying accounts, is 893 and the median is 500.
That's a great data set. Mike, we should do another episode, deep-diving a little bit in the marketing technology challenges that you find in these audits, because there's probably a lot of very specific things we can talk about.
Yeah, it's really interesting, and every company is just super unique in the way that they've, especially they've found initial traction, because oftentimes what happens is they'll find one channel that does well for them, and they'll kind of really hyperfocus on that, and then there's all these other areas that kind of get touched. But in order to really build a flywheel, you eventually, at some point, have to address and get to a really secure spot. Awesome. Cool. Thanks.