Startup CEOs: When Should You Hire a CMO?

I’m surprised by how many B2B start-up CEOs are still building their companies the old fashioned way:  First, they assemble a product team and build the product in stealth mode. Then, they hire a hot-shot direct salesperson to go out and sell it. They plan to build their marketing team after their revenue starts ramping and eventually hire a CMO / VP Marketing when they are more established. If you’re thinking “What’s wrong with this approach? Many successful companies have used it” then keep on reading…

Hiring a Rolodex® is a Short-Sighted Investment

By hiring a sales leader first, you are probably counting on them to use their Rolodex® of contacts to hit the ground running. This approach usually leads to some instant ‘hot leads’ and even a few quick sales. What’s wrong with that?

Well, you should ask yourself whether these prospects and customers are truly in the center of your target? If not, then there are a number of reasons why this approach might not be the best one in the long term.

First, these customers, which likely span a variety of market segments, won’t provide a critical mass of references within your true target market. If you don’t keep a laser focus on your target market, you will find yourself wasting sales bandwidth to force them down your funnel. It’s a classic problem where opportunistic sales may increase short-term revenue, but these customers and the accompanying lack of focus may ultimately sink the business. But, if you have a product in development and will soon need to generate enough sales to prove your product is viable, what’s the alternative?

The Internet Has Permanently Changed the Buying Process

According to DemandGen Report’s most recent B2B Buyer Behavior Survey, 51% of B2B buyers surveyed initiated contact with a vendor only after compiling a preferred list of suppliers. As shown in the accompanying chart, a range of materials—including web searches, vendor web sites, white papers, and social/peer reviews—are more frequently used at the start of a B2B search process than responding to direct contact from a sales rep.

Survey of B2B Buyer Information Preferences

59% of B2B buyers surveyed cited both the breadth of relevant product information and the educational value of that information as the most compelling elements of their chosen vendors’ websites.

So what? You already knew that you needed a website and some great content. That’s why you contracted that cutting-edge web designer and paid a writer to create some blog posts and white papers to put on it. You may have also hired a junior marketer who created some sales presentations and other sales materials.

Nevertheless, your sales team lacks qualified leads. They don’t like spending all their time cold calling uninterested ‘prospects’ and they’ve suggested buying some lists or contracting a lead generation or ‘appointment setting’ firm.

Why Buying Email Lists Or Hiring ‘Appointment Setting’ Firms is a Bad Idea

You’ve probably been bombarded by offers to sell you a ‘high-quality’ list of contacts. But resist the urge to be seduced by visions of an easy road to a robust sales pipeline. As detailed in a blog post titled Why Purchasing Email Lists Is Always a Bad Idea, there are a number of reasons why buying a list is always a bad idea:

  • Your reputable email marketing vendor won’t let you use purchased lists
  • Any email addresses in it that once had value have since been spammed to the ends of the earth
  • People on a purchased or rented list don’t actually know you
  • Your email deliverability and IP reputation will be harmed
  • And finally, because you’re not a jerk

I hope it wasn’t difficult to convince you that buying a list isn’t the way to go, since you’re probably not interested in being blacklisted or labeled a spammer. But why shouldn’t you hire a good telemarking firm to quickly and easily generate some hot leads for your sales team? Here are a few reasons that come to mind:

  • The telemarketers are using lists that have been spammed to the ends of the earth
  • How many times have you picked up the phone lately when you don’t recognize the caller ID?
  • How many times have you responded to a voicemail from a telemarketer?
  • More importantly, the telemarketers don’t know anything about your target customers or the particular problem that you solve
  • And—most important of all—your staff won’t be learning anything about your target customers or the problems they have

So, if buying email lists and hiring telemarketing firms is like taking a wrong turn down a bad alley, what should an upstanding start-up CEO do?

Hire a CMO Early On to Build You a Demand Generation Machine Before You Desperately Need It

By recruiting an experienced, analytical marketer early in your company’s growth, you will be making an investment in the people and processes required to build sustainable demand. I’ll save the details on how to build a modern, demand generation machine for a future post, but let’s just say that target identification, persona development, and a content strategy are essential steps in the process. These key activities—the tools of the modern marketer—won’t be accomplished by a list broker, a telemarketing firm or even your sales team, but they will be the first steps your new CMO takes on the road to building your demand generation machine.

Steve Offsey is the CEO of MarketBuildr and former VP of Marketing of AIR Worldwide.  You can find this post, as well as additional content on his blog located here.  You can also follow Steve on Twitter (@MarketBuildr) by clicking here.