SaaS Breakthrough – Featuring Garrett Mehrguth

demio saas breakthrough featuring garrett mehrguth About Garrett Mehrguth:
Garrett Mehrguth is the co-founder and Chief Executive Officer of Directive, a next-gen software performance marketing agency headquartered in Austin, TX.

Since its establishment in 2014, Mehrguth has led Directive in its expansion of five new locations, starting from Orange County, to Los Angeles, San Francisco, New York City, Austin, and London. Directive’s year-over-year growth rate has increased by 300%, and in 2019, Directive ranked in the top 500 in the Inc. 5000 fastest-growing companies in the U.S.

meetdemio · How Directive Increases SaaS Pipelines with Uniquely Strategic SEO And SEM Campaign

Show Notes:
03:25
The Journey To A High-Touch Model Working With SaaS
09:50
How SaaS Should Approach SEO To Have Positive ROI
"Your brand is more important than your website, so I'm gonna repeat that. Your brand is more important than your website. Now, this is critical for creativity and success. Now, why is this so important is because when you take search engine optimization you want to drive profitability from and you want to drive really strong results, you need to understand purchase intent."
12:30
Using Really Strong Product Positioning And Messaging
13:55
Looking At Opportunity Cost Not Lead Cost
15:30
The Right And Wrong Approach To Scaling SEO
"It's so important to first max out search impression share where there's purchase intent and then scale vertically instead of horizontally across more keywords, scale by showing up more often for the right ones. And then create like a separate bucket that you label essentially called informational intent. And then you go after that campaign with different metrics, different KPIs. And you separate it from your purchase intent campaigns."
19:10
Reset Traffic Expectations Based On Total Addressable Market
"Everyone listening, go on LinkedIn sales navigator and map out your total adjustable market and then rethink what you want to accomplish with your traffic (...) So I'd encourage you first and foremost reset what your expectations are for traffic based on your total addressable market. Hugely important."
22:30
A Product-Led Content Strategy For SaaS
"I would encourage you to think about your pillars as your products, your features, and your solutions. So once again, for search marketing and everything you need to work, we need to try to get, once again married to purchase intent and have very, very short distances between why we wrote a piece of content and how that drives product growth."
26:05
A Little Tactical Tidbit To Drastically Lower CPA and Skyrocket Results
28:00
You Need Trust To Take Risk
"I think one of the craziest things we do as consultants or even in-house marketers, right? If we don't take enough time building trust and so we essentially lower our future ceiling for impact we can make because we haven't taken the time to prove out our hypotheses around our approach. And if you don't have an approach, you need to take some time to build one cause that's what executives want to buy into and they want to buy into why, your approach will be successful. And then you essentially have to prove that it's successful through your data. And then once you have that success, now you can start to do your riskier things."
29:11
The Process To Change Your Pipeline And Increase MQL's And SQLs
"The worst thing SaaS companies do is have a call to action that says request a demo. It performs horrifically because there's a ton of psychological friction associated with the time it takes to be on a demo as a user, there's a lot of psychological friction around the value of demos."
32:12
Actionable Takeaways From Millions Of Dollars Spent In Campaigns During COVIT Crisis
35:15
You Need To Be Building Right Now And Focusing On The Key Things To Still Win In Q3 And Q4
"Here's the hard truth and I hopefully everyone, understands this is, you're going to get grace on your Q2 numbers. You're not going to get grace on your Q3, Q4 numbers and so you still need to be building right now and focusing on your SEO, focusing on your content, focusing on the efficiency, focusing on your CRO, focusing on your essentially positioning all these pieces because you're going to get grace to miss your Q2 numbers, but you're not going to get grace on Q3 and Q4 like you did on Q2 because there's going to become, you know, some numbness to COVID and the board and the leadership is going to become hard nose on still finishing the year strong. So now's the time to prep for that."
39:00
Lightning Questions
Transcript:

Hey Garrett, thanks much for joining me today on the SaaS breakthrough podcast. Excited to have you here and Directive. How are you doing today?

GM (03:05):
Doing great man. Thanks for having me. Excited to chat. It's been a great day. So now I'm glad to be here and excited to talk with you.

DA (03:12):
Yeah, definitely.Crazy time in the world to be honest with you. Lots going on. So I think there's going to be a lot of topical material that we'll be able to talk about today. You know, what's changing in the marketplace from a SEO and PPC perspective. And I think you're gonna bring a great perspective, but before we jump into that stuff, why don't you explain a little bit more about Directive, when you founded the company, who your customers are and what you guys are doing uniquely in the marketplace.

GM (03:39):
Yeah, no. So started right around six years ago and I was slinging social media calendars for like five bucks on Fiverr. And I wanted, you know, I was, I was doing my masters, I was trying to figure out, I want to go into consulting. So I kind of applied to Boston, Bain, McKinsey, Deloitte, and they all just rejected me. So like all the big consulting shops, I got like an auto-response, like not interested. And I was like, dang, I thought I had this. Like I did my degree in econ in three years. I did my master's in a year. And so I thought, you know what? I almost build my own consulting firm. But I had no skills. So I kind of looked in the mirror and said, Hey, what do people think I'm good at? And because I'm young, they think I know the internet.

GM (04:20):
Truthfully. I really didn't. So like all right, I gotta go learn the internet. And so I wanted to kind of figure out what was like most high volume digital marketing field for high value. And so I stumbled into SEO and PPC. And so I kind of just read everything that was online around SEO and PPC and you know, I tried to get a first client, right? So I'm driving around my moped. It's like this old Peugeot one o three SP from like 78, I think it was 1978. And so I was in East LA and I got to this shwarma shop and I wasn't that good at search yet, so I wasn't going to sell it. I was just like helped him build a Yelp page, Facebook. I was kind of just learning everything. Did that for 30 days, came back to get my check. He said, come back tomorrow. The full place was boarded up. So that's the very first Directive (inaudible). Yeah, kind of nuts. And then from there I've got a (inaudible) of shop and he asked for SEO. Now I had kind of been playing around with WordPress a little bit, learning the Genesis framework and kind of teaching myself some basic HTML CSS. And so, I built him a website and then he asked, Hey, how do I get it to rank? And I was like, dude, I don't really know. So I read everything on Moz,Word Stream, Search Engine Land, Search Engine Journal. Just kind of started calling a lot of agency guys and gals and just trying to learn from there I actually ranked the number one. So I went to my best friend (inaudible) to go to law school. Dude, don't go to law school, come join me, we'll start own agency.

GM (05:44):
We had a bunch of clients like paying, you know, 200 bucks a month. And then I think three years later I did the global SEO for Cisco and you know, all state and a bunch of, and then you know, fast forward to now and we really just do performance marketing like SEO and PPC and conversion rate optimization for SaaS. We've got a ton of data around it. We've got a ton of experience and yeah, we work with a lot of really, really special clients, whether they're really high growth funded startups like, you know, going through like series A whatever that is at the time or we're working with like publicly traded SaaS or mid market SaaS and it's been a blast. Yeah.

DA (06:22):
How did you guys actually find out that SaaS companies were the right fit for you? Obviously you were starting with mom and pops and working your way up, but what was it about SaaS that kind of evolved in that perfect target market persona? Was it the influx of capital? Was it, you know, working together like you said, with IPO companies where they have just more funding and they're ready to go, they understand the digital landscape. What was it about that?

GM (06:44):
Yeah, there is something nice about working with SaaS in the sense that they do have capital available to acquire customers. They have great LTV CAC ratios and because of that, you know, their LTVs are so high. As long as they have, you know, churn that hits appropriate targets and they have strong activation, they can really pour a lot of money into acquisition because they have certain economies of scale that you don't have in professional services. Like Directive is really unique in that we only service like five accounts per rep and most reps are at 80% capacity. So we have world class strategists that are making a ton of money here, but they're only working on, you know, four accounts on average, three accounts sometimes. So that allows us to have an extreme high touch model. A lot of like, we share a Slack channel with every client.

GM (07:29):
We can go out to their offices. And what we found is we didn't start at SaaS. Right. So like you're asking is how do we get there? We kind of had to do, I think what every great SaaS company does too. And we have to look at our portfolio and say, Hey, where do we have the best gross margins? Where do we have the strongest retention? Where do we feel like we have a true competitive edge? And you know, we started out actually in local because we had all state and we had some really large strategic accounts in the local space. We wanted to do that. But what we found is because essentially Directive has grown through eating its own, I like to say caviar, like we've grown through our own search marketing. So we advertise a ton on PPC, do a ton of SEO, a ton of sales development, right?

GM (08:08):
We're doing not as much relationship building, but a lot more of our own marketing and sales. And so, well what happened when we did local, we got a lot of these SMBs and it's really hard to service them. It's really easy to acquire them. It's hard to profitably service them in professional services. And so we started to get a couple more SaaS and those ones we were doing great with. We're having a lot of fun with them. They have really strong teams. We just had a lot of, we just had a blast with it and we were good at it. And so next thing you know, we kind of just found ourselves there. And yeah, we've been doing that for almost, you know, three years.

DA (08:42):
That's awesome. That's super helpful. And what about like certain criteria? Are you guys asking for certain levels of ad spend or you know, like you said, a LTV CAC ratio that you already have or some type of specific margin that you need to accurately go in there and just ramp up their marketing? Are you typically coming in at the beginning stages, building out their initial campaigns?

GM (09:04):
Yeah. You know, it's so varied. There's some, you know, SaaS firms that have really strong marketing works and they've got a lot of historical data. You'd be amazed at how many product led SaaS companies or even sales led SaaS companies have no historical framework on a go-to-market strategy around search and they're at 400 million, you know, it, you'd be amazed at how many different types of SaaS organizations there are. And I, it really comes down to who the founders are right, cause every founder has different strengths and they kind of integrate those into their culture and that then obviously affects the marketing org. And so we work with all different types. I'd say the biggest thing right is we, we have, you know, minimums and as long as essentially they're either spending enough on paid search to hit our minimums or they want to invest heavily enough in organic because we really don't work with any like small business clients.

DA (09:51):
Makes a lot of sense. Makes a lot of sense. So let's talk about search engine optimization. Obviously you've been working with a lot of these SaaS companies. What does it take nowadays to create winning or you know, positive ROI campaigns for SaaS? This is a unique period of time right now in 2022 has there anything changed this year that you have to be aware of now to compete in SEO?

GM (10:14):
Yeah, I think it's actually the craziest part of this whole game, right? For SEO and SaaS and why I think Directive has been able to be successful is we have two fundamentally different approaches for how we approach SEO. One of them is that your brand is more important than your website, so I'm gonna repeat that. Your brand is more important than your website. Now, this is critical for creativity and success. Now, why is this so important is because when you take search engine optimization you want to drive profitability from and you want to drive really strong results, you need to understand purchase intent. In other words, just because you scale traffic does not mean you scale MQLs, and in fact, I've found that as you increase MQLs, there's oftentimes diminishing marginal returns. Okay? This is because historically search marketing agencies, SEO and PPC have said that the best way to grow your MQLs from search is to increase the amount of keywords you rank for AKA, I call this a breath strategy.

GM (11:18):
At Directive, we approach it with what I call a depth strategy and then we hinge ourselves from the idea that you'd have to rank a website and this is so important because if you take let's say ERP software and you search top ERP software, there is not one individual website ranking in the top 10 for that search engine results page and that's not because they don't have content links, pages, authority. It's because Google, in what I call the Yelp and the Amazon effect has decided that when they know that there's purchase intent for queries by labeling your category, you exist in ERP software with top best reviews, comparisons, pricing, whatever that is. They're going to show peer reviews (inaudible) third party review sites like G2, SoftwareAdvice, Capterra, and if you think you have to rank your website, you're essentially going to be so limited because you can't even rank your website. Even if you did everything right. And so when you say it's about your brand now, that allows you to strategically position yourself to be discoverable, which is the whole point of SEO is to make your brand discoverable when people search for what you offer. And so when you create that creativity, it can be really successful.

DA (12:28):
Give me an example of what that, what that entails.

GM (12:32):
Yeah. So you search, like I said, top ERP software is one example, but any, any category, right? That you exist in. So you're a sales software and there's a couple like this is really applies in a couple areas. Let's say you're trying to create a new category. Okay. So a lot of SaaS companies, they're innovators. They exist as a subset of an existing category. So let's say your, I mean there's so many in dev ops, I can't even get started. Let's just say something simple like marketing and in marketing, you're a new attribution software. Yet if you do like the research and you search marketing attribution software, there's not a ton of volume. So how do you essentially drive results from a search engine if people aren't searching for what you offer? So what we'd like to do is we go into the greater categories like marketing software and then we'll use really strong product positioning and messaging to say that we're attribution, position them, you know, above the fold to be discovered. And then what that does is it decreases your kind of click through rate because you're really blatant and proudly brazen of what you are. And then people who are looking for that or didn't even know they realize it you can engage with and people who don't want it, you don't have to pay on that cost per click level. So you can keep your efficiency and you can scale by essentially doing like (inaudible) into existing categories. That's one example.

DA (13:56):
Got it. So you're talking about pretty much doing SEM, paid advertising on that listing, on that keyword. Are you also like for instance, you mentioned earlier from an SEO perspective, you couldn't rank maybe for marketing software because it's all review sites, Capterra, affiliate sites, review sites. Are you also going in and doing advertising on those specific review sites to kind of organic, I guess organically rank or pay rankings on those review sites themselves?

GM (14:24):
Yeah, that's (inaudible) paying for SEO, right? So that's this concept of, well if you can't rank organically, but the whole point of organic to start was to just show up when people were searching for what you sold, let's just change our hypothesis that instead of being, how do I make my website show up to, how do I make my brand? And then you can call all of that kind of search marketing, right? So then what you do is you take this and then you look at what I call the opportunity cost, not the lead cost.

GM (14:47):
So essentially demo, like the cost per demo booked. And then you evaluate, is okay, so for top ERP software, we have a Google ad that has a two to 3% click through rate. And then we're in the number one spot through G2 and that has a 30% click through rate. And then we're on the number two and number three spot. So now we actually own 70% of the total adjustable market for purchase intent related keywords. And then you evaluate the cost property from all of those different channels and then you reallocate resources like time, budget and effort to the channels with the highest performance and instead of trying to rank for more keywords, you try to show up more often for the right keywords. And so if you change that fundamental approach, you see huge increasing marginal returns and really strong profitable growth.

DA (15:32):
That definitely makes sense. As far as kinda just maximizing where you're winning is kind of basically what you're doing with time and money and all that kind of stuff. Do you ever hit a limit of scale by doing that? Cause I can see how, you know, the assumption that if you hit more keywords, you have like this horizontal scale mechanism where it can keep going after, you know, new market share and new opportunity. But if you stay in those same categories, although they are the highest buyer intent, you're maybe somehow limited to the scale of those, you know, let's say it's 10 hot keywords or something like that.

GM (16:03):
You would think that's the case. Now the irony of all this is I have never, you know, I've worked with almost 400 SaaS companies now. I've never had one who was able to max out search impression share across all their most profitable channels for whatever reason due to budget.

GM (16:18):
So here's the thing, this idea that, the fundamental flaw in what you were talking about earlier of the breadth approach, raking for more keywords is that intrinsically every time you try to rank for another keyword, you move further and further up the funnel from purchase intent to informational intent. And then this very evil thing happens that people don't necessarily catch and I never caught for years. And what it is Is that you actually start to improve your metrics and get worse at the same time. So check this out. Okay, you've been trying to position bottom of funnel when there's purchase intent and you're pushing essentially demo videos and trials at this point. But then you recognize, Hey, sales development's not happy with the amount of MQLs we're driving. So we're going to start going into other channels. Like LinkedIn, we're going to start going further upstream and we're going to use that Gartner report for a low friction informational type offering. And guess what happens? Your cost per lead drastically goes down because what happens, your conversion rate skyrockets. All your marketing metrics look amazing. So you start to scale spend. Unfortunately when you put all of that into LTV CAC model, what you're going to find is that you're doing a horrific job though because there's no purchase intent of being able to activate those leads. And so what happens is you start to experience diminishing marginal returns at scale and then you evaporate trust in the marketing engines ability to drive revenue opportunities and it actually backfires on you and it happens to everybody all the time. And so that's why it's so important to first max out search impression share where there's purchase intent and then scale vertically instead of horizontally across more keywords, scale by showing up more often for the right ones. And then create like a separate bucket that you label essentially called informational intent. And then you go after that campaign with different metrics, different KPIs. And you separate it from your purchase intent campaigns.

DA (18:22):
So realistically setting better expectations for what those different campaigns should output. Because if you go too wide, too fast on that horizontal scale, you're killing your, your margins, you are killing that return. You've lost trust from leadership in marketing's ability to turn around quality leads you've lost, now your maybe you know, ad spend from the budget. All of these things kind of hurt the whole entire organization from a trust perspective. But if you set the right expectations by scaling in the right areas first with that buyer intent, really scaling that out, maximizing it, and then setting a different expectation on what the rest of the funnel will do. That is kind of the way to do it.

GM (19:00):
David, you're the best at this man. I think I did a hundred podcasts in the last 12 months. I love the way you're talking. So your audience is lucky, man. This is awesome.

DA (19:08):
No, that's a really, well, very astute way to say I'm learning a lot here and I'm really taking a lot in and trying to just make sense of it all because that makes a lot of sense. Now what about content marketing? If you're talking about from an SEO perspective, like really not going after all of these different keywords, how are you creating winning content marketing initiatives? Obviously with only, let's say 10 keywords. It's easy to spend money on, you know, the keywords or the review sites. What about building like the content for these keywords? How do you not have repetitive content? How do you build into that? How are you building SEO around it? What you're doing there?

GM (19:46):
Well, I love that. So great question. Now first off, I am going to say something that everyone should do and no one does and I didn't do for six years of living this like 12 hours a day. So everyone listening, go on LinkedIn sales navigator and map out your total adjustable market and then rethink what you want to accomplish with your traffic. This blew my mind. Here's what I mean, right? I found a SaaS. There's 24,000 marketers in SaaS in the function of marketing, not even by right titles, just marketers, I'm talking field marketing, event marketing, things I don't even really sell to. Okay. But there's 24,000 between 50 and 5,000 employees. Okay. Which is kind of my sweet spot right now. Yet nobody thinks about that when they think about what their traffic goals are, and this is hugely important because a lot of times we want to scale to 50,000 visitors to our website. If there's only 24,000 people in your total addressable market, how the hell does that make sense? No one thinks like this by the way. My whole industry, I never thought like this. Noone thinks like this. So I'd encourage you first and foremost reset what your expectations are for traffic based on your total addressable market. Hugely important.

DA (20:56):
For that in particular is that having better conversations with the leadership on getting a more dialed in understanding of what is my target market, what our actual goals for this company, what are our key KPIs like is it that full conversation or is it just doing the research of a TAM - total addressable market?

GM (21:16):
Most people are pretty good at that other goal setting stuff. Ideally like they're good at setting up OKRs, they are good at setting up quarterly roadmaps. They're good at annual planning. At least all the companies I'm working with are. What they're not good at with. And what I wasn't great at, I'm still working with is our pride, our pride says need more and more and more. Yet it doesn't always go back to that fundamental reality of how large our market is. And so when you really put things in that perspective, you can be hyper successful. That kinda makes sense?

DA (21:42):
It definitely does. I mean it goes back to almost what vanity metrics are like. Do you, would you rather 50,000 visitors every month with a extremely low conversion rate from low buyer intent? You know, low quality leads or would it be better to have a thousand highly qualified, great customers coming in that'll have great LTV, you know, lowd churn numbers, all the kind of good metrics that you want with those powerful customers. Anyways, it's like what would you rather, you know have and the vanity metric there would be just like total traffic.

GM (22:15):
Well you're spot on. Like I've been doing SEO for me forever and I don't actually have that many visitors in my website. Agencies that are like 10 times smaller than us have way bigger numbers, but they aren't able to like essentially generate enterprise leads from their form like we are because of our approach. Now to answer your initial question though, how do you go about content? Okay. Now the biggest pivot, and hopefully people can see this, is ok HubSpot came out with this really brilliant idea around pillar content and content clusters. Are you familiar with that, David?

DA (22:43):
Yes. We've even had them on here to talk about it. So yes, it's, it's something that we've talked about a couple of times out here on the podcast.

GM (22:48):
It's a brilliant idea. And also not the best way to do it, in my opinion. We need to take that same principle but make it product led content in SaaS. So here's what I mean by that. Instead of taking the guide to ERP software and then answering all the questions around ERP software and linking back to the guide, the ERP software, and then leveraging the ERP software as a lead gen, I would encourage you to think about your pillars as your products, your features, and your solutions. Okay? So once again, for search marketing and everything you need to work, we need to try to get, once again married to purchase intent and have very, very short distances between why we wrote a piece of content and how that drives product growth. Okay? And so we need to marry those two the best we can. And so what we do here, we'll take your product and we'll take your features and your product pages become our pillars because those are the things that we want to rank for bottom of funnel purchase intent. You're sales software, you have a forecasting feature. We want to rate for sales forecasting software. To do so we have to be the best answer to the questions people have around sales forecasting. So we essentially put let's say sales forecasting into a tool like Answerthepublic. We map out all the questions we have. We then export that into a CSV final. We then import that CSV file into Ahrefs or SEMrush and we do what's called a keyword difficulty map. We prioritize by brand slash product fit, volume and difficulty. That creates a score and then we create let's say five to 10 pieces, pieces of content that are all surrounding the buyer journey of sales forecasting and then all of those pieces of content have above the fold a lead gen magnet that links back to your product page. See this keeps you at the bottom of funnel and creates the same scale that that content clusters does without essentially generating low quality leads that are content driven, that are very difficult to sales dev to follow up with and other pieces and it allows you to stay really, really revenue focused.

DA (25:01):
I think I may have missed a step there. When you're uploading that stuff into Ahrefs, what are you actively looking for there? You're trying to break down other keywords to find or other pieces of content that you need to answer on your website that you'll create a page for to then link back to?

GM (25:17):
No, I'm just trying to prioritize my efforts. Cause Aswerthepublic does a really good job of visualizing for me all the questions they have, but then they don't tell me how difficult the keyword is to rank for, how many people are searching it, what the SERP features are, et cetera, et cetera. So what I do is I upload that to the keyword difficulty tool in SEMrush and then I prioritize my efforts where I think I have my lowest hanging fruit or I'll go through the website and then find like I'll filter out, so like put their domain in SEMrush and then I'll filter out the sub folder of blog and then I'll put positions 10 through 20 and I'll find all the pieces of content that ranked just outside the first page. Then I'll kind of rewrite those pieces, internally link them to those product pages, and then I'll essentially be able to not only improve existing rankings but then drive more demos. It's kind of an example.

DA (26:04):
Got it. Yeah, that's super helpful. Very tactical. I like that. And what about things like reviews or comparison pages. Are you building those actively too? Are those pretty much a big part of this buyer intent keyword list?

GM (26:20):
Oh, like, like review pages? I'm sorry, what does that exactly mean? Just so I understand what...

DA (26:24):
Yeah, so something like, like a Demio versus zoom or something like that for us, right? Like we have our Demio pages, but it's something like that, a good thing to also kind of rank for from that you know, pillar perspective because of the keyword intent or the buyer intent behind if they're looking up areview or are you specifically just looking at feature pages?

GM (26:44):
Well, I think all of these, like, you know, that's just one tactic in an overarching content strategy. So, you know, cause the initial question was how do you drive SEO growth? I would try to drive first SEO growth through product, like increasing like using product pages and feature pages as the pillars so that I can drive demos and that works really well. But to also answer your question, yes. Comparisons that can be a part of our strategy, guides can be part of, there's other facets to a content strategy. Now what's interesting about that is that the paid level, ironically some of the worst performing campaigns for everyone of our SaaS clients is their competitor campaigns. But what we found there is a little tactical tidbit is if you change those campaigns, so instead of just advertising on Zoom, David, you advertise on zoom alternatives, zoom comparison and zoom reviews. And then you said Zoom itself as a negative, you'll drastically lower CPA and your results will skyrocket.

DA (27:39):
Oh wow. That's a great suggestion. I love that.

GM (27:42):
Now you catch (inaudible) content you see? Everything's about content...

DA (27:47):
Yeah definitely. And I love that. And the way you kind of framed it at the beginning of this conversation and now really makes sense as far as setting those expectations and having the idea that you really want buyer intent as the only thing. It's not about the numbers, necessarily.

GM (27:59):
It's just a start, right? Because you need trust to take risk. I think one of the craziest things we do as consultants or even in -house marketers, right? If we don't take enough time building trust and so we essentially lower our future ceiling for impact we can make because we haven't taken the time to prove out our hypotheses around our approach. And if you don't have an approach, you need to take some time to build one cause that's what executives want to buy into and they want to buy into why, your approach will be successful. And then you essentially have to prove that it's successful through your data. And then once you have that success, now you can start to do your riskier things. Like, you know, whether it's a spinoff product that's a free thing that could pump into our pipeline or other pieces of an overarching demand gen strategy like account based advertising or whatever that is, that's more informational intent and more about lead gen. You always want to start with opportunity generation, build trust, create that essentially like too many people try to generate demand without positioning themselves to capture it. And so first you want to make sure you're really doing well, capturing every piece of existing demand in your marketplace and then you want to experiment with generating demand. And if you do it like that, you'll have a lot more buy in and success.

DA (29:11):
Well, let's take the approach of maybe one of our audience members listening who's in marketing and SaaS and they're looking to increase their MQLs and SQLs in their company. If they were to approach you guys at Directive, what would be kind of the process that you do kind of that audit process to sit down and figure out like where are the first steps that we need to look at? Or what would be your kind of suggestions as far as first steps to start this process?

GM (29:36):
Yeah, so first I'm going to ask, okay, what category do you exist in? Very important. Okay. Because now I can, their whole entire marketplace, what every one of their competitors value props are, what their value props are, what the client, you know my client's call to action is versus what their competitors call to action is. And at this point, I'm trying to understand product market fit and also psychological friction, AKA how well is my client able to give someone value that is greater than the value they're requesting? Here's my point. The worst thing SaaS companies do is have a call to action that says request a demo. Okay? It performs horrifically because there's a ton of psychological friction associated with the time it takes to be on a demo as a user, there's a lot of psychological friction around the value of demos. You just want to know price, show me the damn product.

GM (30:25):
Like this is what customers think, right? So what we do is we help them say, why don't we record a demo video? And why don't we offer a demo video and gate it? Okay, you see what I'm saying? So I'm trying to understand first the category they exist in and if they're able to decrease psychological friction and have a strong value proposition. Once I have that understood, I'm going to, I'm going to become their customer and I'm going to start to do what I call the three tab test. I'm going to search for the top ERP software, top sales forecasting software, and I'm going to ask myself, how discoverable is my client? Are they positioned in a Google ad? Are they above the fold in a review site? Are they ranking organically on that page, do they? And then I'll start to ask things like, like what is sales forecasting?

GM (31:13):
Why is sales forecasting important? I'm gonna start talking wonder if they have any types of supporting content that's middle or top of funnel. And once I understand all of that, now I'm going to come up with a strategy that says, cool, here's your existing content inventory. Here's how we can pivot those title tags or H1s or internally links to get quick wins that are 100% or in our control to make your vanity metrics look good cause that's still a part of this game. And then at the bottom of the funnel, here's your review target. On G2 you need 15 reviews for you to stand out, currently you have 12, we need three reviews from customer success. Here's how we can support you there. On Capterra we need this on software advice. We need that. Great. Now that we're driving leads here, we're going to experiment with Google ads. We're going to measure the cost per opportunity from Google ads compared to third party review sites so we know how and where to scale budget. Lastly, we're going to really focus on our offer and make sure that we can add more value in our call to action than anyone else. And when we do all of that, I've never not been able to change someone's pipeline because it really is that simple.

DA (32:12):
Well that was very thorough and I appreciate taking the time to explain all that. I like that. And obviously this is going to be so dependent on, like you said, the category, the SaaS, the problem they're trying to solve, the outcome and the goal. So all those things kind of have to be prepared prior. But you know, realistically we're in a kind of a crazy time in the market right now. I know metrics have kind of changed from all different types of marketing initiatives and campaigns. And looking back over the past month, any crazy campaign changes, metrics changes that you want to share that could be helpful for people?

GM (32:47):
Yeah. David, that's so cool. So, you know, we're a little, I think we're blessed over here to have a lot of first party data from SaaS and I don't think we might have the most in the industry. And so like right now I can tell you, so let's, when do you think COVIT really hit? What, what date do you want me to look at between now and then?

DA (33:04):
Quite honestly, I think it's the beginning of March is really where I saw personally like a change in the industry. Even, you know, midway through March really kind of being where you're seeing a lot of contraction in the market. But obviously it depends on where you are at in the country. And I'm speaking mostly for USA.

GM (33:21):
Well, no, no, great point. So I'm looking at March 1st then to April 16. I've got $1 million here and I'm seeing period over period, spend is down 24% in our portfolio. And CPC though is down 54%. So what's really cool right now is because of this kind of shrinkage of the economy, the auction is becoming less expensive to bid because fewer people are bidding. And so it's actually drastically lowering CPCs. Now ironically though conversion rates are down. So conversion rates right now are down 27% across that same portfolio. But then cost per conversion goes down by 38%. So you're still seeing economies of scale. So people are actually winning right now from advertising. Now, let me filter it to just search because that's got like a lot of our display and a lot of other stuff. So let me look at just search for you.

GM (34:18):
Looking at, still, you know, very hefty spend, that's down. So across search March 1st to April 16th, we're down 26% on spend. Click through rate though is up 8.4%. So it's actually at a 4% click through rate, which is pretty high. CPC is only down 4% on search and conversion rates up seven cost per conversions down 11. So across our whole portfolio, clients are actually seeing a good return even though they're spending a little less. It's interesting definitely to see that. And then we can look at, you know, really anything you want devices, time of day, location, match types, quality score. We have data on kind of everything across, you know, millions of dollars of spend.

DA (35:02):
So realistically, kind of just the actionable takeaways there is that still, you know, make sure to run your advertising campaigns because there's still good buyer intent out there. There's still a lot of buyers, you may be losing some of that competitive cost per click because other companies are shrinking their spend. But buyers are still there. And sometimes it sounds like because that conversion rate's still kind of strong that a lot of your good buyers are still there.

GM (35:26):
Well yeah. Let me just like simplify more.(inaudible) So PPC like this is cost per click so theoretically with all that it's happening right now is yes, demand is decreasing. But your performing metrics are improving due to less, fewer advertising competition. So in other words, just because of the economy, let's say, you know, shrinks and goes into a recession, that doesn't mean you're wasting spend cause you're only spending when someone clicks. So you're still satisfying all the existing demand in a CPC model. So like right now impressions are down 28% clicks are down 22% but CPC is down 4%, conversion rates up seven. And so yeah, there are still buyers and it's actually becoming more efficient to acquire customers even though your volume is going down.

DA (36:12):
Yeah, super well said. I love that. Absolutely. And I guess looking forward there's a lot of unknowns, right? And this year we don't really know what's going to happen. Are there challenges, new opportunities, anything you're excited for, for the SaaS companies you guys work with? Moving forward?

GM (36:28):
Yeah, I mean if you're a strong SaaS company right now, there's huge M & A opportunities, right? Because you know, there's going to be certain people who are gonna essentially put themselves in poor debt situations and don't have enough runway. So there's really strong consolidation efforts I'd say for the middle and upper part of SaaS. I also think that it will strengthen when the economy starts to reopen. It'll strengthen hopefully marketer's ability to understand the financials of their marketing because I think the strongest SaaS firms have a really strong grasp on things like activation rate per channel. They have a really strong grasp on, you know CAC, like their CAC LTV model, not just overall at the CFO level, but at the marketing level, on a channel by channel basis. And hopefully because essentially they're having to focus on efficiency and effectiveness that they're really preparing. Cause here's the hard truth and I hopefully everyone, understands this is, you're going to get grace on your Q2 numbers. You're not going to get grace on your Q3, Q4 numbers and so you still need to be building right now and focusing on your SEO, focusing on your content, focusing on the efficiency, focusing on your CRO, focusing on your essentially positioning all these pieces because you're going to get grace to miss your Q2 numbers, but you're not going to get grace on Q3 and Q4 like you did on Q2 because there's going to become, you know, some numbness to COVID and the board and the leadership is going to become hard nose on still finishing the year strong. So now's the time to prep for that.

DA (38:04):
I love that. Just kind of hold down right now, but prepare as much as you can because it's going to be even more than business as usual in Q3 and Q4 there may be, you know, this big push for faster growth or to catch up for what we lost in Q2.

GM (38:19):
Yeah. You can't just like shut everything off right now without prepping for how you're going to make up for lost time. So I tell you right now, every executive in the game is going to be really understanding right now, but once Q3, Q4 comes around, they're not going to be as gracious. It's just human nature. They're going to want to know why they're missing numbers. And it's like,well , it takes 90 days for our pipeline and we lost 90 days and they're not going to care. So you've got gotta really ask yourself what you're gonna do about it now so that you're positioned to still win, you know, as a demand gen person or as a marketer in Q3 and Q4.

DA (38:52):
Yeah, I love that. That's great advice. Really, really sage advice there. Well, lots of good tidbits here. What I want to do now for the sake of time is flip over to our lightning round questions. Five quick questions I'll ask you and you can answer with the best first thought that comes to mind. You ready to get started?

GM (39:09):
Let's do it.

DA (39:11):
Alright, you got this, you're gonna do great. What would you give for advice for early stage SaaS companies starting marketing today?

GM (39:18):
Yeah. Eat some humble pie. You don't have to create a category, go into the closest existing category and then do a really good job capturing demand and resonating your product features with your ideal customer persona. And focus on demand capturing, not demand generation. And if you do that, you'll be in a real good spot.

DA (39:37):
I love that. What skill do you think is vital for marketing teams to improve and build on today?

GM (39:43):
Financial modeling. First and foremost, if you can communicate why your numbers directly impact the same numbers that the CFO cares about, you'll always get budget approval.

DA (39:54):
Best educational resource you'd recommend for learning about marketing growth or maybe financial reporting like that?

GM (40:01):
Directive Institute. So Directiveconsulting.com/institute. And yeah, we teach you everything about SEO and PPC, exactly how we do it for 39 bucks a month.

DA (40:11):
I love that. We'll link to that in the show notes and the resource section as well. That sounds awesome. What about a favorite tool you can't live without?

GM (40:19):
SEMrush or HubSpot. I think they both do a really good job.

DA (40:22):
Perfect. And what about a brand business or team that you admire today?

GM (40:28):
Yeah, I mean back to the financial modeling, I think ProfitWell does a really good job with their content. I like what they do. I think their product is really beautiful and I love it for, you know, the SaaS products I run here at Directive. Admire though, I'm trying to think of like who's like super creative that really impresses me. I mean, HubSpot...

DA (40:50):
(inaudible was a pretty good one. Wistia.

GM (40:51):
Yeah, Wistia they do a really good job in those like videos they did on the different like $10, one thousand a hundred thousand. I thought that was brilliant. Yeah. I'm trying to think like who's super cheeky that I'm like really always stood out to me. That's like a total domination. I mean, HubSpot dominates, man, they fricking dominate when it comes to search. Like they're really good at it. I'm trying to think. Moz on the SEO side did a phenomenal job with their content marketing and lowering CPA. I'm trying to think. It's ProfitWell, man. I love ProfitWell. I think their content series is phenomenal as well. Yeah.

DA (41:27):
ProfitWell is a great company. We've had them on here to talk about kind of that content marketing initiatives that they're doing. All their different shows and it's been incredible to watch them roll out over the past six months and they're so good with their content. They're fantastic.

GM (41:42):
Now they make us all look bad. I wish I was better at it. Dude. They do a really good job.

DA (41:46):
They do. They do a great job. But you know, I just want to say, you know, thank you so much for coming on, Garrett. It was real fantastic to chat with you. I think you've shared so much great knowledge. I want to go back and listen to this again, kind of rethink about some of these topics and you know, the idea behind, you know, just having the proper expectations and what metrics are really important for the scale process. I think that's really, really smart and some good clarity for all marketers to kind of have in their, in their mind and in their kind of conversations with leadership. So again, Garrett, thank you so much for coming on today.

GM (42:19):
Thanks David, glad to hear man.

DA (42:19):
All right, thanks so much and we'll talk to you soon. Amazing. Thank you so much for listening today. I truly hope you enjoy this episode with Garrett from Directive. I know I got a lot out of it and I have a new perception and understanding of the expectations you need to set for growth marketing and some of those ideas are in SEM and SEO. Big shout out to Garrett and the entire team at Directive for what they're doing. Obviously working with a lot of SaaS companies.

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