Is marketing-as-a-service the future of marketing?

In the past decade no other department/component in the enterprise has changed more than Marketing. What used to be a function based on creativity and an almost comical lack of measurability is now a complex, multi-discipline, metrics-driven, function with direct bottom-line impact.

Not surprisingly, the role and requirements of the CMO (Chief Marketing Officer) have undergone equally dramatic changes. What used to be a position akin to the head of a marketing or advertising agency is now one requiring equal expertise in product management, corporate marketing, product marketing, and IT — a combination of skills that has led recruiters to refer to qualified candidates as “unicorns.”

But, despite these advances, three realities continue to confound investors and entrepreneurs:

1. The failure rate of startups overall remains at 90 percent, according to CB Insights.
2. Six of the top 10 reasons cited for startup failure can be tied directly to a company’s marketing function (including misfires in pricing, competition, business model, customers, etc.)
3. The CMO is the senior staff member with the shortest tenure and highest turnover, often blamed for the failures in Point #2.

In our tenures as chief marketing officers for Fortune 500 companies and over 45 startups, we’ve had ringside seats to these trends. And we’ve reached the conclusion that they won’t change until companies make two changes:

1. Focus not on what Marketing but on who does it and when
2. Adopt a new marketing model, one we call marketing-as-a-service (MaaS).

The role of the CMO

As mentioned above, the requirements of a modern CMO are numerous and complex:

1. Product management: They have to understand the technology in its earliest stages so they can interact with the market and customers to shape the product plan for Engineering and Product Development teams.

2. Corporate marketing: They have to understand how to build and differentiate their core solutions and then manage a variety of disciplines (website design, content, demand generation) to launch the company, build market awareness, and create sales preference.

3. Product marketing: They have to be able to continue to define and reinforce the product advantages for the market (channel, end user, specifier) to blunt the competition and build market traction.

4. IT: They have to use data and systems to accelerate customer acquisition and shorten time to revenue by measuring and tuning the message of the company’s solution and product.

The problem is, no one person (certainly not in a startup’s earliest stages) will possess all of the experience and skills to staff this role. But CEOs and investors continue to doggedly seek out talented individuals with hybrid skills, hire them too early, task them with a variety of impossible tasks without adequate staff, and then fire them when they fail.

Instead, we find that successful startups can rethink hiring by looking at Marketing as three phases, with a separate approach (and owner) to each phase. MaaS takes the above roles of the CMO, breaks them out and institutes them in a particular sequence.

MaaS: Phased for lean, agile startups

Phase one is about product management and, rather than a dedicated headcount, the best person to own this role (and perhaps even this title) is a cofounder with the technical bona fides to help lead and build the company from its earliest days up to launching the company and first product. A skilled leader who owns product management will interact directly with the market and early customers as well as with the startup’s engineering teams to define the product roadmap.

Phase two is where a MaaS approach is most distinctive. Corporate marketing involves a set of talents and skills that become absolutely vital to a startup transitioning from “the lab” to “the market.” Your grandmother was right: You only get one shot at a first impression. But in the hands of an inexperienced CMO (one strong in product and technology but unfamiliar with corporate marketing), a launch can be disastrous — an event from which the company may not ever recover.

Phase three is product marketing-centric. Long term, this is the capability most important to a CMO capable of steering a company through a challenging and fast-changing market. Past domain experience is currency. For an enterprise cyber security startup, for example, the product marketing pro would bring real experience from a company selling to CISOs.

NOTE:  In this new approach, the CMO is hired much later — in fact, after the company has launched. And it’s the cofounder in the product management role, partnered with a MaaS expert as leader of the launch that will be the company’s best path to hiring a CMO (with product marketing DNA) who will last.

Here are the key principles of implementing MaaS:

Focus on what’s ‘core’ and outsource the rest.  (See MaaS Model chart below) This approach will keep headcount lean and will maximize flexibility to build out your marketing team, post launch.

Justify every full-time hire. Every one. Contractors in disciplines such as demand generation, video, design, and digital marketing are cheaper, usually better at their job and more up-to-date than their in-house compatriots. And when you do hire, hire managers, not individual contributors.

Hire your CMO last, not first. Building a company is like building a house: There’s the design (positioning and messaging), plan (budget, schedule, and staffing), and build (website, PR, launch). Good luck finding a CMO who is equally strong at these pre-launch necessities and who is also versed in the product, market, and technology capabilities that you’ll need long-term from this position. What works best is to outsource the launch, then use the resulting publicity to find and hire the right CMO.

Focus your website and content strategy on early sales and customer acquisition. Too many startups want to display all their great ideas and technology on their website, turning it into a library of brochure-ware that a prospect has to wade through. Instead, work with your early sales team (even if it’s you) to articulate a sales cycle (or funnel), and then design your website and supporting content to lead customers from initial interest to sale.

Automate and measure everything from the start. There’s no excuse not to tap proven marketing technology software to build, measure, and iterate on everything from pricing strategies to content offers to the calls-to-action featured on your website.

Hire managers, not individual contributors for your startup. What used to be a large marketing team (combination of VPs, directors, managers, and individual contributors) can now be scaled down to a small number of managers who hire and direct individual projects and contributors within their areas of expertise.

Focus on the core

The guiding concept of MaaS, then, is to keep Marketing as lean and nimble as possible, establishing and staffing for that which is “core” (essential) to your operation and outsourcing the rest.

In a MaaS model, marketing functions are not equal. How you rank them — and then allocate resources against this ranking — will determine how well you use the advantages of MaaS. Categories (and answers) may vary, but here are the basics:

1. Strategic functions (e.g. positioning, channel partner programs, presentation design) that are core to the business and that shouldn’t be outsourced.
2. Strategic functions (e.g. brand design, public relations, demand generation programs) that are core to the business but are so highly specialized that they almost always require an outside expert.
3. Non-strategic functions (e.g., photography, marketing automation systems, and email marketing) that are typically outsourced (and sometimes crowdsourced) although they have not yet been commoditized.

The advantages to the MaaS approach

Reinventing Marketing using the above model will help build a strong go-to-market presence while planning your spend carefully and remaining true to the bottom line. Done right, MaaS will deliver the following capabilities and advantages:

1. Stronger company positioning, messaging, and competitive advantage
2. A powerful launch that generates powerful market interest (analysts, press, and customers)
3. A low burn rate
4. Flexibility in hiring to respond to early market reaction
5. A “virtual marketing department” that knows your company, speaks with your voice, and is indistinguishable from full-time staff that can eat away your budget and limit flexibility.
6. The ability to then hire a CMO with strong product and market expertise and set them up for early success rather than likely failure.

MaaS, implemented correctly, is the future of marketing.

Carol Broadbent and Tom Hogan are the founders and principals of Crowded Ocean, a Silicon Valley marketing firm that has launched over 45 startups.