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Monday, January 13, 2020

Lesson #320: The Rise of Account Based Marketing

Posted By: George Deeb - 1/13/2020

I have been a marketer for decades, and have seen many evolutions in marketing best practices.  First we saw the rise of digital marketi...

I have been a marketer for decades, and have seen many evolutions in marketing best practices.  First we saw the rise of digital marketing vs. offline marketing.  Then, we saw the rise of social media marketing within digital marketing.  Which was followed by marketing automation technologies, replacing human marketing tasks.  There is a new trend that is starting to take off called Account Based Marketing (or ABM for short), and it has the potential to change everything for B2B marketers.

How Have B2B Marketers Historically Marketed

Most B2B marketing campaigns are designed to support the B2B sales team with their selling efforts.  That includes building all the internal collateral materials, doing inbound “pull” marketing including content marketing, doing outbound “push” marketing including the search engines, public relations and lead generation efforts, trade marketing at events or related media, and business development channel partnerships, to name a few.   Re-read this article I wrote on the basics of B2B marketing, as a refresher.

The goal here was to make everyone and anyone that could be interested in your product or service aware of your company using techniques like this.  The problem with this method is you may be able to narrow down to companies within an industry, but not all companies in that industry are created equal.  Maybe you need to better focus on companies of a certain revenue size who can afford your product or service, or companies within a certain geographic region, as examples.  Which means there may be a lot of wasted efforts and spend in this campaign.

What is ABM and How Is It Different

ABM turns this model upside down.  It basically says, you tell me the top specific company accounts you want to be targeting, and we will put a marketing campaign in place that only speaks to those specific accounts/people.  Presumably, with no wasted marketing spend, as 100% of your dollars are targeted towards those exact accounts.  And, hopefully, with better automated efficiency, than a human sales team would have calling into those same accounts manually.

If a normal B2B company spends 80% of their sales and marketing budget on sales team related expenses and 20% on marketing related expenses, ABM could result in material dollar savings, replacing expensive outbound sales people with much more affordable ABM marketing campaigns, automation technologies and inbound order takers.  This works particularly well for B2B companies with less complex products at lower price points, that doesn’t require in-person selling to strategically sell and nurture enterprise clients buying expensive solutions with long sales cycles.

ABM Best Practices

A good ABM campaign requires the following.  First, you need to have a good list of targets to go after.  Use a service like Experian, Acxiom, Hoovers, D&B or ZoomInfo to help you find the right specific titles/contacts of individuals, at the right specific companies in your industry, who have the other right specific characteristics you require to maximize success for your business (e.g., revenue size, geographic location).  The key here:  we are targeting specific people, not specific companies.

Once the list is built, now comes the fun part.  You can upload those email addresses into your Google advertising account, and if you are a whitelisted emailer, Google will target advertising to as many of those people as they can match in their system, regardless what websites they may be visiting online (assuming it is part of the Google ad network).  You will set up email campaigns and automated nurturing to those exact people, using 6-7 content pieces.  You will set up you LinkedIn advertising through InMail and personally connect with those exact people.  You will target those same people in Facebook.  Etc.  Your target contacts won’t be able to miss your advertising messaging, because they will see it all over the internet at multiple times, presumably resulting in increased odds they will want to work with you given the increased frequency of seeing your messaging.

It is important to note, where possible you should customize your messaging to that specific user.  For example, if you are selling through multiple channels, have a unique set of content for each channel you are going after (e.g., client direct, their agency, different departments, different use cases).  And, even better, if you can make it look like you are speaking directly to that individual—their company, their role, their needs—your results will be even better.

You can either manage your ABM efforts yourself.  Or, there are several ABM focused agencies that can do the work for you (e.g., Ignitium, Iron Paper, Yesler, KEO Marketing, Square 2 Marketing, The PMG Company, OBO Agency, MRPfd, and Momentum ABM,  to name a few).  And, several ABM technology platforms that can help you (e.g., Triblio, Engagio, Everstring, Inside View and Terminus, to name a few).  I have not researched all of these companies, so be sure to do your homework before engaging them, as I simply learned about them doing ABM research on Google.

Restaurant Furniture Plus Case Study

Back in 2018, we acquired Restaurant Furniture Plus, a seller of furniture to restaurants.  The business was 100% dependent on Google for leads.  But, there is no quality control with Google.  You never know whether the click is going to be a consumer, a single location restaurant, a small chain, a large chain, or whatever.  Our target is small growing chains that best need a service like ours.  So, only a third of the clicks we were buying was our exact target.  Said another way, we were wasting 67% of our spend on stuff we didn’t want.

By employing an ABM strategy, we are better able to only target the desired small growing chains we want, no longer wasting money.  In the process, we are watching our average order size increase, losing the small orders from single locations.  We are watching our business become more efficient; we don’t need as many transactions to drive the same amount of revenues.  And, we are seeing our base of repeat revenues growing, as small chains are opening new units every year (as compared to a single location that is “one and done”).  You tell me which marketing route is better for our business!

Concluding Thoughts

If you are not using ABM marketing techniques today, you probably should reassess your entire B2B sales and marketing strategy and execution efforts, to see if ABM can help save you time and money with your go-to-market plans.  My guess is, you may be wasting a lot of time and money today that ABM can help you recover.  It will be very interesting to see how ABM techniques and demand evolve over the coming years, but there is no time like the present, in terms of being an early adopter of ABM.

For future posts, please follow me on Twitter at: @georgedeeb.

Saturday, December 28, 2019

Marketing is Still an Art (and a Science)

Posted By: George Deeb - 12/28/2019

Data-driven decision making has been the mantra of most good CEOs and CMOs over the better part of the last decade. They want all market...

Data-driven decision making has been the mantra of most good CEOs and CMOs over the better part of the last decade. They want all marketing decisions to be based on solid data that had previously not been available, but is today in high amounts. But, data can be deceiving. It may lead you in one direction, when in fact the right answer may be completely in the opposite direction. Allow me to explain with this marketing case study from my Restaurant Furniture Plus business.

Read the rest of the post in Entrepreneur, where I guest authored it this week.

For future posts, please follow me on Twitter at: @georgedeeb.

Tuesday, December 17, 2019

Red Rocket's Best Startups of 2019

Posted By: George Deeb - 12/17/2019

Red Rocket gets introduced to hundreds of startups each year, in the normal course of doing business, or via our involvement with variou...

Red Rocket gets introduced to hundreds of startups each year, in the normal course of doing business, or via our involvement with various startup groups or events.  We wanted to honor the best of these startups that we met in 2019, in Red Rocket's 8th Annual "Best Startups of the Year".  This list is not intended to be an all-encompassing best startups list, as there are many additional great startups that we are not personally exposed to each year.  And, this list is not intended to be only for businesses that launched in 2019, it is open to startups of any age, that they or their advisors had some personal interaction with us in the last 12 months.  The business simply needed to have a good idea, good team or good traction, that caught our attention.  Congrats to you all!!

THE BEST STARTUPS OF 2019 (in alphabetical order):

ABC Insights (President, Steve Beisser) - B2B financial benchmarking universities

Annex Tech Partners (CEO, Doug Speight) - B2B corporate divestiture service

Craft Brew Systems (CEO, Andrew Baker) - B2B small batch brew systems

Fytte (CEO, Adam Spisak) - B2C on-demand yoga app

How U Dish (CEO, Michael Gayed) - B2C restaurant food discovery app

Intake (CEO, Michael Bender) - B2B and B2C urine testing at home

Kelaca (CEO, Keith Langbo) - B2B talent advisory service

Keona Health (CEO, Oakkar Oakkar) - B2B call center phone system for healthcare

Luca & Danni (CEO, Fred Magnanimi) - B2C ecommerce jewelry brand

Momentum (CEO, Jessica Mitsch) - B2C technology coding school

Root Bioscience (CEO, Garrett Perdue) - B2B and B2C CBD manufacturer

Shortcut (CEO, John Meurer) - B2C and B2B haircuts on demand

Sock Fancy (CEO, Stefan Lewinger) - B2C customized socks ecommerce

TrueCare24 (CEO, Leo Popov) - B2C marketplace to find caregivers

Wellistic (CEO, Oz Merchant) - B2C to find and review doctors

And, don't forget to check out the 2012 winners2013 winners2014 winners2015 winners2016 winners2017 winners and 2018 winners, many of whom continue to be doing great things.

Congratulations to you all!!  Keep up the good work.

For future posts, please follow us at: @RedRocketVC

Monday, December 9, 2019

[VIDEO] George Deeb Discusses 'Driving Growth vs. Driving Profits--Which is Right for You?' on ASBN

Posted By: George Deeb - 12/09/2019

I was recently interviewed by the  Atlanta Small Business Network  (ASBN), an online "television network" serving the small bu...

I was recently interviewed by the Atlanta Small Business Network (ASBN), an online "television network" serving the small business community, about when it is best to drive growth vs. when it is best to drive profits for you business.  I thought this video turned out great, and I wanted to share it with all of you, to help you assess whether it is better for you to focus on your top line revenue (growth) or your bottom line (profits).  I hope you like!!

The embedded video player didn't give me the option to change the size of this video.  But, if you want to see a bigger version, simply click the expand size button in the player above, or feel free to watch it on the ASBN website.

Thanks again to Jim Fitzpatrick and the ASBN team for having me on the show.  I look forward to our next interview together.

For future posts, please follow me on Twitter at: @georgedeeb.

Friday, December 6, 2019

[PODCAST] George Deeb Shares Entrepreneurial Lessons with John Vuong

Posted By: George Deeb - 12/06/2019

Red Rocket partner George Deeb was recently interviewed by John Vuong who publishes a podcast with entrepreneurial lessons for startups ...

Red Rocket partner George Deeb was recently interviewed by John Vuong who publishes a podcast with entrepreneurial lessons for startups on this Local SEO Today website.  In this podcast, he features George, who discusses his journey and experiences in growing his businesses, including:
  • Business mistakes
  • Choosing investment options
  • Pitching your business
  • Importance of sales and marketing
  • Strengths and weaknesses in business
  • Importance of networking

Nice work, John.  We thought this turned out great.  Thanks for letting us share this with our readers.

If you have any problems listening to the podcast from this page, you can also listen to it on the Local SEO Today website.

For future posts, please follow us on Twitter:  @georgedeeb, @RedRocketVC, @LocalSEO_Search

Friday, November 8, 2019

Lesson #319: How to Pitch a Business Investment Case to Your CFO

Posted By: George Deeb - 11/08/2019

Chief Financial Officers are often the “gatekeepers” to the company’s cash coffers.   And, as you can imagine, the have a lot of peopl...

Chief Financial Officers are often the “gatekeepers” to the company’s cash coffers.  And, as you can imagine, the have a lot of people tugging on their sleeves looking for investments into various projects within the company.  But, CFO’s need to prioritize their spend, based on what is in the best interests of the company.  This post will help you learn to think like a CFO and how best to pitch your business investment case with the highest odds of success.

First of all, there are many different scenarios in which the business may require capital.  Perhaps the CEO wants to make a big strategic acquisition.  Or, the CMO needs to scale up the company’s sales and marketing efforts.  Or, the head of product wants to launch a new business line.  Or, the CTO needs to develop new technologies for the business.  Or, the head of HR needs to make a few new hires.  The ways capital can be invested in the business are limitless, and the asks from the team are endless.  So, you better make sure your pitch resonates to break through the clutter.

Here are examples of the best ways to pitch for internal funds, for each of the scenarios above:

Pitching for Strategic Capital

Like in any investment, your CFO is going to be most focused on the potential return on investment (ROI).  It is no different than pitching a venture capitalist for outside funds; now you are pitching your inside team for internal funds with an “ROI First” mindset.  Let’s say the CEO wants to invest $5MM into an acquisition of a competitor.  The business case he would want to make is: (i) it adds $10MM of revenues and $1MM in annual cash flow to the business; (ii) it removes a big competitor, making it easy to price our products and grow our margins; (iii) it grows our market share in the space; (iv) it will help us accelerate revenue growth by cross-selling our respective products into non-overlapping industries; and (v) it will help us to achieve a 10x return on the invested capital within the next five years, based on these reasonable financial assumptions.

Pitching for Marketing Growth Capital

Your CMO may be looking for capital to spend on $1MM on additional marketing activities or to expand the sales team.  So, she is going to have to communicate things like: (i) I am expecting a 5x return on my advertising spend, adding $5MM in revenues; (ii) the investment should realize a return of funds invested within 6 months of the spend; (iii) my expected cost of customer acquisition is $250, well below our expected gross profit of $1,000 per transaction; or (iv) we will be able to sell into twice as many regions or sectors than we are today, increasing our potential reach and ability to scale the business.

Pitching for Product R&D Capital

Your head of product research and development may want to invest $1MM into launching a new product line.  So, she is going to have emphasize points like: (i) by doubling our product line, we should be able to double our sales, by increasing our average order size; (ii) the new product line will be a “first mover” in the space, with limited competition; (iii) it will make us less dependent on our original product suppliers, better diversifying our vendor concentration risk; (iv) we have researched our customers, and 75% of them said they would buy this new product if it was available for sale; and (v) I expect the investment to allow to build $10MM in additional revenues, a 10x ROI, within the first three years.

Pitching for Technology Capital

The process is exactly the same for your CTO, when asking for $1MM to develop and upgrade the companies systems in the next year.  He is going to have to impress your CFO with information like: (i) our old technology can crash at any time and is putting our current $10MM in revenues at risk if the site goes down (saving a -10x loss); (ii) by improving our user experience on the website, I expect to reduce our abandoned cart percentage by 25%, theoretically adding $2.5MM in new revenues  (a 2.5x ROI); and (iii) if we don’t make this investment, hackers will be able to get into our systems and get access to all of our customer data, which we don’t want to happen to our customers or ourselves for competitive reasons.

Pitching for Human Capital

Adding $1MM of payroll happens throughout the organization, by department, but adding human resources to the organization requires the same ROI-driven financial disciplines: (i) we need that new salesperson because we are under capacity, with more leads than we can reasonably handle today, and we expect to close $1MM of new sales from that $250K investment in a new salesperson (4x ROI); (ii) our employees are on the “hamster wheel”, getting burned out working at 110% capacity; if we don’t add additional staff members, 25% of our current team is going to quit, taking those relationships and institutional knowledge with them; and (iii) to improve our recruiting, retention and morale, we are going to have to upgrade our employee benefits offering, which should improve our hiring time by 25% (helping us drive efficiencies and revenues faster) and reduce our employee turnover rate by 30% (which stops the revolving door we have with talent, and the inefficiencies and lost revenues that come with that—aggregating around a 5x ROI).

Rinse and Repeat This Process Within Departments

And, this logic needs to flow all the way down to the department level, as well.  Your CMO needs to have their heads of search engine marketing, social media marketing and display advertising each make their ROI case to her, so she can prioritize her overall marketing spend. And, your CTO needs to prioritize the 100 technology improvement requests from the technology team, based on the expected ROI of each one, so he knows which projects to tackle first.  You get the point.

Concluding Thoughts

So, as you can see, if you know how to ask for capital from your CFO, in the language that he is used thinking about it (with an ROI mindset), you should materially improve your odds of securing it.  Your company should develop a template business investment case form that everyone asking for capital should fill in.  First, that will require everyone to “think” before they ask; and second, that will help your CFO to better prioritize the investments based on the expected ROIs from each one. 

But, just because you ask, and have a well-thought plan, does not necessarily mean you will get the capital.  You never know what other competing forces are out there, tugging on the company’s purse strings.  Your CFO’s job is to keep the company liquid and out of trouble, and their job is to make sure all investments are made within the overall budget of the company.  You can count on the CFO to prioritize his spend based on the amount of the ask, the expected timeframe to return the funds and the expected ROI from that investment.

So, based on the above examples: (i) the CEO asked for $5MM to return 10x in five years; (ii) the CMO asked for $1MM to return 5x in six months; (iii) the head of product asked for $1MM to return 10x in three years; (iv) the CTO asked for $1MM to protect 10x and add 2.5x in one year; and (v) the head of HR asked for $1MM to add 4x ROI on the new hire and 5x ROI by making the current hires happier and more efficient.  So, you decide; put on your CFO hat and tell me how you would prioritize the spend?  I have a hint for you:  the CEO’s acquisition would not be my first choice.  (Gulp!)  I’ll let you tell him that!

For future posts, please follow me on Twitter at: @georgedeeb.


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