High-Velocity Digital Marketing With Steve Kahan - Episode 102
Listen to the podcast episodes also on:
How could digital marketing help your business thrive?
As the world shifts ever more digital, businesses need to learn to adapt and thrive at a faster pace than ever before. This week’s episode features a conversation with marketing expert Steve Kahan. Steve and Doug C. Brown discuss how digital marketing could help take your business and its success to the next level, as well as how to understand your buyer’s perception of value, what it takes to have high-velocity marketing in the age of business today, and much more.
In this episode you will learn:
Episode’s guest – Steve Kahan
Steven Mark Kahan has successfully helped grow seven startup companies from early stage to going public or being sold, resulting in $5 billion in shareholder value. He currently provides marketing advisory services to startup businesses, including several Insight Partners portfolio companies. Steven is the author of Amazon best-seller, “Be a Startup Superstar”, and his newest book is called “High Velocity Digital Marketing”.
Visit his website: www.beastartupsuperstar.com
Steve is giving CEO Sales Strategies listeners acccess to his Digital Marketing Masterclass. Learn more here: www.beastartupsuperstar.com/thank-you/
High-Velocity Digital Marketing With Steve Kahan
I have Mr. Steve Kahan here in this episode. He is an expert in high-velocity digital marketing. I brought him on here because he grew his company from $5 million to $145 million in five years. They exited the company and sold it for $1.4 billion. That’s good growth. How did they do that? From the alignment of the digital marketing side to the sales side. If that hasn’t caught your attention, I don’t know what will. This gentleman lays things out step by step by step, stage, and step. It was an incredible and wonderful interview. Get a pen, a piece of paper, or a digital pad. Take copious notes because he’s laying out a masterclass on how to do this right from the beginning. Without further ado, let’s go talk to him right now.
Steve, welcome to the show. Thanks so much for being here.
Thank you for having me.
We’re going to talk about how Steve took his company from $5 million to $145 million.
It was $5 million to $145 million in five years, leading to a $1.4 billion exit.
That’s quite an accomplishment, and a lot of people would want that type of growth process. I guess the question is, “How did you do it, Steve?”
Let me give you the inside story of that company. It was a company with a funny name called Thycotic. I realize that sounds a lot like psychotic. It was strike one from day one, but on day one, when I joined, it was a company that played in cybersecurity. It was known as Privileged Account Management. These are the passwords that exist around an organization’s infrastructure, operating systems, databases, etc.
If bad people get ahold of those passwords, they can have the keys to the kingdom and do bad stuff. On day one, we were the number five player in the market. We were going up against bigger and better-funded competitors. I had a staff a fraction of the size of our competitors as well as a budget. The revenue had flat-lined for the two previous quarters I joined when a VC firm put money into the company.
There was no CRM system. The salespeople didn’t even have quotas or territories. There were no partners. We had our international territories covered by a rep in Washington, DC, as a part-time hobby. Also, marketing consisted of 52 trade shows. It was all pretty tough stuff. We restored revenue growth in the very first quarter, on our way to growing those revenues five years later to $145 million.
We hit our numbers every quarter in the company’s history. We were cashflow positive every quarter, beginning the first quarter that I joined. We ultimately grew to 5,500 customers. We had 115% net retention and 1 million-plus visitors to our website. It was a hell of a ride, as you could imagine from the before and after. I’ll never forget where I started, which was I asked the founder and the existing management team, “Who are our customers?”
They said, “Steve, you’re supposed to be some big-time marketing guy. How could you not know that our customers are the VPs of IT security and the CISOs, which are Chief Information Security Officers? I shook my head and said, “Yes. I got it. Thank you.” I then started to interview the customers. It’s something that most organizations do all too frequently.
What I found was my first a-ha moment. Our customers weren’t the CISOs or VPs of IT security at all. Our customers were the IT admins. These were the techies in the trenches who wore multiple hats, one of which was security, and downtime was unacceptable for the systems that they were administering. These were people that hung out online in places that were very different from the VPs of IT security. They would never read a Gartner report if their life depended on it but they would, for example, read reviews from peers. They wanted fast, easy, and affordable. They weren’t afraid to do the work themselves.
Imagine if I had implemented a digital marketing program from day one targeted to the wrong customer. There’s no way that we would’ve had the opportunity to accelerate revenue growth as we did. What I find is that a lot of companies don’t know who their ideal target customer is. They don’t understand the full context of their world and there’s a very specific methodology for doing that. As a result, they go through an expensive trial-and-error approach to marketing and waste a lot of money when salespeople are starving for good leads.
If I got this correct, the company that you walked into was not dysfunctional. It was chaotic, at best, and you started out by doing what I would say 9 out of 10 companies never do, which is figure out who was the actual buyer of your products and services, the ideal buyer. Is that accurate?
Yeah. I then went about understanding the full context of their world and what I found is that when people talk to their customers all too often, first of all, they don’t do it enough, but the second piece is, is when they do it, they’re oftentimes asking questions that just so happen to align with the products they sell rather than asking the right questions.
For example, here’s a category of questions. I always start out by asking about the status quo. The status quo matters because it reflects their current situation. A lot of companies don’t lose business to competitors so much as they lose business to the status quo. How would you know that you know that? You’d know that when your buyer says to you something like, “What we have now is good enough. We’re going to move on.”
I would ask them questions about the status quo, their challenges, the ideal solutions that they’re looking for, the benefits that they’re trying to achieve, and then the impacts of those benefits. If the impacts are not big enough, it’s certainly not a powerful benefit. I would capture this information in a Google spreadsheet because what I found is that you want to be able to do it, and your buyers don’t care about how clever your marketing department is.
What they care about is that they work with companies that understand them and empathize with them. Utilizing a lot of their words because you’ve captured them effectively proves that you do just that. It’s not only identifying the target buyer, it’s asking them the right questions to understand the full context of their world, such that you can create a differentiated value proposition and great content that gets them to act.
Your buyers don't care about how clever your marketing is. They care about whether or not you can empathize with them. Click To Tweet
This statement is the best I’ve ever heard in my life, Steve, and this is not a, “Let me pander to Steve because he is on the show.” I’ve been doing this for over 50 years, listening to marketing people, CEOs, etc. That was the most concise statement I’ve ever heard in my life and it makes so much sense. I’m going to come back from a different perspective. What I’m hearing is that you don’t only find the ideal client. You find the ideal buyer.
Ask them the right questions, not about the product, but about the status quo. You listed challenges, solutions, benefits, and the impacts on that. Capture that information because that’s what they’re truly thinking about. Use that language and pattern in your copy on your marketing, and then people feel like you’re connecting with them, and they feel like they’re your buddy.
These people get it. They understand, “Finally, I’m working with a company that understands what my challenges are and what I’m trying to do. That sets the stage for a differentiated value proposition and tremendously great content that your ideal target buyer covets, which then sets the stage for a great lead generation that ultimately will contribute to pipeline and revenue.
Everybody, you should send Steve $20,000 right now for this information because it’s easily what you would burn if you didn’t have this. I mean this with all sincerity, Steve, because I deal a lot with digital marketing companies, and do you know what their number one challenge is? The digital marketing company and the agencies I talk with, their number one challenge is, “How do I get my own clients?”
Number two is, “How do I scale my company?” It’s weird to me. You gave people the holy grail of marketing. Start with understanding the client and bonding with the client in a way that they feel is in their best interest, and then create your proposition and your differentiation off of that premise. Did I break it down into steps 1, 2, and 3? Did I miss anything?
Exactly, and if you think of that next phase, value proposition, before we get into content, is that the most common problem with weak value propositions is that they focus on stuff that the seller cares about. In the tech industry, that often manifests itself into bits and byte value propositions or value propositions that focus on features and functionality instead of benefits and value. Never forget that your buyers ultimately will be purchasing benefits and value.
For example, no one cares that your products are built on a cloud-native or cloud architecture. What they care about is what that will give them. Maybe that means a more secure and scalable product or infrastructure or products that take less time and effort to maintain. That’s how to think about it as it relates to a value proposition. You then take your learnings and incorporate them into great content, which is the absolute key to digital marketing success.
The key to digital marketing is to incorporate your learnings into great content. Click To Tweet
If I got that right, the value proposition is not on the seller, it’s on the buyer, which conceptually, everybody should know anyways, but they forget it. “What do you do?” “My company’s great. I’m great. My products are great. You should buy for me right now.” That’s what a lot of people do. What I did hear you say was to focus on the buyer. What gives them the outcomes that they’re looking for? People buy outcomes, not processes that are in the value proposition. Is that accurate?
We then take those outcomes and create the content from those outcomes.
The content is the key. As a CMO, I spent way more time thinking about the content that our company ultimately would deliver than most CMOs, and I’ll tell you why that’s so important. Nothing zaps the velocity out of a high-velocity sales and marketing model more than a gap in content across the buyer’s journey. If you think of a simple buyer’s journey at the top of the funnel, for example, you have discovered a prospect is educating themselves.
The next step could be to consider what they’re thinking about and what they might be looking for and do more education as well. The next phase is to evaluate, which is where they’re evaluating a product to purchase. The first thing that you do is you would map your existing content to the various stages in the buyer’s journey to make sure that you don’t have gaps but focus on great content.
For example, look at that last company that we had. If you think about it and take a step back further, a lot of your readers, if you look at their websites, they don’t offer content across the full spectrum of the buyer’s journey. I was talking to a company, get a demo was everywhere, but what about if you come to the website and you don’t want to get a demo? You’re not ready for a demo. You’re going to leave.
In our case, in the company, Thycotic, that I was mentioning, we had lots of educational content. We had Privileged Access Management for Dummies books with Wiley or Expert’s Guide to PAM, which served to educate, and those flew off the shelves. We had content in the consideration phase. Let me give you a couple of examples for your readers because some of this might apply to their businesses. When I talked to those IT admins and asked them the questions that I mentioned, one of the questions that I would ask them for our business was, “How many of these privileged passwords do you have?”
100% of them said, “We have no idea.” The reason why they had no idea was that their infrastructures are complex. They’re a cloud, they’re on-premise, and they’re all over. They are constantly changing so they didn’t know. In our paid-for product, we had a discovery function. I made a decision, “We’re going to give away that discovery function for free but we’re going to take it a step further.
We’re going to give them this beautiful report that would be targeted to specific environments like Microsoft or UNIX, which meant I could target my marketing even more. It would enable them to see not only the passwords that they didn’t know that they had but what that meant to their business and even what they would do to solve it if they chose to do that manually.
We had another free tool. We call it the Privileged Password Risk Assessment. Someone would come to our site. It would take them about ten minutes. They’d answer some questions, and they would get what they want, which is immediate feedback. They’d immediately get a grade like they’re in university A through F, which judged their risk, and they got this beautiful report, which for the various categories of questions we were asking, how they were doing and what they would need to do to get better.
We then took it a step further. Because we got and collected the industry, the size of the company, and the geography in which the person that was coming to our website filled out that information, we were then able to do some cool stuff. For example, we would slice and dice the data and we would send them an email the next day, which then showed them how they compared their results versus their industry peers. Everybody wants to know how they compare to their peers and that got them in the habit of opening up their emails, which is a great thing.
We then took it even further. Because we collected all this proprietary information, we were able to do The State of Privileged Access Management, a big-time annual report that would feed our social media and our traditional media. We were able to slice and dice the data to do many reports like The State of Privileged Access Management for Financial Services companies in the UK, which meant that we could target even further.
All of that fed our social media. It fed our podcast. It fed information for webinars, and then we took it a step further. We trained our sales reps and our partner sales reps who we treated like part of the family in all of our content. We always did this. Most marketing organizations don’t do this consistently. For example, we train them how to follow up. If a prospect downloaded the risk assessment, we would teach them to follow up in the following way. “What grade did you get? How did you do? Where did you do well? Where didn’t you do? Would you be interested in learning how we might be able to help you?”
It changed the dynamic of our relationship. Our sales reps were young, pushy reps for sure, and we loved them that way but they were now perceived as consultative helpers, which accelerated sales cycles. We taught them what piece of content they should use next. That’s how we thought about content. Some of the cool actual content that we created and how we were able to leverage it in multiple places and turn our sales reps into powerhouse consultative reps that were able to make lots of money.
We’re speaking with Mr. Steve Kahan from Insight Partners. They’re at InsightPartners.com. We’re doing a masterclass on how to do digital marketing or marketing in general in the right way. Steve, you’re blowing my mind. I’ve got three pages of notes right now because everything you’re saying is everything that should be done. It’s step-by-step, and I appreciate that. I know you wrote a book, and I want to get into your book in a moment. For the readers, I want to come back and say, “When we’re doing content, there are a few things to look at, but then we’re going to map the content to the steps of the buyer’s journey.”
Once we are doing that, we’re creating what I would call “I have no idea” questions in the buyer’s mind, “What’s your grade? What’s this? What’s that?” From a sales perspective, that’s creating a little bit of doubt, curiosity, and building rapport at the same time because now you’re starting to position your company as an expert in the process.
You’re taking that full spectrum across the buyer’s journey and you’re integrating marketing and sales. You’re integrating the sales process into the marketing process and making it one ubiquitous process across the board so that your salespeople or your agents, the outside independent agents that you were using, also understand how to capitalize on all the good work and goodwill you have already built. It’s a natural extension of the relationship that you started maybe months ago, and now you’re bringing people through and the salespeople are speaking the same language. It’s this continuous, constant rapport-building process.
It’s all about sales and marketing velocity. This is what contributed to our content flying off the shelves and the way you know your content is good is in the following way. We grew visitors or traffic to our website month in and month out for five years, but we always maintained at least a 5% website visitor-to-lead conversion rate for that content.
Let me tell you what that means. Think about it on your own. If you’re like me, you probably almost never put your name, address, email, or phone number in a form on the website. Why? It’s because you don’t want to get hounded. The thing is, you know you’ve got great content. Your content is so good that 5% of those visitors put in that information that I personally almost never do to get that content that they covet.
If you have great content, and a lot of people say, “You had great ideas for content. How do I come up with great ideas?” Here’s how. Beyond the ideas or time that I spent on it, twice a year, I would get with the best and brightest in our company. These would be people from R&D, sales engineers, professional services, etc. I would send them links to what I consider to be great content, and it could have been totally outside of our industry.
It’s content that I thought was great, and they were responsible, each of them, for coming up with one great idea for content in a meeting in which we would discuss them. We would prioritize them as a team. A lot of times, it’s great content, but as a marketing person, you don’t have the skills to build it. You need help. Now, I had my built-in team of helpers. I always gave them a nice cash bonus for doing it.
That would be where my budget would go first and because it was the best and the brightest, I had cheerleaders that, when this content came out, were the ones that everybody looked to anyways, and they were pushing the heck out of the content. If you implement that process, you’ll have more than enough great ideas.
If you are using the power of the mastermind to create content and create adopters and cheerleaders, people will push it out for you. Steve, here’s the thing. All of these concepts that you’re doing put into a construct, but it’s step by step and you’ve got it right down. I wasn’t joking when I said send him $20,000 because the reality is, it would take people way more money to figure this out and take them sometimes years to figure out what you taught. I’m so grateful.
You could send me $20,000 or, better yet, spend $25 on Amazon on my book, High-Velocity Digital Marketing, and you’ll get all the answers.
Let’s go to the book because the book is awesome. It’s called High-Velocity Digital Marketing: Silicon Valley Secrets to Create Breakthrough Revenue in Record Time by Steven Mark Kahan. It’s a great read. It’s very simple to read and I’m not a reader. I don’t like reading but Steve was kind enough to send the book to me. I love the content of reading, but I’m not a reader. I’m more of an audio guy because my brain works better that way. What prompted you to want to write the book?
I read a McKinsey survey that said 83% of CEOs expect their marketing to drive most of their companies’ growth, but many of them were not satisfied with the return on their marketing investments. These issues impact companies of all sizes, and the reason for this is that the way people buy now has totally changed. Buyers now rely on digital content to make purchase decisions. Gartner Group says that in the B2B space, they did a study that said, “Buyers only spend 17% of the buyer’s journey in meetings with potential suppliers at sales meetings.”
The way people buy today has changed. They now rely on digital content to make purchasing decisions. Click To Tweet
Think about it. If you’re going to go buy a car, what are you going to do? You’re probably not going to go to ten different car dealers when you’re going to go buy a car. What you’re going to do is you’re going to go to Google. You’re going to google the car you think you might want to buy. You might look at competitive cars or different alternatives. You’ll take a look at some of the reviews that are written about that car.
If you’re looking for a new car, go to the manufacturer’s site and go build it, and then you might go do some research on how much that car should cost you. You’ll know probably as much about that car as the sales rep that you’re meeting at the dealer, literally when you walk in. Whether that’s a car or technology, that’s how people buy these days.
Most organizations’ marketing hasn’t adapted to that change and to that new reality. This is all about a new level of information parody during the buying process and it’s changed how marketers need to interact with buyers to influence them towards their products and services. High-Velocity Digital Marketing is all about how you become great so that you can consistently grow revenue at a reasonable cost.
For those of you who are going, “But I don’t need to do this,” I’ll see you at the business graveyard meeting because the reality is, what you said is that 83% of CEOs expect marketing to drive the business decisions. Most of them are unhappy with the ROI. I’ve seen that across the board as well, Steve. Those of us who are selling now, if we’re not embracing this, we’re going to be left behind now, but we were certainly in the next twelve months because this has not only started now.
This started a year ago, a year and a half ago, and it’s been moving and sliding. My side is more of the sales side and we integrate with marketing, but from the sales side, they know just like you said with the car. I was laughing internally when you were talking about the vehicle because I just did this. Steve and I were joking a little bit about the weather where he lives because I used to live in the same community he did. We didn’t know each other but it’s 18 degrees fahrenheit there. It’s cold in your area right now.
I now live in the Northeast of the U.S. in New Hampshire, and it’s snowy here at the time we’re recording this. I’m like, “I got to get a four-wheel drive truck or something.” I have to. I’m looking up stuff online and I’m going to all the websites. I’m looking up this and I’m looking up that. What made me laugh was that I only went to two dealerships because I narrowed it down online.
I’m like, “It’s either this or this.” I ended up going to the dealership. When I was talking with the people at the Dodge dealership, which I ended up buying, I was asking questions like, “In this model, does it come with these accessories standard, or does it come with these accessories as an addition?” I was thinking of heated seats for my wife and things like that.
The sales representative was going, “I don’t know.” I’m going, “I got to get out of this dealership. I can’t do this anymore because they don’t know.” What saved the sale at this dealership was a senior rep who overheard this and came over and goes, “They have this. If you go up to this trim level and you do that, this is going to be there. By the way, you’ll save some money by doing it this way.” He had all the answers. Otherwise, I was walking out of that dealership.
This is analogous to what happens in corporate sales now. A lot of people are selling anything, whether it’s corporate or B2B, non-corporate sales, or B2C now. It happens that way. People know more. Those of you who own solar companies because I know there’s a bunch of them that read this. Trust me, they know about kilowatt usage and what games were played before. They can find all this online. What you’re saying is so invaluable. Steve, I would love to have you back on another episode if you would love to come back. You don’t have to answer right now and embarrass me and say, “No, Doug, this was terrible,” or, “Doug, this was amazing. That was fun.”
I’d love to do it.
Thank you. I want to leave people with this. Go by High-Velocity Digital Marketing. You all know me. I don’t really plug books, but this book is amazing. The content you shared was top-notch, and I appreciate it, Steve. I want to illustrate it this way. If people are thinking, “What do you think?” I did something similar to what you were talking about, but not in a methodical, expert way. I was doing a sales hack.
When I had Telecom Auditing Group, which was one of my auditing and consulting companies in telecommunications, I had a premise where I would go in and I would audit their phone records because 8% to 12% of the errors are by design. I knew I could take their phone bill down. I would go in and I would say, “I can take your phone bill down on average 25% without you ever having to change the carrier. I will do it for free. I only want a percentage of the savings.” It might take me three months to figure it all out because it’s a big company or whatever, and I’d ask for a percentage of the savings.
I thought that was a no-brainer thought process when I started this thing, and 20% on the nose were saying, “That’s a great thing.” But that’s it. I’m going, “What is wrong with people?” I’m thinking this in my head and I get out of these meetings. I’m like, “I’m missing something.” I go back to the Steve Kahan playbook of Know Thy Customer, Know Thy Buyer and understand what the outcomes are that they’re looking for and all that. I go and I do the research that you’re talking about.
I called the buyers, “Why didn’t you buy from me?” I call new people and say, “If I was going to propose this.” I would call people that I didn’t even know. I would talk to CEOs of companies, and I found out the reason that they were saying no. Overwhelmingly 84% of the people said this. “I love the proposition, but I’m afraid you’re going to knock us out of service when we make the adjustments on our bill. When we get knocked out of service, we lose more money than we will save.”
Speaking of content, I went back to my website and I created this content of the top five and it was like, “Would you like to save 25% on your bill or more and never be knocked out of service?” That was the number one thing. I used what they told me in priority because I asked them the level of priority. I laid out the five points and level of priority. The close rate went from 20% to 71%.
To those of you who are thinking, “What’s Steve saying? May it work?” it works because you’re laying it out in a way that I can’t give you enough praise. Thank you for being here, Steve. Thanks for sharing your content, your brain power, and your energy. Any final things that maybe I missed that you were like, “Doug, should we have this?” Are there any final closing thoughts, Steve?
One that I would say is that time is money, and the single metric that reveals the most about time and money is velocity. It’s commonly overlooked and rarely managed, but it focuses on how fast you’re bringing in money, how fast you are moving leads through your pipeline, and how much revenue your customers provide over a given period. That’s why velocity matters to sales and marketing. If you don’t have metrics about velocity throughout your sales funnel, start asking some tough questions.
Time is money, and the single most overlooked metric that reveals the most about time and money is velocity. Click To Tweet
Steve, people can buy your book, but if they want to know about you or contact you in any way, how do they do so?
It’s through my website, which is BeAStartupSuperstar.com.
Thank you, Steve, and I appreciate you being here.
Thank you for having me, Doug.
I don’t know about you, but I got pages and pages of notes, and here’s the deal. It’s no longer, “Should I do this?” It’s a must. In other words, the majority of sales decisions now are made prior to the actual sales conversation. People go out online and they’re looking up all the information and in many cases, they’ll know more about the sales side of your product and service than you may because some people are hyper-methodical.
As the old statement says, “A dog on a bone,” they’re going to make sure they know everything before they even talk to you. Make no mistake. They’re not talking just to you. You’ve got to stay up with this, but your marketing must be congruent with the sales process in order to have them both work in tandem so that you get the highest conversion possible.
I love the content of this particular episode. I’m going to have Steve back on. If you love the content of this particular episode, reach out and let us know. Give it a five-star review if you would. Also, give Steve some accolades and love on this whole process. I would recommend you go get his book. The book is amazing.
As always, if you are an expert on some subject matter and you want to be featured on the show or you know somebody else who is an expert and you want them to be featured, reach out to us at YouMatter@CEOSalesStrategies.com. If you found this content invaluable, let us know that as well. If you want help in growing your sales and getting yourself or your company to the top 1% of earners in your industry, reach out to me direct at Doug@CEOSalesStrategies.com.
Once again, thanks for reading. Go out, sell something, and sell a lot of it. Make a friend. In other words, play win-win. You win, they win. Align your marketing and your sales. You’ll be very happily surprised and maybe even shocked at how much your conversion rates will go up. Until next time, to your success.