B2B companies under $2M in revenue don’t need to hire a marketing person, much less a Chief Marketing Officer

This is a reprint of a post I wrote earlier this month as a guest blogger for the Entrepreneurial Execution Project run by Professors Waverly Deutsch and Craig Waitmann of the University of Chicago Booth School’s Polsky Entrepreneurial Center.

At the risk of being permanently shunned by my marketing peers, I want to go on record as saying that B2B companies under $2M in revenue don’t need a marketing person. A refugee from consumer packaged goods brand management, I’ve spent the last five years consulting to both B2B and B2C companies primarily in the $2M-$40M in revenue range. During that time, I’ve encountered plenty of fabulous start-ups under $2M in revenue, none of whom needed me. Yet.

Here’s why. When you start up what do you really need from a strategic marketing standpoint? You need a market positioning strategy, which is the foundation of all good marketing. It lays out:
1. Why your product/service is notably different than what is currently in the marketplace.
2. Who your core target customer is.
3. Who your competition is.

Any entrepreneur should at the very least have a working hypothesis for #1. Theoretically you started your business because you saw an unmet need in the marketplace that your product/service could fill. As for #2 and #3, I advise people to think of this stage of their business as marketing “Situation Analysis.” During this phase you should be narrowing down who your specific target is and be paying attention to the competitors you are typically compared to.

It is also important to recognize that the time will come when you will have to further refine your positioning, but that doesn’t need to happen until you have some good learning under your belt about how your product/service is actually received and used in the marketplace.

Frankly, in the beginning of a company’s life, it’s all about getting distribution, by which I mean sales. The most important thing during this initial phase is to get out there and sell the hell out of your product/service. And if your product is good, and the benefits it provides are real and differentiated, you will get customers, regardless of how flashy [or not] your marketing materials are.

And speaking of marketing materials, I have two key pieces of advice:
1. While you do need a website so customers can find you, don’t spend too much on a super snazzy website upfront. You’re going to want to change it and align it with your real customer needs as soon as you get more information from your Situation Analysis under your belt.

2. Whatever you do, don’t pay to have 1000’s of anything printed up. For some reason people feel a strong need to pay lots of money to get fancy brochures. But think for a minute – what do you do with the brochures people give to you? Right. Trust me on this one: you’ll be dusting those boxes off in the corner of your office for a few years until the collateral in them is so outdated that you wind up throwing it all out. Fancy printed collateral is not worth the money in the beginning, if ever.

As your company grows towards and beyond $2M, there are two indicators that signal it is time to bring in someone with real marketing expertise:
1. When sales begin to plateau. This is a good time to refine your message and work to really understand why your customers love you and choose you over your competitors. It is also the time to learn how to do lead generation.

2. When your visionary founder stops being the company’s main sales person. That’s when you need to be sure that everyone in the organization who is tasked with selling is “singing from the same songbook” rather than relying on their personal passion to sell the product/service.