Market measures: How can tech companies 'hack' their growth?

Website visitor to lead conversion rate (% of website visits)

The survey showed that the average website visitor to lead conversion for companies averaging 2,001 to 5,000 website visits was 1.3%.

Content marketing tactics used (% of companies)

What's the solution?

You can manage what you measure.

Two keys to being innovative with your content marketing are planning and measurement.

“Do your customer personas and journey mapping if you haven't already.”

Market Measures respondent

Fundamental to content marketing success is building a consistent plan of output, aimed at distinct ‘personas’ (target audiences) across all stages of their buying process (from initial problem awareness through to purchase decision), using a variety of methods and publication channels.

The most effective way to do this is by focussing on the persona’s core business problems (e.g. competitive pressure, operational efficiency, growing revenue, etc).

The other key is measuring the response to understand what sort of content, e.g. video, case studies, blogs, eBooks - works across the available publication channels (e.g., social media, email, organic search, paid searches). Visibility to content and channel performance gives you confidence to invest in the approaches that work.

“Don't overspend resources on marketing that is not effective.”

Market Measures respondent

The biggest opportunity is video, which is exploding as a way of communicating with prospects, whether through your website, social media channels or more direct approaches like email.

Video is the preferred channel for content. According to a recent global survey, 54% of consumers preferred video for brand or business-related content.

We are also ‘boring’ when it comes to the channels we use to share our content. There are large gaps between our planned adoption of mainstream platforms like YouTube or Instagram compared to US companies.

In the survey, 14% of companies planned to add Facebook video as a content distribution channel compared to 41% in the US.

Content channels to be added in the next 12 months (% of New Zealand companies vs US)

Use of marketing automation software platform (% of companies)

According to the survey, 50% of companies produce software products or SaaS, but 47% don’t use marketing automation in their own business.

What's the problem?

We need to be more focused on sales efficiency.

The survey found that only 10% of Kiwi firms have ‘reducing the cost of generating new contacts, leads and customer acquisition’ as a marketing priority in the coming year, compared to 29% of US companies.

Selling Kiwi tech is typically a complex, lengthy process with an average sales lead time of 5.8 months. Not surprising, given 86% of us sell B2B.

What is surprising is that almost half (43%) of companies surveyed didn’t know their lead to customer conversion rate, a key part of their sales funnel.

The less you know about the funnel, the harder it is to drive alignment between marketing and sales, hold marketing especially accountable, and achieve ongoing improvement in the way you market and sell.

“Develop a sales focus. Engage the whole team in a sales approach.”

Market Measures respondent

For those that did track it, the average lead to customer conversion rate is 38% and for high growth Kiwi companies even higher.

This compares favourably with larger US benchmark studies which put average lead to customer conversion rates anywhere from 2% to 10%.

A high rate is not necessarily a cause for celebration though, given almost 40% of survey respondents put ‘productivity and performance’ as their top challenge in managing account and sales teams over the coming year.

While our sales teams convert at a high rate, there is frustration amongst Kiwi tech companies at the inability to scale that into high sales volumes.

What’s the problem?

We need to increase sales productivity.

While there are many indicators of sales productivity, number of quality conversations is a useful metric commonly used in US sales teams.

Quality sales conversations are defined as a connect call or response where the sales person learns at least one piece of qualifying or disqualifying information.

In the survey, sales people had 3.4 quality conversations per day compared to 5.1 in the US (33% less conversations).

For high growth Kiwi companies the average was much closer to the US figure, at 4.9 quality conversations per day.

“Pick up the phone. Personal contact is the single most effective way to achieve cut-through.”

Market Measures respondent

Top two challenges in managing account management and sales teams (% of companies)

What’s the problem?

The average Kiwi tech company is under-resourced in sales.

In the survey, Kiwi high growth companies have 40% more sales people than non-high growth companies, across all company sizes.

New Zealand’s tech industry has been built on a generation of highly talented ‘lone wolf’ sales people who travel the world sourcing customers for their innovations. Technically competent, business savvy and converting at a high rate describes the classic lone wolf. They are also expensive and can’t be easily scaled.

To scale more effectively Kiwi tech needs to be able to build structured, repeatable sales processes that enable a bigger number of lower level sales people to sell effectively.

“Both sales and marketing have a deep understanding of who our company is fit to provide value to.”

Market Measures respondent

Sales team capability (average makeup of team)

What’s the problem?

Trust is harder to earn.

Digital marketing has enabled companies to reach potential customers far more easily and at a lower cost than ever before. The flip side has been diminishing trust in these messages.

Recent HubSpot data shows:

• 81% trust their friends’ and family’s advice over advice from a business.
• 55% no longer trust the companies they buy from as much as they used to.
• 65% do not trust company press releases.
• 69% do not trust advertisements, and 71% do not trust sponsored ads on social networks.

Marketers and sellers have tended to focus on generating and closing leads, almost forgetting about the importance of the end result – ensuring customers are successful with our product or service.

“Keep the customers that you have buying more. It is easier to retain than to gain.”

Market Measures respondent

And while always a foundation of business success, customers are taking on greater importance for marketers in the digital age.

Because people have access to so much information about products and companies, they can educate themselves completely online, and are less likely to be persuaded by marketing. Increasingly what they need amongst all this noise is a trusted endorsement or referral from an existing customer – whether that’s from online reviews or direct conversations. These are becoming more and more important.

As tech marketers and sellers we need to make sure we pay attention to the experience of our customer.

Key Market Measures benchmarks

Sales and marketing expenditure (as a % of turnover)

Sales and marketing spend includes sales and marketing staff expense, and non-staff marketing expense (e.g. promotion), and is expressed as a percentage of turnover.

The benchmarks

The nine growth hacks identified in this study have emerged from benchmarking the survey data against two groups:

• A subset of high growth New Zealand companies that participated in the survey
• Similar report data from the US.

High-growth New Zealand companies

Throughout the Market Measures study “high growth” companies are compared to other survey respondents.

High growth companies are determined using a methodology developed by the Bridge Group, Inc, where the fastest-growing companies are identified per revenue band. In the survey, turnover growth was used to mark companies as being in the top 20% of companies in each turnover band. These companies are referred to as “high growth”.

High growth companies by turnover band (% of companies)

US benchmark information

US data used in these benchmarks was taken from five different sources. The Bridge Group, Content Marketing Institute, HubSpot, Capterra and Softletter.