After talking to marketing leaders for a year, here’s my advice for CEOs

Marketing makes or breaks a company. When I am asked what is the No. 1 thing that I would do to help a company scale massively, it is focusing on marketing. Period.

I learned long ago that the best product doesn’t always win. It’s often a “good enough” product paired with killer marketing powered by unique customer insights. As a VC, I have seen this play out time and time again. Many companies get stuck in “feature and functionality” marketing, meaning they miss the opportunity to create durable brands. That happens when you elevate messaging to higher-level needs that solve a pain point for the end consumer and delight them on an emotional level.

I’m passionate about helping companies uncover new channels or reinvent old channels in a way that moves the needle. Finding a new way to make established channels such as TV, direct mail and radio generate awareness around a brand can be a huge competitive moat and propel a company to exponential growth.

I’m not saying that it’s easy. The job of a marketer gets more complicated with every channel that emerges. Among the latest challenging trend lines:

  1. It’s noisier than ever. In the year ahead, marketers expect a 40% YoY increase in the number of data sources they use, according to Salesforce’s seventh edition of the annual State of Marketing report, for which they spoke to over 8,200 global marketers.
  2. Purses are tightening. According to Gartner, marketing budgets as a percentage of company revenue fell to 6.4% in 2021 from 11%. The firm reports that “this is the lowest proportion allocated to marketing in the history of Gartner’s Annual CMO Spend Survey.
  3. The ponds are overfished. A decade ago, only 17% of global ad spend went to the top five ad sellers (Google; Viacom and CBS; News Corp. and Fox; Comcast and Disney). Today, ad networks are much more crowded, with 46% of global ad spending taking place on the top five networks (Google, Facebook, Amazon, Alibaba and ByteDance).

With this downward pressure on the efficiency of marketing dollars, it’s important to listen to customers, stay curious and remain open to wild ideas that have the potential to break through. Over the past year, I’ve had dozens of conversations with leading marketers to ask them what’s actually working for them, and what crazy idea they tried that seemed ridiculous at the time.

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Here are some highlights of what I heard, and what I now share with all of the CEOs and marketing leads at our portfolio companies:

With developers, marketers need to be problem-solvers, not sellers

“Developers are very quick to sniff out any sort of marketing-speak or BS. They’re looking to get the answer to a problem they have and then move on. How can you get them to the right documentation as quickly as possible? How can you keep them up to speed on the products that are live today, not the ones that will be live two years from now?

Your job is to help them get their hands on the code as quickly as possible. Get them direct access to other developers in the community who think the same way and can help solve some of their problems in real-time.” — Sara Varni, former CMO at Twilio.

Avoid free trials at all costs

“Early on at Curology, we had a hypothesis that by not charging anything at all for a product trial, it was too easy for people to get it without having any kind of mental commitment. We began experimenting with having people pay the shipping cost, $4.95. [That price] was still a very low barrier for people, but we learned that it dramatically changed the perception of value and the mental commitment in the eyes of our customers.

Hong Kong insurtech startup Coherent gets $14 million Series A led by Cathay Innovation

Based in Hong Kong, Coherent helps insurance providers go digital. With their services more relevant than ever during the COVID-19 pandemic, the startup announced it has raised $14 million in new funding. The Series A round, led by Cathay Innovation with participation from Franklin Templeton, will be used to grow Coherent’s client base in Asia, including insurers who want to add more digital services to their usual sales processes because of the pandemic.

Founded in 2018, Coherent’s platform, called Product Factory, allows insurance providers to digitize their backend operations by uploading Excel pricing models, which means their IT departments don’t need to write new code or re-haul their IT infrastructure.

The company also offers three tools for working with customers. Coherent Connect is a social media marketing campaign manager; Coherent Explainer is a sales tool for breaking down quotes; and Coherent Flow allows agents to sell policies to customers remotely with features like video chat and electronic signatures.

While Coherent’s remote tools are a key selling point now, outdated legacy systems have long been a pain point for insurance providers, slowing down backend operations and sales while increasing the cost of premiums.

John Brisco, co-founder and chief executive officer of Coherent, told TechCrunch that the startup has worked with more than 30 insurers in 10 global markets during 2020.

Global premiums initially shrank, but research by Swiss Re predicts the insurance industry will recover by next year, led by demand in China.

Coherent will focus on China and emerging markets in Asia. The startup, which currently has about 120 employees, plans to increase the number of its tech and actuarial talent in Hong Kong, Singapore, Shanghai and Manila, and build new teams for Japan, the United States and Thailand.