Welcome to the latest installment of our “What’s New” series where SaaStr founder and CEO Jason Lemkin sits down with some of the top leaders and founders in SaaS and Cloud to discuss What’s New and what should be top of mind for fellow founders. In the new episode, Jason sits down with Drata CMO Sydney Sloan to talk about what’s new at Drata, the role of CMO at Drata vs. Salesloft, partner marketing, customer marketing, and more.
The Challenges and Pitfalls of a Partner Ecosystem
Drata attributes much of its success to its partner ecosystem, which is an interesting case study for most, so how do they break up marketing, sales, and resource allocation vs. a more direct-sales modeled business?
They have a couple of revenues to market:
- Marketing is responsible for 41% of pipeline contribution
- Partners are another 40%
- Velocity for smaller-sized deals has been key: Drata runs a fast flywheel on the low-end, with a nine-day sales cycle, and on the upper end, a month
With so much revenue attributed to partners, they introduced a partner program and hired a dedicated person to lead the partner marketing function, with AWS being their most strategic partner. Sydney pulled someone from Salesloft with a product marketing background who understands operations, running programs, and being strategic. This person has built out a partnership marketing team within the product marketing team.
Many folks just bypass the partner channel and how important it is, and as a founder, even if you have a partner program set up, it may take an extra cycle to realize that all companies have favorite partners. They don’t have the bandwidth to support five sub-partners in their category. AWS can’t support 20 partners equally. So, if you’re going to lean into a partner ecosystem you want to be the top partner for your partners. Otherwise, it falls apart.
How Do You Decide Who to Partner with?
Look at the most important categories that surround your category. Who are the key players? Who do you want to partner with? Ideally, it’s the biggest person, but sometimes, it’s the partner who gives you the most time of day.
It’s a defensible strategy to create differentiation when you and that partner build out specific integrations. Let’s look at two examples.
- At SalesLoft, Sydney and 6sense ideated on integrations, aligned teams, and co-marketed together. The sales reps were friends, and accounts were shared. This creates a multiple effect because you cross-sell to their customer base.
- When partnering with big folks like Drata does with AWS, you have to bring business to them. Drata was one of three companies mentioned on stage by AWS’ Head of Partnerships because they did the most transactions on the marketplace than any other company.
If a partnership isn’t a win-win, it won’t work.
Mapping Partnerships
When you have a relationship like AWS, you have to hire someone who has managed a complicated, matrix-level, nuanced relationship. Then, you have to figure out who the 100 people are at AWS that matter and map them out on a daily basis. Figure out their incentives, from cookies to spiffs to bonuses, and how each of them profits off the relationship. You can’t drop in every six months, schmooze, and disappear. It won’t work.
Now, people are walking the virtual halls, and it requires a dedicated person on your marketing team to nurture that relationship. Pick your strategies, invest in them, and start tiering. That’s what partner programs are all about, so you can see who contributes based on their work. Those people will get extra benefits, be integrated into campaigns, and get event invites.
More on this in our post, All Platforms Have Their Favorite Partners. Be One of Them If You Can. Some partners are personal and relationship-driven, which can frustrate an outsider. But you have to understand they don’t have the bandwidth to have 100 relationships. If you want to be a favorite, go about it with a combination of these two ways:
- Deliver them revenue
- Do it in a low-drama, efficient way
You can’t just sit back and wait for it to happen.
Bringing Customers to Your Partners
One thing people can get wrong is you say, “Why can’t Hubspot, AWS, or Shopify give me customers?” It’s the other way around. You have to prove yourself and bring them customers.
There are three types of partners:
- Ones that bring you leads
- Ones that make existing customers happier
- And ones that you can help upsell and expand customers
Drata works with companies that store data in the Cloud. They have to be in a Cloud infrastructure, so then they bring net new customers into AWS’ marketplace infrastructure where they’re transacting. That’s a high value for AWS.
How to Train Sales Execs and Marketers to Become Security Experts
In a competitive space, you have to be a subject matter expert. Prospects don’t just want to know the price, especially in security. At Drata, they get a SOC 2 before selling a SOC 2. They go through their onboarding programs and know the policies. To stay competitive, they have experts on staff. So, if a sales rep is in a sticky situation, they can pull in a compliance expert from the team, and that team is accessible to customers in live chat.
So, what about training? Buyers are probably 5x smarter than when we started in SaaS, and the reps should be, too.
Drata trains a lot and has a great enablement leader building out a team. They differentiate again by their commitment to helping out. They use Gong obsessively and proactively coach reps to make sure they can be successful. Specialized enablement is another aspect of training. Drata launches products frequently, with 20+ frameworks and a big product release every quarter. They have a quarterly launch rhythm that David Sacks coined, with set times to educate. They train technical people first and do specialized training for CSMs and AEs, and Marketing separately by function. Drata got more sophisticated by getting off the flywheel of enabling every feature, and now they broke it into tiers — going the deepest on tier 1 and less so on tier 2. Tier 3, you learn it on your own time.
One Sales and Marketing Team on All Products
There’s one team across all products, and product teams are organized by themes, with marketing matching those themes and working with the same product owners. But there’s a balance of giving each product marketer one tier-one product and a couple of tier-twos. Drata also has a dedicated product marketer to help sales, and they have one for each major segment: Enterprise sellers, the startup team, and the CS team.
Product marketing and product owners have specific KPIs on adoption that they track. They set a goal of 90 days for adoption and at six months with where they want the products to be. Now, they’re doing a white space analysis. All products can’t be at 80% adoption, so you have to figure out what the most strategic products are that you want to drive adoption for. Then, you run education programs and emphasize plays around the most revenue-generating products. Adoption rates are equally important as the number of deals you close and bring in. You want to make products customers want and use, so Drata is currently building a customer marketing team that will hold a 100% NRR KPI.
How Much Marketing Budget Should Go Into Customer Marketing?
The power of retaining customers is huge. Jason recommends that 80% of the marketing budget go to customer marketing, yet often finds it at or below 10%, which doesn’t match the flow of dollars. So, how much of the marketing budget should you put towards customer marketing?
Sydney recommends looking at the balance of net new vs. growth revenue. If you’re at $100M, that should be about 50/50. You want to have net new campaigns and customer campaigns. Customers should be in onboarding campaigns, and once they’ve reached a usage goal, they should be moved into another campaign. Build out those models using a mix of marketing tactics, drive current customers to learn more, and determine which format is right to drive specific behaviors throughout the customer journey. Do a quarterly event for all tier-one products so customers can count on paying attention to the big stuff coming. There are few things more powerful than getting your customers together.
Learnings as CMO at Multiple Companies
Drata is growing even faster than Salesloft did, much faster than Sydney’s ever seen. She shares some of her learnings, what’s different, and what’s better as CMO at Drata.
- As a marketing leader, you come in and figure out segments to go after. There are usually 10-12 segments, so it’s a great alignment exercise with leadership. All segments are decent to go after, but not all at the same time.
- They ran this process her second month in, did a half-day session, and identified the top four segments to go after. By Monday, they were making changes. Usually, changes happen the next quarter. Being able to hit the ground running that fast requires an open mind while also leaning on experience.
- As a previous CMO, she knows where to slow down or speed up and where to invest in infrastructure to scale more efficiently. In a hyper-growth company, you want to grow fast but also responsibly, and achieving that balance is a practice.
To grow at this pace, you need to have truly great engineering products that innovate faster. It compounds. If you can do 2-3x more releases a year, think about where you are 4 or 5 years out.
Is There a Downturn in Security SaaS?
Today’s world brings the must-have vs the nice-to-have into clear focus. The threats aren’t going away. More and more info is entering the Cloud, creating more exposure and risk. What are the top three things on every CEO’s mind?
- Growing revenue
- Reducing risk
- Operating efficiently
Security is a place where digital transformation hasn’t hit. The product market fit is so intense, and it’s reducing risk and the key to unlocking growth for many companies. So, no. There hasn’t been a downturn in security. Risk is more prevalent and a must-have for every company.
The biggest trend hitting this industry is the impact of AI and how it relates to risk. The bad guys are using it too and are probably more advanced, so it’ll get tougher, which means everyone needs to consider the implications.
With AI and security products, you have transparency and connected systems continuously monitoring them. You’re notified immediately if something goes awry, so you aren’t in the dark and setting yourself up to be attacked.
What’s New at Drata
Today, Drata is growing at triple-digit rates. It’s unprecedented growth in a crowded category, directly and indirectly. Where does Drata win today with ease?
Finding Insane Product Market Fit
The great fits are first-time customers who haven’t done this and need their first framework in place. The technologies in the space are pretty similar, so people are looking for partners that make them feel secure and supported on their journey.
Thankfully, Drata has a lot of G2 reviews for customer support and expertise, so they lean heavily on that. As they move up market, they’ve had big companies come to them that they aren’t quite ready for.
As a founder, you have to be willing to walk away and say no, we aren’t ready for you yet. You have to be mindful about having insane product market fit for startups and choosing how to get that same product market fit for the next segment.
Often, a big company comes in, and you get enamored by six and seven-figure deals, but it shuts down engineering. So, being able to walk away is a lesson.
What’s Coming Down the Pipe
Drata continues to set the bar at hyper speed. They have a second customer conference coming up on June 12 in San Francisco at Pier 27. They’re releasing exciting new products, going deeper with partners, and how to work with them.
They’re getting sales teams to align on the ability to work with partners more effectively by:
- Not making it hard
- Not selling against them
- Making things as effortless and frictionless as possible
- Playing the long game
- Leaning on what’s right for the partner and customer
Those are the big themes coming down the pipeline, and the product innovation will be awesome!
The post Mastering Partner Marketing: What NOT to Do and How to Excel with Drata CMO Sydney Sloan appeared first on SaaStr.
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