Brian Baumgart is a serial entrepreneur with incredible advice on how to help brands get performance insights to better understand their customers. This interview is loaded with advanced strategies for marketing and business infrastructure. Learn Brian's entrepreneur story and get an inside look at how some of the biggest brands are analyzing their customer experience. Also in this interview, Brian shares the strategy of account based marketing, or ABM and how this strategy is helping to grow his marketing software company Conversion Logic.
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Full Transcript of The Video
Brian Baumgart: Going well. How are you?
Eric Siu: Good. So thanks for joining us, first and foremost. You don't you tell us a little bit about kind of who you are and what you do?
Brian Baumgart: Sure. Thanks for having me. Entrepreneur for probably about the last 17, 18 years. Currently running a company that we started about four years ago called Conversion Logic. We're a SAS platform for large B to C marketers, solving the problems around cross channel attribution, measurement analytics. I've been in mar-tech and ad-tech most of my time as an entrepreneur, and I've never been more excited about a company than now. I think it's a huge problem for most B to C marketers. They're all trying to find a solution and we think we've got a great one in market and are rapidly scaling.
Eric Siu: So what's like a ... If you were to break it down to like a fifth grader, how does your ... I guess a case study would probably be easy, like, "So and so used it and then got this results."
Brian Baumgart: Over at the big brands like GM, GM is looking to drive performance insights across what has typically been brand media strategies. So how do they actually get closer to the user and understanding much more granular KPIs around the effectiveness and efficacy of their media. So they will use a software solution like Conversion Logic to ingest all of their cross channel media, paid, earned, and owned, across any type of conversion or activity that users are interacting with that they want to start to track and optimize against. So we have a very robust ETL platform. They ingest-
Eric Siu: What's a ETL?
Brian Baumgart: Extraction transformation and loading of data. So data normalization. So we'll pull data from disparate data sources where the CMO is now looking at a media strategy and finding their data is incredibly siloed. So it's living across different ad agencies. Ad agencies have fenders in technologies. They maybe have their own technologies around CRMA conversions, so we stitch all that data together, create a holistic blueprint of data, load that into our data science engine, and then we actually provide analytics and insights that make sense of those disparate data sources. So they can look at things like incrementality, customer journey, optimization efficiency of media plans, and be in control of their data. So it's really an intelligence layer for the CMO and office of the marketing suite to be much more intelligent and well-informed in near time, which often times they're looking at data that's three, six, nine months old.
Eric Siu: Yeah. You'd be surprised. I mean, even in 2018, we haven't been able to solve kind of the attribution problem. I think that's really interesting. I think it's relevant for B to C. I think it's probably easiest to work with B to C companies first, and then eventually are you guys planning to roll out to more B to B?
Brian Baumgart: Yeah. In some cases it's a little bit easier, and in some cases it's more difficult than B to B. We're squarely focused on B to C right now. We think it's a big opportunity and there's nuances between the two. And so as you know, it's all about being focused, and we see a huge market opportunity and sort of a green field chance for us to be the market leader, and so that's why we're focused right now.
Eric Siu: What's your background? Sounds like you've started companies in the past too. I just want to take a step back to maybe, I don't know, 10 plus years?
Brian Baumgart: I started as an entrepreneur about seven months out of college. So I moved down here from Washington State, where I grew up. Had a draw to California, and worked a corporate job for the first seven months, then quickly realized that was not for me, and I had two friends, one of which I was working with, and they left to start a company, asked me to join them. It was adjacent to what I was doing, but was not something I had a lot of expertise in being right out of college. We actually started an internet hosting company, and with that, we started one of the first companies selling DSL broadband in Southern California.
Eric Siu: What's the company?
Brian Baumgart: It was 1998 called Packet Central.
Eric Siu: Okay.
Brian Baumgart: Went from that to digital media, so that company got acquired in 1999. Selling broadband and IT services was not exactly sexy, and we sat actually in our refrigerated [colocenter 00:03:18] for a year and a half with jackets on and realized there's got to be something better. So we had some friends in digital media, and made the shift over, and from there, I think I've either co-founded or helped scale as an executive about seven different companies in the space, a couple IPOs and a couple exits, and really landing on measurement and the SAS side of mar-tech is really kind of what we're really passionate about today. How do we provide software to people?
Most of my past was around media services and pretty high touch aspect of ad-tech, and now we're really focused on how do you leverage the evolution of machine learning and starting to talk about AI. I think we're starting to do some interesting things with AI, but we have very powerful machine learning to solve big problems for large brand marketers that are sitting on troves of data and trying to go from the data-driven CMO to the revenue and sort of optimization and accountability-driven CMO. And our software helps with that transition.
Eric Siu: So, I mean you said you've helped with seven exits or so, right? So what are some kind of key, I guess, lessons you've learned that kind of apply to all seven? And I guess even what you're seeing today with Conversion Logic?
Brian Baumgart: I think at the end of the day, if you boil everything down to sort of one key ingredient, it's always the people. Two companies ago, I had an investor from Index Ventures, and you walked into his office, he had nothing in his office. Not a scrap of paper on his table, and he had a sign over his desk that said, "It's the people, stupid." And it always is the people. So I think for me it comes down to once you have your idea, once you have your business plan, you've got your go to market, it all comes down to people. And so I even look at my role today as really sort of chief people officer. I spend a lot of time on recruiting. If you get the people right, I think you get the business right.
Eric Siu: What's one trick or tactic that's worked really well for you in terms of finding great people?
Brian Baumgart: We use a lot of different tools and assessments. I think obviously referrals and if someone comes from a trusted source, that's great. But if you're actually trying to step back and look at things at scale and say, "How do I actually find the right person or the right profile for a certain role that I need?" Over the years, we've definitely used tools that have helped us. We use something called Strengths Finders 2.0, which is a survey put out by Gallup. It tells people their top five strengths. You start to assimilate strengths to roles. And then roles, you kind of look for two to three common strengths, and then that's going to be something that is going to really help inform whether or not this person is going to be a good fit for the role, and then you've got to look at other things like culture and what their motivational drives are and their personal values and things like that. But we used assessments in every single hire at our company today, which we're sub 50 people, and we've done that pretty much from the early days. Those tools, I think, help a lot.
Eric Siu: How do you guys make money?
Brian Baumgart: Our revenue model is about 95% SAS, 5% service fees. We do have a professional services group that helps with everything from just early implementation and on-boarding, to sort of professional services around insights, optimization, and how to consume the analytics. In some of these big brands, there's some big change management steps that have to happen so that PNLs and channel owners of media are aligning to one common goal now. But once we actually help them with that alignment, or if they already have it, that's great, then we actually move to the SAS implementation and it's really about a very robust software layer and intelligence layer that helps them sort of be the focal point of where they're going to consume information, to optimize, to plan, to change strategy, gain efficiency, understand customer journey, and actually get closer to the customer. So that's really the software play.
Eric Siu: You guys are selling primarily to the enterprise?
Brian Baumgart: Yeah, so company's four years old. We had our anniversary, four years in January. First year was really building the software, building the ETL and building the infrastructure and the foundation for the business. Second year, kind of go to market where you can, and went to market with some DR, specific marketers, some mid-tier marketers, and then looked at market dynamics. Most of our competitors were acquired between 2012 and 2014. One of the last independents was acquired by Nielsen in Q4 of last year, and we're sort of looked at as not only the leader as a sort of a second mover in the space, but also the only independent player really left.
And if you look at the importance of independence, we are a measurement software solution for marketers. And it should not be influenced or biased by anything that they're actually paying for, like media, or data, or other things to actually make their media work. So independence is really key. And so for us, it's about capitalizing on that and really remaining independent and unbiased.
Eric Siu: If you're selling to enterprise, on average, what are these contract sizes annual?
Brian Baumgart: The good news is the average of our contracts is actually greater than a year now. So we're at about 18 months. Contracts range from ... Our minimum's about a quarter of a million dollars a year. We've got several seven figure contracts.
Eric Siu: I think a really good theme here is just how do you sell to the enterprise in general? It sounds like this is not your first rodeo. You've done this a couple of times. So what are some tips or tricks around that?
Brian Baumgart: If we had a camera in the back, we'd point to Tony right now, our VP of marketing. So Tony's actually brought us an expertise that I was largely unfamiliar with called ABM, or account-based marketing. In my previous 17 years, we were selling more to a single person within an entity, and that was usually the ad agency, and that's a media buyer. Heavily influenced by relationships. When selling to enterprise, as you know, that doesn't always work, and it's not as efficient and doesn't scale as well. So we've actually worked on kind of a three tiered approach to account based marketing. We're somewhere between tier one and tier two right now.
After about seven, eight months of focus, we're moving very fast. And how you actually sell to the enterprise through ABM is really taking an approach that the brand is an account, and there are multiple influencers and multiple different personas within a brand. You have to have marketing tactics that address each on of the things that would appeal to different personas, whether that's a strategist, someone on the analytics team, or someone in data science, or even perhaps the CMO or CFO. And so we work on a lot of different systems and tools and data enhancement capabilities to be able to send the right messaging, the right marketing, the right sort of influence at the right time to each stakeholder within an account. And so it's a very complicated technology-driven and data science-driven approach. So we eat a little bit of our own dog food in using some of these tools and analytics around attribution of ABM and at machine learning to make sure that we actually get that right and we automate that for scale.
Eric Siu: What are doing, because these sales cycles aren't short I'm assuming? They do take awhile, right?
Brian Baumgart: Yeah, on average, it's about six and a half to seven months, which for the ticket price that we're talking about is on the better side of a long sales cycle. But yeah, it's definitely not overnight. We have had some quick wins, but on average, it's about six to seven months.
Eric Siu: How are your sales people just kind of staying on them? Instead of just saying, "Just following up, come buy my stuff, just following up." How are you guys keeping them engaged?
Brian Baumgart: I think it's important to really understand where each persona within a target account is in their buying cycle. So for example, the analyst group might be leading the charge, and so they've done more research, they're more well-educated, they're looking for specific differentiators and data science and machine learning and modeling methodology, versus maybe the SVP of marketing who controls the budget, is still becoming familiar with, "How is this going to actually change the way I optimize? How is this going to bring me greater efficiency? And what do I need to do organizationally to align to that?"
And so you really have to be smart in figuring out through different points of contact and different communications where each constituent is in the buying cycle, and then making sure that the messaging and the approach is actually going to each stakeholder at the right time, rather than just talking to one person, understanding, "Are you ready? Who's got the budget?" You've got to really sort of circle all around the different personas and make sure that you're messaging them with the right information at the right time to help move the entire group forward.
Eric Siu: What's one new tool that you've added in the last year that's added a lot of value to your life? So it could be like Evernote, it could be like a Peloton bike, whatever.
Brian Baumgart: It's definitely not the iPhone 10. I would say I'm learning a lot about ABM. So I think the stack that we've put together on the ABM side is definitely new to me and something I've learned a lot about.
Eric Siu: Let's hear about the stack.
Brian Baumgart: It's coming together in phases. I think the one thing that's interesting is around data enrichment. Personalization is also something that we're talking about, and actually talked about on the drive over as far as bringing in the content agency, maybe versus a traditional PR agency.
Eric Siu: Yes.
Brian Baumgart: I'll give you one example. So last minute, two weekends ago, I went to the IAB Leadership Summit out in Palm Desert. It's attended by C level executives in digital and non-digital media. And sort of a lot of the conversations around convergence, so you get a lot of people that are important to us that we'd like to get in front of. I got the ticket on Friday night. The summit started on Sunday. We got database of 16 hundred attendees, first name, last name, title, and company. No contact information. We uploaded that to our system. We pushed it out through the stack, enriched it with data, gave it to our SDRs over the weekend, and by Sunday afternoon, I had three meetings and then five more meetings for Monday.
And so that's something that did not require someone picking up the phone, cold calling people, trying to find phone numbers through Google. It was all through an automated process, and that for me was like an ah-ha moment of, "Wow. This actually really works." So not so much a personal tool to answer your question, but really an enterprise tool that's I think positioning us to scale and to really scale into what we think is a very large opportunity.
Eric Siu: So is it your guy's tool, or is it a different tool you guys are paying for?
Brian Baumgart: Combination of third party tools.
Eric Siu: Okay. What's like one that you can mention?
Brian Baumgart: Salesforce, Marketo, different data enrichment tools.
Eric Siu: You've gone through seven kind of businesses, or even more than that. I mean, what's the biggest struggle you've ever faced?
Brian Baumgart: I think how you deal with adversity, and especially adversity around people. I think I've learned over the years to be much more empathetic to situations, and each situation is unique.
Eric Siu: Is there a story you can share?
Brian Baumgart: If I'm going to go back to sort of what I said before, that everything's about people. You sort of get into binds sometimes, and you think of everything as like situational, and you go right to game theory. And you're like, "How do I play this through no matter what to win?" I think ultimately, that is one way to do it, but if you kind of step back and say, "What do people really want? What are they really looking for?" I mean, maybe there's a conflict. Maybe someone just wants validation or wants to maintain their pride if they're leaving, or a business deal's falling apart, or whatever it is.
And so I think I've learned to go from sort of the game theory to like, "Okay, here's the best strategy." To now, "Let's actually sit in the other person's shoes and how are they thinking about it?" And maybe it's not as cut and dry as you think. And so I think combining those two has really kind of helped get through adversity.
Eric Siu: Last but not least, what's one must read book you can recommend to everyone?
Brian Baumgart: Good to Great. We're reading it right now as an entire leadership team. It's our theme for the year. You talk a lot about growth and scaling in your interviews. There's a great quote that I just shared with our leadership team at our office site two weeks ago, which is something along the lines of, "You shouldn't scale beyond your capacity to hire A players, or great people." And so I think everyone looks at scaling or growth hacking or, "How do we pour more VC money into this engine?" And ultimately, it comes back to people. So I think that's been one of my favorite books. I read it probably 17 years ago for the first time, and it's one that I try to encourage everyone to read and really take some key messages away from Jim Collins and some great research.
Eric Siu: Awesome. Well, this has been great. What's the best way for people to find you online?
Brian Baumgart: You can find me at LinkedIn, which is just my first and last name, Brian Baumgart. My email address is [email protected]
Eric Siu: Cool. Brian, thanks so much for doing this.
Brian Baumgart: Thanks.
Eric Siu: Cool.
Brian Baumgart: Appreciate the time.
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