Interview with Mark Stouse – Defining A Recession-Proof Career & Things To Know As A New CMO – Episode #93

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“Just like you need to understand the business, you need to help them [the c-suite] understand the realities of marketing…”
Mark is the CEO of Proof Analytics, a marketing analytics platform that helps CMOs and CFOs bridge the ROI gap by providing cause-and-effect analytics that shows marketing and sales true business impact and financial worth. The company’s ‘Proof Business GPS’ guides through the whole marketing lifecycle, and provides a complete picture of a company’s marketing efforts. Their solution enables planning, budgeting, and optimization of marketing in all channels.
An award-winning B2B CMO and CCO, Mark is one of the first leaders to connect all types of marketing investments to revenue, margin, and cash flow impact in complex, long-cycle companies.
Questions and topics we covered included:
  • The story of how Mark built upon the Honeywell brand, in a sector within a slow sales-cycle industry (aerospace),
  • How Mark approaches building marketing teams today (including how to pick out the right VP of Marketing/CMO),
  • Why do investments in brand always get seen as wastes of money (by leadership) and how to fix that,
  • How Mark defines the T-shaped marketer,
  • What is the biggest enemy all CMOs will face in their career?
  • Why forecasting is such an important skill for CMOs to know (so they can keep their jobs),
  • Who should ultimately own attribution in a marketing team?
  • How can marketers at all stages in their careers remain recession-proof?
  • What is the OODA loop and why does it matter in data science?
And more!

Full Episode Transcript:

Kenny Soto  0:21  

Hello everyone. Welcome to the people digital marketing with your host Kenny Soto and today’s guest, Mark stew’s. Hi, Mark. How are you?

 

Mark Stouse  0:34  

I’m doing well. How are you?

 

Kenny Soto  0:36  

I’m doing well today. And I can say this because you’re on the podcast, and you have a very, very impressive background. You were the previous CMO for Honeywell aerospace, you are now the CEO of a b2b SaaS company called Proof analytics. And, among other things, I definitely consider you a marketing expert. 

 

But I want the audience to get a better understanding of your career, not just from my mouth, but from your perspective. So let’s start off with who are you. How did you get into digital marketing? And what are you doing today?

 

Mark Stouse  1:15  

Well, let me say this, to the extent that I’m an expert in anything, it’s just that I have discovered all the stuff that I don’t know yet. So. So I started out actually, as a, you know, a complete this seemingly a completely different world. I started out in political journalism. And then I worked in politics in Washington, DC, because quite some time ago, I was a speechwriter for President Bush the first so 41. And, and, and so I, you know, I went into big PR agencies after that. 

 

And I still have a pretty strong bias for, you know, really great communications really, really great, what we call earned media. But, I started to really see that profession, that there were limits to that profession, and I’m the kind of person that doesn’t really like a lot of limits, in anything that I do. 

 

So I had the opportunity to go on the marketing side. And start, you know, I kind of had, in some ways a classic career track, in the sense that coming out of comms, I went into Mar comm went into, you know, all the what later became corporate marketing, and then product marketing and solutions, marketing and, you know, did all that kind of stuff in tech and ultimately ascended into what I would call the CMO role in what I would call technology-infused industries. 

 

So aerospace would be a really great example of that. And then about 15 years ago, maybe a little more than that. I really made probably one of the most important decisions in my career. In terms of the way things later turned out. I committed to being analytics lit. And this is a guy, you know, today, you know, anyone who’s known me for a long time, thinks it’s kind of hilarious that I turned out to be an analytic software CEO, right? Because let’s just say that in high school, math wasn’t my favorite class, right? And so probably, like a lot of people who go into marketing and go into communications, right, that had something to do with it. It wasn’t by any means the whole thing. 

 

But I did kind of want a career that maybe didn’t involve advanced math, which, you know, this is sort of hilarious that we are now I’ve come really known for that. So I just, you know, that’s was I was probably one of the very first CMOS in b2b really huge heavyweight enterprise b2b companies to connect what we were doing to revenue margin and cash flow impact as well as other things like recruiting and retention. 

 

And we did it using classic regression analytics, so linear and nonlinear math. And then basically came to the inescapable conclusion that the issue was never math. You know, math has been around for a long time, and even data has been around for quite a while. The issue is operation analyzing analytics, so that normal people, business people, marketers, communicators, whatever, can make a better decision as a result of being exposed to the analytics than they could otherwise make. 

 

And that means automation. That means a much better non-technical UX, for example, that they can understand that they don’t have to sit there and go, I don’t know what the hell that means, right? So that’s what we built with proof. And that kind of brings us up to the present day.

 

Kenny Soto  5:38  

There are many places I want to go in this interview. But I want to start off with your experience at Honeywell. From my understanding, you took a very different approach to what a lot of marketing leaders might be doing today, which is not focusing so much on top-of-funnel activities and initiatives. 

 

From another interview, I heard you mention focusing more so on the middle and the bottom of the funnel, focusing more so on average deal velocity, rather than just growing the top portion of the pipeline. So can you talk more about why it’s a better approach? And if that approach can work today as well?

 

Mark Stouse  6:26  

So the short answer is yes, it apps you know, it absolutely can, the bigger answer is that everything you do as a marketer has to be seen in the context of the business and the industry that you’re in. In the case of Honeywell aerospace, unlike most aerospace companies, everybody was already doing business with everybody else, right there the whole idea of a net new logo, or, you know, kind of classic lead gen. 

 

At the top of the funnel, wasn’t it just wasn’t relevant. Right? You weren’t, you weren’t going to get anything in that sense. Now, demand, creating demand, was really important. But I see that as a full-funnel exercise. In almost any case, I can, right now I’m sure that there is somewhere but I can’t think of a situation where creating demand is not a full-funnel exercise. But where you know, so if we think about Honeywell as a technology manufacturer. 

 

So, Honeywell, aerospace makes everything that goes onto airplanes, except the airframe itself. So engines, radios, navs, wheels, brakes, electrical, you name it, everything that goes inside, fit out an airplane of any size all the way from your Cessna 172 all the way up to huge airline planes, and then certainly defense and stuff like that. 

 

Kenny Soto  8:15  

So can I quickly jump in and ask a question? For more context for the audience, how much was the average deal size, and also the average sale cycle?

 

Mark Stouse  8:27  

Okay, so this is where it was also really relevant, right? So it’s a highly regulated industry, these are really big deals, you not only have to win the deal, but before you even have a chance to win the deal, you have to win a place on a platform. So the big platform that everybody focused on 10 years ago, was the Boeing 787. And so, we, you know, at Honeywell, we wanted a lot of our products to be approved for that platform. 

 

Because there’s usually only like, you know, I’m just gonna pick one category, right? radios, there are usually only about three approved vendors. So and if you’re not approved for the platform, you have no chance for about the next 15 or 20 years to make any money off that platform. So that was job one. And then once you were approved for the platform, you had to let’s say it’s a 787 You had to go to the airlines and convince them that when they bought the 787 from Boeing that they wanted to specify your radio Honeywell is radios as opposed to somebody else’s radios, right. 

 

So we’re talking about a very long cycle situation, yours in some cases. We’re also talking About very regulated, very risk averse, I mean, let’s be honest, we want them to be risk averse, okay? So very careful. And average deal size is in the many, many millions of dollars, we’re talking about more accurately, hundreds of millions of dollars, over a period of years, particularly if you’re talking about the defense sector. So the two big metrics that the company cared about the most were op income. 

 

So as profits, right, and deal velocity. And nobody really thought because it was so regulated and all this kind of stuff, that you could really do too much about average deal velocity, and that it was just kind of it was, what it was, and all that kind of stuff. But op income, you know, was really significant. So we, we went out and we, we started packaging, instead of going to market and separate product lines, we started packaging solutions, that were targeting different major airline or defense industry problems. 

 

And selling them as a solution. And when you do that, whether it’s in aerospace, or whether it’s in SAS, or whatever it is, you typically have an opportunity to make a lot more money, a lot more profit on the deal than you otherwise would. But we also really attacked the issue of velocity. And it was sort of a speculative move. In the early days of all this. As I said, not a lot of people thought it would work. But one of the things that we really saw was that there were very, very, very, but three varies, okay, strong relationships, correlations between levels of customer confidence and customer trust, and velocity of decisions. 

 

And so we really put a lot into building confidence and trust in Honeywell in this space. And ultimately over two year period, we increased average deal velocity by about 4%. Well, more than 4%. So our revenue at that time was running around 12 or 13 billion a year. So you get that kind of revenue moving, let’s call it round numbers, 5%, faster, through the system, right? You’re gonna make a whole lot of people very, very happy, not the least of which was the CFO of Honeywell Aerospace, who is a member of the proof board today, because of that experience. 

 

So there’s you know, we actually got called out in two different meeting aerospace marketing, got called out twice by the then CEO, Dave Cody, in the earnings calls for our contribution because we could prove it. So we were running large-scale analytics, the old-fashioned way. We had, we hired a bunch of analysts to get the throughput. Right. So that’s how it worked. And do I think that marketers have really over-rotated on the top of the funnel? Absolutely. Right. 100%. Totally over-rotated and in doing so, have also opened themselves up for critique. Right. 

 

And, and whether it’s reasonable or unreasonable is not the point, right for sales to say, hey, you know what, yeah, you got me that lead, but that was like nine or 10 months ago, and I haven’t seen you in the say, in the sales motion and the decision journey, as since that time. You were sure as hell weren’t there at the very end where we ate the deal. 

 

So this is not Martin Moore, how does marketing get any credit for this right? Or, we have to come back and I’ll pause we have to come back and say, marketing is here. marketing’s mission is not to share revenue with sales. Revenue credit says marketing’s mission is to help sales sell more products to more customers faster and more profitably than sales could do by themselves. Period. That’s it.

 

Kenny Soto  14:47  

Why did this overcorrection occur?

 

Mark Stouse  14:53  

So this is my view. I think it’s a reasonably educated view, but I don’t pretend that it’s the only one or The complete one, right? I think that what happened is that, for ages and ages, marketers were primarily brand oriented. And a brand is a very long cycle heavily time-lagged investment. And they had no way, to prove that these brand investments were making a difference. And so all these CEOs and CFOs were like, This is just a waste of money. 

 

And then about 10 years ago, maybe a little more than that, you started getting marketing automation. Right. And all of a sudden, they saw marketers saw an opportunity, using data and, and the scale of marketing automation, to say, see, we have primed the pump, right, we have gotten all these new leads that you guys would have never had without us and all that kind of stuff. Right? And, you know, they’re well executed. 

 

These campaigns certainly have worked, right? I mean, there’s nothing wrong with them, as long as they’re well done. And they have the right messaging and all that kind of stuff. But right. They were still too distanced from the end goal. And marketers have for some reason that I don’t understand. And I’m not trying to be pejorative here at all. 

 

But it’s not about how many opportunities you tee up. It’s about what influence you had at the end on Cash Generation, right? And did your investments, short, medium, and long cycle, positively drive revenue growth, and then, of course, the increase in profitability and the improvement in cash flow from revenue? I mean, and that last piece is really important because that is the blood. That’s the oxygen of the business right there.

 

Kenny Soto  17:12  

My next question comes in two parts, you have the unique perspective of being both a marketer turned CMO, as well as CMO to CEO. Yeah, let’s start off with your perspective as a CEO, if you’re actively building out a team, which you are, what are you thinking about when it comes to building out your organization and picking the right partner to help in your marketing efforts?

 

Mark Stouse  17:44  

I mean, I can say, okay, so this is, this is why the answer to this question is why it is so hard to succeed with a startup and why so many of them fail, right? So most customers want to, you know, they, you know, having confidence and trust in their vendor is really important. Most startups haven’t been alive long enough to build up that reservoir of confidence and trust. What it takes to build up that reservoir of confidence and trust is a very time lag, meaning it takes time, you can’t just start your new company and, a year later, be in a great place in that respect, right? I mean, that’s just not typically the way it happens. 

 

So, as a CEO of a startup, you know, I have evolved from the standpoint that in the early days, so, this is just this is exactly like managing a financial investment portfolio, right? You have to have some investments that are long cycle, so-called Blue Chip, right, you have to have some that are shorter and involve more risk, and you have to have some of them. 

 

And where you are in turn in your life has an impact on how you tell yourself you know, how you want your investment portfolio to look, right? So when we started proof, I knew as a CMO and as an analytics lead CMO, that I had to start making investments and brands right now, even though it wasn’t they were not going to show up as highly relevant to our business success for some time to come. 

 

But you gotta start somewhere. You gotta start sometime, right? So we started right away. Now, the amount of money as a percentage of our total go-to-market spend that we spent on a brand in the early days. could not be a lot, because we needed to make the most of our investments, things that could flip into revenue pretty fast. So then as we started kind of moving forward, and our brands started gaining strength, and the whole needs of the business started to shift, the reality, the marketplace started to shift, we started to spend more money and more time on brand. 

 

And we brought it into more like a balance between brand and demand, I did a presence right about the same time. So this is like, right before, this is March 2019. So let you know less than a year before COVID I keynoted. at South by Southwest on this very issue. Right. And it was called gears in Grease gears, in this case, is demand and grease is brand. And you got to have both, right? And if you try to run and this goes back to your earlier question about the top of the funnel, if you try to run a demanding program, without a brand, you will create a lot of problems. 

 

Not you don’t mean to I’m not I don’t want to be misinterpreted. They’re not trying to be mean, but you will, you will burn out your machinery, meaning your marketing, automation campaigns, and all that kind of stuff, you’ll burn them out. Because you’re not connecting with anybody on any kind of emotional level, you’re just, you know, going right up the middle, again, and again and again, trying to close the deal. 

 

If you over-rotate on the brand side, right? You just have this big puddle of stuff that isn’t attached to anything, it’s not making something move better, faster, more effectively, more efficiently. A brand is a multiplier of demand. And by that, I mean the demand function. It’s so you gotta bounce it out. Does that? Does that answer your question?

 

Kenny Soto  22:16  

It gives more context. So let’s, let’s take a step back, knowing fully well, we have the demand and brand side, if you were even taking proof analytics out of the picture if you are building a business, and someone came up to you saying, I’d like to be the CMO. Are you looking for a practitioner? who is an expert on both sides?

 

Mark Stouse  22:40  

Oh, yeah, without a doubt, you know, and I, you know, I mean, in the earliest days, and maybe I think some people would accuse me of still doing this from time to time, it’s kind of hard to stop being a CEO CMO. But I work really hard not to be the, you know, the head of marketing proof anymore, right? I’m, that’s not my job. And to the extent that I do that, I’m, I’m causing problems for somebody else who doesn’t deserve that. 

 

So, but yeah, yeah, absolutely. I mean, this whole idea that you know, I want to, you know, hire a good market team that’s very demand-focused in the early days and only later kind of move over to the brand side. It is not the point at all. Right? I mean, even though we spent our money in percentage terms, more on demand, or in the early days, we have steadily recalibrated that, because we understand that it’s, it’s, it’s, it’s not one or the other, it’s both and it’s just the skew changes.

 

Kenny Soto  23:54  

This is a perfect segue into talking about the T-shaped marketer, what does it mean to teach T shaped, in your opinion,

 

Mark Stouse  24:03  

perpetual growth, right? I mean, I am more T-shaped today than I was last year or the year before. And I have this strange feeling that going into the economy that we’re going into right now that when whenever that is that we come out the other side, I’m going to be even more T shaped as a result of that experience. So the T here is all about the relationship between depth of expertise in one area. 

 

So that’s the vertical part of the tea. So it’s, it could be marketing, but it can be anything, right? And the horizontal bar is, let’s call it contextual understanding. It’s everything that your deep experience and expertise that that vertical leg touches impacts. 

 

And if you don’t understand that context piece, you’ll be profoundly limited as you move up the ladder, not just in marketing, but you know, enterprise IT HR, whatever you pick ticket, right? I mean, I came out of automation software. That was that’s also a part of my career. So I saw all of this happen to CIOs, what is currently happening, CMOS has happened many times before. And probably the last big one was the CIO, some people would say this is CHRO. Right. But it’s, it’s one of those two is the most recent one. 

 

And if you look at a very successful CIO, or CHR, O today, they are profoundly T-shaped, and let me be very clear about what this means they are business people, first, who happen to specialize in enterprise IT or HR or marketing, right? So their whole perspective is a business-first perspective, not a function-first perspective. 

 

And that is really, really key, I just can’t even tell you how important that is, if you have any aspirations to move beyond a specialist role in a marketing team, and, and move upright and have a more horizontal view, across marketing, and then ultimately, across the business, you’re gonna have to, you’re gonna have to master that. 

 

And so I’ll give you just a couple of examples, right? If you haven’t ever carried a bag, if you don’t really know what it’s like to sell, my personal view is that you will not be a candidate for CMO within the next five years. If you can’t read a financial statement. And you know, it’s not like, you know, I’m not saying you have to be a CFO, you know, closet, CFO, I’m just saying you have to be able to read a financial statement and talk about it. It tells a story in it. 

 

And that is the distillation of the language of business right there. So if you can’t read it and talk about it, you do not speak the language of business. And that’s going to be a major limiting factor. I just did I helped co-lead an off-site. 

 

Recently I wrote about it on LinkedIn, for one of them the marketing practice of one of the large recruiting firms. We’re talking about the modern CMO, right being very T-shaped. And one of the things that so I made this point about reading financial statements. And their response was sort of mind-blowing. Right? They said you know, barely 10% of CMO candidates that we talked to, can do that. That’s a big problem. Right? If you don’t know how your business makes its money, right? Like product line by product line. So like, for example, at BMC Software, we had a mainframe. And the mainframe was generating huge margins for the business, but no growth. And then we had kind of a more distributed side, you know.

 

And that was almost a money loser at the time, but it was where the growth was coming from. You invest as a marketer very differently in those two situations. But if you don’t know this, then you will just kind of do this one size fits all kind of approach to marketing and it won’t work very well. At least one-half of it.

 

Kenny Soto  29:10  

Do you think this is a contributing factor to why most CMOS only last two years at most an organization?

 

Mark Stouse  29:19  

I think that it is certainly a really big part of it by no means. Actually, I’ll tell you what the core issue is there is no there’s no doubt in my mind after seeing analytics and upon analytics. So the average tenure is somewhere between two and three years. The time lag is their major enemy. They will come into the role. They will spend three months on a listening tour. They will invariably default to some sort of new website project or new branding project or there’ll be something like that it might even be New demand. 

 

Kenny Soto  30:01  

Mark, before you continue, what is a listing tour? Sorry, what is a listing tour? Is that what you said? Listening tour? No, I didn’t say that. Okay, well, so you went through the list, you were talking about how they will be the first few months they’re going around? Oh, a listening tour or a listening tour? Excuse me.

 

Mark Stouse  30:24  

Yeah. Sorry. Sorry. No worries, okay? Yeah, no, the listening tour is, you know, where you go around, and you meet with everybody in leadership all over the world, and you hear what they all have to say, and you hear the complaints about marketing and where you think, where they think you ought to take it next. And it’s all a big exercise in politics, which is not bad. Okay, it’s necessary. You want people to not only feel heard but be heard. Because guess what, they will teach you some cool stuff, they will give you some great perspective. 

 

But it takes too long. And the way it’s currently done by most CMOS, so they’re wasting time, they don’t think about it in this way, right? But that’s really what’s happening. And because by the time they are really investing in their own programs, as opposed to reaping the benefits, or not as the case would be, of what their predecessor invested in, they’re six to nine months into the job. They, you know, there’s a lot of time lag. 

 

And those new investments that they’re making, a lot of it will look like, it’s not making a difference, the seat in this, the C suite will go, you know, somewhere around 18 months or so, the C suite will start to whisper to each other. This is not working, this is not working. Can you tell if it’s working? Can I tell? It’s working? No, I don’t see anything. Right. This is the beginning of the end, for the CMO in question. And this is why the analytics at the end of the day is so pivotal because you need to be able to educate the C suite on the realities of marketing. So just like you need to understand the business, you need to help them understand the realities of marketing. 

 

And if they think that your campaign is supposed to turn into, you know, an amazing business impact the next quarter. I got you to know, a newsflash for you that probably, you know, I got some oceanfront property in Arizona, to sell if you really believe that, right? No one does. But no one, it’s not enough to say, Well, I understand it takes a long time. That’s not enough. What it takes is being able to forecast how long it’s going to take for these different investments to actually make money for the business, that’s key. 

 

And then to recall, the models, recalculate the models, fast enough meeting frequently enough, where you’re catching the deltas between the forecast and the actuals. And because you haven’t included all this stuff that’s going on in the marketplace, in your model, it will start to say, Okay, it’s these factors that are changing. So we saw a lot of this during COVID. Right, these factors are changing, and it’s slowing down the impact of these investments, or it’s blowing them off course. 

 

So you’re no longer on the course, to hit your goal, right? So we need to make some adjustments in order to get back on track. This is where the whole analogy, the best analogy ever on this is the GPS on your phone. So the issue with analytics for marketing is not just the standard calculations, right? This is your ROI multiplier and all that kind of stuff. It’s the ability to navigate your way through changing market conditions, which right now, and for the last eight, or three years, have been breathtaking in their velocity, and in their volatility. 

 

If you think the past is prologue if you think that because, you know, whatever it is worked for you four years ago, that is going to work now. You don’t know that anymore. You might be right still, but you don’t know that for sure. Not without the analytics.

 

Kenny Soto  34:56  

Speaking of analytics, who should own ash confusion in the marketing team? Is it the CMO? Is it channel owner by channel owner? Is it marketing ops demand? Gen? What do you think about that?

 

Mark Stouse  35:12  

You know, that’s a really great question. And I think it’s sort of being negotiated right now inside of a lot of different companies. We have clients, I mean, in this sense, we are probably an exemplar of the different answers to your questions we have, we have clients that have centralized in finance. So there are the companies that do that are essentially saying we want a disconnected, disinterested third party, to do all the measurement, do all the analytics, right, and just roll it out and say, This is what it is, and, you know, kind of stripped the politics out of it as much as possible. Reb Ops is coming on strong. 

 

And I think that, if you’re Reb ops team is more than just a renamed marketing ops team or sales ops team, then that’s probably that can be a really good place for it. If you’re gonna, you know, even within rev ops, so rev ops, marketing ops, sales ops are still dominated by people who are very, very talented and very valuable functionaries. Right, they run the tech stack, they run different pieces of the tech stack. 

 

They’re very accomplished in this area, they are not analysts. Right. And so you’re going to need to bring some analysts not a lot. I mean, one of the beautiful things about proof or things like proof, right, that are heavily automated like that, is that you get a lot of leverage off of one or two guys in data science, that then you don’t have to hire a 20 person team anymore. 

 

So that is that’s kind of where I see it going right now. I think one of one of the reasons why I mean, the natural statement here or question is to say, Well, why not? centralize it in the data science, right, and data analytics teams. The problem with doing that is that you have a bunch of PhDs that are brilliant, at data science, they know the math backward, forwards, and sideways. 

 

And they usually know absolutely nothing about the business. Nor do they know anything about marketing. Right? They just don’t. So you have to really do the kind of like the conceptual thinking for them. And, for us, that’s an option. And I would really encourage any marketing team to have those kinds of conversations on a regular basis with analytics. 

 

But the problem is, is that most marketers, kind of almost like, by definition, don’t enjoy hanging out with data science people. You know, I mean, it’s kind of like, you know, Vogue magazine meets, you know, pocket protector, dude, right? I mean, these are just culturally, incredibly disparate. 

 

And it’s hard for me basically, to talk to a lot of data scientists. I certainly do. They think of most marketers as vapid, right? Which is really hard for characterization. But they, they that’s how they feel about it. Most marketers look at the data scientist and say, not, wouldn’t, wouldn’t date that guy or that girl for nothing. Right? And so what’s happening here is that both sides are making very superficial judgments about the other and thus not communicating. It gets worse because most marketers see data scientists as a judge in black robes. That’s going to say whether they did a good job or not. 

 

And they should be seeing data scientists as both a coach and a bodyguard. Right. So Coach is fairly self-evident, right? The more you know, the better the decision you make the bodyguard is hey, I made this decision. I need proof, small fee proof that it was the right decision. Right that it produced really great results for the business because I may have taken a big risk and I don’t want people to think that it was a bad decision, I want them to see it for what it was, it was a badass decision. Right. And so that’s the bodyguard side of me.

 

Kenny Soto  40:11  

I’m conscious of our time. So I want to make sure we get my time. So, I want to make sure we get to a very important part of what I had in store for this interview. What does it mean to be recession-proof as a marketer, this is not just for CMOS, aspiring CMOS, mid-level managers, or entry-level marketers, which is the audience, any marketer, what does it mean to be recession-proof?

 

Mark Stouse  40:42  

There are a lot of parts to that. But so we’ve talked about quite a few of them already. So I’ve sort of asked everybody to kind of do a rewind. But some of the others, right to realize that if you have a very high base when a recession hits, C suite, start looking for large pools of money. Because if they can cancel those out, they cut them back dramatically. They meet their goal, their cost-cutting goal a lot faster. 

 

So one of the reasons why people who make a lot of money, particularly on a base, get fired first is exactly that. It’s the same reason why or it’s part of the same reason why marketing gets tagged first, with big cuts, right? in percentage terms, and sometimes in real terms. Marketing represents a huge expense. 

 

So there’s a big pot pool of money right there. And we can really, you know, make a lot of progress just by whacking marketing. The other part, though, right, which is really important to say is that even today, and I’m sorry, both sides own this, but marketers have a disproportionate, you know, it’s not 5050, it’s like 7030, they own the fact that the C suite still is not only unconvinced a lot of times by what they’re doing. 

 

But the C suite doesn’t even know whether they should be spending more money on marketing or less money on marketing. Right, from a purely business perspective, right? If there are a lot of headwinds in the marketplace, and they still need to show 20% growth, guess what? They’re going to have to spend more marketing dollars, right? Probably almost assuredly. But how much more? And in what areas? And where is the point of diminishing returns right? after which time, it’s really stupid to continue to spend money on this part of marketing or that part of marketing or whatever, because you’re not going to get any more bang for the buck. 

 

They’re set. It’s called saturation, right? So I would say that when they cut, they cut because they have no idea what they’ve been getting. And so they also have no idea what they will be losing. In the future. Remember the time lag, right? So this problem is accentuated big time, by the fact that time lag works both ways, right? So all the money that all the investments that were made in marketing six months ago, are going to be working for you going forward for some period of time before they dissipate because you haven’t continued to invest. 

 

So what happens so many times CEO and CFO whack the hell out of marketing, right? And then for the next nine months, they can’t tell that there’s any difference. And they’re like, See, see, told you, right, we were spending too much money. And then all of a sudden, man, the wheels come off the wagon, and everything goes to hell. And everybody goes, whoa. And then right about that time is when all of a sudden everybody says, ooh, we cut too far. We got it wrong, need to reinflate marketing. 

 

But the problem is you’ve lost a lot of your talent. You’ve lost a lot of your continuity, you’ve lost a lot of your brand power, right? So the zigzag if you plot this over like a 20-year period with big companies. It’s like this. It’s a roller coaster ride. That’s what marketing looks like. And it’s two curves that are equally roller coaster three if you’ll allow me to create that word. The right one of them is spin, spend acceleration, and deceleration, and then on a timeline In basis, we should have a mirror curve. Right on what is happening with the business? But yeah, yeah. 

 

So that’s, that’s so if coming back to the recession-proof thing, right? And this is also I mean, I realize on the analytics CEO, but let me just tell you, I think it’s still the truth, whether you buy my product or somebody else’s. If you want to be recession-proof, be able to tie what you do directly and provably to things that the business cares about. And revenue margin and cash flow, top that list every time be able to say, you know, what, I, I believe in my ability and my contribution so much, that I’m not going to go for that super large base, I want higher variable comp, tied to these analytics tied to my not only achieving certain kinds of KPIs in the short cycle but also the value that I ended up creating for the business in the longer cycle. 

 

And that is, as long as you stay synched with the fortunes of the business, where if you’re making a lot of money for them, they’re going to pay you gladly, because guess what, you’re an engine of growth or an engine of profitability. But if all you are is a large base salary, with a little bit of variable comp, your I’ll tell you what, the way you’re seen, and it’s, you know, it’s not fair, or not humane to say it this way, right? But it’s the truth is they see you as a sunk cost. 

 

And if you if all of a sudden, they can’t afford you anymore, which is what’s happening, by the way, right now, all these individuals that negotiated these really big raises, whether within the company they were in, or they went to another company that paid them, you know, 2030 40% more. They are the ones right now. I mean, I talked to him, they’re the ones getting whacked. In these layoffs. 

 

Kenny Soto  47:14  

When you mentioned this, the metric that comes to my mind is what I recently discovered. And this is one of the reasons why I love doing this podcast, revenue per employee. And the reason why that comes up to my mind, it ties back to the earlier part of this conversation. Marketers have to know how the business works. And part of that is labor costs are something you need to look at, on a financial statement. 

 

And to a certain degree, the reason why marketing is cut before sales, and product operations, it’s hard to determine revenue per employee. And you have to whether you’re the marketing leader or someone in the middle, you have to be that voice. If there isn’t, it says we need to be able to attribute our marketing activities to revenue growth. Now, I feel like there’s a lot of value here. So I want to end with my favorite part, which is my favorite question. If you had access to a time machine, and go back in time, 10 years into the past, knowing everything you know, right now, how would you accelerate the speed of your career?

 

Mark Stouse  48:34  

I would have built proof a lot sooner. Right? I mean, again, that the magic, operationally speaking is not in the math or the data. It’s in the speed with which you can use analytics to refine data. So this is the data is oil analogy, right? But you can’t just burn oil in your car, your gas tank, and at work, right? You have to refine it into gasoline. The same thing is true for data. And that’s what analytics is analytics is a giant refinery, a mathematical refinery. And so, but you got to be able to speed it up. There’s something in so Top Gun, right? We’ve all we’re all seeing Top Gun, it’s a great movie. 

 

There was a concept that came out of the fighter pilot community that’s actually totally mainstream and data science today. And it’s called the OODA Loop. Eau de a look it up, right? The essence of the OODA Loop is how long it takes me to observe something to get oriented to decide and then to act. In a fighter plane, right? If you are slow on the OODA Loop, you’re a dead duck sooner or later, right? You have to be faster What makes you win is when your OODA Loop is faster than your opponent’s OODA Loop. 

 

That’s the essence of it. The way that this works in data science and in business is that if your data and analytics OODA Loop is slower than the actual clock speed of the business, you’re never gonna get anywhere with it, right? I mean, we’re talking to a very large enterprise technology company right now, and you would all immediately know who this is, who has been a marketing mix modeling user. So that’s the math for 10 years, right? And they, and they, and the vendor that they work with is a consultancy in there. 

 

So they’re doing it kind of the more legacy non-automated way. And they do a great job. I mean, the math is fantastic, and the models are fantastic. But by the time they deliver the models to this company, everything, including the forecasts in the past. So this is an example of where everything was too slow, you can’t use it to control your future, or even influence your future at all. So that was why we had to hire an overhire in the data science Arena at Honeywell was by brute force by just hiring a ton of these guys, right? We got the speed up. But it was extremely expensive. I mean, we’re talking about millions of dollars a year. 

 

If I had had proof, 12 years ago, man, it would have just been unreal, you know, I mean, it would have just, you know, but things work out the way they’re supposed to work out. I’m a big believer in that, you know, if I had had something like proof 12 years ago, I probably never would have become an entrepreneur, I would have stayed a CMO. Nothing wrong with that. Okay, at all. But you know that my life had a different track, it was moving in a different direction. And it’s not saying that I won’t ever be a CMO again. 

 

But this is where I am today. And, um, my whole goal is to it’s one of the reasons for example, why I don’t get very commercial very often on LinkedIn. I think it interferes with my ability to help people and marketers have the best freakin job in any company. Okay, except for this issue. And this issue makes the profession suck over time. Right? How many times? All you guys listening to me right now? How many times? Have you sat in a conference room and been told? Man, I just don’t see it. I don’t see the proof. I don’t see. I don’t mean, really, you know, we just got through spending $10 million on a brand. What does that get us?

 

We just got through spending, you know, 30 million on marketing automation campaigns, you know, demand campaigns? Did you know that we don’t even know whether they’re good leads or not? Half the time sales don’t even use the leads. Right? Have you heard all this stuff? Right? That does that. Is that motivating? I don’t think so.

 

It didn’t motivate me, right? I mean, the main reason why I made a decision to be an analytics lead was that I was sick and effing tired. Right of that kind of conversation. It was, I felt like no one took me seriously enough to actually believe that what we were doing was valuable. And in fairness, they shouldn’t have to just believe they should, they should have it proven to him. 

 

But I, you know, I really, you know, what, one of the things that were important to me personally, was to be taken seriously. And I felt like that in a lot of these large companies, even as CMO and CCO right, most of my influence was political. I had to develop all these relationships to grease the skids and get done what I wanted to get done, as opposed to being able to make a case. And so that’s why I did it. Right. And it was quite the adventure clearly and I’m so glad that I automated it. I really wish I had had proof 12 years ago, the.

 

Kenny Soto  54:53  

Main takeaways for me, and I definitely will be listening to this over and over again, but the main tool For me is to learn more about the business that I’m marketing and be able to tell a story with data that proves marketing is having an effect on revenue. Mark, if anyone wants to say hello to you online, where can they find you?

 

Mark Stouse  55:14  

Well, I’m very active on LinkedIn. So it’s not hard to find me there. You can also reach me on Twitter at my address Mark Seuss on Twitter. Those are really the two best ways to reach me personally. corporately, our company’s URL is proof analytics.ai. And there’s a lot of information there. And if I can, we can help you if I can help you in any way. I’m happy to do so. You know, that’s really my main thing. I certainly like making money. I want the company to be successful. But I am here to help people, period.

 

Kenny Soto  55:54  

And we definitely got that from all of the information you gave us in the first one-hour podcast of the people digital marketing. And that said, I want to say thank you, Mark, and thank you to you the listener for listening to another episode. And as always, I hope you have a great week. Also, if you haven’t done so already, rate us on Apple and rate us on Spotify. It will help us out a lot.

 

Mark Stouse  56:17  

Thank you. Hey, thanks so much.

 

Bye.

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