How to Scale Your Marketing Team
This was first presented at Facebook Fast Growth Program Launch Summit October 2021
The four eternal start-up questions: what, who, when, and how to hire
Traktion works with over 200 startups at all stages of growth, in a ton of different verticals; Ed Tech, Subscription, eCommerce, Fintech and more.
Irrespective of trajectory, vertical or growth stage we get asked 4 types of questions:
- WHAT do I need to hire?: What skills do I need to grow my business; digital marketing has become increasingly specialised with a wide range of skills so how do I know which ones I need to unlock the growth?
- WHO do I need to hire?: How do I assess specialist expertise. If you aren’t an SEO expert how do you know what a good SEO expert looks like?
- WHEN do I hire?: Some skills pay back immediately such as paid media (which can generally be turned on and off) whereas other skills take longer to yield results such as Search engine optimisation. In addition to the ‘payback horizon’, budget limitations may restrict hiring so you may have to prioritise not just what you do but also when you do it.
- HOW do I hire?: Should I hire permanent staff, freelance staff or agencies? And related to this question is often the topic of structures - how do I organise my team to ensure I get the maximum impact with my marketing.
What marketing capabilities do I need at each stage of growth?
When we think about scaling a marketing team it is important to consider what stage of growth the business is at. Your stage of growth determines your marketing needs not just for today but also the future - which needs to be planned for.
For early-stage businesses, there are broadly 3 stages of marketing team evolution (see image):
- The first is the TEST stage, when you are starting outgoing from Seed to Series A, your marketing team needs to be focused on establishing product-market fit. Your marketing needs at this stage of growth are helpfully defined by the ask - which is to find a market for your product. At this stage, you are going to need the people and strategy to figure out what segments your product and message will resonate with. And even with the best planning, you aren't going to know the answer to that before you start. So this stage is all about testing testing testing.
- The BUILD stage, between Series A and B, is all about driving sustainable growth. By now you should have a good idea of what channels work from your testing, so you can start to allocate spend a bit differently - not everything will be a test budget. You will likely allocate 70% of your budget to channels that consistently deliver efficient scalable growth, 20% to channels you have tested but not scaled yet, and a continuous 10% to new channels and disciplines. As you scale the channels that work you will need a team that can establish best practices for each channel, so it becomes systemic and sustainable; this stage naturally requires more rigour, process and depth of specialist expertise than before.
- The SCALE stage is all about building operational excellence and marketing leadership for your brand and category. You will need to build on the established processes and operations already developed to scale the marketing investment. That means more focus on ops process and compliance for the team internally, and more focus on delivering true omnichannel customer experience for your customers externally. To deliver this will require much more focus on omnichannel marketing leadership over functional specialist skills, and a significant investment of time and resources into customer data experts, analytics and technology automation. The scale of requirements here invariably means you will also need external agency support in addition to internal hires and freelancers/consultants.
So as you can see we are going to need different skills, people, and structures at each stage to support these needs.
Let's have a look at what skills you need for the first stage of growth.
Seed to Series A: TEST
When we think about building the very early stage marketing team we invariably need to prioritise who we hire based on budget constraints.
So let's start there and look at how we fund the journey.
Funding the Journey
The simplest way to think about the economics of building a marketing team is a top-down approach that allocates a % of revenues to marketing. The maths goes something like this. Let us assume at the point of series A you are targeting MRR of 250k, annual revenues of £3m. You want to allocate a % of that to Marketing spend - for established businesses marketing usually represents 2-5% of revenues but early-stage businesses need to invest more in marketing to get off the ground. So let's assume the marketing investment is 15% of annual revenues. That gives us a total marketing investment of £450k. So you have a £450k total marketing budget. Of this, you should aim for an 80% ‘working’ budget and the remaining 20% for talent. That leaves just £90k for talent. Not much is it!
So what do we do with this budget? The average salary for a 3-5 year old marketing expert is around £25-£30k so we can take that as a benchmark which gives us 3-4 people.
Who to hire?
Establishing product-market fit is all about testing. You will want to test organic content Vs paid media as a priority. A key first hire should be a content marketer - someone who can build the organic content strategy and lead the production of content, for the site as well as social media. They should also have enough knowledge of SEO to make sure that all content produced is optimised for search discovery. You will also need a paid media specialist. The type of person you hire here will need to be able to implement campaigns across different channels. Supporting your content expert and paid media expert makes sense to have a designer who can quickly build assets for both.
The most important hire though at this stage is going to be the person directing these 3 people - your growth marketer.
Growth marketers are classic T shaped marketers. They generally have deep experience in one discipline such as paid media. Gaining several years of experience in that area before expanding out their knowledge into other adjacent disciplines that can be easily added to their repertoire. T shaped marketers are great for early-stage businesses because they are versatile and know enough about each channel to be able to write a strategy but also direct and optimise the implementation. They should be equally comfortable presenting a go-to-market strategy as developing a high-level CRM approach. They should be able to write the strategy and growth plan, manage the delivery, optimise the performance and establish the key acquisition channels as you figure out product-market fit.
Series A to Series B: BUILD
Funding the journey
As you build and scale revenues between Series A and B your marketing team will need to evolve. The skills, people and structures you need to get from revenues of 3m to 8m will change.
Firstly let's look at the economics of what we can afford. Assuming we are building towards annual revenues of 8 million and we allocate 15% of the budget towards our marketing investment that gives us a marketing budget of £1.2 million. Assuming an average salary of £25k - £30k gives us a headcount of 8.
Building Functional Specialism
Now at this stage what you want to be doing is building up internal capabilities in the core channels and disciplines that are driving growth efficiently - these are the channels that work for you, and you will want the knowledge and execution of those channels in house. You will therefore need more functional specialists at this stage. It won't be enough to have a paid media expert managing all your ad activity across Facebook / Google Ads/ Snapchat / TikTok you will need specialists, if not at a platform level certainly at a discipline level. Your team, therefore, is going to become more specialist at this point.
The specialists you bring in will be determined by what you discover works for you in your Testing phase but generally, we see the following needs as brands go from Series A to B.
SEO Expertise
At this stage, brands will usually want to hire more specialist SEO expertise. SEO becomes more important as you scale for two reasons - firstly because you will want to maximise your organic ‘free’ traffic and reduce over-reliance on paid media, secondly because SEO specialists are good at identifying content gaps through keyword analysis - so they will be able to optimise your existing content plus inform your future content development. They will enable you to get more systematic about content.
Paid Social
For most businesses having a paid social specialist in the house is critical. This person will of course develop the strategy, funnels and manage the campaign optimisations (for both creative and audience) but they should also feedback insight fast into the business what works and what doesn't. In doing this they can quickly become a source of insight for the business and product not just a source of growth.
Paid Search
Paid search is quite category-specific so your needs here will depend on vertical. If you are in a heavily search-driven category such as fintech or eCommerce you will need this in house. This person should be able to manage all PPC activity including paid search and shopping.
CRM
As you scale your business, your first-party customer data and CRM becomes increasingly important; at this stage you will need to start balancing the efforts between acquisition and retention, spending more time on maximising existing customer value not just acquiring new customers. As you increase the volume and value of your customer data it makes sense to start building the specialist CRM capability to manage this.
Growth Marketer
So you can see in our structure now we have much more functional specialism to handle all these disciplines. I think it's fine to have a growth marketer leading the team but you may need to upgrade to someone more experienced as the team grows.
Fractional CMO
Now, as you scale you will need to start thinking more about long term strategies such as brand building, not just short term acquisition and you will also start to consider an omnichannel media strategy not just digital. So your growth marketer, irrespective of experience, may need support. Adding a fractional CMO is a good way of doing this
The fractional CMO is essentially a part-time CMO. You get the experience and breadth of a seasoned pro without adding massive costs -they can usually be hired 2 days a week and provide great support to a growth marketer
Series B to Series C: SCALE
Funding the journey
As you scale from Series B to C the revenue targets increase which means marketing budgets also increase. Let's say we are targeting annual revenue of £20m we will likely need a marketing budget in the region of £3m. Assume a 20% allocation to talent, you will have a budget of £600k and a headcount of around 20 to play with
The key things to get right at this stage are organisational design and structure (not just talent) to ensure that you can deliver scaled marketing excellence. There are many different ways to organise teams once you get to this size but a common design is to organise teams around the customer journey or funnel-like this
In this example, we have team leads that are focused on specific areas of the customer journey.
So you have a brand team that focuses on upper-funnel activity to generate demand and within this team, you may have PR events, content and organic social.
Your acquisition team is focused on optimising the different performance marketing disciplines including paid social, search and SEO
As you scale your business the product usually becomes more complex which might also require product marketing expertise
The retention team will be tasked with CRM and loyalty programmes
Driving all of this you are going to need a senior CMO with experience of managing large teams and budgets and experience driving all channels including offline. Point of note here: October 2021 IPA report found that optimal allocation between on and offline media for scaled businesses was 55% offline 45% online - so when you scale you need marketing leadership with experience to support that split.
Organising your team like this structure enables you to retain specialism, share learnings within relevant teams, but also set very clear KPIs for each group
This is just one structure though - there are many other ways to organise a team of this size. It's not uncommon to organise around products, customer segments or geographies. You will need to choose the model that suits your business.
Should I hire an Agency / In House / Freelance consultant?
One of the key questions we get asked is how to hire - should I use an agency, hire in the house or get a consultant/freelancer in
The reality is that each has pros and cons and you will need to use different combinations at different stages of growth.
Agencies - have great talent pools so are a great option once you start to get scale and need access to large external marketing resources
Hiring in the house - keeps knowledge inside the building and enables better integration and faster iteration - but you add more fixed costs when you hire house so you need to be sure you are hiring skills needed for the long term when doing this
Freelancers provide flexible domain expertise at cost-efficient prices because they operate remotely without overheads - they are good for task-based or project-based hiring but tend to be less well suited to long term engagements
As a general rule: in the early days you will rely more on agile access to freelancers, as you progress you will add a higher proportion of in house expertise, and as you reach scale you will find the need for agencies increasing
Key Takeaways
- The first is that you will need to hire a growth marketer to go after product-market fit - you may get there without one but it will be slower
- Bring in the key channels that work as fast as possible - having that knowledge in the house will be critical
- Scaled marketing operations need investment in senior leadership and org design to achieve operational excellence
- Combine different sources of talent at different stages: combining house, agencies and freelancers in different combinations at different stages to meet your needs
If you need support structuring your team, or hiring your team reach out at stefan@traktion.ai or drop me a message on LinkedIn.
