Why Every CMO Should Pretend They’re Prepping for an IPO

Noreen Allen has brought two companies public, with the most recent one taking place in 2017 at Bandwidth, where she’s still CMO today. Both Noreen and Kevin, who took Similarweb public this year and Appian in 2017, said not much changes after the IPO. Yes, the stakes are higher, and you may need to talk to lawyers more often, but marketing continues to play a heavy hand in shaping the perceptions of the company with a great product-market fit.

Which is exactly where every career CMO wants to be. Noreen said it best: “If you’re hoping that an IPO might happen at some point, don’t just sit back and wait or expect it to happen. Understand that in your role as head of marketing, you can absolutely shape the outcome and the direction for your business […] We’re in a position of such influence throughout the whole organization. It’s embracing the power of our role and making it happen.”

Great product-market fit isn’t the end all be all of success. You need differentiation to get there. Chapter 2 of Renegade Marketing is named “Dare to Be Distinct,” and it’s all about how imperative brand positioning is in a crowded market. This becomes all the more important when it comes to catching investor attention, and Noreen explained that she spent the early stages of IPO prep carving out a unique strategic position for Bandwidth.

What does this look like? Studying other companies in the industry, amassing S-1 reports, preparing a tight pitch deck and refining it. Noreen brought this positioning to both big-name and niche industry analysts, working with them to educate the market and back Bandwidth up when investors came knocking. Analysts are your best friend no matter what you’re trying to do (M&A, category creation, raising funding), and such thorough research is the way to get them from BFF to BFFL.

Marketing absolutely has the power to 3x, 5x, 10x success. In the IPO world, Noreen and Kevin both highlighted what matters to investors—that this product-market fit is worth it to them and the current marketing engine delivers predictable output. It’s how you get them to buy into the power of marketing, and how you get your C-Suite counterparts to buy into it too, IPO or not.

CMOs always want to be in a position to show value. With a solid, predictable marketing engine in place, this is what you’re saying (no matter who you’re talking to): “We get great results even though we’re underinvesting in marketing… look at how much more we could grow with a bigger investment!”

See above point. These two go hand in hand. The metrics prove the demand gen engine is working, bonus points if it’s operating at a relatively low marginal cost of pipeline creation opportunities. That’s what decision-makers want to see before approving more budget or deciding to invest

Here are a few of the metrics that Kevin and Noreen laid out: lead conversions, customer acquisition costs (CAC) per payback period, dollar-based net retention rate (DBNR), Sales/Marketing efficiency ratio, pipeline metrics, percent of revenue spend on Sales and Marketing.

You can’t get all the above levers in place without internal alignment, and vice versa. A highly functional, marketing-driven org is partnered closely with Sales to optimize that demand gen engine, has a clearly defined culture and brand, and has the C-Suite aligned on how to reach strategic goalposts.

Kevin described the IPO process as an opportunity to shape the story of the company, which in turn builds stronger relationships with the executive team and engages employees old and new. Similarweb carried out a huge employee branding campaign ahead of the IPO to thank employees for their achievements. This is essential in a particularly difficult time when it comes to recruiting and retention of top talent.