Customer Generation- Garrett Mehrguth


Garrett Mehrguth talks about generating customers through effective advertising. He goes over tactics that he has used in his company to generate millions of dollars in revenue. Garrett suggests a shift to a more personal, exciting approach in B2B marketing and sales.


Garrett Mehrguth is the President and CEO of Directive, a company that partners with brands to help them with their search marketing goals. Garrett is an expert on marketing strategy and has helped many brands see growth in the SaaS space.


“Customer generation is a Marketing methodology developed by director that focuses on SQL and customers instead of legacy metrics like MQLs.”

“I truly believe that people will pay more and take an action when they think something’s different. I have found very few people are convinced that you’re better because you say so instead of trying to convince someone you’re better try to convince them you’re different and I think it’ll be more effective.”

Key Points

  1. 1st party data unlocks scale 
  1. Financial Modeling is Necessary 
  1. SQL’s always beat MQL’s 
  1. Sell to people, not corporations 


Hello, everybody. My name is Garrett Mehrguth. And I’m very excited to be chatting with you today about customer generation. Customer generation is a proprietary directive methodology that combines revenue operations, go to market strategy positioning, financial modeling, all the good stuff that many of us frankly, haven’t maybe done before or want to do and I’m going to walk you through exactly how we do it, how you can do it too. So we have some fun today.

First thing, what is customer generation? Customer generation is a Marketing methodology developed by director that focuses on SQL and customers instead of legacy. metrics like MQ ELLs. Now historically, we’ve always believed in research and development here directly. We funded our departments really really well. When it comes to actually advertising right so we sell paid media we do our cell SEO, we do our SEO sell rev ops, we do our revenues. So we always wanted to do was actually, I don’t know, make ourselves some more money too, like we’re trying to do for ourselves, we’re trying to for our clients. And we were using all the best practices that everybody else used in demand gen and we were losing. And when we finally pivoted over to customer generation, and started to challenge some of the best practices and the hypotheses that you get from all the blog posts and all the other conferences. We came up with something that worked and it changed our company for 49 people to now almost 250. 

So let me show you how we did this in only a year. The first thing we wanted to do different than traditional demand generation is we no longer wanted to trust LinkedIn, and social platforms to give us our data right? Right now what happens is, when you look at the data in LinkedIn, I would argue 50% of LinkedIn targeting is inaccurate due to the nature of how do they categorize what I mean by that better. Is better than a financial services company, or their computer software company. And if you click on their account, what you’ll find is they’re actually under Financial Services. But if you were to target financial services, 90% of the companies would be more like Northwestern Mutual than they would be like better. So you immediately have a dissonance between who you think you’re talking to and who you’re actually talking to. And you can’t validate who that is. Because all in LinkedIn is black box. So we want to get rid of that black box and use manually verified data for all of our advertising.

We also want a product led approach to go to market in the old way. Now we want to do customer leads. In other words, a lot of times companies have a tendency to think that their product is great because they say it is, instead of articulating why their products great for their customers’ needs. We also want to use LTV CAC. Instead of ROI we want to use revenue success to create emotional experiences. Right, we want to get away from marketing qualified leads as a marketing KPI that we get to own to a sales qualified leaders as a marketing KPI that we get to share for almost all b2b marketers, marketing doesn’t actually get to drive revenue, sales does. And so what we need to do is be great partners. And have really tight feedback loops. That’s what this is all about.

So let’s dive into principle one first party data on lock skill. So at directive, we like to do ABM kinda like on steroids instead of just saying, Hey, here’s our 500 accounts. What if we mapped out every single solid Terry account your entire total addressable market teardown? Well, that’s what we did directive and had a massive impact. So let’s show you how you can do this. And this is what you can take to really change the way you think about advertising. So we’re getting to seamless CrunchBase, zoominfo, Clearbit, any one of these data providers. Zoominfo is a customer of ours, but I do think they have probably the best deepest data right now. Of course, we agree with funding Clearbit does pretty good tech, seamless is very quick industry with cell phones. So when we build our Tam, your total addressable market, some of the things we might want to think about is how big is the company? What tech are they using? Have they raised funding, like for directive, we’re gonna target companies that have over 100 employees, at least 25 million in funding and are maybe using some type of marketing tech like Marketo or something like that.That makes us feel confident that we are talking to our exact persona. Now the beautiful part about building your tam is we’re going to share this with the chief revenue officer and the SDR team, and the rest in the whole company is going to actually be using this Tam and we’re going to report on market share and how well we’re actually penetrating the market. Now this part is big though, we’re gonna manually verify.

Now, manually verifying your data is critical because when we went away from the black box of advertising, which is we run campaigns, we get our KPIs. We don’t actually know who we marketed or advertised to. So now all we’re doing is we’re uploading our own data to the ad platforms, whether it’s programmatic, LinkedIn, Facebook, Instagram, whoever we’re using, I’ll show you how we’re only advertising manually verified data.That means I can run TV commercials. You know why? Because the chief revenue officer said, hey, I want this account. Well, now I get to be a marketer and be creative and say, Okay, how do I go get that account to care about us? Like, how do we see the world different? So we’re gonna manually verify all these, we found when we did this, we actually had 50% waste, even from these awesome data providers.If you’ve been in data a lot if you run SDR teams, if you’ve done a lot of list building, data quality is really tough. And so we actually have an intern team that did all our manual verification. You can offshore this you can have interns do it. Manually verify your data is must happen this process you’re 100% confident that you know you’re talking to.

Then, we want to integrate this, the TAM to Salesforce remember, we don’t have our marketing data than their sales data. We’re a collective growth organization that shares data and is going after the same vision with the same type of message the same value proposition to get our ideal customer profile from apathy to action. We want to be fully aligned now that we’re integrated though to Salesforce.We can start to report on market share. So for example, at directive following this playbook. I’m going to show you in the upcoming slides, we were able to take 62% market share in 12 months on our exact audience. It works when I say 62% market share, I mean sales calls, okay, like actually broken to these accountants it works.So got our total addressable market, very excited about what we can do with this new data and this new approach to efficiency and effectiveness of their advertising. Now if the model out, can we afford it, how much should we spend, right? What does this mean to our business? Is our pricing Correct? Our gross margins, right? Can we advertise and take as much market share as we want? Can we be as aggressive as we need for our vision?

So first, when we do we get the numbers right? We need to get the numbers and then we’re going to model it out. So we’re gonna actually start to look at your categories. Like for example, we don’t want to make Google Ads one column, we want to separate it so you have your search and your display. We don’t want all of LinkedIn, we want combo ads versus sponsored content. This starts to help us get very, very good with what I believe is the most important question that you can accurately answer if you want to become a C level exec,and that’s, hey, if I gave you another million dollars, where would you spend it? Why, and what do you think would occur? Using this actual sheet which you’re all going to get right here? You’re gonna be able to answer that question. You’ll be able to put in your store goals. And then you’re going to start to look at what your goals are for the future. Right. Here’s what happened in q2. Here’s what we want to have happen in q3. And then this will literally tell you here’s how much spend is required. Here’s a mature enough to increase your spend. And here’s the incremental ROI from funding this initiative. This is very powerful.

As an executive, it will build a ton of trust and confidence in your marketing.  Notice it also takes into account gross margin lifespan of a customer monthly average order value LTV ROI, LTV CAC and so you really know Okay, display not sure about it. Google Ads search seems like it’s working. See and it will really help you. Okay, we got our total addressable market. We know that we’re financially validated, we know that we have the budget required to hit our goals, right? I mean, who here and I wish I could see your hands. But the hardest part of being an executive is to get a bigger goal and less money. We’ll help you fight that and be even more successful. So we got a total addressable market.We got our financial model. Now it’s time to actually go to market. So what do we do? First thing we got to do is got to get an offer. that many of us are swinging ebooks and white papers, like it’s 1999 and we want everybody to care. Here’s the truth. Nobody, like you know what, I want to spend my next 30 minutes doing reading the white paper. I’m gonna read a white paper to be a blast. And I by the end of the white paper, you know I’m gonna be convinced to hire you. So let me do that. In fact, you have one of your SDRs call me immediately. Like once I downloaded call me. What I love doing is reading and talking, I can do those things all day. So work, and I know I’m being facetious right now. But what the heck are we doing? Right? This is what we all do. And I want to show you a different way of doing.

 What I want you to try to think about is your lifecycle stages. Right? If we go back here a little bit, what you’ll see is your demo to do lead to demo, you’ve got to see your lifecycle stage conversion rates. These are really important to optimize what I found that directive. Like in this r&d study, just see off context, I spent over a million dollars on LinkedIn last year as an agency professional services company. We made over 10 million pounds, okay, it works. This isn’t like some fake tiny little strategy. This is something that could change your company, change the way allocate your spend, be hyper effective. We had to do, we had to think a little different. And the big difference was, for years I had run the ultimate guide to demand generation for CMOS on LinkedIn. I run up sponsor content lead gen ad to a CMO. I get my MQL. I have my SDR call and it doesn’t work. I mean, I made a joke and that joke wasn’t about you. That joke was about me. I mean, I spent hundreds of 1000s if not millions of dollars doing social advertising for b2b the wrong way. But sending trusting LinkedIn that my delivery would be accurate. So I was trusting them that when they said I’m targeting computer software, I was actually targeting computer software. I wasn’t I was trusting them that you know, lead gen ads are good and that when I call them the hustle type of purchase intent and it’ll work it didn’t.

Okay, so what I want you to do is I want you to create your own act SQL directly from LinkedIn, we’re going to skip the MQL phase altogether.We’re going to start to get efficiency. We are going to actually drive calls to our SDRs or AES directly from LinkedIn.we’re going to skip the MQL phase altogether. We’re going to start to get efficiency. We are going to actually drive calls to our SDRs or AES directly from LinkedIn. So here’s a couple points of data. Okay, this was across over a million dollars is spent $100 gift cards. A cheaper cost per lead. When I say cost per lead. This lead case is a actual intro call held. It is cheaper to pay someone to show up to an intro call than to not pay them by a wide margin or to not pay them enough. Okay?

What you’ll find when you advertise, okay, it’s all auction driven. So every day that a competitor enters your auction, and it’s social, it’s you’re human, and humans are multifaceted, right. I might like Porsche’s and be a CEO. That means you’re sharing a cost of advertising to me with other people, not better based on my interests, not just like a Google search ad, which is my initial intent. In that moment, socials different, okay. And so I have to somehow compete with those people in every day. My cost per click goes up by more than I can increase my price, or lower my cost of goods sold, creating diminishing marginal returns on my margins .So instead of focusing on lowering our acquisition cost, like most b2c companies do, we need to focus on increasing our activation rate. In other words, getting people from downloading our form to showing up to a sales call. Can I get them from here to there in one moment, as cheaply as possible and I found the best way to do that is to incentivize the action I want to take the gift.

You send also for sending gifts. They are also a client of ours but I do think that the best sending gifts, so I highly recommend them. And from there, I want to give you all the copy. So across million dollars are spent plus here’s the exact copy. We used to have it. I’ll show you why it works. First things first, when you write copy, never have more than three lines. It’s a super simple rule, but your brain will consume content. If there’s no more than three lines. Once there’s a fourth line. I don’t know why I have no data to back this up. Just professional experience and living this brain shuts off don’t believe me? Like literally try to write copy and put four lines and see if your brain even wants to read the paragraph it won’t. t won’t want to be shocked when the memorable set of 30 minutes we say 29 So 100 we use emoji.

The most important we start to build so we all New Relic. We have all these kind of name brands in the space.  Here’s what we do. Take a call a maybe be interested in take a call to actions firm with one of our experts after I send you $105 gift card now because I also need people to yes or no and they just let people say no right here.We say not sure tell me more. Because the concept is I actually think they would want us and we want to make them feel like they’re not doing their job if they don’t take a call with us. Like they’re leaving this amazing opportunity on the table. That’s what we want to frame it. Okay. So we want to make sure that even if they’re not convinced yet we have one more chance to convince them we don’t just let them opt out and say no.

Then this is where we start to get in the tech I’m gonna show you real data from this guy. I got to get someone from saying yes. On Allegiant our pops in information, right. I’m not saying to a landing page. I’m keeping them in platform. What happens little psychological and actual friction as humanly possible. They fill out the lead gen form on LinkedIn, and then the bot on the Convo ad, or on the sponsor content or whatever I’m doing it very next thing is I got to get them to an appointment. Your SDRs will love you. Your AES will love you. They will hate you if they’re constantly trying to follow up with your leads and get them to the moment. Okay.

What happened? Naturally Piper 34% form fill to Intrahealth conversion rate with chili Piper we had a 51% intro form filled to intro help conversion rate. Buying chili Piper are similar technology that can get people to book automatically from your ad campaigns is the highest ROI you can put into your campaigns. Very easily. Next, we got to train SDRs and AES on how to have sales calls. We were using insight squared for this. There’s also Clary a lot of great technology, but we got to support the SDRs and AES.  What I found is most AES these days are good at demonstrating not selling. In other words, they’re used to people requesting a demo and they show them the product. What they’re not used to is people inquiring about the value of the product and how it can change their life. Well, this is where you have to master your positioning. So you have to master your story, your viewpoint on the world. And what I would encourage you to do is focus on what makes your company different, not better.

I truly believe that people will pay more and take an action when they think something’s different. I have found very few people are convinced that you’re better because you say so instead of trying to convince someone you’re better try to convince them you’re different and I think it’ll be more effective.And a couple of things we use a video the video we use is a hype video to educate and get excited, right? I need to get them from wanting to gift card to wanting me and I do that through a video. So once they fill out the form and they sign on they schedule their appointment, the next email that comes out of our marketing automation and our technology stack, hits them with a video have an 84% attendance rate with the video.

We also use automated sequences and reminders. And then we remove Monday mornings and Friday afternoons so that we have to do less follow up and less waste in our attendance rates. And we’ve got it working on combo ads. We’ve got it working on sponsored content. But LinkedIn only has such a large audience so much activity, and there’s only so much scale. They have all we do is we use a partner like their bid x and what Clearbit X does or even metadata you can look at. What they’re going to do is they’re going to allow you to upload all that first party data that we talked about and go right after those target accounts. Notice how I’ve got all my company domains in there, right this is my full Tam. I am now advertising to my entire tam the meta or protecting itself now okay, this makes social in the traditional b2c sense all of a sudden become reality in the b2b world

And oh my gosh, it’s awesome. So here’s a little data for it. 4.4 LTV CAC 5.6 million and pipeline 341% ROI and 60% cheaper than LinkedIn sponsored content. So while metadata and Clearbit do have a SAS feed, holy cow once you validated that LinkedIn works and drives revenue and SQL that leads in MQLs scale of Facebook to meta and grow.

Lastly, there’s no such thing as b2b. It’s almost as if we’re in a world in a war to be more boring than our closest competitors, right? Like how can we try to step on any toes, really say anything have any opinion, but then also convince everybody to choose us? And I don’t know why. I think the truth is, is most of our designers are designing for approval for impact because their executives safe. And I want you to urge you today when you’re thinking about creative and telling your story and making this actually work for your business, is encourage your designers to never present anything to you. That doesn’t make them feel uncomfortable, and be artists to actually pull them up and dream of a world where your brand is different and you have something to say that people care about now we do this with a video. You can kind of see it really quickly here. How we do it okay.

All right, run through a brick wall. Okay. I think video is huge. Okay, you got to figure out how to tell your story. We’re all stuck in these display ads and copy static assets that don’t create a feeling. They don’t create an emotion so I want to give you is this emotional matrix we use to help our clients actually start to articulate even in b2b and DevOps in the most boring industries in the world. How do we want to make people feel right? marketing can be about feeling can be about emotion and I highly encourage you to pursue that Okay, so here’s some hard emotions. Hopefully this has helped you today. You can learn more about customer generation by tuning into our live shows. We do two a week souren SAS is more interviews. SAS marketing makeover is literally like live audit with the CMOS the best SAS companies in the world. They’re both on our YouTube channel channel. Check it out, and then society’s free. It’s a Slack group with over 1000 dimension marketers in SAS amazing real insights, real feedback. All this is totally free. Chocolate sales The team also if you want to, but thank you so much. It’s been amazing to be a part of this conference today. And hopefully that helps you understand what customer generation is, how to do it and why you need to. So thanks, everybody, and have a great day.