3 challenges that consistently hinder marketing performance at HR tech companies

A lot of really good HR tech companies get lost in a crowded market. That’s because you’re vying for attention with more than 21,000 HR tech businesses selling technology platforms—with new start-ups joining the industry all the time. 

Listen to this episode to find out what three challenges consistently impede marketing outcomes and results for HR tech companies. Learn why positioning your business and solutions is at the heart of how to successfully gain traction. Because touting the same features and functionality as your competitors isn’t saying anything at all about your true differentiators.  

01:09 Why it’s essential to differentiate your business and solutions 

09:31 Why marketing to a broad audience is a common mistake

17:16 How to understand and make an emotional connection that speaks to buyers’ pain points

21:05 A look at surface-level messaging and how to dig deeper to connect with prospects

23:49 Why it’s important that your messages resonate with decision makers

The Demand Gen Fix is hosted by Deanna Shimota, CEO of GrowthMode Marketing. Listen to our team of marketing experts and featured guests drop knowledge on how HR tech companies can maximize the success of their marketing for today’s B2B prospects. Learn more at www.growthmodemarketing.com.

Transcript

(00:00:01) - Hey, everybody, it's Jenni from GrowthMode Marketing. You're listening to The Demand Gen Fix podcast, where our team of GrowthModers and our guests discuss the ins and outs of demand generation, and why we believe it's the key to long-term sustainable growth, especially in the HR tech industry.

(00:00:20) - Hello everybody, welcome back to another episode of the Demand Gen Fix podcast. Today we're talking about three big challenges impacting marketing performance for HR tech companies. Making a mark in the HR tech space isn't easy. It's an extremely crowded market, and there are over 21,000 players pushing their technology platform, and new startups are popping up often, and even companies that have been around for a while can struggle to hit their growth goals. And that is a real challenge for those of us who are marketers in this space.

(00:00:57) - And we see a lot of really good HR companies get lost in the crowd. It doesn't have to be that way. It doesn't have to be your fate. So, in this episode, we're going to talk a little bit about some common marketing trends that we see that could be hindering your results.

(00:01:09) - Yes, we have three of them we're going to cover today that we see quite a bit. So, the first one: difficulty truly differentiating in this crowded market, and that is when there is no meaningful product differentiation in the eyes of the buyers. So, pick a category in HR tech. There's usually going to be quite a few players that are competing even in these subcategories. And from a buyer perspective, it can be pretty overwhelming because they're looking yet at saying, okay, I've got 47 options that can solve this problem that I have, but they're not seeing major differences between the products. Maybe, nothing is coming to the forefront as the solution. So a lot of times when they pick, it's based on brand awareness. So, which companies have spent more on marketing to really get their names out there? Maybe, they're choosing based on price and nobody wants to be chosen because they were the lowest cost. You want to be chosen for the value that you're bringing to that organization, or maybe they're choosing because they have bonded the most with the sales rep from this company over the other companies, right?

(00:02:29) - And so, really, when you're looking at like, crap, we have difficulty truly differentiating in this market. What does that mean? What do you need to think about?

(00:02:40) - A lot of times people in leadership think that you're unique, right? You think that your company is unique, so you need to figure out some way to differentiate yourself because everybody says the same things, right? Like, oh, we have the best customer service, or we integrate with all of these other platforms, a quick and easy onboarding process, but everybody says that. So, you need to figure out some way to stand out and be different.

(00:03:04) - Yeah, and I think it's hard for organizations, and the CEO, and the leaders at times to really like, recognize that maybe they don't have any true and meaningful differentiation, or what they're saying is their differentiation. In the eyes of the prospect, perception is reality, so even if you have like really good differentiation, if you can articulate that in a way that is meaningful to those prospects in the buyers, then they're looking at it and they're saying you're no different than what everybody else is doing.

(00:03:38) - And that's a problem. The examples that you bring up, Greg, about things like superior customer service. What we have seen often here at GrowthMode Marketing is when an organization doesn't have truly meaningful differentiation from a product standpoint, they start to lean on the things like, well, we have superior customer service. Well, what happens if your customer service team all quits tomorrow? You no longer have that differentiator, right? Or if Barb and customer service are exceptional and people rave about them, and Bob jumps to your competitor. Like, it's risky to put all your efforts into saying these are differentiators, but even more than that, if you take a step back, things like superior customer service, robust integration capabilities, quick and easy onboarding processes, and customizable and configurable solutions, those aren't differentiators in most cases. Those are table stakes that buyers expect from any vendor that they're working with. And quite frankly, like everybody says, we have superior customer service because when we have these conversations with our clients, they'll be like, but we really do have superior customer service, right? I mean, Greg's laughing because he's been a part of many, many of these conversations. These organizations and these leaders, they wholeheartedly believe, like, our customer service is better than our direct competitors.

(00:05:08) - And the reason that we know this is because we have prospects that become our clients who left the other company because they had a bad experience with them, or they were dissatisfied with their customer service, or their integrations, or their customizations, things like that. The cold, hard truth is, every organization has probably experienced a client leaving because they didn't think that the organization met their expectations, right? So, you can't base that as okay, obviously that organization has really bad customer service, and we're superior to them because we've had some clients come to us that told us that they may be able to say the same thing, so that's not truly a differentiation. Now, are there organizations that could say that they differentiate on customer service? I think there are, but they're far and few between. For example, Southwest Airlines used to be known because their customer service and the way they treat customers was so different from all the other airlines, right, but that was a whole strategy where they built that differentiation in, and obviously that's B2C, but from a B2B perspective, like you have to be realistic.

(00:06:26) - Is this a truly a differentiator? Can you prove it in a meaningful way? And if the answer is no, then yeah, you're struggling from that challenge of really helping organizations see that. We could give you a ton of examples on where we've seen that even working with our clients within the HR tech space, and, Greg, I don't know if one comes to mind for you.

(00:06:47) - Well, all right, all right, I'm talking my head is we were working with a payroll company. They offer the payroll services, and they have a platform behind it. They didn't really have anything all that different, right? Like it's a white-labeled platform, so there's their competitors could have the exact same thing. There's 5,700 payroll companies in the United States alone, so they need to figure out how to stand out the features and the functionality of the platforms. It's a payroll platform, and it was a white label, so that they didn't even really have anything different about their platform.

(00:07:16) - There's really nothing unique they could say, and they did say, like we were just talking about, the differences are people. And that may be true, maybe their people really are great, but their prospects would expect their people to be good, right? They would expect the platform to be good, and they wanted to go upmarket and go to different companies that were bigger so they could grow their business, but they didn't really have anything to support that with as far as their positioning or their messaging to these new prospects. 

(00:07:45) - I think I know exactly who you're talking about, Greg, and we actually told them like, okay, here's the concern. There is nothing unique about what you offer. You're a payroll service company with a white label HCM platform. You're going from selling to smaller organizations to now you want to sell to companies that have 100 plus employees. What is it that you're going to say that would make them choose you versus going directly, even to the white label HCM platform that you're using, right? And that's where they were totally leaning into.

(00:08:24) - Well we have superior customer service. We've always had our clients tell us they love working with us. They stay with us for years. This is amazing, right? And we're like yeah that's not strong enough to go in there. Because in the eyes of the buyer, everybody says they have superior customer service and talks about how they support them. And I do think that in the HR tech industry, there are certainly different levels of service. You know, like an enterprise company is going to get that more 1 to 1 relationship and service versus a small company. Often it's like, here's the 800 number. If you have an issue, call in and one of our agents will help you. So, there may be was an element of truth to what they were saying, but it wasn't enough for them to go out and really sound different in the market. In that situation, we worked with them to help them define their ideal customer profile, which helped to narrow down who they were going after. So, it was a very specific audience, not just trying to be everything to everyone that any employer now with 100 plus employees, we can now market and sell to. And then building out their unique point of view framework where we were helping them identify like what are the main message pillars, the main pain points that organizations that fall into that ideal customer profile have, so that we can really hyper-focus the marketing messaging to them so that you stand out in the crowd. 

(00:9:57) - And I think that example probably transitions really well into issue number two that we run into, which is something that I see, I would say 90% or greater of HR tech companies doing, which is marketing to two broad of an audience.

(00:10:20) - Like everybody is trying to be everything for everybody, and that doesn't work really for you to get anybody right, because the message isn't strong enough. It's not pointed to the prospect. If you're a software is good for 50 to 50,000 employees, right? Like that's so broad, like, how can you be different in that broad of a space? It's hard to narrow it down. They say, well, we're industry agnostic, it doesn't matter. Our software works for everybody. But yeah, that's true. You could still sell it to everybody, but you have to focus on somebody to make some headway in the marketing. They need to understand that you get them and you understand their problems and their pain points, and if you're just being so broad, in general, then you're just going to be glossing over everything. You're not going to be getting down deep into their problems. 

(00:11:10) - Yeah, and I think this is an area where a lot of organizations in the HR tech space struggle because they are looking at their technology and they're saying, but, Greg, my technology really does work well regardless of employer size, regardless of industry. Why wouldn't I go and sell to the masses? Because quite frankly, we've got clients with 50 employees and they're doing really well, and we've got clients with 50,000 employees and they're doing really well, and we've got clients across 28 different industries, and they're doing really well, like they're looking at their client base, and they're saying it's proven we can work with everybody. Why would we do any differently?

(00:11:53) - And here's the reality. If you are putting the same message out in front of that audience, that is 50 employees versus 50,000 employees, they have different challenges. Those are much different organizations because so many companies out there are taking that marketing approach of trying to be everything to everyone. It's resonating with no one. I'll talk to CEOs in this space asking them like, who's your ideal customer profile? And sometimes they're like, oh, yes, we've got it narrowed down. Like we feel really good about who we're going after, but it's still too general. So for example, they'll say, well, we only work with organizations that have 5,000 plus employees. That's great, but there are an awful lot of organizations that go for 5,000 plus employees, right? Or maybe they're like, we work with 10 to 5,000 employees where they've segmented the market down, but they're still really broad in the message that they're going to. And the reality is totally get as a business leader, as a marketing leader, as a CEO or a founder, you may be looking at the market and trying to build as big of an audience as possible that you can go after, because the bigger it is, the more fishing lines you can put in the water, right? 

(00:13:22) - That's what it feels like, but the reality is, when you're in a really, really crowded market like HR technology, there are, like we said before, 21,000 plus players in this industry that are out there marketing to HR tech buyers. Whether they're in HR, they're the finance leader, they're getting all these messages and they're trying to process all of this. I truly think like HR and finance departments are some of the most hit up teams within an organization by salespeople. And so, as they're trying to process all of this, you're trying to appeal to everyone. It dilutes that messaging and it's not resonating with them. A lot of organizations, they'll say, but we don't want to get boxed in, Deanna. We can actually support everyone. It's like, I get that, but if I am, let's say a leader in training and development within my organization, and I have just ten vendors marketing to me, and they're all marketing the same type of solution to solve my problem, they're all going to blend in together, but let's say just one of those organizations says, hey, you know what? We're going to focus in our ideal customer profile to manufacturing companies.

(00:14:47) - And let's say the chief HR officer is the decision maker at those manufacturing companies. My organization, so one out of ten decides to market to me, talking about how they understand the unique nuances of working in the manufacturing industry as an HR leader. So, you've got unions, you've got shift differentials, including third shift, which is a much different beast than normal working hours. You've got administrative staff and factory staff, and they have tension between the two of them because they feel like they're treated differently as employees. You've got OSHA requirements, safety needs on the factory floor that you have to deal with. All of these things that factor into an employee experience that are unique to manufacturing that wouldn't be the same if you went to a fully office setting. You've got that one vendor that's marketing that way. Which one do you think is going to resonate? The one that speaks my language is the one that you're going to gravitate to because they're like, okay, they all sound the same except for this one, because they seem to specialize specifically in my problems that I have. 

(00:16:07) - And so you've got to look at when you're trying to market to everyone, and it's not resonating with anyone. If you're not getting enough market traction, you actually need to narrow down your audience to gain better traction in the market. And that doesn't mean you can never sell to companies that fall outside of that ideal customer profile. Nobody's saying that you can continue to sell to everybody, but this is a marketing strategy with your messaging in how do we focus so that we resonate better with a subset and actually move more deals forward, versus the grind of trying to be out there selling to everyone in the market when it's a very, very crowded and competitive market out there.

(00:16:55) - When you said, put more lines in the water, I was thinking, if you think of all the competition, right, everybody has a line in the water, but everybody is using the same bait. They're all saying the same things. So, you need to use something that's a little bit different, that gets the traction and gets the results that you want.

(00:17:11) - Right, you're trying to catch those walleye instead of a fish in general, right?

(00:17:16) - Yeah, so the other thing we see a lot is that companies aren't going deep enough to connect with the emotional pain of the buyers. It's just part of the beast, right? It's a tech company, so it ends up a lot of times that people get stuck on the product, and they talk about the tech aspects of the platform and how it works and features and benefits, those kinds of things which are important, but doesn't get deep enough to the actual problem that buyers are having. They just scratched the surface of that and don't really get deep enough into the real issues.

(00:17:43) - That is so true. For example, I like to go to HR shows. Walk the trade show floor because that's where our clients are, and I will walk up to different booths and have conversations with them just to learn about the different technologies that are out there. And I can tell you, the last show I went to is the HR Technology Conference last fall.

(00:18:02) - Pretty much every booth when I walked up, I would say, tell me how it works. Tell me about your solution, what it does. And people always lead with the tech. They would talk about, you know, how it works. And I didn't actually say, tell me how it works. I was like, tell me about what you guys do. Nobody asked me about my challenges, or my pain points, or tried to connect the dots and close the gap between, like, here's the problem that you have, here's the solution that we have to solve it for you. And I think finally, one of the people at one of the HR tech booths, I said, well, I am actually in marketing, and the reason I asked this question is I like to understand how companies are positioning their services. And it was a younger gentleman who happened to be in sales. And he goes, tell me how I did. I said, do you want me to be honest with you? And he's like, yeah, I said, you never once asked me what my pain points were. 

(00:19:06) - So, you didn't try to talk about the solution in how you are solving for that. You immediately jumped into the tech, and the features and benefits. And here's how that is different than the tech, and features and benefits of other organizations. And I'm like, I had to tell you, as a marketer, this is one of the things that we know is not the right way to approach things, but organizations in the HR tech space often make this mistake because they're so excited about their technology, and they truly believe it's different, and it's revolutionary, and that it can make a difference for organizations. And I think sometimes that doesn't translate in the way they talk about it to the way that buyers think about it. They're overlooking that pain, and they're not going deep enough to get to the real issue. And here's the thing, prospects, it doesn't matter if you're in HR technology, or any other industry. From a B2B perspective, they don't care about features and benefits. They care about solving their problem, or their challenge and what that would mean for them.

(00:20:19) - And even though we're in the B2B space, people buy on emotion. And if that pain is deep enough and you dig the knife in and twist it right, that's what they're buying on, is this is a real problem that I have to solve on. And I know we've had clients who have come back and they're like, well, I wouldn't describe it as a pain that they have. And it's like, okay, semantics here, right? Like use whatever terminology you want, but it's a challenge that is creating a business issue for them that they need to solve for. We can go into an example. Great, let's talk about recruitment software. What do we see organizations typically say on their website about recruitment software?

(00:21:05) - Well, basically you know recruitment, right? Like we help you fill more positions, right? We help you fill them quicker or easier?

(00:21:12) - That's correct. You do, but where's the pain point there? I think you always have to ask the why and dig deeper into that, so why does that matter?

(00:21:23) - The example of recruitment software I would say, though, why does it matter at times? It may be we are struggling to find enough candidates, and maybe it's for specific roles like software engineers, which are notoriously hard to fill, but really critical to an organization. There's not enough software engineers, or really good ones out there, right? Like, okay, we found the pain. They can't find enough candidates for software engineers, but that's not deep enough still. It's like, well, why does that matter? Well, we're spending a lot of money on advertising positions, but we're not getting large enough volumes of candidates. Okay, well, why does that matter? When you get down to it, it's like, okay, if we can't fill these positions, we can’t evolve our product to meet the market's needs. And that means we can't service our clients, and that means we can't grow our business. Okay, that's a lot different. That's a lot deeper than we help you fill positions fast.

(00:22:31) - So, if you really think about it from a messaging standpoint, a lot of organizations are missing that messaging that helps really connect a person to a solution because we're not focusing on the pain points that they're actually having. We are instead really focusing on the high-level surface. Well, you need this and we solve it. It's pretty straightforward and basic, and it's like it's not straightforward and basic. It's an onion, and we've got to dig into the layers, right? Like pull the tears out of them, and really talk about the reasoning behind why those surface-level issues are a problem for them. Because it goes so much deeper than that. 

(00:23:17) - Yeah, when you were saying that about we can't service our clients, we can't grow our business. Those messages also would resonate with other people in the organization, right? Not just the people that are buying the software. So, potentially, right, if there's other people involved in the buying decision, if they've heard these messages too, then they're like, these people understand us, right? They get our company.

(00:23:38) - It's not just the HR person if you think about it, right? Because that's huge, right? You can't grow your business, you can't serve your clients, you can't evolve your product, like that touches so many other places inside of the organization.

(00:23:49) - Absolutely, I mean, you bring up a really good point, Greg. There's more than just one person typically that's involved in that buying process. And they often have different roles. In fact, Gartner research, I've seen numbers that have said the typical B2B tech purchase is between six to I think it was 11 people involved in that and influencing that purchase decision. I've also seen statistics come out that say the average buying group now at larger organizations is 23 people. That's a lot of people to connect the emotional pain with, right. And so, you've got to think of those 23 people in the different role, those saying that we help you fill more positions, we help you fill more positions faster, things like that. Is that connecting the pain for them, emotionally? Probably not, but a lot of companies make that organization.

(00:24:47) - You may have noticed a theme here. All three of these challenges that we've talked about center around message positioning in one way or another. And if you don't get this right, you're marketing is missing the mark. And quite frankly, I gotta tell you, investing more in marketing programs is a waste of money until you fix that, and a lot of organizations, we see it, they're behind on revenue and they're like, we're gonna invest more in digital advertising. We're going to do this and that and that, but they're not taking a step back to fix the foundational issues that really are preventing them from breaking through the clutter of this really crowded market to be able to get traction. If any of these challenges hit home, of course, reach out to GrowthMode Marketing. We'd love to share some thoughts with you on how to overcome this. We work with organizations to build messaging that will help them resonate better in the market, and break through that clutter to gain more market share.

(00:25:48) - Thanks for joining us on The Demand Gen Fix, a podcast for HR tech marketers brought to you by GrowthMode Marketing. I sure hope you enjoyed it. Don't forget to subscribe for more perspectives on demand generation and B2B marketing strategies. Plus, give us a like, tell your friends. We'll see you next time.