How tech companies are approaching their marketing strategy and how it has evolved, based on the current conditions and objective of path to profitability

“The era of abundance is coming to an end.” 

This message is becoming increasingly prevalent. Naturally, it resonates with critical environmental issues. Yet, it sharply applies to the tech world, which has thrived on the easily accessible financial support of venture capital, private equity, and easily accessible debt for nearly five years.

Marketers, who allocate a significant portion of funds to fuel growth, often bear the brunt of this shifting paradigm. 

Furthermore, they face the challenge of not only achieving profitability (approaching breakeven or faster payback) but also sustaining growth.

Is this even possible? And how are the key stakeholders striving to achieve this objective?

I interviewed around twenty CMOs (including those from Revolut, Qonto, Littlebigconnection…) to understand how each company, whether B2B or B2C, is adapting to this new environment

1. Going Down the Funnel!

Primary objective: be more efficient! This might (like much of what follows, I apologize) seem like common sense. However, implicit in this is the revelation that companies have long burned cash to stand out in an environment crowded with solutions and new startups. There was a need to create noise, often at any cost.

To achieve greater efficiency, what are CMOs doing?

They are cutting down on non-immediately profitable or qualifiable expenses in the direction of imminent profitability (such as more “brand” oriented channels like display, certain video platforms, offline advertising…) to focus on strategies known to generate a quicker return on investment.

This often converges towards the bottom of the sales funnel. Why? Because companies have amassed vast prospect databases, filled CRMs with leads without always properly qualifying them (quantity was the goal), and focused on top-of-mind awareness at the expense of a unique selling proposition (USP) centric message.

Yet, the bottom of the funnel, the stage at which a prospect has become aware of, considered, and evaluated your product, is theoretically the “cheapest” stage to convert.

Every CMO I spoke with confirmed this: the bottom of the funnel has become their obsession, surpassing the quest for reach.

Customer Relationship Management (CRM), often neglected during periods of growth, is once again becoming the essential tool for conversion and retention.

2. Going Upsell

So, the bottom of the funnel.

And existing customers.

Another strategy that stands out, primarily in the SaaS world, is upselling.

To increase the ARPU (Average Revenue Per User), new features must be offered that are not only well-priced but also coherent. By coherent, I mean it’s challenging to propose a feature that solely replaces another tool used elsewhere by the customer (i.e., is a CRM tool in a payment platform really that coherent?).

Yet, it’s also not easy to introduce new features that might complicate the tool’s usage, potentially lowering the product’s utilization rate.

To address this, many CMOs have conducted in-depth user research to ensure their enhanced offerings are quickly adopted.

There, speed of execution is key.

We must act fast, do it very well, and be confident. In this realm, I am fascinated by how quickly companies like Amenitiz release new features: their prioritization and execution logic are well-refined, ensuring each release significantly contributes. Their framework should be taught in many schools!

Upselling is, therefore, a solution, but in many ways, it’s a one-shot deal.

So is the price increase.

I personally witnessed my Airtable subscription increase by 200%! Often because promotions were distributed haphazardly. When renewal time comes, it can be quite a shock.

I worry that this might lead to a high churn rate for these companies.

Why? Because the price-value of a tool can’t be doubled in the customer’s mind “just because” the company selling it decided so! And also because we’ve seen the phenomenon of “over-tooling” emerge in recent years. 

One of the paths to profitability also lies in better cost management, including those of tools that have piled up over months, creating a supposed Tower of Babel of the perfect stack.

3. Stop Overtooling

Considering that an average company uses around 120 SaaS tools, it is evident that roughly 50% of these tools could be easily reevaluated. Every department within a company is affected. Marketing is no exception, having accumulated tools like Canva, Figma, Segment, Gorgias, Notion, and more. Often, certain platforms are neglected, and subscriptions are left unattended.

Two phenomena converge: “SaaS fatigue,” which bewilders teams with the complexity of numerous external solutions, and the necessity to cut costs, compelling a rationalization of software usage and investments.

Here, we witness a notion (quite obvious as well) of returning to the essentials. In alignment with this concept, CMOs are reverting to more streamlined marketing mixes, a trend I tend to refer to as “1-channel focus.”

4. The 1-Channel & The Content Dilemma

A marketing mix is always dominated by a channel. Often, it’s LinkedIn for B2B, lead generation for private sales or training sites, and SEO for price comparison platforms (such as Liligo).
This dominant channel has proven its effectiveness (controlled CAC, monitored LTV, and assured volumes).

One of the crucial effects of tightening budgets is the focus on “this” channel.

The trend is thus to reduce explorations (or budgets allocated to testing new channels) to enhance the existing ones. SEO often emerges as a growth solution. However, there’s a dilemma — it’s a long-term solution, contradicting the imperative of immediate growth.

“Content,” which fuels most channels, is one of these safe havens, although it doesn’t guarantee an obvious top-line effect.

Even though it has never been neglected, it is still returning as the best platform for expressing Unique Selling Points (USPs).

Because it is inexpensive to produce.

Because it allows addressing the middle or bottom of the funnel.

Because it’s a muscle that can be trained for greater efficiency.

Most importantly, it can be endlessly multiplied since the end of last year.

There is a fundamental change that some might reproach me for not addressing here: Artificial Intelligence.

5. AI and Fractionality

What the CMOs I’ve spoken with unanimously agree on is that AI will inevitably change the game, although the extent of this change remains uncertain.

How will this revolution transform their strategies and lead them on the path to profitability?

The first visible effect is twofold:

• Almost all market tools now integrate AI, aiming, if not for immediate financial gains, for significant time savings on tasks that previously required coordination and planning efforts. The best example is video asset production. Content, in the broadest sense, is the first domain entirely redefined by a cohort of tools, with ChatGPT leading the way, granting managers tenfold production power.

• Consequently, there is a tendency to require fewer interactions and fewer people involved in many projects. This is not about highlighting the specter of human replacement by machines (not solely), but about recognizing that it is on these human time costs, assisted by AI, that companies rely on to achieve profitability more rapidly.

However, mastering these AI-boosted productivity tools is a substantial and profound endeavor in itself. 

To achieve this, and as the latest trend, tech companies are leaning towards fractional work. They bring in experts at key moments and on specific topics. This isn’t about resorting to consulting as we’ve known it in the past. In this field, too, things are changing dramatically.

“Fractionality” will instead involve having a constant contact person who is always present and can be called upon for specific tasks—not to create recommendations, but to execute precise things. In this regard, numerous offers are emerging in the market, providing access to qualified resources while determining the specific areas they will address.

Conclusion

In conclusion, it can be envisaged that not all companies will manage to find the path to profitability: overly complex business models, unattainable payback periods, teams disbanding, or investors losing interest. Nevertheless, it is by combining caution, a return to proven strategies, and exploring new tools (such as AI or Fractionality) that CMOs contemplate ‘making the cut,’ which will pave the way for a future period of growth.