A European company received a second round of investor funding, so they tripled the size of their staff. A board member decided they wanted a more active role with a company that was clearly becoming successful, so the current CMO was released to create that opportunity.
The company wanted to expand into the U.S. market, so the new CMO made the decision to invest heavily in an avant-garde marketing campaign in the U.S.
Additionally, the marketing team was directed to produce 10,000 leads for the sales team pipeline; they succeeded in generating nearly 14,000 leads in just six months.
However, there was no formal sales process so many of those leads went cold.
Between the lack of sales process and investing in an unsuitable and very expensive marketing campaign, the company burned through their new funding resources within 18 months.
All the “new” staff who had been hired—two-thirds of the company—were released from their positions.
Ultimately, the C-suite leaders, including the new CMO, lost their jobs as well.
Takeaways:
New funding resources must be carefully allocated to produce intentional results. Making moves too fast or big for the company relative to their history, like hiring many new staff, investing in marketing without having sales processes in place, or investing in full-blown expensive marketing campaigns, can lead to reckless spending.
When it comes to making investments in staffing, marketing, or new markets, make sure there is alignment with company values for good decision-making.
*Bloopers might be real or fictional
Image credit: Photo by Jp Valery on Unsplash
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