Marketing departments once believed it was a sales issue if the sales team couldn’t work the leads from marketing.
Today, this is no longer the case.
Optimizing for leads or marketing qualified leads (MQLs) is great, but optimizing for what drives pipeline and revenue is better.
Marketers exist in a new age where it’s no longer satisfactory only to drive leads alone.
With the available technology and data today, we can do much more than identify hand-raisers to help companies spend their marketing dollars more efficiently and drive revenue.
Just because a channel generates leads doesn’t mean those leads bring value later in your sales funnel.
When you understand where customers are bringing in revenue vs. where they may need more nurturing before converting, you can create a more holistic media strategy to generate qualified leads that will churn out more income than lead volume alone.
Below are three must-haves for revenue optimization.
1. Tight-knit tracking
Tracking is essential for reasons that go well beyond reporting.
In this new age of artificial intelligence, it’s vital to feed machine learning the data that will make it do what you desire.
Platforms like Google optimize the data you provide, making it a powerful tool or your worst nightmare.
Accurately tracking your efforts plays a significant role in your advertising strategy’s success.
Integrating third-party data sources, like Snowflake and Salesforce, with your paid media reporting helps decrease the optimization time against a deeper funnel event, such as MQL, sales accepted lead (SAL) and revenue.
Nonetheless, offline conversion tracking in Google is great for seeing what campaigns drive down-funnel metrics like SALs and closed/won leads. If you’re attributing revenue to these conversions, that’s even better.
If your B2B advertising team is doing lead generation in Google without visibility into where they are going down funnel with offline conversion tracking, they are doing it wrong.
2. Understand the customer base
Marketers should know how users from different channels perform once they are in your sales funnel.
For example, if your average Google search lead value is 4x higher than a lead out of Facebook, how can you use that to prioritize your spending and channel goals?
Understanding your average time to close or how long it takes the lead to turn into revenue will help you only to further optimize toward revenue.
With that said, marketers should avoid reactivity with a down day or week if it can take up to a couple of months for a user to move through the sales funnel.
For example, if it takes two months for a lead to close, you need to give a new campaign or channel at least that long before making abrupt cuts if you aren't seeing initial revenue.
Seasonality is also a critical factor to consider. Understand and prioritize the best time of year to capture your high-value users.
Create a plan to warm up those audiences earlier in the year and then nurture them post-initial conversion to move them along the sales funnel.
Targeting the right audience also helps you assign pipeline value to optimize revenue. Having an ideal customer profile (ICP) in mind for your targeting is an underrated piece of the puzzle.
Knowing what kind of people will be buying your product is paramount to getting your advertising efforts right.
For B2B, you should know their job titles, pain points, tasks and anything that will indicate if your product would make their lives easier. You should also be aware of your sales team's lead disqualification criteria.
Will your sales team throw out leads from businesses that don't meet a revenue threshold?
If so, don't waste your marketing dollars on those disqualified leads when you can target revenue on other strong advertising channels.
3. Understand the lifetime value of customers
Teams optimizing for revenue should understand the value of their customers through customer lifetime value.
How can you optimize for revenue if you don't know who your most valuable customers are?
Understanding the lifetime value (LTV) of your customer base and your customer acquisition cost (CAC) allows you to perform an LTV:CAC ratio analysis to get the complete picture of how your channel mix is affecting your advertising efforts.
Say Google is driving significant lead volume but at a .5 LTV:CAC. It might be time to dig a little deeper into Google to see how you can improve Google's revenue-generating efficiency.
Generally, you'd like to see at least a 3:1 LTV:CAC when measuring this.
If you are having trouble calculating the LTV of your customers, Hubspot has a great article that can help you with this initial step.
The takeaway
CMOs are asked to demonstrate the value of every dollar put into marketing.
Leads are quickly becoming a metric of a bygone age where marketers could simply pat themselves on the back for a well-done job.
Today, any metric outside of revenue is a vanity metric to senior and executive leadership outside of marketing, making every dollar to customer acquisition and improving the bottom line.
Give the platforms the data they need to find the highest-value customers.
By doing so, you'll empower the optimization of every effort for the success and growth of your organization, giving your CMO a few extra hours of sleep at night.
The post Revenue optimization: 3 ways to get your advertising efforts right appeared first on Search Engine Land.
No comments:
Post a Comment