ROI-Centric Marketing Amid Budget Cuts
by Chris Peer on Fri, Jun 09, 2023 @ 02:29
In my last blog, I discussed how marketing budgets can be a large part of a B2B business's total budget and how that makes it so important to make smart (not stupid) marketing strategy decisions. Here’s another reason. Marketing budgets are shrinking. Many marketing budgets have been slashed as a response to the economic downturn and labor crisis. Budgets are tight, and you are asked to do more with less. There is also a growing need for many B2B marketers to "defend the spend" to the C-suite. In a recent study, 50% of B2B marketers place the “difficulty of using data to inform decisions and measure performance” as their biggest challenge.
ROI of Marketing
Compared to sales, the ROI on marketing has never been simple to measure, nor has it always been a priority. Many marketers cut their teeth on feel-good awareness campaigns or design-heavy brand initiatives that were never meant to be measured. Also, marketers who built their careers in the pre-digital age never learned how to effectively use digital data to measure results. Instead, they report on vanity metrics such as impressions, traffic, or opens because they are easy. Meanwhile, the sales department gets all the glory as they bring in new customers and revenue.
Success is Driven by Collaboration Between Sales and Marketing
But the sales department would not have any conversions if not for marketing driving their lead pipeline. In contrast, marketing would not be able to build impactful campaigns without understanding the client the way the sales department does. Neither department will achieve real ROl without the other, especially when budgets are tight. When both departments work together and leverage the same tools and data, you optimize resources and results. And you can more clearly tie marketing efforts to revenue to calculate ROI. Collaboration is key to success.
ROI-Driven Marketing Strategy
Smart marketing professionals start any marketing campaign by identifying the overall goals and the target audience. These decisions will determine which marketing tactic and KPIs to use.
Not every marketing tactic will achieve the results you are looking for because each appeals to a different group of people and different kinds of marketing. Once you've chosen the tactics for your campaign, you can set applicable KPIs to measure your success. Again, these KPIs should fit within your overall goals. Otherwise, it's not worth your time to measure them.
B2B Marketing Tactics and KPIs
Here are some examples of common marketing tactics and KPIs many B2B marketers use.
- Content marketing involves creating valuable, relevant, and useful content to attract and retain a specific audience. In B2B marketing, content marketing often includes white papers, case studies, blogs, articles, ebooks, and videos. Content marketing is a long-term strategy focusing on building relationships by providing your target audience with high-quality content. For that reason, KPIs revolve around the start of the customer journey, such as
- Website traffic: the number of viewers driven to a website via content marketing.
- Time-on-site: the average amount of time viewers are spending on a website consuming content.
- Downloads: the number of times targeted content is downloaded from a website.
- Form fills: the number of lead inquiry forms submitted as a result of a piece of content.
- Sales calls: the number of sales calls generated from a piece of content.
- Email marketing is a type of direct marketing that entails emailing content to people who have agreed to receive it. For example, email marketing can be a part of a sales nurturing campaign using informational content or a conversion campaign using sales messaging. The beauty of emails is that you can personalize the content, which builds engagement. The typical KPIs for email marketing are:
- Open rate: The percentage of recipients who opened your email.
- Click-through rate (CTR): The percentage of recipients who clicked on one or more links within your email.
- Bounce rate: The percentage of undeliverable emails returned to the sender.
- Unsubscribe rate: The percentage of recipients who clicked the unsubscribe link in your email.
- Lead scoring and qualification identifies and ranks potential customers based on the likelihood they will convert and the value they bring to your business. Qualification is based on criteria that make a lead a better prospect. This could include details like their industry, budget, or purchasing authority. Lead scoring involves assigning a numerical score to each qualified lead based on a combination of their demographic, behavioral, and purchasing data. This allows your sales team to prioritize leads and focus on those most likely to convert into customers. Some common KPIs for lead scoring and qualification are:
- Average lead score represents the quality of the leads in your database.
- Cost per acquisition (CPA) represents the cost of acquiring a single lead, which can help you determine the efficiency of your lead generation efforts.
- Marketing qualified leads (MQLs) are the number of leads that have been determined to be more likely to become customers.
- Sales qualified leads (SQLs) are the number of leads identified as ready to buy.
- Paid advertising (PPC and SEM): Pay-Per-Click (PPC) is online advertising where you pay each time a user clicks on your ad. PPC is a component of SEM (Search Engine Marketing), a broader term that includes all forms of online marketing specifically used to optimize search engine results. PPC and SEM can help drive traffic and sales to your website and build brand awareness. Common KPIs for PPC and SEM are:
- Cost per click (CPC): The amount of money paid for each click on an ad.
- Click-through rate (CTR): The percentage of people who click on an ad after seeing it.
- Cost per acquisition (CPA): The average cost of acquiring a new customer through PPC or SEM.
- Return on ad spend (ROAS): The revenue generated per dollar spent on advertising.
- Search engine optimization (SEO) is a tactic to improve the quality and quantity of website traffic from search engines. The goal of SEO is to increase the ranking of your website in organic search engine results. SEO involves optimizing elements of your website's content, structure, and code to make it more attractive to search engines. To measure your success, use these KPIs:
- Organic traffic: The number of people visiting your website from organic search results.
- Keyword rankings: The position of your website in search engine results for a specific keyword.
- Bounce rate: The percentage of visitors who leave your website after only viewing one page.
- Click-through rate (CTR): The percentage of people who click on a website's link in search engine results.
- Social media marketing leverages your company's social media platforms to increase brand awareness, generate leads, and drive website traffic. The strength of social media is your ability to engage with followers and customers in real-time through post likes, shares, and comments. You can measure the success of social media marketing through these KPIs:
- Engagement rate: The level of interaction and engagement your company receives on a social media platform, including likes, comments, and shares.
- Organic reach and impressions: The number of people who see your social media posts and the number of times they are viewed.
- Click-through rate (CTR): The percentage of people who click on a link or call to action within a social media post.
- Follower growth rate: The rate at which your social media following is increasing over time.
- Video marketing uses video content to promote your products or services, increase engagement on social media and other digital channels, educate customers and/or prospects, and increase sales. Common types of video content include product and service demos, explainer videos, how-to videos, customer testimonials, and event videos. Common video KPIs are:
- Number of views: The number of times your video is viewed.
- View-through rate: The percentage of viewers who watched your entire video or a specific portion.
- Engagement rate: The level of interaction and engagement your video receives, including likes, comments, and shares.
- Watch time: The amount of time viewers spend watching your video.
- Event marketing for B2B companies uses conferences, trade shows, webinars, and other events to promote products or services to other businesses. The goal of B2B event marketing is to capture the attention of potential business customers by creating an experience that fosters sales conversations, builds brand awareness, and provides education and networking opportunities. Event marketing KPIs include:
- Lead generation: The number of leads acquired at an event.
- Net promoter score (NPS): A rating given by event attendees on how likely they are to recommend the event to others.
- Check-in rate: The number of attendees who check in or register for an event.
- Attendee satisfaction: The level of satisfaction expressed by event attendees through surveys or feedback forms.
Don’t Forget The Conversion Rate
I'd like to add an essential footnote on KPIs here. For all marketing strategies, the conversion rate is an important KPI. Conversion rate is calculated as the percentage of the target audience (email recipient, social media follower, event attendee, etc.) who completes the specific goal or desired action for that marketing tactic. The goal could be filling out a form, subscribing to a newsletter, or (the ultimate goal) making a purchase. The higher the conversion rate, the better. Your conversion rate is the most effective way to measure the success of any marketing tactic or campaign.
Sources of Data to Measure KPIs
Your KPIs are only measurable if you can access accurate and relevant data. Each marketing tactic will provide multiple sources of data, which can be overwhelming. Also, some sources may not be as accurate as others. To save your sanity, prioritize the data you need and the sources you receive them from.
Some of the more common sources of data are:
- Google Analytics (GA) for website data. You can easily fall down a data rabbit hole in GA so use your targeted KPIs to tell you which data points you need and stick to those. For example, for a brand awareness marketing campaign, you may decide to track overall website traffic, but not individual page traffic. In contrast, you may want to track a certain landing page linked to an advertising campaign. GA can also provide you with limited data from search and digital ad campaigns.
- Ecommerce provider. The platform that hosts the e-commerce part of your website will provide you with critical sales, product, and revenue information.
- Email provider. Your email provider can measure many of the KPIs discussed in the section above.
- Social media platforms. Each platform will offer a set of user analytics that can be helpful in measuring KPIs, including impressions, likes, shares, comments, and more.
- Programmatic ad campaign providers. Your digital ad partners can supply you with the ad campaign metrics discussed in the previous section and much more.
- Digital search tools. Each digital search tool (like Google and Bing) will provide you with metrics on PPC and display search ads.
Aggregate Data Reporting Tools
Now that you have your data points, what do you do with them? There are digitally driven reporting tools that can help you analyze and understand your marketing data. Armed with this understanding, you can make informed decisions about optimizing your campaigns for better results. You don’t have to number crunch alone. Choose a reporting tool that meets your specific needs and integrates with all the marketing channels you use.
Here are the tools we often see clients using:
- Databox allows you to track KPIs across various data sources in real-time. Databox offers a variety of tools for data visualization and monitoring as well as insights and analytics.
- HubSpot is a customer relationship management (CRM) platform that provides tools to manage marketing, sales, and customer service processes. HubSpot's KPI software is in the Sales Hub and offers real-time insights and analytics through custom dashboards and reports.
- Klipfolio is a cloud-based business intelligence and analytics platform designed to help marketing and sales teams make informed decisions by creating and sharing real-time dashboards and reports.
- BrightGauge provides integrations with CRM systems like HubSpot and Salesforce and RMM and PSA tools like ConnectWise and Kaseya. Users can bring data from various sources into one central location and create custom dashboards to track KPIs.
Working with an ROI-Driven Marketing Agency
A strong data-driven marketing partner can take much of the analytics work off your plate and help you make more informed marketing decisions. It is a significant investment in this time of tight budgets, so make sure you do your homework before choosing a partner. That includes setting clear expectations and goals for the partnership and finding an agency with a stellar reputation. When meeting with the agencies, ask deliberate questions about how they build marketing strategies and how they measure success. Find a marketing agency that uses data and analytics to inform everything they do. The right partner will be well worth the investment.
ROI-Driven Marketing is More than Measuring $
An ROI-driven marketing operation should always be your goal. This strategy is more than achieving a good return on your investment. A truly great ROI-driven marketing strategy is constantly being updated and refined based on results, both good and bad. It’s about knowing what is working and what is not. It’s about using data to identify potential business issues holding you back. When you focus on learning from experience, your team will spend less time on random tactics that don't produce results. You'll show results in increased sales, decreased costs due to inefficiencies, and increased brand awareness. You will become a marketing superhero!
My new book, The Great 8 Pillars of ROI-Driven Marketing, will outline over one hundred best practices designed to help manufacturing companies start building their ROI-driven marketing operation. It will be available in late June.
If you are looking for a data-driven partner, SyncShow's Diagnostic & Roadmap can show you exactly what you need to do to see massive and trackable returns on your marketing spend.