4 Steps to Revenue Centric Marketing.
If you read my previous post about why leads should not be your goal, this post will guide you through the necessary steps I take to help a company reach their revenue centric marketing goals:
1 - Define your ideal customer. What are the measurements that make them ideal: lifetime value, low cost of acquisition, low cost of ongoing maintenance, initial order value, upsell opportunities, average time to close? The entire organization needs to agree on what is ideal because what might be ideal in the sales process is not always ideal to customer success and support. Understanding where your product is today and where it is going also helps you identify the ideal customer. Just because they are ideal today does not mean they are ideal for the direction the business is headed.
2 - Profile your ideal customer. Dig in deep. If you had 100 more of your favorite customer, what does this look like for your business? Where does your ideal customer hang-out, who influences them, what motivates them, what are their pain points? What do they love about your business and why? There is some psychology that goes into profiling your ideal customer. What motivates a 26 year old male to take action is, in most cases, very different that what motivates a 36 year old mother of 3, even when it comes to how they make business decisions. Identifying and defining detailed personas (no more than 3-4) will help to get you in the head of your buyer.
Companies who exceed lead and revenue goals are 4 times as likely to use Personas for demand generation than those who missed lead and revenue goals. (source)
3 - Build a plan to reach your ideal customer. Define their customer journey and determine the elements needed to meet them at the different points in their journey. Your marketing plan should outline what each stage in this journey looks like and include where you will reach them and what you will reach them with. From unaware to decision you need to hold their hand through the journey, if you don’t your competitor can step in and take them down another path at any point.
3B - You may have the perfect methods to reach your ideal customer but the biggest mistake I see companies make is delivering the wrong content at the wrong time. Design a content plan that is based on your buyer journey. While we live in an instantaneous world where we want a buyer to commit on our time-line, that is not reality. There are stages in a buyer’s journey that lead to a decision to buy. Asking for the sale before a decision stage is like asking for someone’s hand in marriage before the first date.
4 - Measure. Evaluate. Shift Accordingly. Once you’ve defined the audience, the reality is reaching them with the right message at the right time is not always easy. Some of this takes the 3Ts (time, trial and testing). But by starting out with the measurements that matter the most to the businesses you can have a baseline for measurement, evaluate as you go and make changes as needed. You can react quickly if you know what KPIs matter most. For example, if your CAC (customer acquisition cost) is the number one priority of the organization you set a specific CAC goal. If some of your marketing efforts have a higher CAC you cut there and invest in other areas with lower CAC. However, while CAC should always be a consideration, some companies are in high growth mode and willing to invest more in acquiring customers short-term as long as the churn is low and potential LTV remains high. Once you do acquire new customers marketing;s involvement in the customer journey can’t just halt. To really maximize the relationships you are acquiring, the customer experience needs to remain consistent, proactive and tie back to the original marketing KPIs. If marketing doesn’t understand what is happening short-term and long-term with the customers they help to acquire, the puzzle will be incomplete and marketing can’t and won’t optimize efforts.
Recognizing there is a lot of work that goes into each of these steps, the biggest hurdle is making sure everyone is on the same page about what is important to the business - - the entire business. Marketing is not a silo department that is responsible for bringing in leads. Marketing is central to the conversations on how to execute and reach revenue goals across the entire organization.
with contribution from Ryan Andrew
This is seriously the worst marketing measurement a SaaS company can put in front of a marketer. My typical response, "If all you want is leads I can buy you some leads." If an agency is telling you they can get you 4X leads in 6 months without asking you some very tough questions, don’t hire them - RUN!
I have written about this topic before but it amazes me that I still get asked if I can increase leads. Luckily I know what a company really wants when they ask this. By now smart businesses know a real marketer wants to participate in a serious ROI conversation. A real B2B marketer understands that putting junk in the top of the funnel results in junk across all areas of the business.
A company recently asked me to generate more leads for them but after looking in their CRM I realized they had a large number of leads just sitting there. When I dug further asking why they wanted more of the same with a conversion ratio of less than 10% their response was, well we did not do a good job at following up on those leads. So, their problem wasn’t generating more leads, their problem was converting the leads they already had. Just putting more leads at the top of a broken funnel was going to result in more of the same.
79% of leads never convert into sales due to poor performance, nurturing, and/or engagement. (Source)
If your marketing effort is entirely focused on growing leads 4X without consideration for how you will nurture and convert these leads or how you will keep, maintain and even grow your customer relationships, you will continue to need to grow your leads 4X time and time again just to maintain revenue. Are you leaving the biggest potential source of revenue out of the conversation?
If a typical SaaS business loses 2-3% of their customers each month to churn, they must grow by at least 27%-43% annually to maintain the same revenue. (Source)
I have worked with 3 companies in the last 2 years that did not have a single initiative for customer marketing. In fact, once the customer was onboarded there was little to no proactive communication. If customers are considered a support problem vs. a revenue opportunity and not a big part of your marketing plan, I guarantee you are leaving money on the table.
Loyal customers are worth up to 10x as much as their first purchase, on average. (Source)
So what should you be discussing with you marketing team/agency if it isn’t leads? This depends on what is important to your business right now. In some cases, it may make sense to have a higher CAC (customer acquisition cost) and focus on creating a strong plan to maximize LTV (life-time value), in which case, customer delight and expansion marketing should be at the top of your list. Or, you might be in high growth mode in which case you want to acquire as many customers as you can at the lowest CAC while still maintaining a certain churn rate. So understanding how to reach your ideal customer while still avoiding the noise and costly marketing channels should be your focus. Driving 4X leads should only come into the conversation if you have a solid funnel process that is already hitting all your goal metrics and you are ready to scale this process with more volume.
with contribution from Ryan Andrew
My name is KC DeKorte-Cox and I am a demand generation marketing expert with over 15 years of experience focused primarily on helping businesses with marketing and sales alignment strategies aimed at driving growth. I help design marketing and sales programs that scale by leveraging the power of technology, specifically CRM and Marketing Automation.