An adaptation of this article appeared in Forbes on November 30, 2016Understanding your business’ metrics and driving serious growth is what separates the worker bees from the leaders. If you are in a marketing function at a rapidly scaling company it’s essential you understand your metrics and how they directly impact the primary goals of the business.
This isn’t going to be yet another piece on acquisition, engagement, and conversion—there are countless resources out there you can Google. This is also not going to be a high-level, analytics-heavy explanation. I’m going to show you how to create a simple metrics model, using simple math, to develop a growth-marketing/ growth-hacking strategy that meets and exceeds your revenue targets.
[bctt tweet="Four Steps For Creating A Marketing-Sales Metrics Model That Drives Growth, by @dwcordova" username="StartupInst"]
What’s your goal?
Business goals are achievements that impact the bottom line, such as increasing your company’s revenue by 20%, or entering three new markets in one year. Marketing goals are things that are directly related to marketing functions, such as growing marketing qualified leads by 20%, or increasing website traffic by 15%.
To drive serious growth, you need to focus on both. It's easy to say that you want to generate “more leads,” but how many more leads do you need to achieve your business goal? Ten more? One hundred more? Thousands more? Let’s figure it out.
[bctt tweet="To drive serious growth, focus on both marketing + business goals, says @dwcordova" username="StartupInst"]
Reverse-engineer your target.
Depending on the situation you find yourself in, such as day one at a startup or the first senior marketing hire at a rapidly scaling company, you’ll need to gather as much data as you can. At worst, that could be just your sales target and nothing more. At best, you should be able to determine the conversion rate of incoming leads and the conversion rate of your sales team.
Let’s assume the worst (if you know more you can test your model sooner):
You’ve been told your team has to support a sales goal of 125 for the quarter and you have no historical data other than a few people who have told you the sales team is “killer” and they convert 20% of all leads they are sent. Let’s do some reverse engineering to determine how many marketing leads your team needs to generate to hit the goal.
[bctt tweet="Reverse-engineer your sales target to determine how many #marketing leads you need, says @dwcordova" username="StartupInst"]
What we do and do not know:
The marketing-sales funnel:
See also: The Purchase Funnel (a.k.a. the awareness, interest, desire, and action concept)
To determine how many leads you need to produce in a given time period, divide your target by the known sales conversion rate.
125 / 20% = 625 sales qualified leads (SQLs)
Now you need to divide your SQLs by an unknown marketing qualified lead conversion rate—make an educated guess based on industry standards. For this exercise, let’s assume 12%.
625 / 12% = 5,208 marketing qualified leads (MQLs)
If you want to figure out how many incoming leads/ website visitors you need to hit that goal, you can continue the process, but it’s not vital for building the metrics model (Google Analytics can easily give you this information if you have it installed). 2-3% is a typical conversion rate for web traffic.
5,208 / 2% = 260,400 website visitors
Now you have a working model to test. Let’s walk through a few possible scenarios:
Understanding the difference between lead generation and demand generation:
Demand generation is a branding/ awareness activity. It is focused on shaping the audience’s perspective in order to create demand for your category or your specific products or services. The direct outcome is that your audience is more likely to purchase your products or services over a competitor.
[bctt tweet="#DemandGeneration focuses on #brandawareness so your product shines over competitors' - @dwcordova " username="StartupInst"]
Lead generation is a sales-focused activity, with the sole purpose of capturing a lead’s information. Your messaging, promotions, and navigation paths are centered on the content offered and designed to funnel individuals to a registration page to access the content (such as this landing page for our marketing roles 101 guide). The direct outcome of lead generation is new contacts are made available to sales or marketing.
[bctt tweet="#LeadGeneration is a sales-focused activity - direct outcome is new leads, says @dwcordova" username="StartupInst"]
Unless you are working for a big company with a budget for brand activation, I’ll argue you should focus 60-70% of your efforts on lead generation. I often see new companies and junior marketers make the mistake of getting obsessed with site traffic and display ad clicks—those things are important, but none of it matters unless you are driving quantifiable leads that lead to quantifiable sales.
I’ve had great success with a blended strategy—casting a wide brand awareness net on Facebook and then driving acquisition via website optimization and remarketing. This will enable you to introduce your brand to a broad audience, but only capture high-quality, ready-to-buy contacts in your database. If you have a small sales team, this will also avoid wasting their time on low-quality leads and cut down on churn. [bctt tweet="Startups + scaleups should focus 60-70% of marketing on #leadgeneration, says @dwcordova" username="StartupInst"]
Optimize for data capture
Once you have your metrics model, you should focus your attention on optimizing your marketing channels for data capture (i.e. a potential customer’s information). Take some time to audit all marketing assets and adjust the design of your website, messaging, and landing pages with one goal in mind: add new contacts to your database (for the purposes of this discussion, we’ll assume that your website is already setup for SEO).
Optimize website for conversion
- Make sure there are multiple ways to capture visitors' information (at least one call to action on each page)
- Create forms with three fields or less (more can reduce conversion by as much as 70%)
- Give people a reason to want to learn more (determine what information should be behind a form, also called “gated,” and what information is vital to understanding your product offering)
Create “gated” content offerings behind landing pages
- How-to guides
- Case studies
- Ebooks and white papers
- Videos/webinar recordings
It slays me when I see companies that have all their content marketing and paid campaigns dumping people onto a homepage with no way of collecting their information. Your efforts and money are wasted if you aren’t funneling the most interested individuals into your database.
Your ability to capture the right amount of leads at the MQL stage will hinge on how well your marketing assets have been set up.
[bctt tweet="It slays me when I see orgs driving traffic to a site w/ no #conversion points, says @dwcordova" username="StartupInst"]
Lead nurturing for sales-readiness
Now that you’re ready to have thousands of leads flowing into your database, you need to think about how you’re going to nurture them.
Develop an MQL nurturing program(sometimes called “drip campaigns”)
Marketo defines lead nurturing as “the process of developing relationships with buyers at every stage of the sales funnel and through every step of the buyer’s journey. It focuses marketing and communication efforts on listening to the needs of prospects and providing the information and answers they need.”
- Clearly communicate your value proposition
- Educate, inspire, or assist leads in learning more
- Clear calls to action (CTAs) = Learn more/ Buy now
This is a significant shift from traditional “interruption-based” marketing and advertising, in that your primary objectives are focused on the needs and concerns of the consumer, rather than the company. [bctt tweet="#LeadNurturing focuses on the needs of the customer over the company, says @dwcordova" username="StartupInst"]
Building an Automated Email Lead Nurturing Flow
There are dozens of email service providers (ESPs) from affordable solutions like MailChimp, to enterprise-level systems like Marketo—whatever best fits your budget, you’ll want to select a system that allows you to segment leads based on key data fields, demographics, and behavior.
Build an automated system that is:
- Targeted. Only send messages that are relevant—don’t send “buy now” messages to a lead that just entered your system ten minutes ago.
- Focused. Keep each email focused around one key topic/ value proposition.
- Progressive. Lead potential customers down a logical path of learning—it should feel like a conversation where you are answering their questions and concerns.
[bctt tweet="Build an automated #email flow that is targeted, focused + progressive, says @dwcordova" username="StartupInst"]
Email Marketing Best Practices:
- Copy should NEVER be embedded in the header image. This is not a good idea because many email clients (including Gmail) will strip out the image. Design your HTML templates on the assumption that images might not load.
- Assume no one will read your body copy. The heading, subhead, image, and call to action button should all appear above the fold and be able to communicate what you want the reader to do without ever reading your body copy.
- Keep it short and sweet. Keep body copy to 3-5 sentences and don’t waste people’s time by telling them their time is valuable.
- Write the way you would talk. Unless you’re writing for a law firm or a bank, loose the “don’t hesitate to…” and “thank you for your consideration…”
Build your model, test, integrate, measure, repeat
It's important to set goals that are specific, measurable, attainable, realistic, and time-bound. Your metrics model and acquisition channels will require constant testing and iteration—don’t get frustrated when your first attempt fails. Failure is a huge part of marketing and it’s a necessary part of learning what works for your specific business.
Ownership of your company’s metrics will give you the power to be agile and respond to problems quickly. Understanding how customers are finding and consuming digital assets (your website, social media, ads, email, video, etc.) is vital to planning where to allocate your resources.
Being in command of your data will empower you to make bold decisions that will drive serious growth for your organization and single you out as an invaluable leader.
[bctt tweet="Ownership of your org's metrics will empower to be agile + respond to problems quickly - @dwcordova" username="StartupInst"]