How Much are Your Sales Leads Really Worth?
Every day, marketing and sales professionals in thousands of companies make significant investments to acquire and develop sales leads. The ultimate objective is to grow revenues and profits by winning new customers.
Unfortunately, these investment decisions are often made without a clear and accurate understanding of how valuable leads actually are. When marketing and sales leaders don’t know the true value of their sales leads, they can invest too little and miss out on profitable new revenues, or they can invest too much and acquire customers that are unprofitable.
Sales Renewal’s insight:
The author believes determining the value of sales leads is a four-step process, which he explains and details.
In the post referenced here, he discusses the first two steps. In a subsequent post, he concludes with his last two steps.
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Best of Growth Spurts – Our Favorite Posts from November
Since we update our Growth Spurts blog several times a week, our readers know they can find a lot of actionable marketing & technology advice in it. And in case you’ve missed them, we offer a monthly, summary roundup of the most popular/interesting posts of the month where we extract the most useful information into tips you can use, and in many cases, provide a link to learn more.
Here, then, are our 6 favorite posts for the month:
Marketing Strategy
- Don’t Let Silos Destroy the Customer Experience – Integrated marketing is critical for a good customer experience. It means breaking down silos not only between individual marketing tactics, but across product lines, between marketing and sales, and with upper management, too.
- A Better Way to Calculate the ROI of Your Marketing Investment – Today, marketers have access to data that allows them to track an individual’s various interactions with a brand before their purchase and better understand what role each interaction played in the eventual sale. This approach is called “attribution modeling, ” and allows companies to attribute appropriate credit to each online and offline contact and touch point in a customer’s purchase cycle so that they can improve their marketing ROI. Read more about this approach here.
SEO
- Google’s Natural Language Search Gets Smarter – If natural search traffic is important to you and you have not yet reevaluated your SEO strategy, this story makes it abundantly clear that now is the time to do so! Why? Because you are shooting yourself in the foot if you’re still focusing on traditional keywords instead of semantics.
- 9 Ways Small Businesses Can Be Big on Google – With smart planning, small businesses can have a strong presence even with a limited budget. Taking advantage of online opportunities is key. Here are 9 ways to make sure your SEO efforts pay off, including adding customer reviews and ratings to each product you sell; using a variety of images and/or videos for each product; and building links to specific product pages instead of just your homepage or other high-level pages (a.k.a. deep-linking)
Content Marketing
- How to Market to Goldfish – Did you know that the average attention span has gone from 12 seconds in 2000 to 8.25 seconds in 2015? And that is shorter than the attention span of a goldfish, at 9 seconds. But all is not lost, as we are humans, not goldfish. Find out some of the keys for holding people’s attention in this article from Hubspot.
Social Media Marketing
- How Airlines are Using Social Media for Seat Selection – They call it “social seating.” By using your social media profiles, airlines will select who you sit next to on your next flight. The claim is that it will provide you with a better in-flight experience. What do you think?
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Sales Renewal’s insight:
Since we update our Growth Spurts blog several times a week, our readers know they can find a lot of actionable marketing & technology advice in it. And in case you’ve missed them, we offer a monthly, summary roundup of the most popular/interesting posts of the month where we extract the most useful information into tips you can use, and in many cases, provide a link to learn more.
Here, then, are our 6 favorite posts for the month covering Content Marketing, SEO, Strategic Planning and Social Media.
A Better Way to Set Your Marketing Budget
The best way to develop a marketing budget is to treat that budget as if it’s an investment — something that delivers an expected, quantified return over time. In order to build a strong business case around this concept, a marketer must understand the dynamics of their funnel. Take a deep dive into how new potential customers enter in the top of the funnel, how much you need to invest to find those prospects and help them move through the revenue cycle …
With this model in place, marketers can run scenarios that show how the budget translates into more leads, opportunities, and wins down the funnel. (They can also quantify the impact budget cuts will have.) At most companies, any significant investment must be supported by a business case that shows it will deliver a “hurdle rate”, or minimum rate of return. If you can make that case, the CFO generally approves it. Of course, some types of activities — demand generation comes to mind — are easier to tie to ROI than others, such as brand-building or PR. But no matter what the activity, make “worst case”, “expected case”, and “best case” assumptions to show the range of possible outcomes.
Sales Renewal’s insight:
The author does a nice job explaining some of the ways to do a marketing investment analysis, and even makes a plea to treat marketing just like other business investments, even capital spending (are you listening FASB?)
We ourselves have tried to contribute to this change in mindset, for example, we’ve presented real-life data that shows the more you invest in marketing, the more your leads increase and costs per sale or lead decrease to larger growth (here).
We even offer a quick, low-cost service, a Marketing Investment Analysis, that will help you figure out what a rationale marketing investment in your business should be.
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A Better Way to Calculate the ROI of Your Marketing Investment
“Marketers have access to data [today] that allows them to track individuals’ various interactions with a brand before their purchase, and better understand what role each interaction … played in the eventual sale.
This approach, called “attribution modeling, ” allows companies to attribute appropriate credit to each online and offline contact and touch point in a customer’s purchase cycle, and understand its role in the revenues that ultimately result.
Developing an attribution model is a gradual process. You can’t get there all at once. There are four key stages in the journey:”
Sales Renewal’s insight:
The authors lay out an excellent road map, but like most things in life, the devil is in the details. Sales Renewal, as Growth Spurt readers know, focuses on small businesses and the details are particularly devilish for them since they don’t have the technical & financial resources of the big boys.
Almost all small businesses rely on Google Analytics (GA) for the authors’ Step 1 because it’s free and will tell them what marketing activity to credit for bringing the visitor to the site (ad click, natural search, etc), which pages they clicked through, and whether in the end they converted into a lead or sale. The challenge small businesses face therefore isn’t “data in different databases” but the limits of GA.
For example, imagine a visitor who comes to a site by clicking an online ad, clicks thru pages 1, 2 & 3 and then purchases something. So using a simple attribution model, you might think GA will credit the ad campaign for the sale. It turns out, however, that it does not: if takes more than 30 minutes for them to click from page 2 to page 3, GA loses track and considers the page 3 click to be an entirely new session. GA will report 2 different visitors (the first who came from the ad, the second who magically started out on page 3) and so does not attribute the sale to the ad click.
Sales Renewal’s business model (sharing the risk & reward) makes us very big believers in ROI-focused marketing but it’s a very challenging thing to do, especially for small businesses. That’s one of the reasons, for instance, that we’ve been developing our SR Analytics system for 6 years.
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15 Mind-Blowing Stats About Generation Z
While many marketers still struggle to figure out the Millennials, a new generation-Generation Z-is growing up behind the scenes.
Members of Gen Z, born after 1995, are quite different than their Millennial counterparts, with their own set of expectations when interacting with companies.
Sales Renewal’s insight:
You might not realize it but more than 25% of Americans belong to Gen Z, and with 361, 00 babies born in the U.S. every day the segment is growing fast.
All of their 15 stats are interesting but we found these 2 to be the most intriguing … and scary:
- Millennials use 3 screens on average, Gen Zers use 5 (smartphone, TV, laptop, desktop, iPod/iPad)
- The average Gen Zer has the attention span of about 8 seconds.
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The Increasing Importance of Content Marketing in 2015
A new infographic from ExpressWriters nicely illustrates Content Marketing’s increasing importance to growing your sales and brand.
Some factoids we found particularly interesting:
Sales Renewal’s insight:
A new infographic from ExpressWriters nicely illustrates Content Marketing’s increasing importance to growing your sales and brand. Some factoids we found particularly interesing:
- Coca-Cola now spends more money creating content than on television advertising
- Marketers invest over 25% of their marketing budget on content
- 77% of marketers plan on increasing content production in 2015
- 61% of consumers are more likely to buy from a brand that shares custom content
- 91% of B2B marketers use content marketing
John Wanamaker Would Die for This: We Now Know Which Half is Which!
There is a popular saying which goes “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” Over the years, I have heard many a CEO/CFO substitute the word “marketing” for “advertising” as they lament about all the money they are spending on brand awareness and demand creation with little demonstrable return on investment. But those days are over.”
Sales Renewal’s insight:
Thanks to analytics, trackable phone numbers, trackable emails and marketing automation software you can now know which half of your marketing budget is working and which half is not … and adjust your marketing activities and budget accordingly. The author provides a few interesting examples of the old and new ways of marketing.
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Cost of Marketing: What Is the Average Budget?
As today’s savvy businesspeople know, to have a strong business people have to know who you are and what you offer. You need good marketing. The first step is a marketing budget to help you figure out practical steps to achieve those goals. But, how much should you spend?
Sales Renewal’s insight:
We agree, this is the best way to think of your marketing budget if you’re a small business:
“Allocating a specified percentage of sales revenue is one of the most popular methods for developing a marketing budget. The average allocation usually ranges between 9-12% of the annual budget, while the smallest businesses may go as low as 2%. … The main advantage to using a percentage of sales is that the marketing budget will increase, or decrease, with the sales revenue of the company. The marketing budget will never spin out of control and deplete sales revenue.”
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B2B Beat: What Is the Frequency, Blogger?
The debate began in January with a Tweet from Moz’s Rand Fishkin. In that Tweet, Fishkin, who is known as the Wizard of Moz, noted that HubSpot had posted 49 blog posts in a single week.
Sales Renewal’s insight:
There’s no right answer to the question of how frequently to blog. This article looks at A/B tests from Moz and HubSpot and concludes that the right number of posts per week will be different for every business. While it’s generally based on your readers, your content, and how consistently you post, it can take several years to find your “sweet spot.”
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Beyond Digital Analytics Metrics – Analytics & Optimization
In this post, Pere Rovira discusses COGS (Cost Of Goods Sold) and LTV (Lifetime Value), two fundamental business metrics that can help web analysts be more meaningful and influential with their analysis.
Sales Renewal’s insight:
This articles does a nice job of starting to explain why a typical off-the-shelf analytics platform (including Google Analytics) may not provide you with useful data, even though it seems like it does.
There are many metrics that are important for managers in a data-driven organization both tactical (cost per click, click thru rate) and business (cost per lead, return-on-marketing-investment). Your analytics platform must provide both types in easy to understand ways so that the decision makers can deploy resources towards the programs that will generate the most profit, not just the most revenue.
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