Little by little, the pandemic is chipping away at marketing budgets as businesses around the world continue to lose revenue. Gartner, an international research and advisory firm, reported in March 2020 that 65% of marketers were dealing with significant budget cuts.
It isn’t surprising that many startups are coping with reduced revenue by axing important marketing campaigns and team members. Although unfortunate, businesses serving industries crippled by the pandemic such as restaurants or airlines often have no other option. However, companies serving customers who are less affected have a more sustainable alternative—one that won’t necessarily cost a precious team member their job.
Turn this crisis into an opportunity by learning how to protect your marketing team while securing the future of your company.
How do you do this? I’ve outlined below what you need to know.
At the moment, we’re seeing many businesses react to budget cuts by reducing or shutting down ad spend altogether.
Though this is a natural reaction to save some quick cash in the short term, it could cause even more damage to your company later on.
As the VP of Marketing at Viafoura, an enterprise SaaS company, I’ve seen first-hand how businesses with lengthy sales cycles can take months to convert leads into paying customers. This means that cutting off major marketing activities can and will negatively impact the ability to generate new sales opportunities that may close long after pandemic is over.
Rather than stopping all marketing activity, start identifying and trimming the campaigns that generate the least amount of sales pipeline and revenue. This way you can keep your most critical campaigns running to sustain your business in the coming months.
Sounds simple enough, right? Read on for some ideas on how to accomplish this.
In my experience, many startup CEOs don’t know where most of their company’s leads come from.
This poses a major challenge. If you don’t know where your most valuable contacts learn about your business, how can you know which campaigns are not essential to your company’s survival?
In other words, before you can decipher which campaigns to axe, you must first understand which ones actually generate marketing qualified leads (MQLs).
As Hubspot puts it, “Once you begin tracking where your leads are coming from, you can measure how much of your company’s revenue is coming from leads by each major source.”
Getting the proper lead-tracking conversion tags and marketing software in place will give you some basic answers.
Like many marketers, I learned the risks of a false attribution model the hard way.
I was running a Google Ads campaign for an event management software provider bidding on an affiliated brand keyword. The campaign generated hundreds of clicks and 40 MQLs. On average, each MQL cost us $200 to obtain, resulting in close to $8,000 per month. I had a basic attribution model that connected my ad platform to my Google Analytics account. That model suggested we were doing a fantastic job!
However, after a quick huddle with the sales team, we realized that the leads being generated by the campaign were low-quality since these contacts had no intention of making a purchase. But I needed to develop a model that was more than just a
“gut feeling”’ of the BDR rep.
I’ll be honest, the setup of a proper attribution model required some research and operational magic from my marketing operations team member. Yet once the connectors between Google Analytics, Google Ads and Salesforce were in place, we were able to see exactly which campaigns (or even keywords) contributed to the revenue pipeline and won deals. I finally had a factual answer to my dilemma. Yes, I had been bidding on keywords that just didn’t convert into opportunities.
The key in the new model was seeing the progression of the lead once it was handed off to the sales team through a connector with the CRM platform. A majority of attribution models lack that connectivity.
The result? Thanks to the new model, we managed to cut the advertising spend by over 25%, and saw a minimal loss (~5%) of high-quality MQLs that converted to sales opportunities.
Without a proper attribution model, it’s practically impossible to distinguish which campaigns generate leads that convert and which ones do not.
If you don’t have an internal resource that can help you track leads as they’re handed off from marketing to sales, consider investing in an external resource for a small fee. After all, that small investment will give you a constant flow of actionable information for years to come.
Without valuable input from your sales team on how MQLs progress down the purchasing funnel and directly influence company revenue, thousands of dollars could be lost to your company—and you wouldn’t even know it.
Ensure you have visibility over the entire purchasing funnel so you can identify your least profitable campaigns. Despite the pandemic, this is a major opportunity to reduce your company’s budget strategically without jeopardizing major revenue opportunities in the long run.