Why You Might Suck at Marketing
By Mitch Fanning, VP Marketing for Clickback
Like most entrepreneurs, you're dedicated to growing your business, which means increasing revenues and profits. To do this effectively, you generally need prospects and leads, which means you need to do marketing.
You begin by creating a marketing budget. Next you decide on how you'll "do" marketing. As a result, you begin tracking metrics from various channels and pay close attention to the number of leads being generated by marketing. As time goes by, you notice that some of the activities seem to generate more leads than others so you do more of what works and less of what doesn't.
By doing this, your leads improve and it really feels like your marketing efforts are starting to pick up steam.
There's just one problem.
Despite all of your marketing efforts, you're still not generating more revenue.
It's Time to Starting Thinking About Revenue
When you focus solely on lead growth and don't pay attention to where your marketing dollars are generating the revenue, it's kind of like driving a car with just a speedometer. Sure, you know you're driving the speed limit, but without knowing how much gas is left in the car what's the point?
For example, at Clickback, our marketing team keeps track of the channels that bring in the most total monthly recurring-revenue for the company as well as their ROI. Knowing this information allows us to double down on what's working and fix or cut what's not. But we also put budget towards trying new things.
But focusing on revenue and ROI also gives you the confidence to experiment more because you can put constraints on a marketing campaign or activity if it doesn't generate results. One such experiment we ran, over the past several months, is with advertising on Facebook. So far, we've seen impressive results in both the number of leads generated and the cost per lead. In fact, using paid social has helped our team surpass a previous lead target.
With our Facebook advertising, all lagging indicators look good, but we still haven't generated a single customer from this effort. As a result, by the end of the quarter, if we still haven't acquired customers or generated revenues from this campaign it will most likely be cut and budget will be re-allocated to something else.
Changing the Focus of Marketing
While marketing-qualified leads often indirectly lead to revenue, focusing solely on leads and pipeline metrics can sometimes create a conflict between marketing and the rest of the organization when it comes to the real value that marketing brings to the table.
That's why the most important marketing metrics should always be (a) the amount of marketing-sourced revenue driven by marketing activities and (b) the effectiveness of the marketing investment (ROI).
Of course, improving lead generation will always play a pivotal role in the growth of any business. But if those leads don't contribute directly to revenue growth or generate a poor return then you're driving your business without a gas gauge...and eventually, you're going to run out of fuel.