Marketing departments believed it was a sales problem if the sales team couldn’t work with marketing leads.
Today, this is no longer the case.
Optimizing for leads or marketing qualified leads (MQLs) is great, but it’s better to optimize for what drives your pipeline and revenue.
Marketers exist in a new era where it is no longer satisfying to just drive leads.
With the technology and data available today, we can do much more than identify people who raise their hands to help businesses spend their marketing dollars more efficiently and generate revenue.
Just because a channel generates leads doesn’t mean they add value later in your sales funnel.
When you understand where customers bring in revenue and where they may need more attention before converting, you can create a more holistic media strategy to generate qualified leads that will generate more revenue than lead volume alone.
Here are three must-haves for optimizing revenue.
1. Tight tracking
Monitoring is essential for reasons that go far beyond reporting.
In this new age of artificial intelligence, it’s vital to feed machine learning the data that will make it do what you want it to do.
Platforms like Google optimize the data you provide, making it either a powerful tool or your worst nightmare.
Accurate tracking of your efforts plays an important role in the success of your advertising strategy.
Integrating third-party data sources like Snowflake and Salesforce with your paid media reporting helps reduce optimization time against a deeper funnel event like MQL, leads sales receipts (SAL) and income.
However, offline conversion tracking in Google is great for seeing which campaigns are driving funnel metrics such as SAL and closed/won leads. If you attribute revenue to those conversions, even better.
If your B2B advertising team is doing lead generation on Google without seeing where it’s going in the funnel with offline conversion tracking, they’re doing it wrong.
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2. Understand the customer base
Marketers should know how users from different channels perform once they are in your sales funnel.
For example, if your average Google search value is 4x higher than a Facebook customer, how can you use that to prioritize your spend and channel goals?
Understanding the average time to close or the time it takes to convert to revenue will only help you further optimize revenue.
That said, marketers should avoid being reactive with a day or week of inactivity if a user can take up to a couple of months to move through the sales funnel.
For example, if a client takes two months to close, you should give a new campaign or channel at least that much time before making abrupt cuts if you don’t see initial revenue.
Seasonality is also a critical factor to consider. Understand and prioritize the best time of year to capture your high value users.
Create a plan to warm up these audiences early in the year, then nurture them after the initial conversion to move them along the sales funnel.
Targeting the right audience also helps you allocate pipeline value to optimize revenue. Considering an ideal customer profile (ICP) for your targeting is an underrated piece of the puzzle.
Knowing what kind of people will buy your product is paramount to getting your advertising efforts right.
For B2B, you should know their job titles, pain points, tasks, and anything that indicates whether your product would make their life easier. You should also know your sales team’s lead disqualification criteria.
Will your sales team bounce leads from companies that don’t meet a revenue threshold?
If so, don’t waste your marketing dollars on these unqualified leads when you can direct revenue to other strong advertising channels.
3. Understand the life value of customers
Revenue optimizing teams should understand the value of their customers through customer lifetime value.
How can you optimize revenue if you don’t know who your most valuable customers are?
Understanding the lifetime value (LTV) of your customer base and your customer acquisition cost (CAC) allows you to perform an LTV:CAC ratio analysis to get a complete picture of how your channel mix affects your advertising efforts.
Let’s say Google is generating significant customer volume, but with an LTV:CAC of .5. It might be time to dig a little deeper into Google to see how you can improve Google’s revenue generation efficiency.
In general, you’d like to see at least a 3:1 LTV:CAC when measuring this.
If you’re having trouble calculating your customers’ LTV, hubspot has a great article that can help you with this initial step.
Takeaway food
CMOs are being asked to demonstrate the value of every dollar spent on marketing.
Leads are quickly becoming a metric from a bygone era where salespeople could simply pat themselves on the back for a job well done.
Today, any metric outside of revenue is a vanity metric for senior management and executives outside of marketing, earning every dollar in customer acquisition and improving the bottom line.
Give platforms the data they need to find the most valuable customers.
By doing so, you’ll empower the optimization of all efforts for the success and growth of your organization, giving your CMO a few extra hours of sleep at night.
The opinions expressed in this article are those of the guest author and not necessarily Search Engine Land. Staff authors are listed here.
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About the author
Madalyn McConnell began her career in paid social campaigns in 2011 when Facebook only offered Page Like ads. Over the years, he has worked for some of the world’s largest advertising and PR agencies and managed paid social campaigns for a variety of clients, including eBay, iRobot, GODIVA and TD Ameritrade. Madalyn now serves as Director of Digital Advertising at Closed Loop, empowering clients with her data-driven approach and expertise in paid media algorithms. Madalyn currently lives in Virginia with her family.
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