A marketing strategy should be tied directly to improving your bottom line. If it's not, then what's the purpose?
While you may find it difficult to correlate marketing spend to actual revenue growth, that doesn't mean they're not directly related. And here's the good news: with inbound marketing you absolutely can track the impact of your efforts on business performance!
Revenue Goals for Your Marketing Strategy
To be sure your marketing activities are geared towards revenue, start there and work backwards. Most established businesses will have at least a rough idea of goals for the next year - if not 3, 5, and 10 years. If you haven't established those yet, you need to.
(Note: If you need some assistance in planning revenue goals, check out the book Traction and the Entrepreneurial Operating System®.)
Let's dig into revenue goals a bit.
Start with next year. Take your revenue goal and outline your plans to get there. There should be a mix of activities you've outlined to help you achieve your goals, not just one. Also, keep in mind that revenue goals might be profitability related vs. actual growth.
It's likely that meeting your revenue goals (short and long term) will require a mix of existing and new customers. Break down the portion of revenues each will represent.
You now have a revenue number that is an estimate of what should be coming from new clients next year. Based on the average value of your clients, how many new clients do you need to achieve this specific goal?
|Revenue From 1 Existing Customer||Revenue From 1 New Customer||Revenue Goal for 1 Year||# of Existing:New Customers Needed to Meet Revenue Goal|
It's understandable that your average customer value might be all over the place, but we've got to start somewhere. If it is helpful, you can bucket different types of clients and outline what portion of each bucket will account for overall revenue growth.
Now you have some numbers to work with that outline not only your revenue goals, but how many customers it will take achieve those revenue goals. Now it's time to tie it specifically back to your marketing activities!
Planning and Meeting Growth Expectations
Planning Your Approach
You've got your goals and those goals are on a timeline. Now, how are you going to get there?
It's possible that you'll be able to achieve your goals by maintaining status quo. If that's the case, great! You may not even need to read further. But... in many cases, status quo won't be enough.
Many business have to do something different to achieve their business growth goals, especially if they're playing catch-up or are in growth mode. "Something different" can mean a lot of things, not necessarily just in marketing. (Maybe you'll expand your sales team, attend more trade shows, do more business outreach, etc.) But for now, we're going to focus on marketing.
The first step is to take your goal and separate out the portion that you plan on generating from your marketing efforts. Yes, historically it wasn't easy to tie revenue directly back to marketing, but with current technology it is very possible.
What's the specific revenue goal you plan on achieving from marketing? With your average customer value, how many new customers do you need?
At your current website lead-to-close rate, how many leads will it take to get the number of new customers you need? (If you don't currently generate leads, estimate the close rate of your sales team for non-referral and non-customer leads.)
|# of New Customers Needed||Current Website Lead-to-Close Rate||Column 1 / Column 2 = # of Leads Needed to Meet Revenue Goals|
OK, now we know how many leads you need... how are you going to get those leads?
This is where marketing comes into play. And we're not talking TV, radio, billboards, trade shows, etc.
Your leads are funneled into your pipeline via your website, so it's time to focus on that.
Take the number of website leads that you need to reach your overall sales and revenue goals. Identify your current website traffic and current website conversion rate. You should be looking to improve both of those metrics.
In order to achieve those lead numbers, how much website traffic do you need and what conversion rate do need to achieve to reach your lead volume number?
Increasing Conversion Rate
|# of Leads Needed to Reach Goals (From Column 3 in Previous Table)||# of Website Visitors Per Month||Column 1 / Column 2 = Conversion Rate Needed to Meet Revenue Goals|
Increasing Traffic Volume
|# of Leads Needed to Reach Goals (From Column 3 in Previous Table)||Current Website Conversion Rate||Column 1 / Column 2 = # of Website Visitors Needed to Meet Revenue Goals|
Now here is where things can get a little hairy. It's easy to take a calculator and determine realistic revenue and marketing goals; meeting those goals is another story.
First and foremost, start with strategy. Don't just jump into a bunch of tactics. Your strategy will outline your goals and identify how each tactic works to achieve those goals.
Timing is also important. You've placed a deadline on when you hope to achieve your goals. A digital marketing strategy takes patience. If you're a quarter of the way through time-wise, but you're not quite to a quarter of the metrics to achieve that goal, don't abandon ship. The benefits of your strategy will be compounding, so you'll likely experience slow results up front, but increasing results at the back end.
Expertise is vital. Don't expect to achieve stellar results if you half-ass your implementation. A digital marketing strategy takes a wide range of skills - including SEO, content writing, design, analytics, and so on. If you have all of these skills in-house and they have time to do it, that's great! If you don't have these skills in-house or the time to implement them, don't hesitate to outsource. Agencies have experts in each of these areas, results will likely be greater, and typically the cost will be significantly lower than bringing it in-house.
If you've read through this blog post and your head is spinning, don't stress... I'm happy to plan out these goals and strategy with you. In fact, feel free to put 15 minutes on my calendar here and we can have a short intro call.