Yesterday, we wrote about the importance of producing messaging and copy that address your prospects instead of you. This must have resonated with many of you because the social shares, article views and click-through numbers were very good.
Today, I want to illustrate how to connect marketing directly to your company’s business goals. Believe it or not, this is seldom done. Oh, don’t get me wrong, it’s discussed. But it's never directly connected. Let me give you an example.
CEO: This year, we need to go from $10 million in sales to $15 million in sales, so make sure you create a marketing plan that gets us there.
Do you think the CMO knows exactly how many visitors to their website are needed month in and month out to get an extra $5 million in revenue? Not really. But a solid marketing strategy actually produces trackable metrics that tie inbound marketing tactics directly to corporate revenue goals.
Let me show you how.
This company has $8 million already invoiced, but it lost $2 million in revenue due to retention-related issues. So, in reality, it needs not $5 million, but $7 million in revenue from new business. Each new client is worth $100,000 to the company, and its close rate on qualified sales ops is 40%. By doing some simple math, it's clear that it needs 70 new clients. At a 40% close rate, it needs 175 sales ops. But only 10% of its leads are going to be sales opportunities. This data comes from looking at all of our clients over the past 10 years, and it means that the company needs 1,750 leads over the course of the year to even get close to its revenue targets.
That’s 145 leads a month, which, at a conservative 1% conversion rate, translates to 14,500 visitors to its website per month. Which means the CMO better be investing a lot of money into marketing, or the company better reconsider its revenue goals. This math also assumes that the sales cycle is 30 days, from lead to close. The discussion about realistic revenue targets would never even come up if the CMO didn’t do these calculations. How many of you have been handed sales targets without any real basis for the targets or without any connection to an investment in sales or marketing? This happens all the time.
It’s rare that the CMO is already tracking marketing metrics with revenue goals because all that would mean is that the revenue projections are too low. So assuming they're not, now you have to look at current performance to decide what marketing is required to make up the delta. If the current site is producing 5,000 visitors a month and 50 leads, it’s easier to determine which inbound marketing tactics are required to hit the goals.
First, you need more traffic and more leads. More traffic means blogging. And if you want to triple the traffic in 12 months, you better consider daily blogging. Since tripling the traffic is the goal, you are going to need new website visitors from a variety of sources: social media, organic, referrals, email and direct traffic. Make sure you allocate money to build out all of the social properties, do plenty of on-site SEO work, publish your content all over the Web and implement email campaigns twice a month. Execute this properly for a full 12 months, and you are going to get to your visitor goals. Now that you have the traffic ramping up, you need to convert those visitors into leads. This means that you need educational content, and you need a lot of it.
Consider publishing something monthly, at a minimum. If you can deliver monthly educational content in the form of e-books, whitepapers, infographics, videos, tip sheets, slide presentations and webinars, you’ll get close to your goals. Keep in mind, nothing launches without ramp-up. So the faster you get all of these elements up and running, the faster you get to your goals. It’s reasonable to expect between three and six months of ramp-up for a plan like this, which means you won’t be at your revenue clip for 12 months after ramp-up. Make sure your CEO understands how this works.
While inbound marketing works just like we’ve illustrated, it does take time to get the traction you need to get to your goals. This isn’t advertising that spikes up and then dips down as soon as you stop. This is a slow move up and to the right, which you sustain over time. More important, you should be able to see a direct relationship between the amount of marketing you’re doing, the amount of money you invest in marketing and the quantitative results your marketing is generating.
Start Today Tip – You have to run the numbers to make sure your revenue goals are actually attainable. Just because your CEO tells you that the company needs to do $15 million in revenue doesn’t mean you’re going to be able to do that. You have to make the connection between the current state and the future state. In the scenario above, if your company is only getting 1,000 visitors and 10 leads, it’s going to be impossible to improve the marketing by the amount you need in just 12 months. That is, unless you have an unlimited marketing budget ... and who has that? Marketing has to be goal oriented, and inbound marketing gives you the data, platform and tools to make it so for any business.
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Posted By Author Mike Lieberman, CEO and Chief Revenue Scientist
Mike is the CEO and Chief Revenue Scientist at Square 2. He is passionate about helping people turn their ordinary businesses into businesses people talk about. For more than 25 years, Mike has been working hand-in-hand with CEOs and marketing and sales executives to help them create strategic revenue growth plans, compelling marketing strategies and remarkable sales processes that shorten the sales cycle and increase close rates.