November 21st, 2013 by Ashley Poulin, Principal - Sharpen Demand
Has the implementation of your marketing plan become routine—spending more on current programs if the marketing budget increases and pulling back as budgets tighten? Regardless of the size of your company, this routine should sound all too familiar to you. As a technology marketer, I used to feel this way about every six to eight quarters. Most recently, I was at a Fortune 50 company with a multi-million dollar marketing budget, which may seem like a lot, but relative to a multi-billion dollar revenue goal and a constantly shrinking budget, getting the most out of my marketing efforts was by no means an easy task. And given that the economy has been on a downward roller coaster over the past decade, it was an even bumpier ride. So, about every two years, I hit the brakes, challenged my routine and revamped my Go-to-Market Strategy.
Transforming your marketing strategy starts with data
A data-driven marketing strategy enables an intelligent approach to your marketing plan with measurable results as the ultimate goal. Giving you the ability to (1) plan, (2) build, (3) implement, (4) measure and (5) optimize every marketing and sales program you launch, thus delivering 5-10x more revenue and return on investment (ROI). I thought I’d show you how I’ve applied these principles and how I continue to use them today.
Using customer data to fuel growth
The force behind a data-driven marketing strategy is customer insights and analytics. If eyes are the windows to your soul, then customers are the doorway to your growth. Use customer data to (1) Define your target market, (2) segment your customers into manageable groups, (3) target those customers based on their unique needs, (4) measure your results and (5) make changes based on the outcomes. I’ve found that the simplest way to segment customers into large groups is by using the RAD (Retention, Acquisition, and Development) Model approach.
Implementing RAD customer segmentation
As you see in the image below, marketing and sales programs for retention customers require specialty campaigns based on the “value” of the customer, and the programs in development focus on increasing customer share of wallet (selling additional products). Acquisition campaigns are more challenging, due to the high-cost to acquire net-new customers, so marketing programs for acquisition customers focus on specialty sales teams for the highest value targets, leveraging channel partners and their existing relationships or low-cost high touch marketing campaigns.
Measure and Optimize
Once you’ve implemented your data-driven marketing strategy, it’s imperative to build a structured metrics dashboard for measurement and optimization. Identify Key Performance Indicators (KPI’s) and an initial ROI forecast upfront and tweak as more accurate data becomes available.
In the sample dashboard to the right, you can see a high mix of Retention leads – this is because retaining your best customers represents the most significant revenue generating opportunity. You’ll also notice the Acquisition lead mix is relatively small (smaller than ideal) — this is because marketing tactics to acquire net-new customers tend to have poor response rates, which is why measurable tactics are so important. If you can implement marketing intelligence to measure marketing results and allow you to test different variables, then you can learn exactly which variables entice consumers to act. As a result, response rates rise, lead numbers increase and the effectiveness of future campaigns improve.
Over the past 5 years, I’ve seen a substantial shift in the marketing mix from advertising and direct mail campaigns to lead generating tactics – online lead generation programs, events, targeted email campaigns, lead nurturing, etc. This isn’t to say that awareness activities are going away; this shift is due to the desire to invest in more measurable tactics. Thanks to new digital platforms and advances in statistical modeling and analytics, we now have access to far more powerful and sophisticated data than ever before. The key is collecting the right amount of data that will enable intelligent actionable decisions and leveraging that data to continuously make improvements.
Unfortunately for all of us, B2B technology marketing has no exact formula. If that were the case, you certainly would not need any advice from me. We all have different perspectives, different tactics, and most importantly, different customers driving our strategies. The one thing that we universally share is the need to constantly improve. Hit the brakes every once in a while and re-assess your strategy. I guarantee your marketing will be better for it.
Ashley Poulin is Principal Consultant and President of Sharpen Demand, a boutique marketing consulting firm focused on enabling end-to-end integrated marketing and sales campaigns for their high-tech clients. She has over 10 years of experience in technology marketing and believes the keys to a successful marketing strategy are sales alignment and measurable results.