To continue delivering five-star business results on single-star budgets, the modern CMO will increasingly rely on salient cost optimization measures. For the uninitiated, cost optimization as an exercise may sound daunting, but it’s simpler than most peg it to be.
Compared to the one-time sweeping cuts of emergency cost-cutting, cost optimization efforts consist mostly of strategic micro-cost adjustments of marketing efforts—from overarching strategy right down to individual metrics—to reduce costs while growing revenue. And because costs evolve, it requires CMOs to adopt an “always-on” mentality to managing costs.
But it doesn’t take much to begin. The four simple ideas below are good starting points for most CMOs. And true to the nature of cost optimization, they are scalable, evergreen, and easy to implement, allowing marketing to get back on track with their revenue targets and avoid future budget cuts.
1) Hone Demand Gen for Personalization, Not Awareness
Seeing plenty of inbound leads, but only a trickle going through your sales pipeline? That means your prospects may be highly aware of what your business offers, but don’t yet have compelling reasons to transact with you. To achieve the best ROI, shift away from the notion of building brand awareness and focus on generating demand instead.
Today’s B2B buyers are already 57% into the purchasing journey before they decide to buy. What you do—or don’t do—in that 57% will determine if they choose you or your competitors. To attract demand—and turn that into revenue—channel resources towards engaging and educating your prospects to your offerings.
That would require finding out what their challenges and pains are. Tap into your data—whether sales data or intent data—to identify intent signals or purchase triggers like searched keywords to determine what your prospect’s business pains are.
Then personalize your outreach to these prospects, using carefully angled content and campaigns. Going the extra mile with account-based marketing (ABM) allows you to target prospects with a higher propensity to buy and become recurring revenue. In some instances, data-driven ABM has allowed 2X to grow engagement rates between our clients and prospects by 60% and generate sales months later.
While not as sexy or exciting as brand marketing, personalized data-driven demand gen efforts do possess a higher success rate by industry standards. When it comes to the tough act of turning cost to revenue, nothing beats that assurance of success.
2) Focus on Addressing Your Prospect’s Greatest Pain Points
Due to the huge expense of most B2B purchases, business prospects often require a high level of touch before they sign on the dotted line. During the nurture phase, 82% of B2B buyers usually engage with a minimum of five content pieces before buying—which means your demand gen content needs to be highly targeted and as compelling as possible.
But creating content focused on a prospect’s business challenges can be difficult, especially when you consider the multitude of pain points experienced by most businesses. Instead, focus on identifying one or two major pain points that you can then focus your limited budget and resources on.
To do this, look again at your data. Analyze how your prospects interact with your existing content. Are there pillar content like whitepapers or videos that they frequently view? Why do customers seek specific content? What makes these so compelling? Is there a common pain point or need that they all address?
Once you’ve identified what these pain points are, proceed to atomize popular pillar content into smaller, laser-focused pieces like infographics, blog posts, and e-mails. Done well, atomized content retains the elements that made the parent content so compelling in the first place, making them potent components to seed into your demand gen touchpoints—or even ABM initiatives.
Finally, consider placing your content on the appropriate syndication channels. Because they tap into intent data to place your content in front of the right audiences, syndication is a predictable lead generator. 2X clients get anywhere from 100 to 200 MQLs from content syndication, at 50% less cost than paid advertising.
3) Realign Digital Metrics with Business Success
Another area where you can make quick cost optimization changes for a huge impact is in your digital spend. Particularly in this, marketing is often considered a cost burden because what is being tracked and measured for digital efforts is often disconnected or at odds with the metrics that matter to the business.
Take, for instance, conventional digital metrics like cost per click or bounce rates. These function to improve the quality and accuracy of marketing efforts but are irrelevant to metrics that management—or even sales—relies on to track growth and success. To the point, if marketing can’t prove how digital spend pushed the needle for revenue, management may deem it as unnecessary spend, and further slash budgets next year.
Cost optimization for this area involves less adjustment of marketing initiatives and more adjustment of tracked and reported metrics. Moving forward, aim to prioritize the tracking of:
- Cost per lead (CPL) measures the cumulative costs of acquiring a new prospect by dividing total marketing costs against the volume of inbound leads. This allows marketing and sales to set benchmark figures on how much it takes to generate a new customer—and optimize their coordinated efforts along the sales pipeline
- Cost per opportunity (CPO) tells you the total cost of procuring a new customer, from start to finish. This is an important metric for business leaders because it informs them if marketing’s efforts are targeted accurately; higher CPO indicates more work to convince prospects, meaning a mismatch in messaging or targeted audience
- Lead velocity rate (LVR) is the real time indicator of how quickly leads are going through your funnel before meeting sales. Higher LVR proves that your marketing efforts are accurate and relevant to your prospects, turning them into highly qualified leads that would predictably close at a faster rate
- Opportunity stage aging indicates how long a lead has remained within a specific sales stage. When viewed against past time-to-close data, this reveals the health of an opportunity; longer duration to close means delayed revenue. The metric clues you in to where marketing can focus resources for the greatest effect—for instance, by creating sales-enablement material that reduces lead friction and moves them along the pipeline towards a profitable close.
With these metrics, marketing and sales can better collaborate and decide areas that require a more strategic focus of resources and attention. It allows you to re-evaluate your ongoing marketing efforts to identify underperformers that don’t support your renewed efforts. Switching these off allows you to redirect funds to marketing efforts that do, improving your ability to turn costs into revenue for the business.
4) Bridge that Final Stretch with Chatbots
Most business websites suffer from poor cost-efficiency—compared to B2C, the conversion rates for B2B websites hover between 2.23 and 4.41%. According to research by Salesforce, when business buyers reach out to you through your website:
- 65% expect to find needed information within three clicks
- 80% expect someone to reach out immediately, in real-time
All this means that you could be spending significant dollars on lead nurturing and SEO efforts, only for prospects to fall off at the website because nobody reached out.
Short of redesigning your website—a time-consuming and costly venture—an efficient and scalable way to plug this gap is through chatbots. Modern chatbots can be pre-programmed with FAQs from the sales playbook, allowing them to drive conversations with prospects and support your demand gen efforts, all the way to close.
Even better if your chatbot can proactively continue from the previous point of your prospect’s journey or move them onward towards a buy decision. For instance, 2X tapped into the power of Drift’s chatbot to help our client, a global management and IT consulting firm, to engage customers that landed on their website. The chatbot was able to tap into intent data to reference previous topics that prospects were interested in, then loop in the sales team once the prospect was ready to make a decision.
This resulted in three successful sales valued at $500,000. It also proves how simple cost-optimization decisions on static assets throughout your demand gen pipeline can bring in powerful results.
Accelerate Cost Optimization with the Help of MaaS
The above ideas are just some of the many that 2X has implemented for clients over the years, allowing them to achieve the best ROI for their efforts. While they can be implemented right now for short-term results, the biggest impact can be achieved only through sustained long-term implementation.
What you’ll need to achieve that is an affordable, dedicated team of offshore marketing experts who are adept at implementing and maintaining optimization efforts across a longer timeframe—giving your internal team more headspace to identify and act on emerging opportunities. That’s what a marketing-as-a-service partner like 2X provides.
Contact us to find out how we can help optimize costs for your marketing efforts.
Siew Mee Yong