Welcome to episode #80 of The PPC Show, where we interview the best and brightest in paid marketing. This week we’re joined by Heather Cooan, Founder and Principal Growth Strategist at HDC Digital.
Heather is laser focused on revenue growth for clients and one way she accomplishes this with CRMs. If your B2B PPC campaigns are stuck or you’re having issues scaling performance then this episode is for you. Stay tuned to hear Heather’s advice for unlocking revenue growth through the power of CRMs.
Listen to the Episode
Heather is an entrepreneur, author, international speaker, & an ex-roller girl. She founded HDC Digital, a Phoenix-based digital & demand marketing agency revolutionizing the way companies think about and approach growth. Over her career, Heather has served in digital marketing roles both in-house and agency-side, spanning the full funnel, across many verticals, both lead generation, and eCommerce. Credits include The Smithsonian, UGG Australia, Teva, Google, PapaJohns, ISOTONER, Totes, ESET, PetSmart, Infusionsoft, and numerous others.
Transcript and Show Notes
JD: Hi there, welcome to The PPC show.
Heather: Thanks so much JD, it’s nice to be here.
JD: Yeah, we got to meet up at SMX West for the first time ever. I’ve been a fan of yours, at least on the Twitter, as they say, but you’ve been around in the community for a while now. So, give us a quick update, what you’re up to and where are you?
Heather: Yeah, so I have been around for a long time. Some folks on PPC chat and I like to joke around, we use the hashtag #ppcmoses, we’ve been around that long, since before you could advertise on Google, which is kinda crazy to think about.
I’ve been all over the place, so I did some time agency side, did some time in-house brand side, and recently just went out on my own, started a company called HDC digital, where we are doing a lot of digital and demand marketing. Kind of blending my experience and background, and we’re focusing on growth. So really helping companies bottom line revenue, that’s what we’re doing, I’m doing now.
JD: Perfect. Well, yours was a can’t miss session at SMX West so I asked if you would come on and rehash it out for all of our listeners that couldn’t be there. For all those listening, be ready, get your pen and paper out, it’s going to be really great. We’re going to be talking about stuff like CRM’s, and I’m sure marketers are already tuning out right now because like ‘I do not want in a CRM’, that is for sales, that’s for the business op’s side of things, but, let’s jump into it. You really talk about framing this problem and so, what is this problem that you’re seeing as we move into 2018 and beyond?
Framing the problem
Heather: Sure. This is something that I started to see when I was agency side, dealing with running paid campaigns for clients, where we would start to hit diminishing returns, and I couldn’t figure out why we couldn’t continue to grow. Then when I moved in-house did some work brand side with a couple of CRM companies actually, I realized it’s because on the back end inside of the company there’s a lot more going on than anybody realizes when they are just running the paid channels, or even the organic channels or the content or any of the individual pieces of marketing.
So, what I’ve noticed, and I continue to see it now with my clients, is that there tends to be a problem with anybody who really has an offline sales point. So anybody that has a sales fleet or has to talk to someone in order to get information, do demo and actually go through the sales process.
And so these companies start out, and they start out running bottom of funnel paid campaigns and they really lean on the paid channel. And it’s gets them growing, it gets them started, it gets them a lot of traction, and then they start to hit diminishing returns and they can’t figure out why. And, what I’ve found is that they’re missing the entire back end. They don’t have a funnel to find, they don’t have a buyer or customer journey defined. They don’t have any of their metrics defined. They haven’t been tracking anything through a funnel to look at conversion rates in between metrics. They’ll get funnel velocity to look at leaks and where things are falling apart, and often-times, sales and marketing are at odds and it’s a little bit of a thunder dome battle, if you will, between sales and marketing. And, sometimes inside marketing of the company is large enough to have a separate content team from the demand-gen team.
And, so that’s really what I’ve been running into, more and more, and so, we started to specialize in taking people through funnel taxonomy, getting things set up on the back end. Getting things measurable so they can actually see, and then providing alignment between sales and marketing so that they can work together, instead of working against each other.
JD: Yeah so a quick recap. We’re really going to be focusing on B2B for this talk. So, with it, a lot of this information, if you have this problem, if you are having trouble scaling your paid campaigns. If you have some data silos and you’re having some team alignment. Those are the main three things I picked up from that, and one thing I really loved about your presentation was like, break all those down, and let’s get started and let’s actually grow some revenue. If you got those problems, buckle up, because we’re about to get into it and Heather’s going to be helping us understand how to really frame this problem and how to get past it.
So, what do you think? What is the first thing we should start to do?
Define metrics across the funnel
Heather: Yeah. What did they say, when you have an alcoholism issue, first you have to realize you have a problem?
JD: That’s right.
Heather: And what I find is that a lot of companies are way far beyond the problem before they realize they have it. Often-times we end up working with clients who are at a point where they have hit diminishing returns and have stalled in growth for so long that now the Board is starting to get grumpy, or the investors have started to get grumpy, and now they’re in a panic mode, really trying to get it done. And, then they’ve got a lot of turnover, they’re burning out their people because they can’t get there.
So, realizing that you need to plant for the future and continue to progress and build forward, before you get there, is the biggest thing. So, realizing you have that problem. And, then once you realize that you have it, it’s time to get all the stakeholders in a room and start defining your buyers journey, your customer journey and your funnel metrics.
What is a lead to you? Define what that means. Is a lead just someone who fills out any form? Is it someone that fills out a form that’s just a piece of content or is it someone that subscribes to the blog posts? Or is it- what is it?
And then all the way down to the bottom. What does it mean when it gets passed off between marketing/sales? What does it mean when they’ve actually qualified in sales? And then the bottom part of the funnel, the actual sales process itself needs to be mapped out. And then once it gets handed off to customer success, or an implementation team, what does that look like? And then, beyond that, building the relationship all the way towards advocacy and then back around to create new acquisition on the top of the funnel.
So, mapping all that out, is step one after you’ve realized you’ve got this issue.
JD: Yeah. So, I have a problem. Now we’ve figured out- at least we’ve defined it, and so, to contrast that, you’re saying within your own experience, what your seeing is, you’re seeing a lot of paid teams running and getting maybe a bunch of downloads, which could be, let’s say, a white paper download or attending a webinar, the common B2B “leads”, and then, nothing right? No real follow up, they’re not really growing anything they’re just capturing this number.
JD: Perfect, okay.
Heather: Because they’re getting squeezed so the paid teams and the demand-gen guys are getting squeezed because sales doesn’t have enough leads. What sales is really saying is ” we don’t have enough people that are ready to talk to us”. So, what marketing does is, they go get more leads, they just get more form completions. Sales can’t really do anything there and that just causes sales more pain, costs the company more money, doesn’t get to the root of the problem and doesn’t produce more revenue.
JD: Yeah, and I think this is something that we can jump right into. I think a lot of us understand this too, because we might be measuring, and Google Analytics, for example, are online activity, and sales is over here in this offline activity, maybe a Salesforce, maybe a hotspot, right, that’s our CRM’s, and they’re not really talking to each other. So, there’s your data silos, there’s your team alignment and now you’re having some trouble scaling, so, how do we- what is the next step? So, we’ve framed it, we’ve figured out all of our definitions for our leads and our MQLs and SQLs, what now?
Getting all the technical requirements set up
Heather: Sure. So, once you’ve actually got definitions and these definitions need to have everybody in the room to come up with them. Marketing can not make definitions themselves. Sales can not make definitions themselves, and customer success needs to be involved as well. Everyone needs to be in the same room because it’s one big long demand chain, or a revenue architecture across the entire funnel that’s actually a circle if you think about it.
All those guys need to be in the room because they’re going to have different perspectives and at the end of the day, what we’re doing is we’re aligning everyone around business metrics that ladder up to revenue, because sales marketing customer success together is team revenue. That’s their job, they do it together. So, once you’ve got everything defined and you’ve got alignment, then you need to select your technology and get all of the things installed into the technology, the technical set up of all these things.
Usually involves things like getting lead scoring put together, getting all your criteria for lead scoring, getting your lead routing and lead management put together. Using automation, so based on lead scoring when are we going to route things to sales, what kind of things are going to trigger to send it to marketing. And then, is there going to be lead recycling? What criteria is going to bring something back from sales to marketing, and how long is it going to be there. What are all of the lead statuses that are going to trigger these things so that you can report off once it goes to sales, what’s working, what’s not working if it’s not coming out the end as new units or customers or revenue.
So, getting all the technical set up is probably the next step.
JD: Yeah and I know that you’ve helped out quite a few businesses in getting this set up. What are some the main issues that you see with this, let’s just break down lead scoring as an example. What are some of the road bumps that you see?
Heather: Sure. One of the biggest things is getting all of the right stakeholders in the room. I went through a Salesforce implementation with a client, and, Salesforce is wonderful, but you can’t use a Salesforce if you don’t know what you want when you set it up.
You have to have an architecture, it’s that customizable. And, a lot of the things are out of the box are really just an example of what you can do, not a best practice, not a recommendation. And, this poor company, that was already in pain because they had gone too long on their old system, got Salesforce implemented and then when their sales team started using it, they realized ‘oh gosh, we can’t track things all the way through the funnel, we can’t use this the way we want to use it’, they accidentally had set it up exactly like their old system, which was duct taped in the first place. And, so, they found themselves in a place where they were rebuilding and re-architecting Salesforce on the fly.
So, really getting all of the right stakeholders in the rooms, with a higher up implementation partner if you need to, getting all of that defined and set and thinking through ‘What do we need to measure, when we set this up? What kind of conversations are we going to have? Who are we going to be held accountable to? What metrics are we going to be held accountable to? What people and processes need to be accounted for? How’s our sales team going to use this? What’s going to disrupt them? What’s going to take time out of their call time?’
All of those things need to be diligently thought through and if they’re not, you will pay for it on the other end in terms of wasted time and money and resources.
So, that’s the biggest thing. We will take months sometimes defining everything on that end, to make sure that everything is aligned correctly and we’ve run through scenarios of ‘Okay, this is the kind of reporting you’re going to end up if you set it up this way. Is this right?’ before we build it in the system, that way it’s done correctly the first time and they’re not struggling operationally and making things worse. It’s just it can cause a lot of additional pain if you’re not careful.
So, that’s the biggest thing, and it’s scary.
Heather: I see a lot of executives that are wide eyed and intimidated. I’m like ‘Oh crap, I have to basically stop the business to get this done’. No, you don’t have to stop the business, but, yeah, it’s a tough ball of worms to tackle.
JD: Yeah, it’s like one of those things too, even putting in our perspective. So we’ve both running PPC campaigns, coming up through that. We spent so much time architecting our own campaigns of what does the flow look like? When are we going to re-market? What does that message look like? What does that ad look like? Is it on AdWords, or is it on RLSA? Is it on Facebook? It is- wherever it is, we spent all that time and yet, only to get that lead, and we don’t really think about what happens next, and we’re not really organizing that and structuring that piece of it, so[crosstalk 00:12:11]
Heather: And that’s why it’s so important to actually think through the entire lifecycle of your customer. So, we coach companies through persona development and lifecycle marketing. When we do this definitions of all the metrics and things, because we want to make sure that we’re thinking through awareness. Not awareness of me and my product, but awareness of what the pain is that we actually serve, all the way through to advocacy on the other end, because you will find that there are things that need to be measured in between each of those stages of the buyer or customer lifecycle or journey. That they weren’t even thinking about that would be helpful when we’re actually putting the technical pieces together to produce reporting on the other end. And, a lot of that happens to be around content. We’ll get into measuring channel attribution vs asset attribution, and that usually ends up being a war inside marketing.
Where do they come from? Well, I don’t care where they came from, what did they consume? Well, I can’t see and that can be tough.
JD: Yeah, It’s also again, pointing out- I think it’s why also it’s so important to work with someone like you, who has had to do this several times, several different types of businesses, several different types of CRMs. So, again, we might outsource our PPC and we do that for a reason, right? Because they are experts and I think this is something like- I’m like hearing it and I was like ‘Man, I would totally outsource this if we could do it again’.
Heather: Sure, yeah it’s hard.[crosstalk 00:13:35]
And it can hurt, yeah.
JD: Even our own Salesforce instance, and I’m sure everyone listening would hear this and probably agree. It’s not good, it’s okay, but it’s not perfect, right? And I wish we would have had a better structure in place whenever we were setting it up. But…
JD: ..Tis life.
Heather: Oh yeah. I’m sure I can hear people groaning in agreement. Yes
Heather: Because, everyone seems to have issues with their CRM in the way things are set up. And, difference CRMs have different limitations, but when you’re dealing with Salesforce it’s so customizable, it can always be adjusted and optimized on the fly. The people component is what’s difficult, retraining sales, retraining marketing and then getting all of that data correctly put together.
JD: Yeah, definitely. So, let’s talk about putting it all together. So, let’s just say, We’ve defined everything, we’ve got our structure set up so, how do we go about gathering the data and then measuring it?
Measure and gather data sources
Heather: Sure. So once you’ve got all of your taxonomy defined, everybody’s agreed on what we’re going to be measuring, what we’re going to be held accountable to. And then we’ve got the technical in place/installed. Lead scoring is set up, algorithms are tested and running, and the whole database is scored and you’ve got lead management and flow and routing all based off of those lead scores. Then, you turn it on, gather some data, see how things are going, fix all the bugs. Because there is always inevitably some things that break when you turn things on. And then, you’ve got that, usually sometimes it can take two to four weeks, sometimes six weeks depending on the culture of the organization, for sales to get the hang of things to be tagging things with the right statuses, using the right work flows, for the data to even out.
So you first things on, you got that people interference, and so they’re still learning and they make some mistakes and so things end up in the wrong buckets. So, once that’s done, then you’ve got your baseline data and you can start to define, or start to build all of your reports as the data is flowing in.
Now, I’ve seen this happen, the biggest mistake is people wait until they’ve got the data to figure out how they’re going to report on the data. Report definitions and architecture need to happen when you’re defining all of your taxonomy up front. So, that’s where the whole thinking through ‘what is it that we need to measure? What do we need to report on? How do we want to see it?’ All that needs to be thought through, prior to even building anything.
That way when you have the data come through, you’ve got all your baseline, you can see where things are broken, you can fix them, but then you can just turn on your dashboard reports, and then it’s really a matter of ‘Is this what we thought we needed? Or, is this- did something change? Did we find something different that we didn’t realize was there, when we started turning it on and look at what we’re actually reporting on’. The insights that are coming out. And, you’ll find some mistakes. I’ve seen companies turn on Salesforce for the first time, brand new implementation, and they realize ‘Oh shoot, we didn’t string a unique identifier through the entire funnel’, so now we can see stuff on the incoming side through marketing, but when it comes down to sales we can’t see it. Or, we can see it on the revenue producing side but we can’t measure it/tie it back to the marketing side.
So, those things happen. Ironing out and getting your dashboards put together.
JD: It’s always a tough one, and it’s so tricky too because even building out our own dashboards for the marketing team and the sales team using Salesforce, we do this all the time. But, you’re constantly wanting to change them, because you want to see something different and again, it just reminds me of agency side, when you have those kick off meetings, it’s like ‘So, what are your business- what do you want to see?’ All these questions, we’re so accustomed to doing this and yet we’re not doing it and they’re not implementing it. I’m hearing you say this and I’m going ‘Yeah, right?’
Reporting and dashboards with CRM
Heather: Oh shoot. Yeah, and when it comes to reporting and putting together dashboards, because there are usually a handful of folks who need very flexible dash boarding and reporting, this is where tools like Tableau come in handy. Where you would have some folks who are practitioners and trained in Tableau, so they have an instance on their desktop where they can actually build the reports and mess around with the data, accessing the tables directly. And then you’ve got folks who, can just do server side access like the execs and those guys who they have predefined reports that really don’t change that they can jump in, at a glance reports.
So, think about these when you’re defining your metrics and your reporting. Who is going to need what? Are some people going to be able to use a Salesforce dashboard and that’s fine? Or, are some people usually, the guys that are nitty gritty, nuts and bolts in the marketing channels, or the sales enablement guys, they might need something like direct access to Tableau so they can build their customized reports on the fly to get even deeper insights.
What you want to do is, in the definition phase you want to get everybody aligned to business metrics, but then you want to also account for channel metrics. So PPC guys have all of their Google Analytics, and they have their tools in AdWords and Bing and Facebook, and then you’ve got social stuff, you got the organic stuff. Every single marketing channel is going to have their own levers that they pull on day to day, but then sales and marketing and everyone, customer success need to be aligned across the business metrics, which is where the funnel stuff comes from and that’s where your CRM becomes your heart of the reporting, your one source of truth.
JD: What are some common problems that you’ve seen whenever your people are trying to set these up? So, you mentioned one I thought was really good, their unique identifier. Any other ones that you would call out?
Heather: The unique identifier is usually the biggest one. The other thing is sometimes lead statuses are not defined correctly, and that comes into play when things are handed off from marketing to sales. And, if you didn’t think through granular enough or sometimes too granular on the lead statuses that’s when leads are dis-positioned.
So, when a sales rep is reaching out and figuring out is this someone that should be talked? Is this someone that came through too early? Maybe the lead scoring accidentally sent it over. You’ll need to have those defined and implemented in a way that they give marketing enough information so they can adjust their channels, but they don’t take up so much time from the sales team that the sales is just picking the first one in the pick list and moving on, and they’re not ending up in the right bucket.
So, often times when we go through definition engagements to get everything mapped out, we find that marketing wants so granular. They want to know the favorite color of these people and that’s why they didn’t close, but sales is like ‘Man, I only have so much time to get this person figured out on the phone and I have got to Jam through all my quota, make my calls, make my talk time’, and so, figuring that out at first is a big, big deal, because I’ve seen sales teams get overloaded, screw up the data because there’s too many options. And I’ve seen, marketing be locked out and they’re totally blind because there’s too few options and the buckets are too broad.
So, lead status or disposition tends to be a big one. And then, everybody seems to get stuck in the lead recycling conversation, ‘When should we send someone back through to marketing? And does that change the metric?’ So, if someone gets all the way down to sales and maybe there an opportunity, but then they don’t close for some reason and we want to send them back through to nurture over to marketing, do they stay in op? Do they move up the funnel? What do they do? How do we define this and where does it go, and then how do we keep that reporting separately so that those are not mucking up their reporting.
So you want total opportunities in the pipeline, but if there is some in there that haven’t closed and they’re not ready and they’re in nurture, how do we account for those and how do we get them out of the reporting so they’re not active pipeline.
JD: Got you. So, let’s just say, we whipped through all this stuff right, we defined it, we set it up, we’re measuring, reporting, and we go back to this beginning question, of framing the problem. We’re talking about scaling our paid campaigns, so how do we take this information now and use it to now scale campaigns?
Scaling paid marketing campaigns
Heather: Yeah. So, one of the biggest things that actually the bulk of my presentation at SMX was about campaign tracking. Inside the CRM there’s something called campaign tracking and most people don’t even realize it’s there, and once you set it up to measure what’s coming through the entire funnel, and all the channels that are involved, all of the content assets that are involved, everything that’s rolled up in a single campaign that’s producing revenue. Then you start to unlock what’s happening post lead acquisition.
So, after the form completion, not just how many of them went to sales and moved to the next level of the funnel, but how many went to sales and moved to the next funnel and came from paid versus organic and consumed these two E-books and this one blog post. So you start to get more granular information. Once you’ve got campaign tracking set up and you’ve got your lead source tracking set up inside Salesforce, correctly so that you’ve got granular enough, but not too granular, then you’ve got all of the pieces to then make optimizations on the top end in the channel from that back end data.
So, we might realize or find out that a lot of our revenue is actually coming from trade shows, and so that might inform the paid marketing team ‘Oh, I didn’t realize that our enterprise business line, that’s all the revenues coming from trade shows’. Maybe we’re going to carve out some of our paid media budget to drive foot traffic to the booths, instead of just driving to demo, because that particular persona, they built more trust in person and so those trade shows are making big difference.
So, it’s really about gathering that information on the back end and then recycling it back through to your PPC vendor or, team, to start implementing. It does change or inform the strategy.
JD: Nice. I like that one. Another question that I had too is, a lot of marketing teams are, I think, still held to lead, right?
JD: And I see this changing left and right for years now, really with this new ABM models, specifically for B2B, that we’re talking about, but, how do you get marketing teams to really start thinking around revenue, or lower pipeline contribution at least?
Marketing teams moving to pipeline contribution
Heather: Sure, yeah this is a hard one. Especially when it comes to folks who are in more of the traditionally top of funnel channels. Folks in social media, especially in organic social, content, even sometimes the SEO guys that are dealing with ‘How do I get traffic and content ranked? How does that even contribute to revenue?’
In my experience, the visibility is really what helps them understand. Once you get everybody aligned to the business metrics and then roll out ‘Okay this is the business metric’, We’re looking at marketing qualified leads. That’s the number of leads that have been bedded by marketing that are ready to go to sales, to see if they can be developed into a qualified lead that sales can really work with.
So, if that’s what we’re looking at, we’re driving there, then that kind of aligns everybody to a point where marketing doesn’t feel like they are responsible for revenue 100% because there’s so much out of their control when they pass it off. But, they feel comfortable in getting into the funnel instead of at the very, very top where they’re just talking about subscribers or leads, or getting into a place where, okay, these are qualified, we can hand these off, we can confidently say that we think these guys ar educated and warm enough, that you guys can have a conversation.
Being able to measure that, and define that, and then get the two teams to agree ‘Okay, sales, yes, that definition of an MQL suits our fancy, that’s what we’re going to accept, we can deal with that’, and marketing says ‘Yeah, okay, we can produce X number of those types of leads for you on a regular basis given the toolkit and the budget that we have’, then everybody gets aligned.
Then on the marketing side, you have to roll up their daily, KPIs that they’re using in their individual channels, and show them how they roll up to those business metrics. So, if revenue plan breaks down to X number of MQLs each month, then PPC needs to know that that breaks down to X number of leads because we now know the conversion rate between lead and MQL.
And so, once you finally unlock all of that data on the back end, people can see the trail, they can see straight through between how my channel and my work directly contributes to revenue. And that’s where people seem to get really excited and really empowered, and you start to have different fights between sales and marketing, and they’re better more progressive fights, and I think a little bit of friction always moves the business forward.
And, the change, it’s amazing to watch this happen, to pointing fingers at each other and now they’re analyzing the data together and you’ll see marketing people go over to the sales floor and sit with some reps they’ve made friends with and say ‘Okay so I see all of these guys are sitting in this latest position of non-responsive, so, why? Why are they not answering the phone? Is it the season? Why do we think they’re not answering the phone?’
Such a more productive conversation between sales and marketing, and that actually starts to move things forward and you find little pockets of opportunity that you can optimize to, and it really opens up new opportunity. It’s awesome.
JD: Yeah, 100% agree with that. We’ve made a huge shift, probably the last nine months we have our team is “shmarketing” we have our slack channel where we’re talking to each other and, we’re really having much more informed and engaged conversations now. Even before this call, a meeting with our sales guys, I was like ‘Oh hey guys, what if we, marketing, automated this with a video message, showing people how to do this and do that? You think that’ll work?’ And they’re like ‘Yes, yes, touchdown’. I don’t have to do it, it’s automated, it’s coming from you so it’s not from us. You’re going to do the work and you’re going to use video. They’re like ‘Yes, thumbs up, you can do that’. I’m like ‘Alright, cool, I’ll take care of it’. It’s a much better conversation.
Heather: That’s awesome, that’s so awesome that you guys are doing that. Because that’s where you evolve to once you’ve got all this back end stuff put together, is now you’re brain storming strategies together instead of siloed and now you’re starting to work in a place that’s more holistic. And that’s wonderful.
JD: Yeah, I think it couldn’t have been done until like, what you said. It really has to come around deeper funnel metrics, I don’t think you’re going to get there is you’re still looking at leads and still only looking at that number. You really have to come down to where sales is, meet them half way, whether that’s contribution of- whatever it is, right, I still say, get all of your tracking in place so you do know what’s working so you can say ‘You know what? Maybe I do need to shift paid budget’. You need to be big enough to say’ I’m willing to give up budget, shift it over here to events, because it’s going to drive more revenue’.
Heather: That’s right, team revenue. Everybody is about driving more revenue. And you’ll find, if you do that, the more revenue you produce, the more customers you produce and at least in a SAAS or a B2B or anything that is customer service focused, in terms of products, those customers are then going to your biggest driver of acquisition later on down the road as you continue to scale and grow.
What is it like 80% of your revenue should be coming from your installed base or is this 20% new acquisitions? And so, you’re really building for the future. But if everybody is on that same page, it just is such a more harmonious and frankly, cool place to work. You get to do all of these cool advanced awesome things, that you couldn’t do before because you weren’t enabled because you didn’t have the data.
You’re probably enabling your sales guys, walking him through ‘so this kid of lead that’s marked with this came through this channel, and they saw this and they read that’, and they’re like ‘Oh cool, now I know what kind of talk track to apply to this conversation when I get on the phone with these guys’. It’s a much more productive conversation for the customer, and then that leads to revenue. Because all of this is omni and it’s all based around customer experience when it really comes down to it.
JD: Yeah, and I mean another way that I also think though it is, it’s a much bigger team now, right? So it’s no longer just marketing, I get the sales team so it’s like ‘Look, our team just doubled/tripled in size, and now look how big and how more powerful we can be?’
And so, if you guys are still not there, I would really encourage you for 2018 and really get out of this stuck, or maybe you’re really looking to scale, take a listen to this podcast obviously. It’s actually funny, this is actually going to be pretty close to what my topic is for Hero Conf.
Heather: Oh Awesome.
JD: …coming up in a couple of weeks. It’s going to be increasing PPC campaign effectiveness through pipeline contribution.
Heather: That’s awesome.
JD: So it’s really measuring the deeper funnel metrics to really improve what you’re currently doing. So, you teed it up perfectly, I didn’t even see it going there, but I’m glad that it did, but, anything else? What else are we missing here? What else- you know, pitfalls?
Common pitfalls to watch out for
Heather: Well, there’s one more thing, that sometimes people in this whole denial thing right, you’ve got to realize you’ve got a problem in order to fix it? Sometimes I’ll run into companies that are measuring leads at the very top, and they’re measuring customers at the very bottom, and they’ve got a conversion rate of lead to customer and they think they’re fine. What they don’t realize is that there are so many additional levels and conversion rates in between those two things that they’re missing out on, and there’s a ton of opportunity that’s likely being left on the table because they can’t see those things. So, that can also be an impediment to folks progressing forward and getting this stuff built, and that’s where- usually if they’re in that kind of mindset I think ‘Okay, well in a year, here’s my card, let me know if you get stuck’, because that’s usually what happens.
So if you’re in that mindset where we’re measuring the top or we’re measuring the bottom, we’ve got a conversion and we’re just rolling, be mindful, you might be coming up on some issues pretty quickly.
JD: So for those listening who might be stuck, and they’re interested in getting a hold of you, what’s the best way to get in touch with you?
Heather: Sure. I’m available all over the internet, Heather Cooan, I’m on twitter, I’m on linked in, I’m all over the place. You can always e-mail firstname.lastname@example.org, and then, we’re doing some blog posts and we’re doing some podcasts and videos and all kinds of stuff trying to help out in terms of providing education and awareness around this stuff, because, as long as this has been going on it’s just not something that everybody is aware of.
So, yeah, so I’m all over the place.
JD: Yeah, and Cooan too, COOAN.
Heather: Yes, Jewish pronunciation, but too many vowels, it trips people up. OOAN.
JD: Yeah, so Cohan Brothers but COOAN, yeah I like it. Any other conferences you got coming up?
Heather: I’m going to be at SLC SEMs digital conference in August, where I will be speaking about how to bust through the ceilings of PPC using marketing automation. So, I’ll actually be talking about how to put together and nurture sequences and apply treatment to leads after they’ve been captured from content, because that seems to be the black box that you mentioned earlier. Marketers are getting all of these leads and they’re killing it, right? But sales can’t do anything with these leads because they’re not ready, so how do we bridge that gap?
So, that’s probably the next one. I think that’s it, I’ve got scheduled right now.
JD: Alright, and to wrap it up and finish, what advice would you give marketers starting to venture into CRM world?
What advice would you give marketers starting to venture into CRM world
Heather: Sure. The best place I learned a lot of this stuff, is I went and I hung out with all of the systems and ops people. So, marketing operations guys, sales enablement guys, they’re my people, they’re my friends. So, if you’re a marketer, it would really behoove you to understand a little bit about how these technologies work, and about the limitations of these technologies.
So, go sit with your MOPs folks and your sales enablement folks and learn a little bit of the tech. Geek out with them, and just kind of learn about what they do, and what they struggle with. They’re in the heart of the ricochet between sales and marketing, and they usually have a really good insight in terms of what’s going on and where the blind spots are. And they actually, usually have really surprising ideas about strategies that you never would have thought about, so, They’re a really, really great resource. That’s where I would start learning if you have access to those guys.
Other really great resources, Demandgen.com has a really good blog. Siriusdecisions has really good blog. Those are probably the two best, and then the MarTech conference is really great if you want to get into a lot of B2B and CRM and marketing automation and all of these tech stacks and things.
JD: Perfect. Well fantastic resources and if you’re going to be a MarTech, let me know, we’ll be there. We’re going to be standing in a booth so please come by, hang out with me because I don’t want to just stand there by myself. So, come by, say hello, and I’ll really appreciate it.
So Heather, thank you so much for coming on, talking to us about how to get unstuck, really getting into that back end data. I really appreciate all your knowledge, skills. Welcome back from the community to you! We really appreciate you coming back in. So, that’s all I’ve got, anything else?
Heather: I don’t think so, thanks so much for having me, this was a blast.
JD: Alright, well, thanks again everyone for listening to the PPC show. That wraps up this episode. We’ll see you guys next week.
Welcome to episode #76 of The PPC Show, where we interview the best and brightest in paid marketing. This week we’re joined by Andrew Breen, the President at Outshine.
In this episode, Andrew discusses what ROI means, how to calculate it, and how to focus your time on the tasks that impact revenue.
Stay tuned as he covers:
- Defining ROI and the tools you need to find it
- How to calculate ROI
- Our job is to let platform do it’s job
- Finding the biggest levers to pull that will drive business results
Listen to the Episode
Who is Andrew Breen
Andrew Breen is the President of Outshine, a consultancy that helps B2B companies generate top-line revenue with advertising, analytics and automation.
From start-ups to billion dollar brands, Andrew has spent over a decade working in digital advertising. He helps clients navigate the complexity of the modern advertising and marketing technology landscape, but still loves to roll up his sleeves and build enterprise AdWords accounts from the ground up.
He has been featured in outlets around the world including B2B Growth podcast, PPC Hero, iPullRank and more. Andrew is an AdWords Certified Professional and a Google All-Stars 2015 & 2016 winner, helping Outshine garner its Google Premier Partner status.
Show Notes and Transcript
JD Prater: Andrew, welcome to the PPC Show.
Andrew Breen: Well, thank you so much for having me. I’m really excited to be here.
JD Prater: Yeah, man. Well, I know we’re gonna be tackling this fantastic issue of what is ROI, but before we do it Andrew Breen from Outshine, why don’t you go ahead and give us a quick overview of who you are and what is Outshine all about.
Andrew Breen: Yeah. Thank you so much. So, I think a lot of your listeners, I started by this kind of being in the trenched day-to-day in search query reports, in ad works, in Facebook really looking for opportunities to increase the ROI for my clients. And my clients when I started out were other ad agencies because I had a lot of agency connections, but not a lot of business connections. So, when I started Outshine most of what we were doing was running campaigns for other clients. I’m sorry, for other agencies. So, that was fascinating in that I got to understand at a broad level how do other agencies run adverts and paid media. How do they think about it? How do they track it? And how does it work and how does it not work?
So, for years I was behind the scenes in the trenches day-to-day optimizing campaigns. And thankfully I was smart enough to bring a business partner on who was smart enough to tell me that was a terrible business model. And he was 100% right. So, in the last three years we’ve gotten really client-facing going after our own clients and really focusing on the B2B stats market. A, really it comes down to them knowing their numbers and that we love clients who know the value that we can provide. And B2B stats, they know all the numbers, the LTB, the cap, all that sort of stuff. So, they really know when we’re driving an eagle download or a demo request, how that’s helping move the needle for their business. And that’s what really resonates with me.
I find it hard to get excited when I’m doing … We don’t do a lot of B2C, but if we’re buying Impressions, for example, it just doesn’t get me excited, but conversions in ROI and revenue, that gets me excited. So, I’m happy we’re talking about this.
JD Prater: Yeah. Me too. For anyone that’s been following AdStage you can see that we really have focused a lot on the close loop reporting and really showing advertisers basically from click to customer in one report. So, I’m with you man. I love B2B stats. I love ROI. Yeah man.
Andrew Breen: Awesome.
JD Prater: With some of your customers you’re talking B2B. What is ROI to some of them? I know before the show we were talking it’s different for some different companies. Let’s jump into it.
What is ROI in B2B SaaS?
Andrew Breen: Yeah, absolutely. So, I think it’s really important when you’re starting out with a client and usually multiple stakeholders who might be an executive sponsor, the person you’re working with day-to-day, and maybe their boss. And ROI unfortunately often means different things to different people because it’s not just one set in stone thing of what does ROI mean in an organization. So, for example, someone you see doing traditional advertising, maybe ROI to them is CTRs, is click through rate because to them that’s what’s important. That’s the metric of advertisement quality, but really it shouldn’t be. It should be as close to revenue as you possibly get in our opinion. Now, of course, you can’t always do that perfectly.
So, sometimes you have to use proxies. I think that e-com is a great industry to be in because you live and die by your numbers there, but often time let’s say you’re doing B2B stats and you have a long sales cycle. It’s six to 12 months. Well, it’s not so easy to tie everything back to a hard revenue number and that’s when you come up with these proxies. So, maybe it’s a form fill load is worth X and a demo request is worth Y. Maybe we can’t nail it perfectly. You should try to get as close to the truth as possible, whatever that truth is in your organization. And I think the mistake that people make is that they set a number and they set a goal and they never revisit it. And really the way that you’re tracking it is, unless you’re in e-com and you’re doing revenue, keep coming back to your model and your assumptions and make sure that they’re as close to the truth as possible. And if not, get them closer to the truth.
JD Prater: Nice. Yeah. Well, we’re gonna definitely dive into source of truth and what that looks like and how you guys are calculating it, but I want to back up before we get into it. And so, we’re talking about different lead generators and understanding that conversion rate. Whenever you are working with your clients are you guys working with them on so we know our conversion rate for this lead form? And now what is that conversion rate to that next step? Or how far down the funnel are you guys working with them?
How Far Do you Track Metrics Down the Funnel?
Andrew Breen: Right. So, a lot of times the customers will have that data, but not know how to get it. So, we help them bubble up the truth, but we’re going as far as we can. So, we’re tying in Salesforce data, market data, Bizible data, visible data and really trying to get as close to actual closed one revenue as possible, but a lot of times it isn’t possible. It’s always challenging despite sometimes what thought leaders will say on LinkedIn. This is really hard stuff. And that’s why we have good job security I think because as long as it’s hard trying to get to the truth there will always be a market for that. So, let’s say for a net new client let’s say they don’t know any of these numbers. Well, what we would do is we say “Okay. How many close one opportunities did you have last year? And how many SQLs did you have from that? And how many MQLs?” So, we kind of reverse engineer it.
“How many lead forms did that take? How many people clicking on your ads did that take? How many,” I hate Impression, but “How many Impressions on ads did that take?” So, we try to look back at the model as far as we can. We document what our assumptions are. And then we create a model. And it’s never a perfect model. I don’t negate. And the really valuable thing of capturing that model and the assumptions is that you get the client on board with “Here’s what I think is gonna happen, but I don’t know.” Instead of trying to come in and say “Oh, I can get you an MQL for $100.” Well, what happens if you don’t? You predicted it and you were wrong, but if you come together and you build a model together and you say “Well, I think my conversion rate will be three percent based on the last six months of data and Google Analytics,” that seems like a more informed approach. So, that’s the approach that we try to take with clients.
JD Prater: Nice. It kind of reminds me of there’s a quote from Wil Reynolds, the president of Seer. And you’d be amazed at how presenting directional data to clients, how happy they would be with that. I think too many time like you were saying in the beginning, like we’re in the trenches and it’s like “Oh, I can’t say it unless I’m 100% sure.” But, it’s like “Hey, directionally this is what’s gonna happen. If we increase impressions this is what’s gonna happen down funnel.” And I think that’s something we all have to think through and it’s one of those nervous things, but directional data I’m with you on man whenever I’m thinking through ROI.
Andrew Breen: Yeah. Just the other day I was putting together a model and I had to come up with what I thought the average cost per click would be across all of our stuff. So, I built a weighted model based on some of it was predictions and the average tool, but sometimes I know the tool just isn’t right or my gut tells me this doesn’t line up with my experience. So, you have to be willing to deviate from what the tools might be telling you, but again, tell the client that, if you say “You know what? I think my gut is telling me based on my experience our cost per click is gonna be eight dollar,” they’re gonna be fine with it, but if you don’t say how you got that number and then you prove to be wrong they’ll start questioning you. So, I think the more that you can be upfront about where this number is coming from and why you feel that way, the more buying you get from the clients.
And the buying you get from the clients in the kickoff of the project is so incredibly valuable because one thing that I’ve really learned over the course of my career is that unfortunately being really good at doing paid media often times doesn’t necessarily matter a lot to the client. It’s about how you communicate, how you set expectations, how you respond, how you report. So, being good at paid media is table stakes for what we do. And where you really excel is in the other stuff.
JD Prater: 100% agree with that one. And I saw that one come really full force with a friend and a previous guest Matt Umbro who’s at Hanapin. And if you ever read any of Matt’s stuff, Matt will always be talking about account management and really the client services side. What makes him such an effective account manager is he is really good with clients, he’s really good at telling it how it is, but also just following it up. So, I couldn’t agree more with that after seeing that in action with Matt.
Andrew Breen: Yeah. And that was a mistake that I made being behind the scenes for so long was that I thought just being good at paid media meant that I would be a great consultant. And as I got in front and dealing with clients and working with clients I realized “Wait. I was the one who was wrong this whole time. It’s important to be good at your job of course, but there’s so much more to it than just search query reports and bit optimization.”
JD Prater: Yeah. That’s for sure. So, whenever you’re … I wanna dive into that. So, let’s talk about different stakeholders and presenting different ROI to different stakeholders. So, whenever you’re going into these meeting how do you position that report or the way that you’re gonna be talking to them? So, maybe a manager versus a director versus VP, CMO kind of level. Do you adjust how you’re gonna go into that meeting?
How Do You Change Reports Based on the Stakeholder
Andrew Breen: Yeah, absolutely. So, I think, again, the closer you can get to the revenue the more buy in you’ll get, especially the further up you go in the corporate ladder. So, ultimately a CRO or a CMO or a CEO, if they’re using Salesforce they only really care about Salesforce numbers. They don’t care about what Google analytics says. That was another blow to our ego of “Oh, but Google analytics.” They don’t really care. It’s like what does Salesforce tell them. And if Salesforce says this and the analytics says this, Salesforce wins every time. So, you better get good at getting your data into Salesforce so you can take credit for your win ’cause otherwise to them you’re not winning. So, yeah. For the C levels it’s really like “Heres what we spent. Here are the leads. Heres the opportunities or the revenue,” or whatever is important to them.
But, as you get further into the weeds, let’s say you’re working with a digital manager or someone who’s more hands-on keyboard, we’ll get way more into the weeds of Brand Search did this. Competitor Search did this generic remarketing. And that serves them. So, we’ll break it down to the level of interest of the client really ’cause another thing that we’ve made a mistake on in the past is over-reporting. Just pages and pages and pages, stuff that nobody cares about or looks at when really all they want to know is “Should I put more money in Facebook or Ad Words? Or did my new e-book work?”
So, I think the mistake sometimes that we make as marketers is we report on things that matter to us and not the client. So, we’ll have often multiple clients that go one pager to the C level and then for the content team it might be 15 pages of really granular GA data, but you have to know the audience and you have to tailor it appropriately. And the further up the ladder you go, the more concern with revenue it becomes.
JD Prater: Yeah, man. Spot on. I love … I’ve done that so many times. I’ve made these mistakes in the agency world of I build up this amazing report just to show that I’ve been effective and that I’m really good at my job and they’re like you’re in this meeting, especially in person, and you get stopped in the middle of a meeting and they’re like “I don’t really care. Can you just tell me this,” but it’s not in your report and you’re just like “Oh, dammit.” Lesson learned. And so, again, you make that mistake once and you learn it for the rest of your life, but whenever you’re bringing it back into ROI I’d love for you to break down the different platforms for us. So, before the show we were really talking about letting the platforms do their work. So, how do you fold in automation into your work so you can really focus on that ROI?
How Do You Fold in Automation into Your Work So You Can Really Focus on that ROI?
Andrew Breen: Yeah. I think this podcast could probably be labeled mistakes Andrews made over his career. And this is really one of them is we’re talking about letting the platforms of their job and letting them excel. And this was a hard learned lesson for me because I was like an old school Ad Words and old school Ad Words guys as we’re talking about, they just segment everything to hell. And it’s just single key word ad groups broken up my mash types. There’s a time and a place where that made sense and that was successful, but we’re not in that era anymore. And I have realized that and I’ve been switching everything over the last 18 months, but if you’re not there yet and you’re still thinking that you can outsmart Google bit algorithms, you can’t and you will lose that battle. So, what I’ve really seen is that our job as digital marketers is allowing the platforms to do their job when it’s the right time and place.
And I’ll give you an example. The dynamic search campaigns can work really well. They can also waste all of your budget. And knowing when they’re effective and when they’re not is part of our job. And you can test and you can learn over time, but don’t be married to your old school approach because that’s what you were doing before. So, Ad Words it really means switching how you’re doing your ad group structures to go a little more broadly. Putting in more ads is a major change that we see in the last two or three months is it used to be AB test ad one versus ad two and now it’s like well, no. Google can pick what ad is more appropriate based on 3,000 different signals. Put a bunch of different offers in there and let it auto-optimize.
And I only learned that reading other people doing it and we have done it and I can say conclusively that is more successful. It’s working a lot better for us, which is fascinating. On Facebook it’s building conversion campaigns, letting go of what your CPC is. Some of my campaigns I’m spending $20 CPCs and Facebook. And had you said that to me five years ago I would have been disgusted with myself, but the caveat is the conversion rate is 40%. So, I don’t really care what my CPC is ’cause I don’t care what my revenue is and it’s working there.
LinkedIn still has some way to go in terms of its automatic optimization, but I think Facebook and AdWords are absolutely there. It’s not like we’re not quite in the 100% AI thing, but we’re moving towards that. And I think our job is to help our clients succeed with that, aim closer to that.
JD Prater: Yeah. A couple of things while on package. 100% agree with especially bit management. I mean, I … In the company that’s doing bit management right now, I just wonder how they’re gonna evolve in two to three years to still be relevant looking at how fast and it’s mostly how fast Facebook and Google are moving with not only their machine learning algorithms, but also with their adoption. Even like you and I, right? 18 months ago we were like “No way, would never do it.” You fast forward just a year and a half and we’re like “Yeah, man. Why spend that time doing that when I could be focused on this part of this lever?” Right? So, 100% agree there.
The second part of that was we had Mark Irvine from Word Stream on and he did a huge analysis on ETA ads and he was basically saying you got to have four to six really in order for Google to spin them, learn from them, know which of those four to six ads it wants to serve to this person. Like you and I might see different ads in the same ad group. It’s because of our buying signal search history and that’s stuff that these third part algorithms just don’t have. So, it’s fascinating. After that PPC show, that was back in December and I’ll link to it in the show notes, I went and made sure every ad group had four to six ads. It was like in editor, add ad, you know? Trying to create new ones.
Andrew Breen: Yeah.
JD Prater: Sorry. No, go ahead.
Andrew Breen: I was gonna say and I think the renaissance to switch over to automated bitting for example, so target CPA or maximized conversion bidding, it comes from a good place in that three years ago a lot of people who were saying “Oh, just do automated bitting,” well, the old school guys were like “Well, you’re just being lazy. You’re not doing your job.” So, I think that people who are still holding on, they feel like they want to, they’re providing a lot of value to their client, but I would actually say like even just run a test and see. If you’re doing better, hey, that’s awesome. And if the time that you’re investing justifies the ROI, all day, but I suspect that is you do an honest tell you’ll find that it doesn’t. And there’s still value that we can provide as consultants and as agencies. You know? Is target CPA bitting right? Is maximized conversion bitting right? It’s still not a clear path to what works best. There’s still a lot of learning to be done. It’s just the learnings we have to as marketers are now different.
JD Prater: Yeah, I agree with that. I think it’s just a shift of where your focus and what your time is doing. I don’t think it’s less time or more time unless you’re just doing everything that we’re talking about, but I would say what you said is spot on. It’s just really focusing on the output rather than always just focusing on the input or got to get that quality score up to 10. “Look man, how much revenue did we get,” you know what I mean? Those CMO things. “Hey, our quality score’s an eight.” “I don’t care.”
Andrew Breen: You know, it’s funny. I don’t ever hear anyone saying this publicly, but I’ll just say it. I find very little correlation between quality score and anything else. Cost per click, conversion rates, none of it. I don’t focus on it. And so, my clients who used to be PPC people will sometimes ask about it and, to your point, it’s like well, does this impact revenue or not? And they’ll say “Well, it leads to a lower cost per click.” And I say “Well, okay. We could try to optimize this by changing a few words in an ad. It’s not gonna have a big impact. Maybe would try adding in a new offer.” There’s different ways you can pull the lever, so to speak, that have much bigger impact than other ones. That’s how we really think about it all. It’s like levers that you can pull. Key word match types are levers. Bitting on different devices are levers, but even like choosing different platforms, they’re all levers that you can pull to get more or less ROI and your job is to figure out what’s the biggest lever I can pull with the least input?
JD Prater: Right, right.
Andrew Breen: Yeah. Sorry. I was talking about quality score and I don’t know. There seems to be a disconnect between quality score and outcomes.
JD Prater: Yeah. It would be nice. Well, one of my favorite inputs of the makeup of quality score is landing page and being agency side looking at your clients you’re like “Hey, man. So, can you update that?” They’re like “Well, I gotta put that into a request. Or I’ve got to go submit this.” It was never really that easy or something that I could control I should say. And that was always kind of frustrating, but it is what it is.
Andrew Breen: Yeah. And especially at large enterprise organization you’re just not gonna win that battle. And you’re not gonna learn when to dig in and what hills to die on. And if you want to change something because you think the quality score might improve, that doesn’t make a great business case.
JD Prater: Nice. Well, let’s take the next couple of minutes here and let’s actually dive into ROI. So, one of my big predictions for 2018 is really gonna be ROI. And I think marketers are gonna be kind of forced to really get into actually contribution to pipeline. Right? Especially B2B stats. It’s specifically what we’re talking about. How do you see that shifting overall? ‘Cause I know that you and I are probably on the same page. We get it, but we know that there’s a lot of marketers that are still two years behind. Right? You’re talking about clients that don’t even know their numbers of all this. Where do you see 2018 headed for B2B stats?
Where Do You See 2018 B2B Headed?
Andrew Breen: Well, I think a lot of people are on the right path and they’re starting to ask the right questions now. The challenge becomes the better questions you ask, the more you realize that your existing data can’t tell you hose answers. So, for example, if you want to understand contribution to pipeline right now, but you don’t have the ability to measure it, well crap. Now you have to start from nothing and start building something up new. So, I think that more people will start asking these questions and fighting the good fight, but also realizing that it’s really challenging. There’s no simple solution to it. There are tools that make it a lot easier. Absolutely. And I think probably one of them, but you can’t just get a tool and do all the work for you. It’s a lot of work and it’s a lot of unknowns. You know?
You need buy in from the top because you’re going to have to invest in some tools to help start pushing you down that path. And it requires a change in mindset because it’s easy to say “Okay, Facebook’s cost per conversion at the front end is five dollars and LinkedIn is $25. Let’s just do Facebook all day.” And 10 years ago I would 100% agree with that. If our Google Analytics form conversion triggers, than that’s good enough, but what we realize now is that, especially in enterprise, not all conversions are equally valuable. So, we need a mechanism to value that. We love ClearBit for that example. We can measure who’s coming from what website and if they’re enterprise or not, that sort of thing, but you have to get some sort of mechanism in place to get you closer to that truth because it’s really hard and Google analytics unfortunately, breaks my heart to say it, it just can’t do it.
And it’s not designed to do it. It’s designed to measure web outcomes. You need something that goes beyond that, especially if you have a sales team.
JD Prater: Yeah. And I think the only way you’re gonna get it for all of you die hard GA fans is GA360 with the full attribution and the Salesforce integration that they just launched, but unless you have all of those things and you’re spending hundreds of thousands of dollars to do all those things you’re probably like the majority of us and you’re doing a lot of heavy lifting. It’s a lot of brain power. It hurts. We have a lot of meetings with the sames team even here at AdStage and you’re line by line just going through them. It’s a very manual, tedious process.
Andrew Breen: Yeah. It’s like time sheets, right? Time sheets such, but they’re really important because they give you really valuable business data that help you make good business decisions. Same thing with Salesforce. It’s like no sales people like doing Salesforce, but again, it gives you some valuable data points to make decisions on marketing attribution, that sort of thing. And even in your example there of GA 360 and optimized and the sales force, I actually don’t think even then it would be as close. I think that … Well, I won’t say much, but it’s still very challenging.
JD Prater: Yeah. For sure. It’s a slug. Back what you were saying with sales people, sales people hate Salesforce, but you know what? You have to use Salesforce. It’s just like what you do. And it’s so hard to get you out of it ’cause it’s so sticky and it’s so ingrained into all your work flows that it’s just difficult to get out of. So, kudos to you Salesforce for-
Andrew Breen: -owning the ecosphere.
JD Prater: For sure. But, there are some other good ones. Hubspots out there. It’s up and coming. Definitely the SMB world, that’s a great one. And I know ZOHO is getting better. So, there are some other CRMs who are worth taking a look at. And I know there are a few others trying to disrupt. So, make sure you go take a look at them before you sign that piece of paper for Salesforce.
Andrew Breen: Yeah, absolutely. But, on the flip side, on the enterprise side no ones every lost a job for recommending Salesforce. They’re the IBM of that space for sure.
JD Prater: Yeah. Good point. Good point. Cool man. Yeah. Well, let’s put a bow on this. What are some takeaways here for ROI? So, leave us with a few good nuggets here.
Key Takeaways on Tracking ROI
Andrew Breen: Yeah, absolutely. So, if you have a CRM in place try to understand how you get the right data into it to help measuring your marketing inputs. It could be as simple as a few big holding buckets that allow you to judge the effectiveness of the overall things that you’re doing. But, if you’re more sophisticated you can start breaking it down by platform and channel and ultimately ad grouping key word, but you don’t have to get there on day one. Have a road map of how you’re gonna get there and work towards it and set the expectation from the outset that is going to be a long slog. It doesn’t happen overnight. And it takes a lot of people’s buying and a lot of people’s effort. But, at the very simple thing is just at the start build a simple model of in the last six months here are the sales, the opportunities, the SQLs, MQLs.
And just work it backwards and then keep working that model over time as you get more inputs and more data and try to make it an engine that you can predict in the future and your predictions get better and better and better. It’ll get more and more and more buy in. Oh, and one more thing. Don’t think about platform data. It’s important to you, but you don’t have tot alk to your bosses about it. Nobody cares about cost per click except us or CTR or any of that. So, help them focus on the right thing by reporting on the right things or as close to the right things as you can get currently.
JD Prater: Nice man. All really good points. So, again, we’re talking ROI here with Andrew Breen. He’s at Outshine.com. Go check out the website. Go check him out. Where can the good people find you online?
Andrew Breen: I spend a lot of time on LinkedIn. I got to give credit to them for building a great platform. So, I’m just Andrew Breen, Outshine, but you should be able to find me with a search.
JD Prater: Nice. And I’ll be sure to include a link here in the show notes so you guys can connect with you. So, if you get a bunch of weird connection requests I apologize from a bunch of PPCs.
Andrew Breen: I look forward to it. Please. I love talking shop.
JD Prater: Awesome. Awesome. Well, thanks again man for coming on, really getting into the ROI weeds, especially with B2B stats. It’s such a relevant topic for 2018 and I think you tackled it pretty well man.
Andrew Breen: Well, thank you so much. I really appreciate the time.
JD Prater: Alright. Alright everyone. Thanks again for tuning in to the PPC Show here talking about ROI. We’ll see you all next week. Bye.
70% of marketers expect an increase in demand generation budgets in 2018, according to the Demand Generation Survey.
At the same time, overall marketing budgets are shrinking (as per Gartner’s 2017-2018 CMO Spend Survey). Last year, marketing budgets claimed 11.3% of overall company revenue, down from 12.2% compared to 2016. So why would B2B demand generation marketers grow their spend while the rest of us are bracing for a cut? And how are marketers planning to allocate their marketing budget to increase ROI?
Let’s look at the key marketing trends that may offer some insight into this curious phenomenon. The data shows that while the budgets are going up to support more personalized campaigns and higher spend on digital, B2B marketers will be held to higher standards of measurement.
tl;dr: more money will come with greater accountability.
1. Demand Generation Team is Becoming the New Revenue Team
This year, more marketers see revenue as their key metric. The number of marketers who said they have specific revenue-based quota increased from 23% in 2017 to 28% in 2018.
91% of demand generation marketers surveyed for the report say that they track their revenue contribution to the company. And for a good reason: that contribution is growing! When asked what percentage of revenue is attributed to marketing-sourced leads, 28% of marketers said between 26% and 50%.
As you can see, the demand generation budget increase comes with weighty expectations for delivering on deeper-funnel metrics and conversion goals such as revenue.
Less than 2% of marketers are measured on web traffic, while most only eye the metrics that directly contribute to the bottom line — such as SALs (sales accepted leads), a metric that counts the number of potential customers whom both marketing and sales teams consider “a fit” for their business, based on a variety of criteria such as budget, need, and the prospects’ timeline for making the investment.
Why you should care
How you report on marketing spend to the higher-ups will likely change. Because CMOs today are under more scrutiny for delivering ROI (or so says Gartner), paid marketing teams will be tasked with measuring the full-funnel impact of their campaigns.
2. Focus on Higher-Quality Leads Will Require More Expensive Marketing Tactics
73% of marketers consider lead quality their priority for 2018. Targeting high-value customers in 2018 will mean that marketers may have to rely on more expensive marketing techniques.
Take events, for example. 68% of marketers use events to generate qualified leads for the top of the funnel, according to the report. Trade shows, seminars, and summits take up a large portion of B2B marketing budgets. Even virtual events and webinars require a significant investment if you consider technology, sponsored speakers, and promotion.
Content, even though still “ROI-amazing” according to Brian Balfour of the ProfitWell Report, is also getting more expensive to produce as demand for good content marketers exceeds supply, Digiday reported.
Why you should care
Whether or not you’re considering an ABM strategy, you’ll likely shift your marketing budget around to test new channels. Be prepared to set up your tracking to account for multiple marketing touches, online and off. Your marketing dashboard should reflect the dollars in/dollars out for each channel, whether it’s a Facebook campaign or a steak dinner.
3. Dollars are Shifting to Digital
8 out of 10 of the most effective demand generation channels are digital, and the top 3 of them are, again, all digital: email, search, and website.
Digital ad spending reached $209 billion worldwide and is expected to grow by 13 percent this year.
As a relatively new marketing function, demand gen encompasses many marketing activities, with lead generation perhaps being key. B2B prospects are online, empowered with all the information that was earlier unavailable or hidden under the “contact sales” form-fills. So naturally, demand gen marketers will be investing more money to have relevant information ready and accessible at every stage of the buyer’s journey — and tracking the impact across different channels to close the loop between ad spend and revenue.
Why you should care
As your digital spend grows, you will need to consolidate all your paid marketing data in a single dashboard with easy access to granular metrics. This is important not only to have a central view for cross-network PPC reporting, but also to spot trends and find opportunities to improve.
So, while the overall marketing budget growth is stalling, businesses will keep spending more on activities that generate incremental revenue. If the trend for unifying sales and marketing under a single revenue metric is to continue, demand gen teams are poised to grab the largest slice of the marketing budget pie in the years to come.
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Despite glum predictions, US retailers saw steady growth in 2017 and finished with a record-breaking $598 billion holiday season, proving once and for all that retail is not dead. Even e-Commerce colossus Amazon is making concerted moves into retail.
In spite of its growth, tracking and proving retail marketing ROI can pose a challenge for marketers. This piece will explain how to set the right goals, gather the pertinent information, and provide your clients with detailed and practical insights that prove your retail marketing ROI.
Before you get started, keep in mind that you can’t prove ROI without first setting a performance baseline. This can be tricky in retail, so make sure that you ask your client whether or not they have records of in-store activity, such as foot traffic, sales (both number and volume) and promotions that you can combine with the information from the online side of their business.
1. Set Goals Linked to Business Outcomes
Retail businesses are less concerned with how many people visit their stores than they are with how much money those people leave with them. That is why it’s crucial to set correlational goals that illustrate how consumer behavior relates to revenue and profit.
Here are some examples of business-outcome-based goals:
- Decreased customer acquisition cost: Are you able to bring more customers through the doors using the same amount of marketing dollars, or maintain the current level while lowering marketing costs? Can your campaigns attract a new customer base?
- Increased sales volume: Are you able to persuade customers to take home more items per visit? Can you nudge them into purchasing the higher value item?
- Increased sales amounts: Are you able to increase the number of people who come through the doors and make a purchase?
Since retail can be a highly seasonal business, you’ll want to account for any potential fluctuations in future business in both your planning and any reporting that you do. According to the most recent Gallup Polls, consumer spending tends to slow in January, August, and September and peak in December, April, and July.
If your client’s merchandise is impacted by seasonal shopping, make sure that you account for that in your goals to avoid underperforming by default. If the retailer has limited physical locations, you may also want to keep tabs on current and future construction, events and openings happening nearby that could impact the numbers.
Depending on the size or age of your retailer, they may not have a comprehensive picture of in-store information for you to work with, making it difficult to set your baseline and prove your ROI. If in-store behavior is one of your client’s top priorities, you may want to throw in the towel, quit your job and go home and drink cocoa.
I don’t blame you. But you could also invest some time in the beginning estimating current levels of traffic and consumer behaviors. Tools such as ShopperTrak or even Google Maps track daily visits to locations, which you can then combine with purchase information and past promotions to get a general picture.
2. Design Smart KPIs
Once you’ve determined your business outcome-based goals, you’ll want to design KPIs that align with those goals.
You’ll find many possible options for tracking in our extensive list of e-commerce KPIs, but the ones that are absolutely critical are customer acquisition cost (CAC), average order value, sales conversion rate, and revenue generated from marketing campaigns (incremental revenue).
Physical locations are an expensive investment, so be sure to track the two channels separately (and to track multiple locations separately, if they have under 10 locations). This will help your client decide whether or not to keep physical locations open, and also allows you to show off your ability to drive growth in all channels.
Retail can be a unique beast in that it requires you to combine hard-to-track in-store intel with online indicators. Before you commit to performance metrics that involve the former, you’ll want to research how your retailer is tracking that information and what will be available to you.
3. Align your Campaigns with your Goals and KPIs
A retailer’s physical foot traffic may be hard to track, but fortunately, most shoppers leave a clean digital footprint that you can use to prove your marketing ROI. Design campaigns that target both online shoppers and those who prefer a more traditional experience.
Just like with online-only advertising, you can use codes, promotions and customized printed promotions that are redeemable online to give you deeper insight into what is driving customers through the doors. This is as simple as a link or QR code the customer scans in order to retrieve a voucher, and if your retailer’s clientele is less digitally oriented, it could be displayed throughout the store or conducted via a text-based sign-up campaign.
4. Measure Retail ROI With Closed-Loop Reporting
Once you’ve planned your campaigns, use AdStage’s software to schedule a number of ads targeted towards your ideal audiences, and measure engagement and retail marketing impact using closed-loop reporting, combining paid marketing campaigns data with your conversion data, online and off.
If you can drive revenue and growth above the cost of advertising, why would you want to cap your marketing budget?
The truth is, that’s not how most marketing organizations function. The status-quo approach focuses on clicks and sign-ups, not revenue, and this model of thinking is clearly broken. Measuring incremental revenue helps marketers understand and prove the real impact of advertising – calculated in dollars, not clicks.
Here’s a hypothetical example:
A subscription service startup expects to make $100,000 off their services in a typical month without advertising. In March, while running a Facebook campaign that costs $10,000, the startup makes $150,000 off their subscriptions. To calculate incremental revenue and measure the effectiveness of their advertising, the paid marketing team runs the following calculation:
$150,000 – $100,000 = $50,000
The incremental revenue generated by the paid marketing team equals $50,000.
Or, in other words, those Facebook ads just earned their business an extra 50k.
What’s incremental revenue in paid marketing?
Incremental revenue is revenue that wouldn’t have happened without a specific paid marketing campaign, all other things being equal. This metric is radically different from other PPC metrics — and way more impactful.
Incrementality measurement helps marketers understand the effectiveness of paid campaigns by comparing differences in outcomes between an audience that saw the ad and a comparable audience that didn’t. This metric shows the real value driven by paid marketing, which ultimately helps the paid marketer decide on where to invest ad dollars — and justify a budget increase if they need more money to spend.
The CEO of a company is naturally interested how much revenue the company produces in a given time. The CMO of a company should be equally interested in the following question:
How much money did the company make thanks to paid marketing?
You can answer this question with incrementality measurement.
Calculate incremental revenue to prove the impact of paid marketing
Another way to show how incrementality measurement works is to compare two hypothetical digital campaigns.
Say a company is running two Facebook marketing campaigns, each of which requires $10,000 investment:
The sales for campaign A are $100,000.
The sales for campaign B are $75,000.
Which campaign delivered the best return on ad spend?
Facebook campaign A:
With a marketing spend of $5,000, actual sales at $100,000, and expected sales at $100,000 (without marketing, based on historical data from a similar time period or based on data from control group not exposed to advertising messaging), that brings the incremental ROI of paid marketing campaign A to….$0.
Facebook campaign B:
With a marketing spend of $5,000, actual sales at $75,000, and expected sales at $0 (without marketing, based on historical data from a similar time period or based on data from control group not exposed to advertising messaging), that brings us to $75,000 in incremental revenue (thanks to the marketing campaign).
Even though the sales figures look better for campaign A, if you compare to control group or historical data, campaign B is clearly the winner from a paid marketing perspective.
How to measure incremental revenue
You can calculate incremental revenue/sales as Actual Sales (thanks to marketing) – Actual/Expected Sales (without marketing). (If you can attribute the difference to your marketing campaign).
So, to calculate IR, you’ll need to create a baseline metric to represent the average results based on historical trends (how much you sell in a given time, no ads). Or, if you can isolate the variable you’ll be measuring (your ad campaign) by having your target audience very similar to your control group (comparing apples-to-apples), you can measure incrementality in an experiment.
Prove the impact of paid marketing with closed-loop reporting
Measuring incremental revenue and other meaningful business metrics in paid marketing is easy with closed-loop reporting.
You can track the incremental revenue from each ad network, campaign, ad set, or ad when you consolidate all your cross-network data in one place and connect it to conversion data that lives in your CRM, spreadsheets, or any other platform or tool.
When you bring in your offline conversions from different platforms and tools and connect those with your cross-network campaign data, you can understand the incremental revenue for each (that is, if you set your baseline revenue or compare it to a control group in an experiment).
Optimize your campaigns for incremental revenue
Once you close the loop between campaigns and revenue across different networks, you can see the full picture and make improvements. With a clear view of how each ad campaign translates into revenue, not just clicks, you can set up automated rules to pause or scale campaigns up and down based on custom metrics (such as incremental revenue).
The importance of incremental revenue in paid marketing
As we’ve seen, incremental revenue is a powerful metric for paid marketers to track how much revenue can be attributed to a specific marketing campaign. Incrementality measurement shows the real effectiveness of advertising by comparing how much money a business makes with marketing vs. without marketing, all other variables being equal.
Incremental revenue not only proves the value driven by paid marketing, but also helps to improve performance by tracking more meaningful PPC metrics. As a result, marketers will invest in the most effective channels — and justify a higher spend if necessary.
With calculated metrics (currently in beta), you can also set up automation to tweak your campaign settings based on custom metrics in near real-time, optimizing for business results, not clicks.
As paid marketers are increasingly held accountable to revenue, closed-loop reporting solutions will help measure, optimize, and report on deeper-funnel metrics. What’s more, measuring incremental revenue will make it easy to report to the CMO or the board because now you know how to answer the critical question: “How much money are we making thanks to paid marketing?”
If you’re running a business in 2018, you certainly know that your success largely depends on your ability to acquire high-value customers at a low cost. If your ability to monetize new customers falls below the cost of getting clicks and sign-ups, your business is in trouble. Closed-loop reporting helps marketers measure and track sales/marketing efficiency to better understand this ratio and improve business performance.
What is Closed-Loop Reporting?
Closed-loop reporting is the process of organizing and presenting data in order to monitor and understand how the investment in paid marketing brings business growth. Closed-loop reporting helps marketers access and link disparate data sources, including multiple ad networks and conversion data, in order to extract meaningful insights and take action at scale.
The closed-loop reporting approach challenges the traditional methods of measuring paid marketing effectiveness with traffic or lead volume, raising the following business questions about deeper-funnel metrics:
- What kind of ROI are we getting on X ad network/campaign?
- Did we get any new customers/pipeline from it?
- How do you know that worked?
This approach supports radical transparency about the return on advertising spend, meaning everyone knows how ad dollars translate into actual business growth; and meaningful KPIs like revenue or customer lifetime value replace vanity metrics.
Marketers that have adopted closed-loop reporting can more easily figure out the best-performing ad, network, and channel and justify the budget increase based on measurable results that improve the bottom line.
Closed-loop reporting consists of three major components, displayed on the graphic below:
1. Ad Campaigns
Reporting starts with the ad campaigns you’re running on Facebook, Google AdWords, LinkedIn, Bing, Yahoo Gemini, or any other ad network. Consolidating all your cross-network data in one place is the first step to closing the loop in paid marketing attribution.
2. Conversion Data
Conversion data lives in different places, such as spreadsheets, CRM, and other marketing tools. Paid marketers need conversion data to understand if campaigns are bringing actual revenue, not just clicks. Siloed conversion data creates a fuzzy vision of paid marketing performance. Just like driving in the dark with misaligned headlights can be a traffic hazard, optimizing with campaign-level-only data may lead to wasted spend.
3. Return on Investment (ROI)
The link between ad campaigns and conversion data is key to closed-loop reporting and analytics. Once you attribute your conversion data to the original campaign, you can scale campaigns that bring more return on investment, pause the ones that don’t perform well, and easily prove the impact of your paid marketing efforts.
7 Benefits of Closed-Loop Reporting
Today, CMOs and agency clients expect paid marketers to report on how each ad dollar translates into value. In response to this trend, data-minded marketers are adopting the closed-loop reporting approach to show measurable impact. Here’re 7 reasons why closed-loop reporting is the logical step for matured PPC teams:
- It helps teams understand the best-performing networks and campaigns.
Before you dive into optimizations, it helps to understand which advertising networks and campaigns are the most cost-effective so you can better focus your time and budget.
- It helps track customer journey metrics from the initial touch to the purchase.
Using closed-loop reporting, marketers can track everything from clicks to purchase or lead quality, a metric with the most obvious tie to revenue for B2B marketers. A customer journey for B2B marketers includes many touch points, including web actions, emails, events, calls, and coffee meetings (or steak dinners). Closed-loop reporting helps understand the impact of paid marketing on metrics from opportunities to closed-won revenue.
- It enables the bird’s-eye view of the impact of marketing spend, potentially lowering cost per acquisition.
Reports are helpful if you actually understand what the data is telling you. Closed-loop reporting means all your paid marketing data is organized in a logical, easy-to-read way, with the level of granularity as detailed or high-level as you like, so you can easier optimize for cost per customer acquisition across all channels.
- It helps marketers to allocate marketing budget in the most effective way.
How you allocate your marketing budget has a direct impact on the company’s growth trajectory. Clarity about the ROI of each channel takes the guesswork out of planning your paid marketing spend.
- PPC teams will gain more credibility and trust within the company by reporting on the most meaningful metrics.
The closed-loop reporting approach builds the culture of transparency across departments. With the data on how each marketing campaign generates leads and sales in relation to the cost of the campaign, paid marketers can share the results of their work with anyone in the organization, PPCer or not.
- It uncovers trends and data to set better goals.
Easy access to granular paid marketing data helps uncover trends and opportunities for optimizations, as well as help set better goals based on past performance.
- It simplifies access to insights needed to maximize the return on investment and justify ad spend to senior management and clients.
Closed-loop reporting helps paid marketers create PPC reports for senior-level marketing executives, CMOs, and investors who focus on the bigger picture. When you can simply explain the dollars in/dollars out ratio of your campaigns, it’s easier to ask for a budget increase.
Measure the Impact of Each Advertising Dollar
Closed-loop reporting gives paid marketers the ability to quickly visualize, analyze, report, and optimize their ad performance. With this approach, marketers don’t stop at counting clicks and leads — they can measure and optimize performance based on the full-funnel impact of each campaign, across all networks.
The closed-loop reporting approach begins with consolidating all ad network data in one place. Then, marketers can bring in offline conversions from all their tools and platforms, such as CRM data or spreadsheets. By connecting campaigns with conversion data, marketers can understand the ROI of each ad campaign and easily calculate the revenue broken down by each lead source. That means, they can track dollars in and dollars out for each paid search and paid social channel, essentially closing the loop between campaigns and business growth.