Optimising your marketing mix for success
With limited budgets, B2B marketers struggle to optimise the marketing mix for driving purchase consideration and ultimately revenue. One thing is for sure – old methods of investing a large percentage of their budget in industry tradeshows/events, advertising and public relations does not work. In this post, I will share with you a proven seven point framework.
- Align marketing mix with corporate strategy: The alignment is the key foundation for any B2B company to ensure execution of the marketing mix will meet the overall strategic objectives of the company. For example, if increasing growth rates in cloud segment is a key part software company’s strategy, then marketing mix must reflect it.
- Invest disproportionately in growth segments: Most large B2B companies find that 80 per cent of their revenue comes from a proven few products, where they have a significant mindshare. However, they allocate marketing spend by revenue and continue to invest in those proven segments. Incremental marketing investments in well-penetrated segments yield diminishing returns. Spend should instead be biased toward future growth, and not past performance. For example, at SAP, our marketing priorities are aligned each year with our growth ambitions, which means investing in new or even future products.
- Focus on building a lasting brand: In fine-tuning the mix, it is tempting to primarily allocate money to short-term initiatives that drive next quarter’s sales pipeline. However, they don’t influence customer’s long term bias towards the brand, which come from activities that promote thought leadership. Businesses need to ensure their mix models are capable of driving marketing effectiveness over both time horizons.
- Design your mix based on your buyer behavior: Where do your prospective customers go for information? Do they attend webinars? Are they likely to find information through search? How much influence do trade publications have? For example, if you are selling an IT management tool, then webinars, key industry events, trade journals and search must be a part of your marketing mix. If your product category is still evolving, thought leadership and executive education must be in your marketing mix.
- Keep the customer journey front and centre: Investment in trade shows and content syndication bring new sales leads. Alternatively, webinars and customer reference programmes advance the leads forward once the prospect is engaged. It is important to build a marketing mix that brings lots of relevant leads at the top of the marketing funnel and then moves them through the funnel quickly, so the sales organisation gets a healthy mix of qualified opportunities to close.
- Ensure economics of marketing and the business are aligned: Start with the economics of the business before crafting the right marketing mix. For example, if your product is priced at $10 per month per user and typical customer is 20 users and your conversion rates are: a) 35 per cent from opportunity to deal b) 10 per cent from qualified lead to opportunity c) 10 per cent from raw lead to qualified lead; then to break even in year one, the cost of raw lead must be less than $8. If the company wants to do expensive keyword buys, they need to balance with lower cost programmes that yield an aggregate cost per lead of $8 but still meets lead quality (conversion rates) and deal size metrics.
- Put the analytical approach at the heart of the organsation: Marketing analytics should be a core part of optimising the marketing mix. It is also important to identify the right metrics and measure success of the program against them. When used well, analytics bring agility into marketing processes by allowing you to compare results with your plans, so you can make rapid adjustments to the mix and budget on an ongoing basis.
Ultimately, driving marketing mix effectiveness comes down to capabilities, processes, and talent. The seven points above should help you improve your processes and add new organisational capabilities to help you optimise your promotional marketing mix.