Your startup is lean. You don’t have access to extra funds to waste on unsuccessful marketing experiments. The thing is, startups have to experiment. You can’t know what works until you try different marketing campaigns and find out.
As a whole, startups are inexperienced by nature. That’s true whether your startup’s team consists of multiple departments or if it’s just you and a co-founder. Either way, somebody is going to have to try a few marketing campaigns and figure out which campaigns work.
Somebody is going to have to find the answers to your marketing questions, such as:
- Which keywords should you be targeting in Google Ads?
- Which website pages are converting?
- Are you getting qualified leads from your campaigns, are they junk leads that waste your time?
It’s okay to spend money on unsuccessful campaigns once, but doing so repeatedly will drain on your marketing budget. The sooner you move your marketing resources to campaigns that have proven to be successful, the sooner you can curb wasteful spending.
Start-up marketers can’t afford to make marketing decisions based on gut feelings. Your marketing person has to have the digital skills to make decisions based on hard data; only then will you know for certain which marketing worked in the past and have actionable insights about which marketing will work in the future.
Here are three steps you can take to ensure you’re making marketing budget decisions based on strong data.
Tip 1: Find a way to experiment effectively
Startups must experiment; the very idea of a start-up business is an experimentation. Experimentation is only effective, however, if you can accurately measure the results of each experiment.
There are two things you must do to experiment effectively:
- Define what it means for a campaign to be successful.
- Quickly identify the campaigns that aren’t giving you return on investment.
You can address these two steps by focusing on quotable or qualified leads.
Just because a marketing campaign drives conversions doesn’t mean the campaign is working.
A successful campaign drives conversions from qualified leads that have the potential for high sales value.
That’s a more in-depth definition of success than simply “leads”, but using this definition will help your startup identify the marketing campaigns that help your bottom line.
Tip 2: Don’t rely on the “hollow” metrics
Let’s talk about the metrics you should use to determine which campaigns work and allocate marketing spend.
It’s important to realize that some metrics are hollow; they seem like they’re signalling success but don’t actually impact your company’s revenue.
Hollow metrics can be misleading, and making decisions based on hollow metrics is not a recipe for measuring marketing effectiveness.
“Conversions” is an example of a hollow metric.
Most companies can easily track conversions that come in the form of live chats and form-fills, but if you’re not also tracking phone call conversions, your reports won’t show every conversion that actually occurred.
You might end up cancelling a campaign that generated a lot of phone call conversions simply because you couldn’t capture those conversions.
Even if you can track every type of conversion, the metric might still be hollow. That’s because not all conversions result in qualified leads. Some people may call your company with a sales pitch or to get in touch with your support team.
Those aren’t real leads.
You might see that your marketing campaign is generating lots of conversions, but you have to disqualify the bad leads before you can be certain about which campaigns are working.
Once you’ve disqualified the bad leads, you can focus on the sales value potential for your best leads. That brings us to our next tip.
Tip 3: Use lead value to determine marketing ROI
The third step is to assign potential value to the qualified leads. This is the best way to measure marketing ROI and accurately allocate your marketing budget.
Most salespeople are accustomed to assigning sales value to leads, but it’s important for marketers to be involved too.
That way, your marketing team — or yourself, if you’re in the early stages of your startup — can figure out how much revenue the company is potentially earning from each marketing campaign.
When you compare the value of the lead to the dollars spent on the marketing campaign responsible for the lead, you’ll have a good idea of whether or not your marketing is delivering more dollars than you’re putting into it.
The sooner you identify which marketing channels deliver your most valuable leads, the sooner you can reinvest in those campaigns and stop wasting your budget on campaigns that clog your sales pipeline with unqualified leads.
Let’s do a quick recap:
You have to be able to track every type of conversion, including form-fills, chats and phone calls.
You must capture enough information about every lead so that you can disqualify the bad leads. That means knowing who the lead is, where they came from, what they wanted, and what kind of conversion action they took.
If you have all that info, you can move on to the third step of accurately allocating marketing spend: incorporating sales value for your leads and using it to determine the exact ROI of each marketing campaign.
Follow these three bits of advice to ensure your marketing budget is spent on successful campaigns. Managing a marketing budget for a startup is no easy task, but relying on strong lead tracking data will at least allow you to rest easy knowing you’re making the most informed decisions possible.
Author Bio: Mac Mischke, Content Marketer at WhatConverts
Mac is a writer and content marketer at WhatConverts, where he helps marketers understand the importance of data-driven decision making. You can reach him at firstname.lastname@example.org