I started my marketing career in 2008, just as the latest recession was rearing its ugly head. As you undoubtedly already know, priorities in the worlds of lead generation and sales were very different then. Thousands of companies were coming to the harrowing realization that referrals and business development leads were drying up as media-driven panic caused the entire business world to table all planned investments indefinitely.
Faced with a sudden revenue crisis, businesses everywhere were accepting jobs from nearly everyone that was willing to pay. Profitability took a back seat to gross revenue as business owners desperately tried to keep the doors open with as few layoffs as possible. Strategic goals shifted from growth to “weathering the storm.” The list of long-term effects of this period is lengthy, and businesses picked up new habits both good and bad. One of the bad habits that must be shed is the focus on revenue over profitability.
Businesses that survived the recession did so by becoming leaner. Under the circumstances, that was mostly through cutting unnecessary overhead cost. But wasted money is wasted money; it counts exactly the same whether it’s wasted on an unneeded resource or an unprofitable project. This has major implications for marketers because it calls for a change in both messaging and channels to sacrifice quantity for increased quality. This is something that will absolutely (1) pay off in the long run and (2) be a pain in the short term. If you’re a marketer and your boss hasn’t already put pressure on you to do this, get ahead of the game. Here’s how to start:
- Determine if there is a problem in the first place. If your company isn’t measuring profitability on a client-by-client basis, it should be! Be the one to get it started. Get the finance department to help you figure out the best way to track project overages and tie them to revenue generated. Tie success and failures to the marketing channel that produced the leads. Now, you have baselines, and it is from baselines that progress can be measured.
- Talk to your manager about your findings. You may have discovered a serious issue, or you may have discovered that things are going swimmingly. Either way, you’ll want to talk about benchmarking future investments based on your current profitability, and it makes sense to let your supervisor decide on how to handle the information and potential change of focus.
- Rethink your messaging. This does not mean you need to rethink your brand. In many cases, this is simply shifting your target to a narrower part of the sales funnel. How many of those whitepaper downloads actually turn into work? When they do, are they profitable projects? Changing your call to action to require more commitment will likely lose a lot of leads, but it may be the perfect next step for the prospects you want the most. Getting better qualified leads to sales faster means more efficient use of everyone’s time.
- Rethink your channels. One of my clients was in love with SEO because its leads turned into sales appointments at a much higher rate than its telemarketing leads. However, a closer look revealed that those appointments from SEO turned into sales at a much lower rate than those from telemarketing. A little investigation revealed that the telemarketing appointments were, on average, more qualified than the SEO appointments. This client didn’t throw out SEO, but they did test new copy to try to be clearer about the types of jobs they were willing to perform.
No one blames you for prioritizing revenue when the recession hit, but now it’s time to get back to profitability. Just make sure you set the expectations correctly within your organization, or a movement to make more money may just look like fewer new leads to your boss.
Simple Machines Marketing