Next-Level Marketing Annual Planning

In Part I of our series, we discussed Pre-Sales and Sales and what levers to pull to increase efficiency beyond hiring more people. In this part, we’ll explore marketing planning and typical pitfalls to avoid.  

Usually, everyone wants to know whether marketing brings in enough quality leads to support the sales targets. To answer this question, sales, marketing, and customer success must work together. I’m including CS here because even though not every customer is an advocate, with marketing support and customer success involvement, more customers become advocates (“advocates” are defined as referenceable customers). Following these best practices will improve marketing efforts’ efficiency and ease the planning and budgeting processes.

• Staff up for the number of leads needed and be ready to pivot
  • Secure monthly program budgets
• Ensure messaging continuity between pre-sales, sales, marketing, and customer success
• Differentiate between Channel Diagnostics vs. Channel Forecast
• Secure a budget for large investments needed

Based on Part 1, you’ll be able to determine how many SDRs and Account Executives you need and have a good idea of the number of the required leads, which will be derived from the conversion rates, sales cycle, and average deal size. With these calculations, it is easy to start moving up from the bottom of the funnel to the top using simple math. 

 

Mapping Lead Requirements to Channels 

Once you have the number of leads needed, the marketing director sits down to figure out which channel will produce that number of leads, using rough percentages as a starting point to allocate budget. Typically, you’ll want a channel manager dedicated as an FTE for any channel producing 50% or more of the leads you expect, depending on your specific business.

The goal here, though, is to map the lead requirements to channels and allow the channel managers to build detailed monthly program plans to hit those targets. Those plans should include monthly program budgets as well. Whatever the least number of people (be reasonable) required to execute these programs is the number of marketing people you should budget to hire. To optimize program costs while achieving the desired number of leads, budget for the appropriate combination of channels each month.

Be Ready to Pivot

Discovering that a channel you believed would be wildly successful turns out to be disappointing requires the ability to pivot: adapt and change direction. Having hiring managers with experience in diverse channels is crucial to ensuring a smooth transition and avoiding skill set gaps. To bridge such gaps, you have two options: provide training or make new hires. However, it’s unrealistic to expect someone with zero experience in social channels to generate a substantial number of leads if their expertise lies primarily in areas like paid digital ads.

 

Ensure Cohesive and Consistent Communication with Prospects 

When marketing starts interacting with prospects, they are usually the first contact the prospect has, unless it is cold outreach. This is a typical process and there isn’t anything wrong with it as long as the marketing team/systems know to stop interacting with the prospect when a pre-sales person puts them into an automated cadence or sequence. This is a common mistake and it ends up with prospects getting emails from your marketing system and the SDRs at the same time. It should be orchestrated in a proper way — for example then the lead doesn’t respond to an SDR and after a certain time they are removed from the prospecting system and moved back into a nurture stream that is then managed by the marketing automation system.  

To ensure consistent and cohesive communication with customers, it is important to consider the use cases of prospecting automation software for customer success. In some cases, marketing activities like sending newsletters and product updates may not be aligned with customer success efforts. This can lead to customers receiving multiple emails within a short span of time, lacking a sense of continuity. To address this, it is crucial to map out the entire journey from prospect to customer and eventually to advocate. By doing so, you can identify the systems involved in communicating with the end user and orchestrate the messaging at each stage. This ensures that the communication remains consistent and aligned throughout the customer’s experience.

 

Channel Diagnostics vs. Channel Forecasting

When diagnosing a channel, you want to know the conversion rate for that channel and any sub-channels (an example would be a social channel, but a sub-channel would be Facebook vs. Instagram). You also want to know the conversion rate of each person responsible for working and closing those leads. Calculating the channel and sub-channels is pretty straightforward if you have an attribution system in place. When it comes to calculating conversions for people, it’s more useful to ignore channels in the initial analysis and find out what leads each account representative is closing the most of and then move on to which channel sourced the lead.  At the end of the analysis, you should be able to tell which channels close at the highest rate with each sales representative. This will allow you to provide feedback to create a performance-based routing system, whereby the leads the representatives are most likely to close will be routed mostly to them. I say mostly because you also want your lead follow up time to be extremely quick and sometimes that means routing a lead to someone that is available rather than an expert. Tools like Chilipiper can make this performance-based routing easy to set up and maintain, assuming you regularly use channel diagnostics. When you are Channel forecasting, it’s recommended to use the blended conversion rate from the top level channel to forecast the number of leads expected. This differs from channel diagnostics because you are more worried about predicting what leads will come in than figuring out how to increase your conversion rates. The topics are similar, but separate and each approach is a bit unique.  

 

Remember:  if you are trying to increase conversion rates, you need all the details you can get, but if you are forecasting, you can use top-level channels and historical data.

 

The next section will cover channel diagnostics and forecasting in much more detail following three main questions: 

• Which channels are performing best?
• Who is closing the best leads?
• What do we consider best?

Determining which channels are performing best has a lot to do with your specific business model and attribution system you’ve got in place.  As marketing has become more and more scientific and less and less of an art, we’re finding that attribution systems like first touch and last touch are not enough to truly explain the prospects journey.  Now, we have software like Segment that can capture all marketing interactions. Even if the browser was reset, the interactions are still captured. You can see the full marketing interactions across the prospect journey, even past the website and into the product but it’s difficult to set it up correctly.  This is why companies like Clari have had so much success. They endeavor to show this journey in a useful way and it appears they are pretty good at it. Clari is also vastly easier to implement than Segment, which has trade offs that are use case limitations.

 

Regular Analysis 

However you choose to analyze your data, it’s important to know which channel is performing best and who is closing those deals. Keep in mind that this will probably change over time. It’s helpful to be prepared to do this analysis regularly and update your lead routing accordingly. If you find it takes a lot of manual work to calculate this, consider re-designing the process / systems to support automation. 

 

Marketing and Sales On the Same Page 

What Sales calls the best lead versus what marketing calls the best lead is rarely the same thing. It usually changes from person to person!  To get ahead of this, showing the analysis of the best performing channels will be extremely useful to help your team fine tune their performance. Instead of showing one channel’s conversion or one person’s conversions, you show them combined and that changes the conversation from fairness of lead distribution to the one about education and improving conversion rates. If a sales representative consistently excels at closing leads from webinars, it might be worth having an enablement person work closely with them. The goal is to determine if their success can be taught and replicated across the rest of the sales team or if it’s simply a personal style that cannot be easily trained. 

If the successful approach can be taught, it’s worth considering setting up a training program based on it. However, if it’s more of a personal style, it’s best to accept it as it is and focus on finding other areas for improvement within the team.

 

Company-Wide Investments Included in the Marketing Plan 

Another area that is commonly overlooked is not the monthly marketing program budget, which we’ve covered, but the bigger investments that are required as business enters different stages of growth. For instance, if your company is pivoting into a PLG motion, there will be significant investment to dial in the right ICP from a marketing perspective alone (apart from the internal software that has to be done as well, but that is budgeted under R&D and beyond the scope of this series). Or maybe you’re making a big splash in a new industry and “the event” each year is $125k, however, the revenue for this segment won’t support such a large expenditure. That’s where you have a few guiding principles that will help facilitate this process:

• Match business cycle to expenditure
• Attribution vs Execution
• Large Investment / Event Reviews

When a company decides to break into a new portion of the market, either going upstream or to a different vertical, the investment associated with this should be matched to the expected business cycle.  

For example, if your company offers services only the United States and it took it 3 years to get a decent brand presence in that region, then when another region is to be opened, all larger investment expenditures should be capitalized over the number of years expected to receive benefit; in this instance a guess of 3 years would be reasonable.  

This might sound picky, but if this isn’t followed, the marketing budget may get bloated during the first year of any new company pivot because the revenue obtained from those expenditures takes much longer to realize than a year.  

To implement this process, you would nominate a C-level (CMO) to take on managing the capital expenditure approval process and be accountable should the investment turn out to be poor. That said, replacing a marketing team once a year due to the lack of performance in one area, in my opinion, is not matching the performance to the business cycle. Perhaps, if the plan fails in the middle of year 2, it could be best to look at marketing employees’ performance and consider an improvement plan. Any time before that is likely premature to tell if a strategy is working.  

 

Marketing departments should not be held to the same monthly or quarterly standard that sales is, but rather to a yearly or bi-yearly standard to match performance to business cycle.

 

Tracking Attribution for Major Investments 

We’ve talked about best practices for attribution, but specifically when we are talking about attribution for big investments, such as large industry events, then execution is never an excuse for the  lack of attribution. Meaning, what commonly happens is a marketing team secures budget for a large event, everybody gets crazy excited, the event happens and a “ton” of prospects were touched on and business created, but a solid attribution program and process for tracking wasn’t put in place.  In short, execution was chosen over attribution. This translates into finance believing the event was not successful and that’s hardly ever entirely true.  

From the operational perspective, it’s truly worth figuring out how you want to track interactions at larger events. With QR codes becoming common, OCR being available on phones, and voice to text translation, there’s no reason why you couldn’t be talking to people and tracking as much as possible without a ton of administrative overhead.  

For instance, it is important to know if you are talking to a net new lead or if a company is currently in your pipeline. The attributions for those are different (new leads are first touch, while current leads are technically multi-touch; the first being creating pipeline, while the latter moves the current pipeline along faster, increasing velocity).  

Keep in mind, without this admin work, subsequent approvals for the same event are highly unlikely if there are any issues with sales targets.  This event and the sales targets not being hit may not be causal or even correlated, but they will be looked at as if they are and the budget cut without the proper attribution. Your team is better off talking to less people and having more quality conversations than a shotgun approach where no attribution is completed and no tracking or review can be provided.

If the attribution process is laid out and executed as planned, an event review becomes extremely easy to compile. In this review, it’s very easy to put together and should not be time intensive, but it should be looked at as the business case for your next year’s budget to the same event (assuming your company was successful at the event and they were the right personas, etc).   

The review should include all numbers from the bowtie:  

• New Prospects
• Current Pipeline
• Customers

How many prospects did you meet that were new?  How many of those turned into meetings?  How many meetings turned into a proof of concepts or a full demo?  And finally, how many of those turned into customers?  

On the flip side of pipeline creation, how many prospects did you meet that were currently in the pipeline and how did you accelerate them faster through the sales stages? Increasing sales velocity at events is a key metric for marketing to show value in an event review. 

Finally, how many customers did you meet and did you move that customer closer to be an advocate? 

With these 3 areas laid out, the only expectation that needs to be set is when you will provide this report back to sales, marketing, customer success and finance.  This depends on the business cycle and you may have to phase out the presentation if the cycle extends beyond a year.  For instance, if your tracking shows it takes about 2 months after an event for a new prospect to show up in the system as qualified in some way, then you’d only provide the new prospect portion of the review after 2 months have passed.  If the sales cycle from qualified to close in another 9 months, then you’d use weighted pipeline values to project revenue until you have 9 months of closing time providing the accurate number.  

For increasing sales velocity and converting customers to advocates, however, this time frame could be much shorter. That said, compiling the completed report to marketing, sales, customer success and finance should make sure that the business cycle was matched to the business outcomes.  This process secures the necessary marketing budget in each year of a plan without removing larger, necessary investments. 

 

Successful Annual Planning Formula 

When combining the best practices recommended, marketing teams should find it easier to have the right number of channel managers, be able to forecast and diagnose channels, and secure the appropriate budget to execute each year. The reason budgeting this way is so important is marketing programs and events are the most common place to cut budget when attempting to make an operating plan “work.”  Even so, the plan may mathematically work, but without matching the business cycle to outcomes, it will fail. Additionally, as this pitfall continues it prevents marketing teams from having enough staff, programs or investments each year to provide the leads the sales team needs to hit their targets. Wasn’t that the first question asked: is marketing producing enough quality leads?

In our next part, we’ll be tackling Customer Success and best practices around planning.

 

Don’t forget! Discover the top GTM strategies from B2B experts at RevCon: our must-attend annual conference on October 18-19, 2023! 

Video of building a plan from scratch for all departments: