In my last blog post on revenue-based Campaign Planning, I talked about a key step in the planning process: using conversion rates to predict how much demand needs to be created at each stage of the funnel.
However, the unfortunate reality is that most companies getting started with campaign planning have not been in the practice of tracking and collecting conversion data, so using an external benchmark is required. This sounds easy enough, but deciding what benchmark to use is not. In fact, I’ve had several conversations with people questioning the validity of industry benchmarks due to the variability in the data collection process and the nuances that exist for each business.
Inaccurate benchmarks are especially dangerous when they are used in planning, because you’re typically talking about projected revenues – and when you’re talking revenue: accuracy is advisable!
Benchmarks are designed for assessing progress by making comparisons. Inherently, they can only provide value if the data is collected in a consistent manner and the underlying processes are similar. That requires a lot of trust in the organization that publishes them. Having said that, I believe industry benchmarks can provide a good point of reference if chosen carefully. There are several considerations I share with my clients to help them decide which benchmark to use in their campaign planning.
Benchmarks: Average or Median?
First, decide whether to use benchmarks based on average or median calculations. As a quick refresher, Average is the sum of values divided by the number of parts. Median is the value that falls directly between the top and bottom 50% of the parts in the set.
The problem with using an Average calculation comes about when you have “outliers” in the data set that can cause the result to be significantly skewed.
Alternatively, you could just use a Median instead of an Average formula. If you have rather inconsistent results across the board, then Median is probably also a better choice.
Another consideration for Average vs. Median is the maturity of the demand generation organization. A more mature organization will have more consistent results, and the average calculation will be most accurate. In the end, go with the calculation that best represents your organization’s level of maturity and circumstance.
Break the Rules
There’s no rule that says you have to use one set of benchmarks for everything. It may work best to use different benchmarks for different kinds of marketing activities such as: Integrated Campaigns, Always On programs, and Outbound tactics. Each of these activities serves a purpose in the demand creation ecosystem, however the conversion rates can vary quite a lot.
For example, an Always On campaign is typically going to have much higher conversion rates because it uses behavior and logic to determine next steps in a communication stream. I would not want to apply the same results to my outbound tactics that are driven by short-term objectives.
Your Baseline is the Ultimate Goal
If you’re asking the question, are industry benchmarks even valid? I would challenge you to reframe and refocus your thinking. Benchmarks are just a starting point for comparison. Measuring yourself in a consistent way, establishing your baseline, and improving against that baseline is what matters most. If you prioritize your own data collection processes, you can put aside industry benchmarks and use real outcomes.
What do you think?
A challenge that comes up over and over again in discussions with my marketing clients is how to do realistic campaign planning. While campaign planning is a common exercise within marketing teams, it is usually not tied to revenues or benchmarks. More often in my experience, it is based on short-term objectives or quarterly quotas, which is not ideal and ultimately increases the risk of the dreaded “fire drill.” Quantifiable planning is also difficult because when it’s done right, it can be tied to performance bonuses which is great if you’re knocking it out of the park, but bad if you’re not (ouch!).
When it comes to planning, it begs the question: what is the value of the process if it’s not linked to business outcomes? One can argue that it provides structure to the deployment of demand generation tactics, but at the end of the day that’s not what the sales function or the leadership team cares about.
With that said, here’s a window into how I approach revenue-centric campaign planning:
Start at 30,000 Feet
Campaign planning is both a thought exercise and a math problem. Take a numbers-based approach to identify whether your goals can be met and where gaps occur in the programs you have planned. Many clients will “reverse-engineer” their demand quotas by backing out the amount of demand they expect to generate at each stage of their lead management process according to their baseline conversion rates.
Here’s a very simple example: If one knows they have to generate 100 marketing qualified leads, and their baseline conversion rate from “hand-raiser” to MQL is 10% – then a program strategy to generate 1,000 hand-raisers within a certain period of time needs to be planned. The same exercise should be done for each stage of the lead management process.
With campaign objectives established, the program strategy is then laid out in a comprehensive manner to ensure that the objectives are met.
Campaign Planning Methodology
Following is a planning framework that we use to ensure that reputation and demand creation programs are aligned with funnel goals and programs are planned across Inbound, Outbound and Always On activities.
- Business Goals. Collaborate with your counterparts to develop an aspirational statement about the future for your business. What is the business priority set for your organization and why is this a priority for the organization? Describe what the businesses’ future looks like once the priority is achieved. Within Business Goals, the following items should be detailed: Market Opportunity, Target Audience, Revenue Opportunity, Value Proposition
- Campaign Objectives. After business goals have been established, then turn the focus toward the audience of the campaign and what is compelling to them. Here you identify how you will achieve the goals of the campaign through relevance by appealing to buyer needs, and how you will know when those goals are met.
- Campaign Planning – This is where we get into the numbers – number of touches and projected conversions based on the agreed upon benchmarks. It may work best to use different benchmarks for inbound, always on, outbound and field marketing activities. Bear in mind that benchmarks can be tricky. If you don’t have a baseline established and rely only on industry benchmarks, those benchmarks may vary considerably from what you can expect to achieve (more on that later…)
- Program Strategies & Tactics. This is the “How.” After goals and objectives have been established, you should get even more specific in your planning by writing program strategies and tactics to achieve the objectives. Program strategies describe a collection of synchronized tactics. For example, a program strategy could be a series of local workshops designed to provide in-person product demos. Tactics are the email, display ads, social posts, and telemarketing that are done to encourage registration for the workshops. Tactics are the exact things you can do to achieve your objectives.
Admittedly, getting started with a revenue-based approach to campaign planning can be daunting and downright scary due to the inefficiencies it can expose! However, it’s also an eye-opening experience that helps demand generation teams adopt a more gradual transition from “batch and blast” to customer-driven, solution-oriented marketing.