
Cost Savings Toolkit – Marketing
Enhancing Marketing Efficiency
When times are tough, every penny counts. With this in mind – we have been working across the Susquehanna portfolio to help position our portfolio companies to save money without impacting performance.
The focus of this series of blog posts will be on non-headcount related cost savings – primarily headcount for a typical software as a B2B service, marketplace, or data company.
This initial blog post will focus on increasing marketing efficiency – typically 7-8% of operating expense for a $20M portfolio company. Of the non-wage & benefit costs, this also is one of the highest risk in terms potential growth impact. Reducing investments in critical sources of leads trades off short-term cost savings at the expense of long-term growth!
What we are seeing
- Decrease in Cost Per Impression (CPM) based on macro advertising spend reductions
- 23% higher Click Through Rates (CTR)
- 20%+ better engagement on COVID/downturn specific messaging
This varies by company and target customer. For SMB-focused companies, we are seeing the majority of new leads come from self-service channels (Drift, website), and mixed returns from virtual events. However, since most leads are self-service generated (and buyer has a clear need), conversion rates from inquiry to Marketing Qualified Lead (MQL) and from MQL to Sales Accepted Lead (SAL) have increased 10-15%.
For companies focused on enterprise customers, we are seeing many move from 1:Many to 1:1 (personalized prospecting) messaging. This change has been catalyzed by a significant decrease in MQL generation (up to 50%) and initial sales conversations (up to 35%). However, once a Sales Qualified Lead (SQL) is generated, some companies are again seeing enhanced conversion rates.
What we recommend
Overall, in particular for enterprise accounts, we are recommending reducing 1:Many campaigns and activities and instead focusing on personalized messaging. For SMB focused businesses, be highly selective – if spend was questionable before the downturn, its likely not worth it now. Invest/reallocate spend to the most highly efficient channels (e.g. Reddit). Be careful in particular on SEO (vs. paid search) – underinvestment can have long-term impact on your ability to generate inquiries and leads.
WHAT WE ARE SEEING | RECOMMENDATIONS | |
Field Marketing |
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Webinars & Educational Content |
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Paid Advertising
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Higher Cost Content (e.g. Video) |
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Personalized Prospecting
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Case Study – Enterprise SaaS Personalized Prospecting
One of our enterprise SaaS companies targeting mid-size to Fortune 50 customers has significantly increased focus on personalized prospecting with positive initial results.
TACTIC | CHANGE |
ABM Prospecting | Supplemented existing program with 25% more resources. More people, more accounts, more meetings |
Exec-to-Exec | Picked 5 leaders X 50 accounts each and coordinating outreach on their behalf |
En Masse Connect | Picked most connected employees and coordinating outreach on their behalf to LinkedIn contacts |
Customer Referral | Structured outreach to existing clients for referrals |
A framework on how to approach this
Most importantly – approach marketing spend reductions strategically. You need to understand your current spend and effectiveness, levers, and how you can shift/optimize spend to reduce cost while minimizing impact on your growth trajectory.
We recommend the following framework:
Importantly, this is not one and done. Companies need to continually re-evaluate return on marketing investment (ROMI) as they shift spend and the underlying dynamics of the downturn evolve.
In summary – a checklist for you to use today
Undertaken thoughtfully, we have seen our portfolio companies reduce spend while meaningfully increasing marketing efficiency. Below summarizes 14 best practices you can potentially apply to your business today:
INCREASE | SHIFT | REDUCE | |
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Stay tuned for the second installment in this series on managing rent expenses. We look forward to your feedback and hearing your growth journey.