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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

  1. Decrease in Cost Per Impression (CPM) based on macro advertising spend reductions
  2. 23% higher Click Through Rates (CTR)
  3. 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
  • Totally gone: most all 3rd party organizers are moving to “virtual” conference
  • Ask for a refund or credit for next year
Webinars & Educational
Content
  • Short window opportunity for COVID-specific messaging
  • Appetite for ‘roundtables’ vs traditional presentation
  • Repackage as “tools” and more surveys
  • Be selective
  • Long return horizon getting longer
  • Recycle materials from personalized content
Paid
Advertising

 

  • Some have increased budget but finding it hard to get enough quality impression/clicks
  • Others deselected to most efficient channels (e.g. Reddit)
  • Judiciously increase spend
  • If you don’t have in-house expertise
  • Wouldn’t build now. Find an agency
Higher Cost
Content
(e.g. Video)
  • Reduced Return on Investment (RoI)
  • Many companies reducing/suspending budget
  • De-prioritize
Personalized
Prospecting

  • Significant success
  • Moved people from wherever field marketing and content marketing to focus on prospecting
  • Double down on account-specific outreach and individualized content
  • Context-sensitive email campaigns still top producer
  • Targeting first closed-lost

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
  • Invest in brand awareness via social channels
  • Invest in technical backlog of site issues, esp. that impact SEO performance (e.g. Pagespeed)
  • Invest in personalized prospecting: content, outreach
  • Judiciously increase paid ad spend
  • Shift spend into multi-purpose channels (evergreen content, SEO)
  • Leverage multi-purpose on organic & paid social and email
  • Partner with other brands to piggy-back off their momentum
  • Can pause/reduce spend in paid search, but reducing investment in SEO will be detrimental long-term
  • De-prioritize 1:many efforts (e.g. webinars) unless recycling (from personalized efforts)
  • Cut PR and other agency spend if limited visibility into performance
  • Make a swift decision to cut the bottom 20% of ads
  • Reduce investment in organic social if low engagement
  • Triple check performance on expensive creative and other programs (video, ABM direct mail)

Stay tuned for the second installment in this series on managing rent expenses. We look forward to your feedback and hearing your growth journey.

DAVID BADLER

DAVID BADLER

Father of three, lover of history, video games, and donuts, still trying to find his athletic talent.


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