Finding the ideal marketing channel mix is a continuous challenge for demand generation directors. Where should you invest? And how often should you reassess where you are investing? What metrics should you be using to determine which channels get more investment?
According to the 2015 State of Pipeline Marketing Report, most B2B marketing organizations use more than 10 different channels. When you consider sub-channels (e.g. LinkedIn is a sub-channel of Social), too, that can make finding the best mix difficult.
So how do you do it and what metrics should you use? To find the best channel mix, marketers must measure and analyze how each channel is driving both revenue and ROI.
Why optimize channel mix for both revenue and ROI?
Ideally, every effort from every employee should be intended to maximize ROI -- get the most bang for your buck. But for a lot of organizations, it’s also important to be able to scale. There’s tremendous amounts of pressure on organizations to grow and grow fast. Smart marketing should be the key to unlocking that growth potential.
So when it comes to creating the ideal marketing channel mix, marketers have to be able to identify which channels have great ROI and can scale (high ROI, high revenue), compared to channels that have great ROI but no ability to scale (high ROI, low revenue) or have great revenue and low ROI.
Channel Mix Example: High ROI, Low Revenue
Let’s look at small-group dinners at events. This year we have found a lot of success grouping existing customers and prospects at a table for a few hours over steaks. The relatively few that we have done have helped close several deals and are therefore attributed their fair share of revenue credit. It's a high ROI channel for sure. But compared to a channel like LinkedIn or Organic Search where we are able to generate monthly touchpoints in the thousands, dinners can’t compete at that scale.
It’s a high ROI, low revenue channel, so when we create our ideal marketing channel mix, we have to consider its limitations.
Channel Mix Example: Low ROI, High Revenue
On the other hand, marketing channels that have high revenue, but low ROI can look deceivingly good if you only look at one of the factors. For us, this was Paid Search. The Paid Search channel has a tremendous ability to scale, but depending on your industry, it can be costly. Because there is the potential to get a lot of clicks, leads, pipeline, and revenue from Paid Search, it can be tempting to want to scale it up too fast. We’ve found that when we do try to invest more, the ROI goes down, so we must be vigilant that we’re watching both the revenue and ROI metrics.
How do you get the right data to optimize your channel mix for revenue and ROI?
Follow the data. Attribution data, to be specific.
Attribution data connects marketing efforts to down-funnel metrics, including revenue. This allows marketers to see how their efforts are making an impact on revenue, and ultimately, give credit where it is due. How much revenue is Social generating? Paid Search? Email? Events? Attribution data answers these questions.
At Bizible, we have a running report on the number of Sales Opportunities and how much Revenue is being driven by each channel. This way, we are always conscious of which channels are impacting the business’ bottom line.
With attribution data, you can see how each channel is contributing to revenue. And when you couple this with channel spend figures, you can get an accurate picture of ROI.
6 tips for optimizing your channel mix
Now that we know how to get the right data, here are some tips on how to use it in order to optimize your channel mix:
Follow your data, not industry benchmarks. Just because a particular channel is working for other companies that are similar to yours, it doesn’t mean that it is ideal for you. Benchmarks can be a useful starting point, but ultimately, it’s best to use your data to determine whether a channel is successful.
Keep a finger on the pulse of the channels you are using. Marketing channels are constantly in flux. This seems to be particularly true with social channels. As the various social media networks fight for supremacy, they are constantly changing their platform capabilities, both on the paid side and the organic side. These changes can have a pretty big impact on your channel strategy. When a channel makes an adjustment or introduces a new product, see how it affects your revenue and ROI data.
Trim fat. If a channel isn’t producing revenue or ROI to meet your standards, modify your strategy for that channel or drop it. Don’t keep investing in a channel just because it’s popular. You have the data, use it to your advantage.
Double-down on promising channels. If you find a channel that is performing well, give it an opportunity to succeed. Channels must be given the opportunity to scale before you can say whether or not it can.
But of course...
Continuously monitor successful channels. Marketing channel dynamics are exactly that: dynamic. Whether it’s audience fatigue or competitors bidding up keywords that had brought you success, it’s vital to continue to monitor the performance of previously successful channels. If your ROI is slipping or if your revenue isn’t growing as fast as it had previously, consider modifying your strategy and continuing to innovate. Not all channels can scale up and maintain their ROI.
Use MULTI-TOUCH attribution data. Attribution data is essential to making smart marketing channel mix decisions. It is the only way to base decisions on revenue and ROI. However, to get the most accurate data on how your marketing programs are impacting the bottom line, it’s vital to use multi-touch attribution. Unlike single-touch attribution, multi-touch attribution ensures that channels at all stages of the funnel have the opportunity to receive revenue credit. This way, marketing channels aren’t over- or under-valued just because they target the top of the funnel or the bottom of the funnel.
A great place to start optimizing your channel mix is to get a high-level view of every channel's contribution to revenue. We've found that the best way to monitor this is through an attribution-enabled dashboard. At any point, marketers can see the current channel performance, based on key bottom-of-the-funnel metrics like sales opportunities, customers, and revenue.
Taking the next step with deeper revenue and ROI analysis, the marketing organization can continue to reallocate the budget and continuously refine the marketing channel mix.