Triple Lead Generation: 4 ROAS Leveraging Strategies

The Importance of Strategic Investment for Business Longevity

Companies that fail to prioritize future investment may jeopardize their long-term viability. Allocating resources, whether to personnel development or essential technologies, is a necessary short-term expenditure for sustained success.

This principle extends to marketing efforts; effectively promoting a product or service necessitates investment in advertising. However, if this investment doesn't translate into tangible leads and conversions, significant challenges arise.

Defining Success Through Key Metrics

Determining and implementing the most appropriate metrics, aligned with specific business objectives, is crucial. There isn't a universally applicable best practice or standardized methodology.

Nevertheless, the strategic application of return on advertising spend (ROAS) data can dramatically enhance lead generation – a fact demonstrated during my tenure at Brightpearl, where I led a restructuring of marketing campaigns.

Brightpearl's ROAS-Driven Campaign Improvements

Let's examine how Brightpearl leveraged ROAS to refine campaigns and boost lead acquisition. The core strategy involves establishing a benchmark for a healthy ROAS specific to your organization, enabling targeted optimization.

Understanding your ideal ROAS allows for informed decisions regarding campaign adjustments. This ensures marketing spend is allocated efficiently and effectively.

Optimizing for Growth

• Focus on identifying the metrics that directly correlate with your business goals.
• Implement ROAS tracking to measure the effectiveness of advertising investments.
• Regularly analyze ROAS data to pinpoint areas for campaign improvement.
• Adjust strategies based on ROAS insights to maximize lead generation.

By prioritizing data-driven insights, businesses can ensure their marketing investments contribute directly to sustainable growth and a secure future.

Selecting the Appropriate Return Metric

Determining the correct return metric is crucial for accurately calculating your ROAS (Return on Ad Spend). This selection is significantly influenced by the duration of your sales process.

Brightpearl experiences a relatively extended sales cycle, typically ranging from two to three months, and occasionally reaching up to six months. Consequently, utilizing new customer revenue data on a monthly basis provides limited data points for analysis.

While organizations with shorter sales cycles may effectively leverage revenue as a return metric, this approach proves insufficient for optimizing our campaigns. Therefore, we opted to utilize the value of Sales Accepted Opportunities (SAOs) instead.

Measuring SAO value generally requires approximately one month, allowing for a more frequent and substantial flow of ROAS data. This stage represents the final step prior to securing a deal.

The SAO stage signifies that leads possess the necessary budget, align with our ideal customer profile, and can benefit from our software’s capabilities. This allows for a reliable assessment of campaign effectiveness.

When selecting a return metric, it’s essential to ensure alignment with your overarching company objectives, while also maintaining a reasonable data collection timeframe. Furthermore, the metric must be quantifiable at the campaign level to facilitate performance optimization.

Embrace the Power of Focus

A common observation is that many businesses operate under the apprehension of overlooking potential opportunities. This often results in a widespread advertising strategy across numerous platforms, rather than a concentrated investment in the most lucrative avenues.

Potential customers typically engage in research across multiple channels, prompting a desire to encompass all possible touchpoints. While seemingly beneficial, this approach demands substantial marketing budgets and manpower.

Understanding Channel-Specific Performance

Upon joining Brightpearl, the company was actively advertising on a variety of channels, aiming to connect with prospects throughout their entire purchasing process. However, it became clear that audiences on different platforms exhibit varying stages of the buyer's journey and distinct purchasing intentions, consequently impacting the Return on Ad Spend (ROAS).

For instance, individuals actively searching on Google for a retail operating system demonstrate a more immediate buying intent compared to those browsing related content on LinkedIn.

Prioritizing Based on ROAS

A comparative analysis of channel performance revealed that Google Ads consistently delivered the highest profitability. This led to the question: was further growth achievable within Google Ads?

Could reallocating funds from less effective channels yield a greater volume of leads at a comparable, or even improved, ROAS?

Leveraging Google Ads Tools

Utilizing the tools available within Google Ads, such as Impression Share and the Keyword Bid Simulator, it was possible to assess the potential for increased investment in top-performing keywords and the resulting incremental lead generation.

Simultaneously, landing page performance was evaluated to identify opportunities for conversion rate optimization. Based on this analysis, a decision was made to temporarily suspend advertising on other channels – including social media and third-party publishers – to maximize growth and ROAS within Google Ads.

A Strategic Recommendation

It is generally advisable to initially concentrate resources on the channels demonstrating the strongest performance. Ensure that the potential for lead generation from these channels is fully realized before expanding efforts to lower-performing alternatives.

The Google Ads Bid Simulator provides valuable insights into potential traffic and conversions achievable through increased bids, alongside the associated budgetary requirements. While not entirely precise, it offers a useful indication of growth potential within existing campaigns and the incremental cost per click or conversion.

As illustrated in the screenshot, an increase in budget from £39 to £1,662 could potentially generate 73 additional clicks and two extra conversions. However, a careful evaluation is necessary to determine if alternative channels or campaigns might offer a superior return on investment.

Understanding ROAS in Context

ROAS, or Return on Ad Spend, is a crucial metric for evaluating advertising effectiveness. However, maximizing its utility requires considering it alongside other related performance indicators to pinpoint the most profitable customer segments.

Specifically, ROAS can be dissected into its constituent components: the number of conversions achieved and the average order value (AOV) generated. Analyzing these elements individually offers deeper insights.

Examining these two factors allows for a determination of whether an elevated ROAS stems primarily from an increased volume of conversions or from a larger average transaction size. This nuanced understanding informs more targeted campaign strategies.

A Case Study: Brightpearl and Keyword Analysis

At Brightpearl, utilizing Adwords, a correlation was observed between specific keywords and higher AOV among generated leads. Variations in AOV attributable to keyword selection sometimes reached as high as 30%.

This discovery highlighted significant differences in the audiences associated with different search terms. Notably, users searching for competitor-related keywords exhibited lower conversion rates, but those who did convert tended to have substantially higher AOVs.

Consequently, landing pages and ad copy were refined to prioritize keywords associated with higher AOV. Messaging was tailored to resonate with the specific challenges faced by larger organizations.

The Importance of Cross-Functional Collaboration

Sharing these findings with product and marketing teams is essential for refining overall messaging and strategy. This feedback loop ensures alignment and optimization.

Directly engaging with customers to gather their perspectives is also vital. Their reactions can validate assumptions and uncover further opportunities for improvement.

Optimizing Sales Cycle Timing

As previously noted, gauging performance becomes more complex with extended sales cycles. These cycles often encompass distinct phases, such as marketing qualified leads (MQLs), sales qualified leads (SQLs), and sales accepted opportunities (SAOs).

This duration must be considered when evaluating ROAS. Accelerating the sales cycle yields more data regarding ROAS and other key metrics, facilitating campaign optimization. Shorter cycles can also minimize lead attrition; delayed responses may drive potential customers to competitors.

Brightpearl addressed this by refining the initial stages of the funnel. Prospects are now asked qualifying questions to determine business size and order volume. This information, gathered through demo request forms, enables the sales team to prioritize leads based on quality.

A data-driven approach necessitates tracking the time sales teams dedicate to each lead stage. Analyzing the average time to transition from MQL to SQL, or SQL to SAO, reveals optimal funnel progression timelines.

Establishing this benchmark allows for the implementation of an alert system. This system identifies MQLs that haven’t progressed to SQL, or remain open beyond the established timeframe. These instances are flagged for the sales team, prompting investigation into delays.

Streamlining the entire sales funnel promotes proactive engagement and efficient resource allocation. With a finite number of sales representatives, focusing efforts on high-potential prospects is crucial for maximizing conversion rates.

Final Thoughts

It's crucial to recognize that a satisfactory ROAS score is unique to each business and marketing initiative. Should your current score fall short of expectations, utilizing ROAS data can facilitate the development of focused campaigns and customized user experiences.

This strategic approach will minimize expenditure on campaigns that are not delivering optimal results. A balanced approach between growth velocity and customer acquisition cost is also recommended.

Brightpearl, prioritizing accelerated growth, opted to adjust its ROAS target downward to broaden its reach into upper-funnel channels and engage prospects earlier in their purchasing journey.

Currently, our attention is directed towards account-based marketing (ABM). This involves employing company identification resources and intent signals to pinpoint organizations that align with our ideal customer profile.

We are targeting businesses demonstrating interest in retail operating systems, regardless of whether they are actively seeking a solution. Subsequently, we will develop customized content to guide them through the sales funnel.

Understanding the present challenges faced by your target demographic is invaluable, and intent data can provide insightful predictions. For instance, a surge in searches related to preventing inventory loss was observed shortly after the pandemic’s onset.

In response, we hosted a webinar on data-driven inventory demand planning tools, designed to assist businesses in optimizing inventory costs and maintaining healthy cash flow. This event directly resulted in the acquisition of several new clients.

To summarize, here’s how Brightpearl successfully enhanced lead generation through the application of ROAS:

• Selecting the appropriate return metric.
• Prioritizing channels exhibiting the strongest performance.
• Integrating ROAS with complementary metrics.
• Accelerating the sales process.

A comprehensive analysis of ROAS, in conjunction with other key performance indicators, provides a more accurate assessment of campaign efficacy. This ensures that all pertinent data informs our marketing strategies.

By concentrating on high-potential leads, we can effectively drive business expansion.