There are many ways in which businesses are misinformed about what marketing is. It’s not uncommon that businesses with an internal marketing department are not even aware of what the team’s day-to-day looks like. A frequent perspective of sales executives is that marketing is responsible for generating leads and keeping a healthy flow of prospects in the top of the conversion funnel. While it’s easy to prove the value of marketing independent of any efforts made by the sales team, this perspective from sales leaders that I frequently encounter is at least somewhat true. In this three-part blog, we dig into different strategies and tactics that marketing can take to increase volume at each stage of the conversion funnel, and more importantly, how marketing leaders can measure these efforts to ensure they are credited appropriately for their financial and time investments. We will not discuss SEO here, as that piece of your omnichannel strategy does not generally have an associated cost, and this blog series is about how to manage your marketing budget to achieve your desired results. Let’s dig in.
Option 1: High Volume, Low Conversion
You may have heard of this one under a different name: the “spray and pray” method. Though it receives little affection, this method of lead generation does have some merits. This is also more effective on some tools than others. For example, PPC does not have a percentage match where you can open or close that “top of funnel” and therefore adjust your remarketing list size, but paid social, particularly Meta, does – and it’s extremely useful (don’t get me started on the interface, glitchiness, or literally anything else regarding Meta ads). If you find yourself in the dream situation of having excess marketing budget, this strategy might make sense. Continue to grow that pipeline, take a worse cost per acquisition, and build those (highly segmented) remarketing lists so you can have greater success in the future. If you are to go this route, you’ll want to target that 10% mark in your Meta lookalike audiences.
The few positives of this approach seem to quickly be lost when we get to email marketing. The equivalent of spray and pray in email marketing is utilizing zero segmentation whatsoever. “That’s how we get the most opens,” you might say. It’s also how you get the lowest open rate and the lowest conversion rate. We call opens and clicks “vanity metrics,” meaning they don’t actually serve the business and are generally a talking point when there aren’t better numbers to present. I’d wager most orgs are still emailing to their full list, regardless of the promotion, product, or location, but this doesn’t serve the bottom line. When looking at your total omnichannel strategy, email marketing is the worst tool to use the spray and pray method.
Businesses can find themselves in a situation where they feel backed into a high volume, low conversion approach. Typically, this stems from great deals of pressure from one or several stakeholders: shareholders of the company, new leadership looking to make immediate change, or a sales department that insists on asserting themselves over other business units. Generally, an “HVLC” approach is considered short-sighted. But many business decisions are short-sighted. This may satisfy stakeholders immediately, but “volume metrics” are often vanity metrics as well – your conversion rates, cost per conversion, and process efficiency will all begin to slip. That’s not to say this approach doesn’t have a place; it does… but not very often, and in increased scarcity in this analytics-first business environment. If you’re looking to spend more on branding or want to “flood the market,” this strategy may be for you.
Option 2: Moderate Volume, Medium Conversion
Now we get into the weeds. What constraints can you place on your email, paid search, SMS, and paid social campaigns that would qualify as moderate volume? Well, the options are nearly limitless. Let’s say you’re in the B2C retail space and you sell women’s athletic wear. Your affinity audiences in paid search might look something like this: fitness, health and wellness, sports fans, runners, yogis. Your usual lookalike audience on Meta might be similar to these interests and your existing remarketing lists (likes and followers of your social accounts, at a minimum) with a 1-2% match in your lookalike audiences. This means the closest 1-2% of those that already engage with your brand will be served this particular campaign. Again, this is a narrow focus. So how do we adjust this to make it a moderate volume? Start by adding associated affinities. You know through market research from your awesome marketing team that your customers love yoga, and you also know that people who love yoga generally love tea and coffee. Great! Start there. Let’s add tea and coffee to your list of affinity audiences. Through the same means, we also know that runners wear your products, and they also buy high-end footwear. Let’s add that to your affinity audience as well. Furthermore, despite being a bit more rugged of an activity, we can add kickboxing and weightlifting because they are directly adjacent to your existing customers. This process is often iterative, takes a great deal of ideation, and can be replicated over on paid social. The other imperative to achieve a moderate reach is going in at a 5% on your Meta lookalike audiences. Where you otherwise may have started at a tight match and expanded as you’ve conducted business with much of that list, here you’re starting at a middle mark for your audience match.
What’s the purpose of this strategy? Keeping some level of filtration on your campaigns across your marketing channels ensures you aren’t wasting resources showing your products and services to those that will never purchase. This allows you to use your marketing budget more efficiently and build higher-quality remarketing lists that can be utilized in your future efforts. If you work for a business that understands the importance of marketing and invests in your department, this strategy may be for you. Most commonly, an MCMV strategy will be utilized by medium to large businesses. While it’s not for everyone, this strategy is my favorite. It allows you to find new customers more quickly than a narrow funnel and it scales much faster. It is important to note that a good marketing strategy invests not only in the business directly, but in itself. Through investing in itself, that marketing strategy is thereby investing in the future of the business as well, because it identifies likely customers early in the conversion funnel or that are currently unfamiliar with your brand. Due to short-term impact and long-term investments, an MCMV approach delivers impressive results more frequently than other strategies, and marketers don’t need to cherry pick results.
Option 3: Low Volume, High Conversion
The last strategy we will discuss in this blog is the one with the greatest constraints placed on funnel entry. The tactic here is to limit your marketing message to being seen by only those that are most likely to convert (which largely consists of those that already have). While you should be practicing some level of loyalty program in just about any industry, you’ll see the highest percentage of customers opting into loyalty programs when using this strategy. Note that “high conversion” is relative to the volume of traffic flowing through your conversion funnel: the conversion rate will be higher here than in other strategies discussed, and your total number of conversions will be the lowest.
How do you keep traffic volume low, as to greatly reduce your marketing expenses? Let’s start with email. Most ESP platforms (all except two, by my count) will charge you by send – this is why it’s super important to keep that email list clean and healthy. Because you’re being charged by send, you’ll need to segment the heck out of that list, whether it’s by product/service, geography, demographic, online behavior, or something else. In doing so, each campaign is delivered to the most interested customer group, which means efficient results on a lower total send cost. If you’ve made it this far, you may see now how this can be replicated across your complete omnichannel strategy. It may mean offering your SMS loyalty program only to those that just completed a purchase. It likely means a 1% lookalike match on your paid social campaigns (again, the closest match to your existing fans and customers). It can mean displaying paid search campaigns only to previous site visitors, existing customers, or specific affinity audiences (a targeting approach rather than an observation approach). All of this depends on your marketing budget: you may run with some or all of the above recommendations based on your own optimization and creation of best practices, as well as financial constraints.
The LVHC approach is common with organizations that don’t understand marketing and therefore don’t value it. It can be frustrating to be forced to take this approach because the 700% ROAS you provide on a $5,000 monthly advertising budget isn’t going to look anywhere near as good as the 700% ROAS you provide on a $50,000 marketing budget. It can also be hard to “prove it” to stubborn leadership when they aren’t giving you sufficient dollars to do so, or they don’t believe you can have the same, or even greater success, if you were given more money to throw at your best campaigns. Sometimes this strategy is necessary for other reasons, however. It is common with businesses that are not yet profitable. It is also common with businesses that want to dabble with certain innovations and turn to digital to do so. This approach is most frequently taken with startups and small businesses due to limited budgets and/or limited talent in the marketing department. While there’s nothing wrong with this approach if you don’t have the profits to do more, businesses that do have the resources should consider option two above and invest more in their most profitable business unit.
Conclusion
These three examples of “top of funnel” marketing strategies seen here are some of the most common approaches to marketing from your SMEs. While it’s certainly possible to land somewhere between option one and two, or option two and three, doing so will depend entirely on financial constraints and the expertise of your people. Each strategy has its own merits, and as is the case for any business strategy, none of these are “one size fits all.” It’s important to remember that you get what you put in – leadership can’t expect you to double leads, triple digital profits, or quadruple traffic if they aren’t giving you the resources to do so. The pieces of the equation you do have control over are the strategies, best practices, and overall optimization of your campaigns and your promotional calendar. If you’re ready to learn what the best marketing strategy is for your business, let’s chat.