Formulating B2B Lifecycle Marketing Dashboard – Part 2

In our last blog, we covered the key metrics to be included in the first two sections of the dashboard – Attract and Capture.  In this blog, we will cover the remaining three sections – Nurture, Convert, and Expand.

3. Nurture

Main Nurture metrics include:

New Marketing Accepted Leads (MALs): Number of leads officially accepted by the Marketing department for further nurturing or immediate forwarding to Sales. This milestone removes faulty leads such as duplicates and invalid emails.

Reopened Leads: These are the recycled leads that were being nurtured, and subsequently qualified to be considered again for sales, mainly because they attained the necessary lead scores.


Formulating B2B Lifecycle Marketing Dashboard – Part 1

Objective of a lifecycle marketing dashboard is to provide a quick understanding of various stages of the lead lifecycle. The metrics in the dashboard should be selected carefully so that fewest metrics can give the broadest understanding of the business. The dashboard should be populated regularly (example: quarterly) so that trends in the metrics are apparent and actionable.

B2B lifecycle comprises of the following five stages. We recommend that the metrics are grouped under these stages for providing an intuitive structure to the dashboard.



Estimating Customer Acquisition Cost (CAC) in B2B SaaS

Customer Acquisition Cost (CAC) is an important metric in the SaaS industry.  CAC is tied at the hip with Lifetime Value (LTV) that we discussed in a previous post.  The simplistic formula for estimating CAC is:

{Fully loaded (including Headcount) Sales and Marketing Expenses for the quarter} / {Number of new customers in that quarter}

For example, if the full loaded Sales and Marketing Expenses in the quarter are $10 Million and the number of new customers in the quarter is 500, CAC is $10,000,000 / 500 = $20,000

The above formula works reasonably well for SAAS companies with short sales cycles – say under 90 days from lead generation to win.  These tend to be SMB-focused SAAS companies.


Estimating Lifetime Value (LTV) of SAAS Customers

Calculating Lifetime Value (LTV) of customers is essential for smart marketing in any B2B SAAS company. LTV dictates how much money to spent in acquisition as well as the nature of retention and upsell efforts.

To make things interesting, LTV typically differs by customer tier, requiring further refining of marketing strategies and budget allocations for different tiers.

In this blog, we will look in to how to calculate LTV of customers.  For this discussion, customers are treated as homogenous (say, mid-sized businesses only). However, the logic can be extended to different customer tiers as your business warrants. Also, we will assume all customers sign annual contracts – meaning churn occurs only at the end of contract period.


Considerations for prioritized lead handling

There are two factors that make up the revenue potential of a lead:

  • Size of the potential deal
  • Likelihood of conversion from lead to customer

How to handle the lead is dependent on the combination of these factors.

Size of the potential deal

This is primarily based on firmographic variables, like Employee size, Location (especially Country), Industry, and Annual Revenues. If one does a thorough analysis, the best way to quantify this would be by a regression analysis on ARR with all key firmographic variables of customers. This will allow us to predict potential ARR of a new lead, given the above variables.


Creating a high-potential Prospect List for Outbound Marketing

A well-balanced demand generation plan requires both inbound and outbound marketing components.  In the past few years, all the buzz has been around inbound marketing tactics such as website content, SEO, Google AdWords, and retargeting.  However, audience have now wised up to the fact that filling a form means enduring a series of emails and phone calls, and many are less prone to oblige. Marketers try to compensate for this slack – leading to the ongoing resurgence of outbound marketing.  The cornerstone of any outbound marketing tactic used, whether it is cold calling or list email nurturing, is the prospect list.


Uncover hidden high potential segments in your Marketing Leads database to generate more Opportunities

As a marketer, your goal is to generate more opportunities and sales.  To that end, you keep your eyes fixed in the marketing dashboard to track your progress towards the goal for the quarter. You get a sense of how things are going by the first month in the quarter.  If you are falling short, is there anything proactive you can do to meet the goals?

The answer is yes! One proactive way is to use customer-lookalike analysis on your leads database to find immediate opportunities. This is explained in a B2B marketing context below. It can be easily translated to a B2C world if that is more relevant to you.


Reducing Customer Churn in SAAS companies using Data Science

The need to reduce customer churn is now a common wisdom – it is estimated that retaining a customer is 5 to 20 times more profitable than acquiring a new customer.

Data science can be used to predict customer churn, but the approach is different for different business models – for example, a B2B SAAS model like Salesforce will need a different approach from a B2C subscription model like Netflix or a B2C non-subscription model like eBay.

For this discussion, let us focus on the churn issue for B2B SAAS companies that have annual contracts with the customers.  Our goal is to predict the likelihood of churn at the end of the contract. Assume we need to know the likelihood for the churn three months before the end of the contract so that we can take the necessary preventing actions.

Read more…

Eight ways to turbocharge your marketing performance using data science

Below are the eight ways you can turbocharge your marketing performance by applying data science:

Churn prediction: Predict likelihood of churn by current customers, especially at the end of ongoing contract. (more information)

Leads Sweet Spot: Identifying segments of nurtured leads and accounts for rapid conversion to opportunity. (more information)

Offer to Segment Matching: Identifying lead segment that is most likely to respond to a specific offer, ensuring high performance of marketing campaigns. (more information)

Read more…


Four Trends Elevating Marketing as the Key Business Engine

Many of us who have been in B2B marketing for some time know that marketing has been undervalued or plain neglected in a majority of small and mid-sized companies. As Doug Davidoff of Imagine Business Development points out: “as recently as five years ago, it was not unusual for me to meet with companies that were several hundred million in revenue who had no marketing department or focus whatsoever.”

Read more here.