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Inbound Marketing generates leads, for sure. But don't stop at Lead Generation. Go deeper, and focus on creation of actual paying customers. Fully account for your costs and revenvues from this channel. And make sure you have an efficient customer acquisition channel.

  • PC

    Pedro Carmo Oliveira

    over 4 years ago #

    Right!!

  • SS

    scott sharp

    over 4 years ago #

    I think the author touches on, but blows past, some gray areas. It mostly comes down to how complex your acquisition system is, particularly when you have a more complex process with longer sales-cycle.

    Cost-per-lead isn't a prehistoric metric only measured by marketing luddites. It can be a valuable metric for marketers because marketers don't control the sales process. To the bottom-line of the company, yes, CPA is the profitability metric, but to the inbound team, they're more worried about CP(q)L, because they don't have levers to control the full acquisition cycle.

    I'm also not 100% on-board about over-focusing on payback periods. Reducing payback periods is essentially a function of reducing CPA and increasing MRR, but more many businesses, it makes more sense to be focused on optimizing LTV rather than MRR. Would you rather have an 2x LTV at a 12-month payback period or a 1x LTV at a 3-month payback period. I'll take the first. It's better for the long-term bottom line.

    • PM

      Paul M Boyce

      over 4 years ago #

      Hi Scott, I'm the author of the article - its awesome to hear your views and you make some great comments. Its a complex subject and I only scratched the surface. You're right the process can get very complex with multiple channels and complex or extended sales cycles. I wanted though to keep it simple just to high-light the difference between the two approaches and encourage more people to think about tracking their CAC (and as per the research, about 50% of marketers don't quite get as far as calculating the cost-per-lead). Yes, you are right that marketers often hand-off the leads - what do you think - is that why Chief Revenue Officer role is becoming more important, especially in growing startups - to bring sales and marketing under a common view of revenue?

      About Payback period, yeah interesting comment, and I guess Payback period is very much a case of cash-flow. The better funded a company the longer the payback period they can sustain, so that's a balancing act for each company to decide based on their own circumstance.

      p.s. how do you guys complete the circle - i.e. feedback from sales to marketing about which leads convert best, to help marketing improve their lead quality?

      • SS

        scott sharp

        over 4 years ago #

        I don't currently work in a business that has a sales team. Our company does have a gap between lead and purchase and we use email to keep the conversation alive in-between, so marketing does control the full-cycle. I've talked with marketers with sales teams from mega-corps to much smaller ones and leads are a big metric for them since that's their last touch before hand-off.

        If I was working for, or consulting with, a company that did, I'd make sure all my critical inbound tagging got attached to the leads in CRM or whatever and would continuously monitor their performance for quality. I'd get as granular as reasonably/technically possible, so tagging leads to campaigns and channels is a must, but if you can even further walk back to know things like which A/B versions they saw, what emails they saw, etc. you can start to develop a pretty great picture of how your marketing affects lead quality and quantity.

        • PM

          Paul M Boyce

          over 4 years ago #

          p.s. I was just talking with Pawan Deshpande (@TweetsFromPawan) and he was talking about comparing the CAC and LTV for 2 cohorts: those who came in through content, and those did not. what do you think of that??

        • PM

          Paul M Boyce

          over 4 years ago #

          I LOVE your thinking on this Scott. To track and have visibility on the whole upstream flow including versions, A/B tests etc would be awesome. A very joined up view of the full picture from start to finish, from channel arrival to paid up happy user (and even beyond into referrals?)

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