Visualize Your Entire Process
Let’s start by going a step beyond your ads.
Many B2B paid advertising campaigns find themselves unproductive in part due to variables that don’t have anything to do with the ads themselves.
We’ve seen several campaigns fall short because of a poor process for booking meetings, poor follow-up in the form of unrelated automated marketing emails, or in some cases, no proper follow-up with leads taking place at all.
Even if a campaign is extraordinarily effective at driving quality leads, if these leads are not processed and handed over to the sales team in an effective manner, the entire funnel can fall apart before it even takes shape.
To ensure your process is completely optimized from form submission to signature, we recommend starting your paid advertising journey by creating a Lucidchart depicting every step of your process in granular detail.
Here’s an example of one of these charts from a zoomed-out view:
Although this might look a bit intimidating, a closer look reveals that this chart simply maps out all of the key events and decisions that take place following a lead’s entry into your system such as:
- At what point is a lead marked as an MQL (marketing qualified lead), SAL (sales accepted lead), SQL (sales qualified lead), Opportunity, or Closed Won deal?
- What happens when a lead submits a form but does not book a meeting?
- What happens when an unqualified lead submits a form?
- What happens when a lead no-shows their scheduled meeting?
By stepping back and taking a high-level view of your inbound lead management process your business has the opportunity to identify any potential gaps that can impact the productivity of your paid advertising campaigns before you start scaling spend on advertising.
This reduces potential wasted ad spend that sends leads into a funnel that is doomed to fail from the start.
Remember, the levers that your business can pull outside of your advertising channels can sometimes be just as (if not more) impactful than the levers you can pull within your advertising channels.
Think of it this way:
If your business can enhance its “book rate”(in the example below, Lead-SAL rate) of paid leads from 50% to 75%, it has just increased the raw volume of meetings (SALs) by 50% without having to spend an extra cent on paid advertising.
The two campaigns below demonstrate this in practice. Every metric across both funnels is identical, except for the Lead-SAL rate.
The result? More qualified meetings, more opportunities, and more closed won deals on equivalent spend and lead volume.
If possible, ensure you have a solid grasp on every aspect of your process before you start spending money on advertising. This will ensure ideal conditions for driving a return on your investment.
Setting Goals and Targets
Now, let’s get into some methodology that is more specific to your paid campaigns themselves.
Your goals and targets should serve as the guiding light for all of your paid advertising initiatives.
With the wrong targets, your paid advertising program is likely to stray off course and fall short of driving a desirable outcome.
Fortunately, any business can calculate what we deem to be the single most important metric a business can track to determine the efficacy of its paid advertising program: Its “Target Cost Per SAL (Sales Accepted Lead).”
Put simply, your Target Cost Per SAL represents how much your business should be willing to pay for a booked meeting with a qualified prospect.
The goal of paid advertising (for most businesses) is to drive productive bottom-of-the-funnel conversations with prospects that ultimately lead to closed-won revenue, and in turn, a return on your investment.
There is no more fundamental measurement of whether your campaigns are holding up their end of the bargain by “bringing the horse to water” than your Cost Per SAL.
Although paid advertisers absolutely exercise control over activity down the funnel, there are a myriad of factors outside of your campaigns themselves that can determine whether a qualified lead or opportunity turns into a customer. For instance, if a lead is extraordinarily qualified but decides to go with a competitor, that does not mean it was a bad lead, and that your campaigns are not doing their job.
The beauty of the “Cost Per SAL” is that it distills the evaluation of your paid advertising campaigns into a single core measure of viability. If a campaign is able to generate qualified leads at a financially viable rate, it signifies that your ads are doing their job and that it is time to scale investment.
So, how do you calculate your business’s Target Cost Per SAL? It’s simple. All you need is a basic understanding of your average contract value, your growth goals (Target CAC%), and the rates at which leads tend to progress through your funnel.
If you understand these aspects of your business, you can reverse engineer what you should be willing to pay for an SAL.
Here is an example of a Target Cost Per SAL calculator we created for one of our clients. With this client’s average contract value, growth goals, and funnel progression metrics, they should aim to drive SALs at a rate of $512.
If a paid advertising campaign can drive booked meetings with qualified prospects at a rate at or below your business’s Target Cost Per SAL, that signifies that the campaign is an efficient driver of demand for your business.
Once your Target Cost Per SAL is achieved (assuming all other funnel metrics are normal), we typically recommend that organizations begin to explore the possibility of scaling investment in that particular channel to drive as many qualified booked meetings as possible, setting your sales team up with more efficiently-generated opportunities to close business.
The SQL stage (a held, qualified meeting) represents a critical inflection point in your business’s sales cycle. If qualified meetings are held, and the prospects are strong fits but do not become customers, your campaign will not drive an ROI, which may cause key stakeholders to look at your ads as wholly ineffective.
However, if the math backs up that your ads are driving qualified meetings at an efficient rate, and that a metric further down the funnel like “close rate” is where the funnel falls apart, your business may have a sales problem on its hands, and not a marketing problem (assuming there is not a systemic flaw in the leads themselves that causes them to not close into new business).
