Empower your Procurement Department with Lead Qualification Marketing for Procurement

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hi guys ian johnson from driving success calm today I want to talk to you guys about defining your marketing budget and what I want to do today is I don't just want to talk about the marketing budget itself you know we're gonna talk about how you account for expenditures how you express your marketing expenditures as a percentage of sales we'll go through this it's it's fairly simple and straightforward but I want to take it a step further and I want to help you define your cost of leads your cost of qualified leads and ultimately how you should go about determining your cost of customer acquisition so we're going to cover three things the marketing budget the cost of leads and the cost of qualified and a lot of people looking at the video probably gonna say well you should start with your qualified leads first you should define the type of companies you want to pursue you should define your ideal potential customer first and go backwards and that's true okay however when you're first starting out you know you're it's going to be a lot of trial and error you're gonna come up with a marketing budget you're gonna produce a lot of leads you're gonna get a lot of people calling you but whether those leads are qualified or not is something else entirely so that's why we're going from 1 2 to 3 marketing budget leads and then qualified leads and as you get more and more comfortable with your marketing program and and you start to see which strategies producing those qualified leads then yeah you can work it backwards and start to adjust your expenditures based on results in terms of qualified leads today I'm gonna take it through the steps of 1 2 3 as if it's a company first starting out so very quickly the company here is basically accounted for expenditures and marketing January February March they're using trade shows print radio online advertisements which is Google Ads affiliate programs which are similar to google adword campaigns pay-per-click campaigns paper action campaigns and affiliate marketing is more niche marketing specifically tailored to specific websites or blogs that decision-makers attend to then you've got direct mail and then email campaign so in this case the company has defined its expenditures on each one of these strategies through January February and March okay and then at the bottom here they have totaled up all their expenditures by month across all of the campaigns so in January 2002 75 in February 10,000 275 because trying to they attended the trade show in February that cost him 7,500 and then it went back down to 2,000 275 because I didn't attend any trade shows in March so in this case they're attending a trade show once a quarter so what you got here is you've got your expenditures by month and now you're going to count for your sales okay so sales in January 75,000 February 85,000 march 95,000 now you move to expressing your marketing expenditures as a percentage of sales and it's simply the amount it's spent during the month divided by the sales okay so in this case it's two thousand 275 divided by 75,000 it's three percent repeated it's twelve percent again they attended the trade show so it's 10,000 275 divided by 85,000 and then Nick drops down again and it's two thousand two 75 divided by 95,000 it's two Institue percent so what you got in this case is a percentage for the quarter of six percent okay which is basically the total expenditures for January February March which is 14,000 285 divided by total sales which is 250 5,000 now the reason why I expressed it as a percentage of sales is because I like to see the results of a given marketing strategy and understand whether or not his producing results and a lot of times you won't see it right away but it's good to track this on a monthly basis in order to see whether or not you know your percentage of sales is increasing relative to the increase in sales okay so that's the marketing budget now very quickly a link is probably popped up above my head this marketing budget is available on my website at driving success.com it's available at a sample Excel spreadsheet you can use the marketing budget and express your expenditures in terms of pipe pie charts and bar charts and do all kinds of wonderful things so click on that link and you can get that sample Excel spreadsheet okay now we're going to move to the cost of leads now quite simply what I've done here I'm only covered 3 not enough space on the board and what we've done is the company has defined that they have met 325 potential customers or leads at the trade show ok a lot of business cards and then a lot of decision makers so they wanted to determine what was the cost per lead of attending that trade show so you're basically taking 7,500 dividing it by 325 so what I put here is the expenditures divided by the number of leads seven thousand five hundred divided by three twenty five cost per lead is $23 do it again for print it's two thousand two hundred and fifty divided by one hundred and fifty is fifteen dollars online marketing they spent three thousand dollars from the corner they got three hundred and fifty leads eight dollars and fifty seven cents per leaf now naturally as you go from leads to qualified leads you're gonna whittle down the number of actual leads that you've got because you know you're gonna be talking to a lot of people whether or not they're qualified or not is something else entirely so in this case the company is taking it a step further and they said you know we met three hundred twenty-five people but under two hundred and ninety five and really the kind of companies want to deal with so in that case it's simply seven thousand five hundred / 295 25:42 so yes in this case it went up but it's going to go up for all of them okay all of these all of these marketing strategies you're going to see an increase once you determine your your cost of qualified leads okay print went from 150 to 75 so not I'm not a very good marketing campaign it's double the cost once you've analyzed exactly you should be dealing with and then online marketing is fairly accurate so three hundred and fifty to three hundred is ten dollars as a cost per qualified leap now when you look at something like this you say immediately online marketing is more accurate it's more specific and you can analyze results at a granular level and you can do real-time changes you can change it isn't aeneas lee whereas with you know radio or print once you do the print you can't really change it as quickly and that's true so there's a lot of benefits to online marketing but you really have to take it a step further you can't you can't just look at the lowest cost of qualified lead and say that's the best strategy you've got to determine out of these campaigns where you've determined your qualified leads which campaigns has the highest closing rate on sales which campaigns has the lowest cost of customer acquisition so yeah you know trade shows may be fairly expensive but if you're meeting specific decision-makers and you're closing a high number of sales from these qualified leads then that's maybe program than running an online campaign okay so you got to combine strategies when it comes to marketing inbound marketing is online marketing online marketing is predicated on being searched by potential customers okay it's specific it's focused but it does take a lot of time to become experienced in it okay a lot of companies make a lot of mistakes when they start off with online marketing outbound marketing is the radio the print and the TV commercials and all these other things they're very expensive and it's difficult to track where the leads come from it's a lot you know that's why whatever you do call a company they they ask you how did you come to hear about us because they want to determine how you basically ended up calling that Company LP our marketing is difficult to manage because it's hard to pinpoint where leads come from give me an example you get up in the morning you see a TV commercial you drive to work you hear a radio advertisement you open up the newspaper during lunch you see a print advertisement you drive home another radio advertisement you see a billboard on the highway then you turn on the TV you see another TV commercial at some point in time you'd call that company and they'll ask you what made you call them and it's almost impossible for you to know exactly which one of those strategies forced you to move forward okay maybe it's a combination of all of them and that's why ellbow marketing is difficult in terms of tracking performance but it's important because in business the business markets nothing is better than a trade show we've got all your customers in one location so again marketing budgets available on the website the link was available earlier a link is probably puff above my head to explain the differences between inbound and outbound marketing in terms of the pros and cons but define your marketing expenditures determine your cost of leads then determine your cost of qualified leads and when you get to the point where you're identifying the marketing strategy that produces the most customers that lowers your cost of customer acquisition that has the highest closing rates then you can work it backwards and start making adjustments up in your budget so that's it Ian Johnson driver success com bye-bye