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Explaining how you are spending your marketing dollars is a challenge that all heads of marketing face. Cynics in your company are always happy to point out a failed program, which tars all your demand efforts with the same brush. What to do? Counterintuitive as it may seem, start by pointing out your failures. Here’s how.
Many marketing teams make the mistake of lumping all of their demand generation programs together. So all people hear about is the total number of leads delivered to sales. But when you do this, one bad program taints all leads. Stop letting that happen. Instead, use what I call the “Demand Maturity Matrix” to present a structured view of your demand generation efforts.
The matrix is useful in communicating to other teams as well as within your own. Prioritizing your demand generation efforts in this way is helpful in communicating to your CEO or your board. The matrix demonstrates you have a plan and a disciplined approach to marketing investment. By pointing out programs that have failed, you remove that dart from the cynic’s blowgun. Failed programs are just a matter of course.
Your marketing team will also benefit. Conversations within your team will become more objective. I’ve also found this approach encourages creativity by allowing the introduction of new ideas in a metered fashion while not taking too much budget away from programs that are working. Having a category for failed efforts tells your team that it’s okay to fail—it’s expected, really—and you can conduct constructive post mortems on things that didn’t work.
Here are my five categories of demand generation programs in the Demand Maturity Matrix. I suggest you use these five, but adjust the thresholds according to your business or budget.
Moneymakers: These are your mature programs with a known ROI. You can tell your CEO how much pipeline one dollar of investment will yield. Arguably, you could stick only to these programs if there is enough headroom to get you all of the leads you need.
Emerging: These programs are showing a positive ROI, but maybe not quite as much as your guaranteed moneymakers. Perhaps they are not optimized or have not had enough time to yield. You should use your judgment on how long to run them until they either graduate to become Moneymakers or are retired.
Experimental: Marketing teams should always be innovating—or copying programs they have seen elsewhere (no sin in this, as it says in one of my fave books to flip through, Steal Like an Artist). Allocate small budgets to these until you can tell whether they are moving up or out. This categorization is also really effective with budget gatekeepers. Just show them that you’re allocating a small amount for an experiment that could get big. If you have an example of an experiment that made it all the way to the Moneymakers stage, even better. “You wouldn’t want your parsimony over a $5000 purchase order to stand in the way of a big payoff, would ya, boss?”
Bullpen: For those few humans who have never watched a baseball game, the bullpen is where relief pitchers warm up. Put your ideas for experiments here until you have time to work on them.
Retired: Not all programs work. Put your failed Experimental and Emerging programs here. I find this effective in demonstrating one’s fiduciary responsibility to one’s superiors. You are not a wanton spendthrift. You pull the plug on stuff that does not work.
Importantly, programs can only move up or move all the way down to Retired. You can’t cheat by simply knocking a program down one level. Cut the ballast and move on.
Here’s an example of how you might display the matrix. I’ve made these numbers up; I’m not going to telegraph my marketing mix. Plus, they really vary by company.
The table above is pretty straightforward to read. I’ve intentionally left out CPL and conversion rates for this “executive summary” version. It’s pretty easy for a CEO to look at this table and understand the yield on marketing investment per program. The emerging paid social program is ROI positive but not at the level of the Google AdWords program. The comments field shows what is being done to improve its performance, or the impetus for planned experiments. For the partner webcasts experiment—which was inspired when someone noticed higher registration when a system integrator partner spoke on a webcast—I’ve included an estimate, which should serve as a target for the experiment.
You can create a more robust version of the matrix for your team. In that I would include not only the CPL and conversion rates but the quarterly lead counts per program.
Organize your demand generation programs into these five categories, and you will find it easier to ask for more money and still have room for creativity. Give your successes, crazy ideas and failures equal billing, and watch your demand soar.