Budget season is here! One of the most stressful elements of budget planning is the guesswork and the calculations. In order to provide an accurate budget estimate, you need to understand revenue forecasts. While analysis of pipeline is largely mathematical, there are numerous assumptions that make it difficult—you look at the number of deals, opportunities, SQLs (Sales Qualified Leads), MQLs (Marketing Qualified Leads), leads, and finally names in your database. Working backwards, you estimate conversion rates between stages, and ultimately, you land on a number which determines how many programs you should run in order to be successful.
The problem is that determining the number of programs to run necessitates a lot of estimation. How do you really know that the paid email program you are spending $7500 on will provide you with 500 new contacts? And of those new names, how many of them are actually a great fit for your business?
This makes budgeting a huge challenge. How can you account for these unknown variables and how do you know that the programs you are running are targeted?
But, what if you could be more targeted and optimized with your program spend? What if you knew you were basing your ROI estimates on actual data and not just guesses?
There are multiple ways that predictive marketing can make this a reality. We go through all of them in our brand new ebook, 2016 Planning: How to Budget for Predictive Marketing, but we wanted to give you a taste.
Implementing predictive marketing enables you to optimize your program spend—making your dollars much more effective. Optimization ensures that your program spend is better positioned to return real ROI.
We know you are going to spend money on programs. You are going to spend money on lead acquisition programs and you are going to spend money on relationship-building programs for the prospects already in your database. However, there are two problems with this broad-based methodology:
1. Your programs are not targeted.
Sure, you can create targeting rules for your ads, paid email campaigns, and content syndication. You can try to target certain companies that are in the right industry, with a certain number of employees, and a certain amount of revenue. However, you can’t be sure that the people who respond to your programs are precisely who you selected. And how do you know that the people you think are your target audience actually look like your best customers?
2. You can’t prioritize your database.
In addition to top-of-funnel programs that you are using to generate new leads, many demand generation marketers also engage in programs targeting those already in the database—nurturing leads to become customers over time. However, you run into the same issue. How do you know you are spending time working the right accounts and leads?
Predictive marketing can help make your programs more precise by enabling you to target accounts that look like your best customers. Instead of the typical batch-and-blast wide top-of-funnel model, predictive marketing enables you to analyze your customer data to create an accurate customer model. Using the model, predictive marketing provides you insight into what accounts you should actually be spending time on.
So instead of testing three different content syndication vendors to see what works, you are armed with the data you need to make your program decisions more wisely. In other words, why test out three different content syndication vendors if you know your target audience only frequents one?
Additionally, predictive marketing gives you a perspective on your current database. Instead of blindly nurturing prospects, you can focus on the people in your database who match your customer model. Using a predictive solution, you can bucket your leads based on their probability of closing. From there, you can determine what to do with your A, B, C, and even D leads. You can stop wasting time on your D leads and start spending time with your A’s!
Sound intriguing? To find out all of the ways that predictive marketing can optimize your budget, download our latest and greatest ebook 2016 Planning: How to Budget for Predictive Marketing.