The marketing movement by Refine Labs. Hey everyone, welcome to another episode of the marketing movement podcast by Refine Labs. My name is Sydney Waterfall. I'm a VP of demand here at Refine Labs.
And this episode, I'm a company by some of my favorite people, Ashley and Tori. And we're going to do intros in just a second, but we're going to be talking about split the funnel. What is it? Why we do it?
How we do it and how you can actually do this at your own company. So it's going to be a great topic and I'll kick it over to Ashley and Tori for intros. Yeah. Thank you, Sydney.
I'm Ashley Lewin. I'm my director of demand gen here at Refine Labs. Hi everybody, Tori Kinlick, director of demand gen at Refine Labs. Awesome.
So actually funny story, I'm going to kick with a quick story. I had a LinkedIn post a couple of months ago that I was talking about. So the final, if you follow any of our fine labs on LinkedIn or any content, you'll watch our other podcasts. You've probably definitely heard of this, but in the comments section, someone asked us, do you have a class or do you have an instructional way where I can get more details than just like a text LinkedIn post?
And so what better way than the source topics for our own podcast? We talk to you all the time. So that's just a fun story. And then we can go back to those comments and link back to this podcast and say we did it for you guys.
Awesome. So let's jump into it. Let's start talking about, first of all, why we even what the split funnel is to us and why we even go through this. So Tori, I'd love to get your perspective on why is this even a helpful thing to do and what is it?
Yeah. So I didn't have a lot of experience with the split the final exercise before I came to Refine Labs. And along with Chris and Megan and the state of demand gen podcast, that's really where I started learning about this concept a little bit. And the more I dug in, the more sense it made.
And so kind of getting to the root of it, right? The reason that we regularly perform this exercise when any of our new clients come on board is to understand, I would say above all else, how their leads, how their investments are turning into revenue and understanding more importantly, is that coming from inbound sources or outbound sources. I think that is possibly one of the biggest takeaways from going through this entire exercise is the output is going to give you a really clean sense of how much, what percentage of your overall revenue are coming from those inbound channels, those inbound investments, inbound sources and what's coming from outbound. And for so many marketers that right now are interested in trying to make the move from lead gen to demand gen, this is a great way to do it.
You're leading with data, right? You're analyzing some of the past performance and you're splitting out your performance results in a way that's really going to help you justify the changes that you're looking to make. And so that's a big part of the reason why we do it here. And it's also super insightful for our clients.
I can't tell you how many times I've run through this exercise and met with just wide open eyes. Like, oh, wow, I hadn't seen that before. I hadn't thought of that. I hadn't looked at the data this way.
So certainly valuable output, but I think it also creates a nice dynamic between our clients and I when we start off our engagements and are able to see some things in their data and their performance that maybe they hadn't before. Yeah, that's the key thing that we like to do here. I've done that previous companies too, but it really helps when you're trying to make that transition from a lead gen model and you're trying to get that stakeholder buy-in to kind of switch to more of a demand strategy, focusing on high-intent conversions, essentially using especially paid social in a completely different way. It's scary for people because they're like, well, we don't know what this is going to do to our pipeline.
We don't know what this is going to do to our entire funnel. To put your eggs all in one basket is very scary for marketing leaders, sales leaders. They're maybe not so bought in. But by looking at this, especially if you have been running a lot of lead gen, you can clearly see which types of channels and types of conversion points.
So gated content, webinars, demos, trials, pricing requests, contact us, whatever you got, you can clearly see how that articulates into your funnel and what levers you can pull instead of looking at it just blended. We need this many leads. We don't care where they come from and they're going to convert to this many MQLs. That's a little too high level when you're running more of the traditional B&B playbook.
But I'd love to hear too from Ashley what's your perspective on how to introduce this, and how to present this to get that buy-in to make some decision changes? Yeah, for sure. What you alluded to, a lot of times when you're wanting to switch a marketing from a traditional B&B playbook to this new D&B model, a really hard piece of that is getting buy-in, especially from the executive leadership team because of the metrics that marketers are held to. So typically it's cost per lead volume, things like that, conversion rates.
In this new way of doing a demand gen really makes you rethink the metrics. It's a great way to use this funnel analysis to pitch what metrics you should be opinionated by and why the previous playbook is not working. I think it's a really great persuasion piece and also a really great deeper, different way to look at the business in general as well. You can see those inefficiencies and see in order to scale, a lot of times I've seen certain businesses say, okay, in order to scale, we need to hit 30,000 MQLs per month.
One that does not make financial sense if you break it down by how much does the cost per lead, how much are we paying SCRs to work these leads, what's the conversion rate, what is the total cost of these leads? It just doesn't make financial sense. When you're looking at doing it a different way, bringing in a split the funnel analysis and giving a really great deep dive for everyone to look at the financials, I think it's a really great use case for it. Definitely agree.
I want to pivot a little bit. We've definitely talked about how we use it, why it's useful, how you could probably use it in your organization, especially if you're trying to get people to move in a different way of the traditional B2B advertising playbook. Now let's start talking about how we actually do it. What data do you need, how we actually execute it, and some tips like that.
I feel like we will probably spend a lot of time on this because there's a lot of different setups and a lot of different things. Let's just start with data points that you need. I might get a bit of a tour to go over some of the key points you should be looking for in your Salesforce, set up or marketing automation setup, and then we'll probably riff on this for a while. Yeah.
The place that you want to start, and actually, Sydney, I would love for you to weigh in on this topic a little bit, but the place that you want to start is by looking at your campaign sources or your lead sources. These can be two different things based on different attribution models that you may or may not be looking to move away from. In your experience, Sydney, what do you think is the right way, what's the right starting point here? Is it a lead source report?
Is it an opportunity source report? Is it something different? How do you feel like it's the best way to get started? I'm happy to run with things from there, but I feel like this is a great topic for you to weigh in on.
So, companies will call fields whatever that they want. It leads to source and campaign, and all these things that we're talking about could mean something completely different to each individual company. We see this across the board, how people are using the field lead source versus a campaign metric. But really, the two things that you need to get to is, I'll say how I refer to them and the definition, but find this in your data, whatever you call it.
Is number one is how the lead actually, what offer that they interacted with. We typically call this a campaign. Campaign are offer, but a lot of people populate this field into their lead source field. However, whatever field is capturing this.
Let's look at gated content, webinar signups, free trial, whatever. Those are your campaigns. You might have a global campaign with a lot of data content and then what types of data content or webinar, what types of webinar, right? But overall, bucket them into those campaigns and offers.
That's what you're going to need to pull all of your leads by. And usually, it would be great if you had that at the conversion source, but not a lot of companies have that set up, especially for historical data. We definitely recommend, I would say, doing this book the funnel for like a year, like the previous year or like a long data set, especially depending on your cell cycle. So that's one field.
If you don't have a campaign source, don't worry, just use first touch. Let's just start there. How the first touch is. And now that brings me into source.
So source, again, whatever you call this field, I think about it is actually the marketing channel, paid social, organic social, paid search, being Google, whatever the actual channel and the channel details that drove that to convert on that offer. That's how I think about source. A lot of people use different field to call that. So again, whatever you think, whatever that looks like in your data.
But you're going to need that source and then you're going to need that campaign or offer. And then that way you can take all of your leads. Let's just start at the top of the funnel. Take all of your leads.
If you don't use the lead object, use the contact and it's going to be a contact report for you. Pull all of those. And then when you pull that report, you can either do a lead with converted, a report called lead with converted information report, which will show you the opportunity data associated to those leads. Or you might have to piece a few reports together.
You might have to run a lead report and then you might have to run a separate report for contacts or separate report for opportunities. It very much depends on your operational setup. So if I'm just talking gibberish right now to you, then this is a great project to really partner with your operations team and learn the ins and outs behind how you're reporting and set up, how things flow into different objects and how to report on this. That's the only way to learn is to reel your sleeves up and get into it.
So if you're not as confident on the upside, use someone that is and use it as a project, like a working project to figure it out. And that will pay dividends in your career. So that's kind of how I would start at least those two metrics. And then I actually, and Tori, you kind of level this out a lot with the different clients.
So we'd love for you to kind of build on like next steps after you pull that initial thing. Like where do you do next with it? Yeah, so I think, thank you for that, by the way. That was the next level insight that I was hoping you'd be able to offer on the topic.
And so to just kind of recap on that, right, we're essentially taking, if you have that kind of conversion point data by campaign, maybe, you know, you're ultimately compiling all of those that might fit into one of these channels, you know, like Facebook, like LinkedIn, and so on and so forth. And if it takes a couple of different reports and you kind of have to, you know, do a little bit of manual data manipulation, still be it, it'll be worth it in the long run, I promise. But the really what you're getting to there is, you know, kind of your starting point. And once you have that list of those conversion points or campaigns that are ultimately making up that channel source, that's when you can start to pull the individual data points that you're really going to want to kind of plot out, ideally on like an Excel sheet or something like that, to start understanding how these things are tracking all the way from your lead to close one revenue.
So the way that we're typically running through it and designing our kind of, you know, spreadsheets here, right, it's going to start with that source. And from there, you want to look at how much close one revenue did you get from that source, right? And at this point, you're going to be summarizing all of the conversion points that make up that channel source. How much close one revenue came from that source?
How much money did you spend on that source? The number of leads that were created, the number of opportunities that were created, that will give you a lead to opportunity conversion rate, always helpful. From there, the number of opportunities, one, the opportunity to close one conversion rate, helpful lead to close one conversion rate, also helpful. And then from there, you can also start to see what's your average deal size from this particular source.
If you have sales cycle data, that will come in handy here as well because the last data point that you're really working towards and this is kind of what's going to help you stack rank everything is that pipeline velocity formula. And so you'll be able to calculate that based on some of the data points that you just collected, the number of opportunities, the average deal size, the win rate, and then divide that by the sales cycle in days. And so that pipeline velocity figure that you'll get for each one of your sources, that's going to be what you're going to use to really help you understand just how impactful that particular source is as compared to the others. That's going to help you kind of normalize the data.
So you've got a common point that you can compare to each one of your sources. So that's the way that I've learned how to do things based on the templates that we follow here. And I think that it's been, like I said, super powerful to put some of these results in front of clients, but also very insightful for us as we're really starting to get familiar with a new account that we might not have a long-standing relationship with. We don't know what happened before we started collaborating together.
And so this data really helps you kind of tell that story. Yeah, I think that's the spot on, Sini. And you got it perfectly and Tori as well. I think another really great thing is to put the ROI on it too.
So being able to take this data after you have completed the whole process of splitting the funnel and then look at how much money did we spend on X-channel. So let's say I linked in Facebook, Google AdWords, et cetera. And then you can look at the results that you have generated through this process. And you can see what is the ROI on it, what's our ad payback period or CAC or things like that.
And I think it'll really shine some light on where to focus or where to pivot, especially with marketing initiatives. Yeah, something else just don't on me that I think is important too, right? We're talking about this move from lead gen to demand gen as a, and about face, right? It's a very, it's a big change.
And we're kind of looking at it in a very binary fashion, right? You're doing lead gen or you're doing demand gen. What this exercise could also help you do is let's say you're trying to maybe do a little bit of a slower move from lead gen to demand gen and you're looking at holding on to maybe one or two of those investments or channels or campaigns. That is really your traditional lead gen approach while you're trying to really focus a lot of your time and energy and attention on a demand gen strategy.
This is going to also help you understand which of those sources and channels you should be considering hanging on to. Even if it doesn't fit the roadmap that you're interested in going on and taking on this full inbound strategy because it's a big change for many companies, this is a way that you can figure out, all right, which of the campaigns, which of the investments do we want to continue using? Even if it's not exactly what our collective team is interested in doing, this is a channel or a campaign or an investment that was profitable, that was fruitful for us last year. So maybe we hang on to this one a little bit longer as we're starting to make the move from lead gen to demand gen.
Yeah. And I think a big piece of this too is when you do this exercise, you'll have direct and organic as channel sources that you will see. And nine times out of 10, they're going to be very, are live positive. And I've seen a lot of marketers get a little bit roadblocks by these channels because unlike other channels, they're not easily attributable.
You can't see directly into them, you know, direct at someone coming straight to your website, organic, they're searching for you. You don't know the actions that they're taking beforehand. And that's really, really where demand comes in. And it's driving that demand in a consumable way for your target audience.
So you're looking at how can we get our message in front of more people? And so how can we drive, you know, those direct and organic up? So those are two channels that you can impact. So I just want to call that out because I know that's been an obstacle that I've faced in the past or I've seen other marketers face as well.
So if you see those two channels come up, you can drive results in them. That's a good, we were talking about amount a lot here too, which is most marketers are focused on inbound, but it's also a good way to truly understand the business. Like you might have a pretty large partner section. So you could do the same, like that could be one of your just like, we're looking at inbound and outbound.
You could also have partner or I don't know if you have like affiliates or something like you might have some other big channels and then you can understand how inbound compares to all of those channels. And what that will really allow you to do is like, okay, so outbound is, you know, our lead to win rate or opt to win rate is this and let's compare that against inbound, all inbound and let's compare that against like partner or something. So you can understand what is more efficient for the business and where this will help you when you want to try to go present and get more budget and more resources. You can say, okay, if we put more resources here, it's going to have these, this channel or this segment of the business has a better, you know, lead to win rate and it has a higher ACV.
So that's why we're justifying moving some of the resources maybe around a little bit. So it'll give you experience there. If you're doing demand gen well, not lead gen. If you're doing demand gen well, you should have higher conversion rates than outbound.
If you don't, it's a signal that you definitely need to make some strategy changes. Also, hopefully your great demand gen model of, you know, kind of what we preach about will also help increase outbound as well because they should be more familiar with your brand. And what you do, however, I also want to call out like don't like to Ashley's point, like don't get stuck of like, oh my gosh, paid social, the especially for running lead gen, the lead to win rate is horrible. The cost for, you know, close one, your advertising cap, your advertising cost to acquire customers is outrageous.
That is a signal that you're using the channel in not the best way. Yeah. So, you know, just because you're on LinkedIn and on Facebook, and maybe you're using it in the wrong way, LinkedIn, Facebook, all these channels can be used effectively. Same thing with paid search, maybe you're overspending there, over indexing.
So just when you run that, it's going to tell you what's going on in that channel based on your strategy that you've been running in that channel for the X, last 12 months or six months, whatever data set you're looking at, I would recommend at least 12 months if you have the data. So that is also going to add fuel to your fire to say, this is why we need to change our strategy and approach in these channels. It's very clear. This is inefficient compared to all these other things we're looking at.
This is why we need to make that push and kind of get that decision maker buy in. And then your point on organic and direct, I would say that's why we really focus on, okay, once you switch your strategy over to demand gen and you switch your approach on some of these paid channels, you need to be looking at the website funnel because you are not going to be getting, when you change your strategy to a true demand gen, not asking for convergence, waiting for people to come to you and convert, you need to look at all of the source level, the channel level metrics blended because as we know, we're not forcing the conversion, we're not going to get direct attribution on it. You know, shameless plug for the how to hear about us field, that will definitely help you because it's very hard to explain to some executives how organic and direct increasing is due to a shift on our social strategy, if they're not completely bought in. But those are some key things that you can use from that data when analyzing those results.
So don't just get stuck in inbound, like look at the whole business as a whole, it'll make you a better marketer. But here's to how any other insights that you guys kind of pull out from different reports and different setups as well. Yeah, one of the interesting, I think, flavors of all this, right, is there's going to be marketers that are maybe you're coming into a new role at a new company and they don't have a history of demand gen. You know, going through this exercise, some of the granular details that we're talking about, those insights might not be available to you and that's okay.
One of the ways that you can go about this, if you do have a little bit of a shortage of clean trustworthy data, is you still want to go through the same exercise, the same approach as best you can, but your output might just be how much of your revenue comes from those inbound and outbound sources and that ultimately becomes your new North Star. All right, I want to change this mix. It was 50-50. I want to get it to 70-30.
And so I think that there's still a lot of value in going through this, even if you don't have the same level of detail on some of your CRMs, because I've certainly come across that in some of the work that I've been doing for clients. These CRMs, it's difficult. You've got a lot of different people with their hands in it. And sometimes, over time, the overall quality of the data can degrade, but that shouldn't stop you from trying to move forward with a demand-gen strategy, just because you don't feel like you've got enough trustworthy data as your foundation.
There's still a lot of valuable insights that can be had by going through this, even if the output isn't quite as detailed as some of what we're talking through here. Yeah, I see this as a huge obstacle for a lot of marketers I've faced in the past, too. Data is never going to be 100% clean, so I think just accepting that right away. And you don't need to be able to have all these reports live within your CRM.
I think it's going to be alluded to this really well in the beginning of the podcast of you can just slice and dice different reports. If you need to pull it from this CRM or this database or this spreadsheet, you can match it all up and Frankenstein it into your own Excel document and get the same actual insights. So don't let the uncleanliness of data hold you back from doing the exercise, because it does provide really, really great insights. I like the whole idea of Frankensteining data.
That might be a separate one. That's not the case. Linked in the headline post. Sorry.
I think that's a good point. Yeah, there might be a bunch of different data sources, especially depending on your maturity as an organization and how many resources that you have. One thing we talked a little bit about how to action results, but these results are also super helpful to come back to when you're getting pushback or anxiety about how is this working. I don't know.
Let's just go back to running ebooks and doing this. So a lot of times you could show your company, but we could go back and say, hey, this is why it doesn't make sense to put paid media, paid spend, paid dollars behind gated content. We know that they don't close. You can go back to that data and reinforce the decisions that maybe you've agreed upon to move forward and change your strategy.
I'm curious how you guys have used that data too of moving forward. Once we make a decision, we start to move forward. How do we make sure we're refreshing that data, coming back to that, handling objections, because I'm sure a lot of marketers are a little worried about how they're going to handle objections of pivoting the strategy. Yeah, I think first and foremost, you need to get aligned on the metrics moving forward.
So for instance, instead of looking at cost per lead or lead volume, you might be looking at pipeline created, you might be looking at cost per SQL or marketing, and then really making sure everyone is aligned to those metrics versus what may have been measured beforehand. So that when you keep coming back to it, you can say, okay, we were running gated content, leave gen forms on platform. It was a marketing pack of X. We've been running this for six months and now we have a marketing pack of X, you know, just using your ad spend, a very kind of rough number there.
And it really just shines a light on the efficiencies and it does take a little bit forward to come into effect too. So you need to give it adequate time in order for it to hit, but making sure that you have the right metrics in place, I think, is like number one, you need to get down. And then coming back to it, making sure either if you're doing it on a cohort analysis or if you're doing it on monthly analysis, just make sure that you're pulling it the same way every single time to make sure you're comparing apples to apples here and making sure that you constantly reporting back on it too, because you do need to watch. You need to see how it's performing over time.
And I think that also allows for confidence in the plan as well. Yeah, I think that was so well said, Ashley. And it's coming back to and continuing to revisit, right? Ultimately, you're establishing your benchmarks here.
And this is kind of the data that you want to continue to improve upon. So like you mentioned, time has a big factor in all this. You need to make sure that if you're calculating things like pipeline velocity or cost to acquire a customer that you're leaving enough room for that full sales cycle to happen so that when you're measuring things from that lead entry point all the way through conversion, you're not ultimately selling yourself short by cutting off that window that it personally typically move towards a close one. But no, I think you really hit the nail on the head there.
That's continuing to revisit these things I like to do on a quarterly basis and just comparing how our current performance over that quarter compared to those baselines just so you know that you're continuing to move in the right direction because there's a whole lot of value that can come from doing this so that you can make the case to move from a demand gen to a lead gen model. But people aren't just going to say, okay, you're off on your way, right? They're going to want to make sure that you're generating results from this new approach, this new strategy. And so continuing to compare your new results against those original baselines, that's how you can continue to justify this new way of working, this new way of marketing.
Awesome. Well, I hope this was super helpful for anyone that's trying to go through this with the funnel process or is thinking about it. We could probably riff on this for like another hour, honestly. Just to kind of summarize data points that you need to get started, your lead sources, which is we're going to be your marketing channels and details on those channels like paid social, LinkedIn, Facebook, paid search, Google, Bing, those types of things also include outbound and the other channels that you have like partner.
The second data point that you're going to need is going to be that campaign or offer. So demo trial, contact us, webinar, data content, incentivizing demo gift cards could be one that you might want to do this on because the results are very telling and then run that through for the last 12 months at lead to op create to pipeline to close one, measure your conversion rates, lead to op, opt to close one lead to one, your advertising costs where you start calculating your advertising cap, marketing cap. And if you have sales cycle pipeline velocity and deal average deal size, that will calculate your pipeline velocity for you. So quick summary, but hopefully this episode was helpful and yeah, let us know if you guys have any feedback or any questions.
All right. Thanks for listening. Thanks everyone. I'm going to go Frankenstein some data.
Bye.