Hey everybody welcome to the second growth podcast. I am Tory and I'm joined by my co-host today Allison So we've got a good topic for today a timely one We are currently in the US we are in entering the fall season and the fall season means a lot of fun things It's my favorite time of the year personally the weather's getting a little bit cooler. There's gonna be American football on TV I'll probably go shotgun a pumpkin spice latte from Starbucks tomorrow morning and and for all those marketers We're entering planning season which can be a really kind of crazy hectic time if if you don't know what you're doing But I think the the most important part right is that you're really kind of looking at the the year the last couple months last couple quarters behind you Understanding you know how things have been going in 2022 and also, you know really starting to focus on 2023 right what your your revenue targets your you know your different campaigns and things of that nature that you've been talking about all year that maybe you're pushing out to Either the end of q4 early q1 and so there's a lot of different things in motion right now And so alson and I thought we would try to record an episode talking through really a very high level framework for annual demand planning Admittedly, I did come across, you know a brief outline in the dgmg community just around annual marketing planning That's where this idea kind of was sparked But I also felt like although it was intended to be high level content It just left a lot to be desired and I know that we do a lot of this type of planning Whether it's right now for you know a full year or just a month ahead of quarter head We do this a lot with our clients And so I think that there's some things that we can take from you know the the high level outline that we have and add a little bit of the experience that alson and I have going through this and and provide all the listeners here with a framework that they can follow to You know a really conduct a productive planning session with their colleagues and get everyone really geared up and and headed in the right direction into 2023 Yeah, absolutely I would say one of the best things about progressing along and in my career here is I've gone through multiple planning planning periods and it's funny to look back on some of those first planning periods where it's basically I was very reliant on somebody giving me the goal and then I kind of figured out how we were gonna hit that goal and as I've grown in My confidence in my knowledge of how what marketing's role should be within an organization I like to approach these these periods of planning from like a really interactive perspective where I'm coming prepared with my data with my analyses my hypotheses to say you know This is what I think the number should be or could be or what marketing could contribute And so I think that's like probably my number one just thing I wanted to get across today is If you're a leader in your organization that has any involvement in planning Don't feel like the other departments have to tell you what you know marketing can or can't do you should feel really empowered to be part of that Decision and saying based on the data based on the history based on our market. Here's where I think we're gonna land Yeah, I think that's that's so important right that that we're we're taking a look at those historicals right to understand where we've been making some realistic projections and forecasts about where we could be but the thing that I want to kind of you know Double back on here that you mentioned Allison which when you and I started talking about this topic I think you rightfully kind of you know I guess called me out on this right and it's like when we were talking it was okay You start with the revenue target and and kind of you know work backwards from there, right?
This is not your traditional reverse waterfall math There's definitely a lot more to it than that but I think that the key thing here Right is that it shouldn't just be that your leadership team is coming to you and saying you know marketing This is your number this year. This is what we need you to hit It needs to be a conversation and and maybe even a negotiation and so I think that Having the data is going to be critical and being able to come to the table and really get realistic about the target that you're signing up for in marketing And then the other caveat that I want to throw into all this which is almost a little bit ironic Is that like one of the biggest mistakes I've made in my career is? Is is is thinking that these plans that we're gonna put together are setting concrete and that this is the charter for the year This is this is what we will follow if there's anything I can you know say with certainty throughout my marketing career It's that nothing should be sentenced to it should all be fluid You know you should continue to reassess but I think that there are some things that it is good to have a really You know at least a formalized plan is possible and a lot of that I think can be around the demand planning around forecasting using the historicals and mixing it a little bit about You know the growth targets and projections that you have and so why don't we get into that? Let's let's let's dive right in so to start you know again setting that that kind of outline that sparked this idea for us the the real kind of I guess key components of of this this approach was you know start with your revenue target break it down into key marketing levers and then And then really figure out your tactics for for impacting those levers and so here's what I mean Let's say let you had your revenue target and the levers in this situation are going to be you know What are the big bets the big approaches the big programs that you're going to be running to hit that revenue target and the tactics from there might be your individual campaigns or you know channel specific strategies or something that you might work on to improve conversion rates or retention and so You know it starts big and it gets it gets kind of smaller from there But what you don't want to do right is just be planning tactics at this point in the year That's gonna get you in trouble That's just kind of spinning your wheels and it's and it's not the the best approach especially at this point in the year when you know You're kind of thinking What the year of 2023 my green what big targets does the company have is this a plan?
I can put in front of the the C suite and if you're talking about tactics then you're not gonna get very far So starting with revenue definitely the critical component of it here and Allison going back to what you were saying before right? Like it shouldn't just be about you know What what is the revenue target and what percentage of that you know is marketing signing up for but instead? Yeah, I'll kind of let you take things from here. Yeah, well, I mean, yes the ideal situation is it's like we're coming and having a conversation I love your idea of the negotiation, but actually I would even take here's your revenue number over Here's your MQL target or here's the website traffic target or here's the you know LinkedIn follower target that we have So actually if your company is coming to you with a revenue number I would say you're probably on the the better half of the path here forward So yeah, I was just kind of thinking about that actually as you were talking is ideally It's it's collaborative But the next best scenario is that the company has identified that marketing can be accountable for a revenue number Not a pipeline influenced number not an mql number but an actual revenue net new logo acquisition number So I think that is you know Just the number one thing if you have not gotten there yet as a marketing organization You need to beg to own a number because that's the only way that I think marking in you and I talked about this will be shifted from a cost center to a Very strategic part of the business is a hundred percent right and I talked to a lot of marketers Not necessarily, you know just like clients that we work here at fine lives So people in my network people I've worked with throughout the years and that is a common complaint right marketing is we're looking at as a cost center People come to us to you know build decks and and and collateral and help them prepare for events And and we know that marketing can and should be doing so much more than that And it starts with owning that revenue number and really trying to figure out like how much we can contribute to the business this year How much can how much marketing sourced revenue right that revenue that comes in from the website or even let's say is directly attributable to some of your other sources how much of that can marketing contribute to that overall target this year and Figuring out you know what that that number is is going to be your best starting point And also you know could potentially be a really big unlock for some of those companies where marketing is really trying to earn a seat at the table And not just be looked at as a group people that you know Sits around goes a happy hours and and builds PowerPoint decks all the time Exactly and right along with that I think one of the things I did wrong early in my career is maybe I had a number But I didn't have the right line of sight to what the cat goals were and so I do think a very important part of establishing a revenue target Is also understanding the cat goals?
So what's your average selling price and how does that factor into your net new logo number? Which is then sort of a larger revenue number and okay now I have my my cat goals so that when you move into that growth over in that tactical Phase you know exactly how much you can spend to be efficient to be profitable or maybe you're willing to say all right We're gonna run out of kind of a profitability deficit for a little bit because we have a lot of work to do and we need to really spend kind of Grow that all costs in the beginning and then focus on our you know profitability on our efficiency metrics So until you identify if you don't identify a cat number It's very difficult to make those budget projections and the other thing that can be difficult is if Finance is giving you a budget and you don't know those cat numbers It's hard to say this is or is not enough and to have those healthy conversations with your finance team on no You know, this is this is what I think I'm going to need I need this You know has to be able to be used fluidly throughout the quarter You know, I don't like to get into a use that or lose that situation So I think all those those inputs are really critical to get like in the early stages before you even dive into tactics or go making the 125 page marketing playbook for the year, you know, you really want to know exactly exactly how you're going to get to that end goal Yeah, and I think the other thing I'll add is Oftentimes it can be difficult for marketers to get the full cost to acquire customer because that is frequently going to include things like FTE right the headcount and that's not always let's say kind of publicly available information throughout the company So depending on you know the level at which you work and how close you are to your finance team and you know the overall leadership team CAC is the ideal but you know, you could also look at it as like ad-cac, right? That's something that we use pretty frequently and you know And that is much more focused on like the amount of money that you're spending within your advertising programs or paid media programs And how that kind of connects back to your ability to acquire a customer and certainly the you know the act back paid back period as well, right? How soon are you gonna be able to effectively repay the the funds that you know, you're using up within your your ad budget?
So great stuff. Okay, and so taking things right, you know, we're at the top, right? We've got the revenue target and so what do we do with that? So I think like here's where we get into what we're calling these these growth levers, right?
What will be these key drivers of the marketing contributed revenue and you know Trying to also kind of figure out how much budget do we need in order to really achieve these growth levers? So I think that you know, this is going to be a part of your strategy where having quantifiable goals is The best case but but big but here, you know, maybe not every single one of your growth levers is going to have you know a specific let's say number or metric that is is gonna be part of the growth lever and it should be part of the tactics That will follow but we'll get into that in a few minutes And so with these growth levers right like for instance As you're starting to get into you know, some of the kind of like demand planning here and and starting to look at your historicals That's when you can start to say okay, you know, based on the let's say the the hand raiser number that we saw come in previously This is you know, what we saw from our conversion rate This is what it led to in terms of opportunities and close one revenue And so from there, you know, all of a sudden when you're starting to kind of unpack each let's say sage of your your your inbound funnel That's when you can start to kind of uncover what your true growth levers are is it going to be that top level demo number? Is it going to be the conversion rate from the demos into pipeline? Is it going to be the conversion rate from pipeline into close one revenue?
You know really starting to dissect your funnel and look, you know stack ranking against what else you can find as far as like industry benchmarks and how your your company is stacking up or perhaps Looking at it year over year and figuring out areas where you've grown in the past that you know, you can continue to grow You know, this is really where you can start to figure out with data What the right way for you to approach that revenue target is and do a little bit of kind of modeling and forecasting around that So, you know, Alison I know that we've got a really robust template that you played a large part in building around here for how we do this demand planning But do you want to kind of let's say run through it verbally here and at least give some people, you know At least some some insights into like how this um, you know that how we handle demand planning here and we can tie back to you Know the annual planning the growth levers Yeah So I think like your biggest growth levers are obviously your budget and then your conversion rates and your income of your unit economics Which is largely tied back into budget So I really like to think of and I've made this mistake before where I mix up levers with tactics So a lot of people will say oh my growth lever is linked in no linked in is your tactic your growth lever is you know a paid media strategy on on a you know on LinkedIn platform and in order to do that really that the lever is like growing and Accelerating and amplifying your inbound programs holistically. So I think it's just like if you're still like just that one level up So I like to look at Tori's point Like where can we increase conversion rates because we can do we can get away with less at the top if we can squeeze more out of the Bottom so what are the fundamental programs that I need to put into place to tighten up some of those conversion rates accelerate those conversion rates a little bit more I think Yeah, no the other thing I like to look at too is I talk a lot about like point of diminishing return from a budget perspective So really look at on average You know as you increase over the last six months as you've increased your budgets by X How much have your forms of missions grown and that gives you a sense like if your ratio is extremely off if you're Increasing budget on average like 40% month over month and you're only seeing a 5% lift then you've you're overspending in that tactic and you need to Consider pairing back reallocating investing in some other fundamental programs. So really just making sure you're not equating If I spend here, I'm gonna get that equal amount of return here. It's not it's not parallel that way Yeah, and so I think it starts with your historicals right mapping all that out, you know use a Google sheet or you know an excel sheet Starting with your you know your revenue your your demo volume the opportunity volume and calculating the conversion rate in between You know, maybe what turns into what we call a hero a high-time revenue opportunity Some folks know it as a sales qualified opportunity So that that lower stage in the funnel and again, you know calculating your conversion rates along the way And then you know into the close one revenue And so what that'll give you a picture of over the past year is what your performance look like throughout the funnel And now you can start to begin kind of playing around with each of these levers and saying okay let's say that I know what all these conversion rates are and I know that you know if I Spent a hundred dollars last year and I got a hundred demos Well, if I spent 200 dollars next year might I get 200 demos?
And so you know really kind of playing around with the numbers like that to figure out again, you know What do you want to make your bets on in terms of being able to impact that that bottom line that close one revenue? Which is ultimately going to tie back to the revenue target that your company owns? But I think the part that's also important right is that let's say that your you know your financing says your budget is flat year over year and But your your revenue target is going to increase 25% So this same approach is how you can go and and say okay, let's face that in a little bit of reality here Here's what we achieved last year and here's what you're asking to achieve this year And here's the delta now How are we gonna go make up the delta is that you know a hundred percent marketing's problem to figure out in many cases? It is but again you know This is where you want to have the tough conversations with your your leadership team with your CFO and really kind of you know Help them see your view of the world and and of course facing a lot of that in the performance data is the best way to do it So it's not purely assumption based or you know Yeah, kind of going against what a lot of the beliefs are around the company if you've got the data to really back up a lot of your Your narrative there.
Yeah, absolutely Okay, so from here, right, you know figuring out your growth levers, you know Maybe you've got like three or four of them your big bets for the year now is when you can start to really get into the tactics And this is kind of you know, I guess when it gets fun for marketers, right? It's okay If we know that we need to for instance increase our pipeline conversion rate in the closed one revenue How are we gonna do that? Right? It's probably not going to be from like cold targeting awareness based ads Maybe it's gonna be something a little bit more specific around let's say, you know Working really closely with your customer success team and identifying frequently asked questions that are coming to their team and figuring out how to build out Content strategies around that or maybe it's going to be something around, you know Your sales team is is just you know seeing a lot of bloat in a certain stage of the pipeline And at that stage is when x y and z is typically part of the conversation with the with the prospects And so again, you know really trying to unpack the data and trying to figure out what is the best way for you to make an impact there And starting to assign some different tactics and again, you know What the potential budget allocation might be for those tactics so that you can really start to Help your your collective team and certainly your leadership team understand how you go from the tactical execution all the way up to You know the the revenue projection or you know, let's say that the revenue requests that that you're being You're being handed at that at that juncture Yeah, and I think this is a really good spot to sort of take that larger revenue goal and break it down into quarterly or monthly targets Just to make the execution piece a little bit less nebulous and a little bit more like alright in q1 Here's what I'm going to focus on these are my specific tactics the goal is to you know pull those different letters that we talked about And in pulling those levers we're going to reach our target or our targets So I think that's how you start to sort of like ladder out these conversations together I think also at the sort of the tactical stage too is This is where you want to understand like what has been working and that like you're sort of like always on programs Any sort of incremental changes that you need to make there But then this is also a really great opportunity to think about your experiments and what does your experimental roadmap look like for the future?
What are you going to test out and and when is that going to be slated and how does it tie back to one of those levers that you need to pull So definitely in the tactic it shouldn't all be experimental But it should definitely be a healthy balance between the two and I think that sometimes I've gone too far in one or the other direction I've either been like pretty flat and just made these little micro changes Which really isn't impactful or I've been like I'm gonna try everything new it's a new year new me like this is exactly what you know I'm so excited for the experimental and you lose sight of like what's the engine that's keeping things running when you're in the Middle of this experiment, so yeah, or you're running so many things that you don't know what's actually making the impact there That's that's entirely possible too. And so I think that this is actually a perfect segue into kind of like the last, you know segment of what we're gonna talk about here, which is which is measuring success, right? You talked about experiments just now and you can't run an experiment without having an idea of how you'll deem that experiment successful Or not and I think that the same can be said for you know The entire kind of strategy that were and framework that we're setting forth here So I think I like to think about you know measure success and performance measurement from two angles There's the angle that's gonna you're gonna be looking at on like a day-to-day week-to-week basis Most likely this is gonna you know include at the very least some type of dashboard in your CRM Maybe you've also got like you know something that is in your marketing automation platform Who maybe you've got some type of business intelligence tool that marries it all together? But whatever the case like you need your performance dashboard, but then you know You also need to have some type of a very simplified view that can be socialized or put in front of the you know The leadership team the executives the investors the board of directors, right?
And so I think a popular approach there is right some type of marketing scorecard again You want to make sure that you're providing updates on your growth levers how you're progressing against them You want to kind of talk through let's say maybe any shortcomings and and gap remediation plans But the ideal here is that you can do all this on one page on one slide right and and ensure that this is gonna be very digestible Even if you're not the one that that is presenting it or socializing around so those are the in my opinion kind of the two pieces of the performance measurement But let's double back to that performance dashboard because we certainly have a very prescriptive view on What we like to look at in terms of our performance dashboard and Allison I know that this is something that's certainly near and dear to your heart So I'll let you kind of you know take a lead and and talk through a little bit about what things we like to look at inside a CRM yeah inside the CRM I always like to look at pretty much four main things and I'm different just sort of ways of visualizing that data so what you know How many close one? Opportunities do I have so how many net new logos do I have I like to look at the numerical value and then I look at the monetary value And I like to look at that in a quarterly and a month over month view And then I also like to look at my people have a variety of different You know ways they'll term this but essentially like your meetings booked and your meetings completed So I want to understand what that is is looking like and actually I'm sorry I skipped one book in between their clothes one would be your high-intent revenue opportunities so again like these are typically a stage two opportunity and They I like to look at that from both a numerical and a monetary value as well in that quarterly and monthly view And then the level below that is gonna be like your meeting booked meeting complete and then the level below that is your high-intent hand-raisers your high-intent conversions That's really the bulk of what my my dashboard is made up of and then kind of in a separate spreadsheet I like to look at the conversion rates between those I like to look at Layer in some unit economics. So like how what is my cat ad-cack? What is my?
Cost per hero cost per meeting booked, but it really it like everything I need to Understand what's working and what's not working comes from essentially those four main metrics that should live within your serum Yeah, and like you don't need a ton of tech to measure all this stuff right like you don't need you don't need a demo You don't need you know a full-blown business intelligence tool Hey great if you've got one and you've got you know team members that that can own that and utilize it that You know the appropriate way and if that's the case then bio means work with those people and you know build out Every single dashboard view under the Sun, but for the rest of us, you know, yeah that that view which ironically, you know Your view of the funnel there out and it's kind of flipped upside out right you're starting with the revenue at the top And then the top of funnel metrics at the bottom, but but yeah, you know Those are really the key pieces that you want to be watching as a marketer And you know even if they don't tie directly back into your tactical execution or your growth levers You know these still are the most important parts of what you're going to be looking at especially as a demand marketer is understanding You know the health of your funnel how things are you know what type of volume are you getting in the top? What's the quality look like and are there any kind of friction points throughout and you know These are the areas that you know we're recommending that you look at in order to build this plan But it's also extremely important to look at on a regular basis to understand Do you need to pivot away from that plan right maybe at some point you say wow our top of funnel volume is is higher than we expected our Conversion rates are better than we expected, you know, that's great And so that means you know You don't want to sit back on your heels and celebrate that means you need to pivot and and figure out something else to work on Some other way to continuously improve your operation your investments and and figure out, you know How to get even more out of the money that your your finance team is you know is giving you to spend and I promise that You know they're gonna be happy if you do take that approach and you're not again Just getting back to going happy hours and build a PowerPoint X Totally and I mean I'll tell you why I always flip that funnel and I'm definitely not alone I learned this from a lot of great marketers as well But I will inevitably get asked to make to your earlier point one slide or one sheet of paper to summarize what's going on whether it's an a quarterly monthly scenario and Really when you only have one slide or one page you don't have the space to look at your entire funnel You have to start with your customer goal Did you or did you not hit that goal and what are you going to do about it? And so the very like sort of next layer then is like alright Why didn't these opportunities come to fruition like I expected what can I do to move these already in my pipeline? So I already know they're they haven't sent their brand aware.
How do I move them? That's like problem number one and then alright why didn't these meetings become opportunities? That's problem number two so then I can kind of solve that tactic Why didn't these form submissions become meetings and I saw that and then kind of last on my plate would be like How do I get more form submissions? You know because I think it's always like you have to fix what's in your funnel first You're always going to want to put more into the funnel, but if things can't progress stage by stage then It at a certain point.
It's kind of irrelevant right? It's not going to materialize into anything So you have to figure out how to get all the juice out of the lemon that you have at the top And make sure that that you're thinking about it kind of from that backwards bottoms up perspective. Yeah, I love it That's that's that's such a great recommendation and I think probably a good one to close out on here So I think that we have outlined what I look at as a really effective framework for you know building out an annual plan Just saying annual plan kind of you know, excuse me out a little bit But it is still something that we know that you know many executives are asking for right now So build out that annual plan, but but be sure that you know again You're not just kind of putting this on the bookshelf and letting it collect us until next year But that is something that you're constantly monitoring measuring and figuring out You know do you need to pivot? Are your other gaps?
Do you need gap remediation plans and you know and going through and kind of diagnosing the health of your your funnel? Just the way that that Allison had you know kind of picked apart her her theoretical funnel here You know, that's that's exactly what you should be doing So so go ahead and go forth build those plans put them in front of your executive team feel confident about it But in the back of your mind know that like hey, you know at any point here We might need to pivot if we see you know things that are playing out a little bit differently Do we expect it and that's the name of the game of marketing So, you know don't be afraid to make those changes when you need to write it's all about experimentation and getting better every single day So hopefully by listening to this y'all got a little bit better today And we were able to offer some helpful tips for you as you're entering planning season here So anything anything else for you Allison before we close out? No, good luck. We we feel the pain.
We're right there with you And yeah, hopefully this is helpful. Yeah, happy happy spooky season happy planning season everybody until next time. Bye