Michael Gaudet joins the Predictable Revenue podcast to discuss the best B2B growth channels for different CAC levels and how to use them to drive pipeline revenue.
Michael Gaudet is a Performance Marketing Leader with over a decade of digital marketing experience building and managing high-achieving revenue teams.
He joined the Predictable Revenue podcast to discuss the best B2B growth channels for different CAC levels and how to use them to drive your sales pipeline.
What you need to have in place before investing in growth
Before you start adding sales growth channels, there are a few foundations you need to have in place. First, the entire organization needs to be aligned on your ideal customer profile (ICP), including their pain points, psychographics, demographics, buyer personas, and career goals.
Once you’re clear on your ICP, you can then map their buyer’s journey to your sales pipeline. Determine who will be responsible for each pipeline stage (sales, marketing, customer success, or a combination). Assign metrics of success to each stage in the sales pipeline, and make sure sales and marketing are aligned there as well.
Some of the most important metrics include customer acquisition cost (CAC), average contract value (ACV), sales cycle length, and conversion rates for each stage in the sales pipeline.
Lastly, you’ll need automation in place to effectively track those metrics. A good CRM is critical for tracking pipeline revenue. Use a CRM like Hubspot or Salesforce to track your metrics, view where leads are in the sales pipeline, and calculate conversion rates.
Deciding which B2B growth channels to invest in
Before you spend a dollar on marketing or sales growth, you should have a hypothesis about what the results will look like from a revenue perspective. What are you assuming will happen if you invest in this channel? How do those assumptions compare to your current baseline?
If you’re comparing multiple channels, consider what the difference will be in terms of return on investment (ROI). You can then test that hypothesis with a trial run. For example, if you believe spending $10k on paid search will yield an ROI of 2, then put that theory to the test.
Remember that you don’t need to choose between investing in sales or marketing. To drive pipeline revenue, both functions need to work together. True cold outreach is rarely effective–instead, sales and marketing need to work hand-in-hand to nurture and qualify leads.
Building the minimum viable marketing team
To start your marketing team off on the right foot, you’ll need a leader to tackle both strategy and execution. This can be a marketing operations or revenue operations manager. They should be analytically minded, ideally with experience in site optimization so they can get started on that.
After that initial hire, you can bring in contractors or an agency to support them. Depending on which B2B growth channels you choose to focus on, that could involve specialists in LinkedIn, Search Engine Marketing (SEM), or retargeting.
The next hire will likely be a content marketer to create both marketing and sales content. This person should ideally have a background in search engine optimization (SEO) or be willing to learn. Lastly, as your pipeline revenue grows, you may want to consider bringing on a graphic designer to handle the visual aspects of your brand.
How CAC levels affect the best B2B growth channels
The best sales growth channels for your business will depend on your ACV, CAC levels, and sales cycle length. Generally, the smaller the deal size, the shorter the sales cycle. For ACVs between $1k-10k, it’s less important to forecast your sales pipeline and more important to understand the ROI of various channels.
Top 3 channels for $1k-$10k CAC levels
At these smaller CAC levels, the ability to scale is critical. The best sales growth channels will be fully automated. Drip campaigns are a great option, especially if you have a free trial for your product. Segmentation can provide a personalized experience throughout the buyer’s journey.
The second most effective channel for this CAC level SEM. Your ROI for ad spending is easy to track, so you can continually test and optimize. SEM is also more targeted than other channels. If you don’t have an SEM expert on your team, it’s easily outsourced.
Lastly, you may want to consider landing page and/or website optimization. If you’re pushing a lot of traffic to your website via paid ads, then you want to ensure your page is actually converting. Small tweaks can have a big impact on conversion rates. Use Google Optimize to get started, or try Optimizely for a more advanced option.
Key metrics and leading indicators to track at this stage include CAC, return on ad spend, closed-won revenue from inbound, aggregate inbound ROI, and ROI for each channel (including ad spend, internal, and contractor/agency costs).
Other channels to consider for $1k-$10k CAC levels
Other options to consider at this stage are on-page and off-page SEO, review sites, and high-volume sales development. Although it may take longer to start seeing results, cold outreach is extremely effective at driving sales growth.
To be successful in sales development requires a strong strategy. Our coaches can help you build a sales pipeline from the ground up, from hiring support to understanding your ICP, creating sequences, and managing your pipeline. Reach out here to learn more.
Stay tuned for Part 2 of this interview to learn more about the best B2B growth channels for higher CAC levels.
If you want to connect with Michael to learn more about sales growth channels and how they relate to CAC levels, reach out via LinkedIn.
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