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How to invest in conversion for B2B: The Second Lever [2022 Edition]
Times are changing for B2B marketers and B2B marketing budgets. The rising interest rates, crash in valuations and rethink of “how sustainable is our SaaS business” hit marketing and marketing budgets hard.
We spend the vast majority of our marketing budgets on driving demand — people, programs, tools — and just a small fraction on converting that demand.
In June, Mutiny CEO and Cofounder Jaleh Rezaei and Henry Martz, Business Ops and Finance, shared their “Profitable Growth Blueprint” from their time at Gusto (scaling to 200,000+ B2B customers) with our fellow portfolio companies, and how her budget was split 50:50 between demand and conversion programs.
Yesterday, we heard from VCs, CMOs, and revenue leaders at The Second Lever about why they prioritize conversion and how they build their conversion programs.
Inside this guide:
1. How you can (re)structure your B2B budgets
2. The 80:20 budget guidance to get started
3. Where to prioritize your conversion program
4. Detailed budget and performance breakdowns of conversion investments
How to (re)structure your B2B marketing budgets to drive pipeline
The basic pattern of every B2B marketing budget: Every month you spend $X to drive Y activities that lead to $Z quarterly pipeline.
Every line item should drive more pipeline (and revenue) as it increases. More ads, more events, more content — all programs to source signups, meetings, opportunities, ‘demand’. But what about programs to convert more of that demand (signups, meetings, opportunities…) into revenue?
You should budget for your conversion programs in the same way as demand programs:
1. Invest monthly (like ads)
2. Measure output monthly (based on $, % or quantity lift in performance)
3. Resource with program, people, and tooling budget
Jaleh shared Gusto’s marketing budget was 50:50 demand and conversion. Seems high, right? But that’s where they saw the most growth efficiency. They had more “bang for their buck” investing in conversion rather than yet more demand programs.
This makes sense. Demand programs also tap out. There are only so many events, so much ad inventory, and so much content to saturate your audience with. Demand programs tend to become more expensive with more scale (as you search for new, larger, and perhaps less relevant audiences), whereas conversion programs feed a ‘rising tides raise all ships’. Demand programs are also competitive (you’re competing for a finite pool of attention) whereas conversion programs are just you.
An effective growth engine requires both demand programs (to generate traffic), and conversion programs (to generate revenue). A 50:50 investment is recommended.
Still, 50:50 is a big jump for a marketing team who are not yet investing in conversion at all. But if you’re starting out with conversion programs, what would 80:20 look like for you?
Let’s run through an example!
Fully-loaded B2B marketing budgets are usually around 40% of the new ARR goal. So, a $1.5M new ARR goal typically translates into a $600k (40%) marketing budget, or $50k/month if it is distributed evenly over 12 months.
Say, your $50k/month marketing budget for people, programs, and tools — what could you achieve for $10k/month? Could conversion programs make up more than 20% of the gap to your pipeline goals?
(Spoiler: Yes! Keep reading…)
Maybe, you don’t need to reshuffle your marketing budget around and can ‘just spend more’. Great!
But, if you need to pull budget from somewhere, where are good places?
Ads — don’t cut indiscriminately, but assess your marginal campaigns that are making very little impact. If you had to trim a $k each month, which campaigns would cost you the least to pause?
Tools — particularly tools where you’re not using most of their capabilities, are paying for significantly more usage/seats/contacts than you need month-to-month, or aren’t seeing at least a 4X return on investment.
Brand — big brand bets are the easiest programs to pause, but we’d caution against cutting entirely. Budget-wise, we see investing in brand has the effect of making demand programs more efficient - brand lowers the cost of acquisition. Financially, this is the same outcome as conversion, so it makes sense as a place to pull from.
Where to prioritize your investments in conversion for the biggest “bang for your buck”
1. Start earlier in the customer journey
Yes, there are opportunities to improve conversions with customer referrals and in-app activation. Of course, these are valuable too! But, they lack many advantages of working at the beginning of the customer journey.
Where marketing hands off to sales or your product, you’ll have much higher volumes (e.g. website traffic will be 1000x your customer count, so increasing website conversion will likely be more effective than increasing customer referrals).
Earlier is easier to build statistically significant experiments (so you can be sure what is/isn’t working).
Earlier is easier to correlate changes to your marketing campaigns and activities (where most of your spend is).
Earlier is easier to pull useful insights (because it is easier to tie data together).
Every marketing activity ultimately drives website activity too, and any increase in conversion earlier in the customer journey increases volume later in the customer journey. So start early in the customer journey!
2. Start with what’s easiest to implement
Unless you’re FAANG, you likely don’t have many (any?) engineers to spare for marketing programs, particularly if they’re new programs.
So, focus on areas of the customer journey that are owned by marketing. That means tooling can be owned and operated by marketing (vs. working across sales, product, etc.), so you’re not constantly blocked.
Marketing is also less people-dependent than sales, so conversion experiments are usually much easier to manage. You don’t have to brief, train, and then control for having many different reps who all operate and sell slightly differently.
3. Start with the fastest wins
Starting with what’s earliest and easiest means you can experiment much faster and build confidence in your conversion programs.
You’re looking for constant, high-velocity of experiments — that’s always the pattern of behavior amongst the most effective conversion teams.
What should I invest in to increase my conversion?
Like in the Profitable Growth Blueprint, we prescribe investing in people, programs, and tools in a 40:40:20 ratio.
Below is a summary of some of our partners, typical outcomes, typical costs, and customer stories to help you build a budget, plan, and case for investing in B2B conversion programs.
Invest in conversion tools:
Invest in conversion programs, with agencies:
Invest in people, with conversion training:
Increase website conversions by 60-150% with Mutiny
Mutiny enables you to display and test different messaging to different B2B audiences on your website. You connect your sources of data, build an audience (or pick our suggested underperforming audiences), create your changes in the web editor (or pick our suggested top-converting changes), and then run your experiments.
Mutiny is best for B2B marketing teams with at least 20k monthly visitors to their website who can spend at least an hour each month launching and evaluating experiments.
Those of you who joined The Second Lever saw customer presentations from Ramp’s 96% global sitewide lift, Snowflake’s 3X campaign response, and 6sense’s $20M new pipeline from website personalization too (recordings coming shortly via the Mutiny newsletter).
Most Mutiny customers pay $2-5k/mo, rising with more impressions (higher traffic and experiment velocity).
Increase form conversion rate by 50% with Clearbit Forms
Clearbit Forms dynamically hides form fields that can be enriched, reducing the number of fields and increasing conversion rates.
Learn more about how Clearbit Forms work here.
Clearbit is best for B2B SaaS revenue teams that want to activate their ideal customer profile.
Most Clearbit customers pay between $2-5k/mo, rising with database size, traffic and advertising spend (based on package).
Increase free trial-to-customer conversions by 20-40% with MadKudu
MadKudu is the PLG platform of choice for B2B companies. We help you monetize your product-led engine, without the reliance on technical teams. MadKudu provides actionable insights to GTM teams to know who to engage, when, why, and how.
Especially within product-led companies, sales and marketing teams don't have access to the critical, real-time data that is needed to do their jobs.
With MadKudu, you can connect directly to the modern data stack without relying on engineers or learning to code. The result is a system that leverages data and science to run all go-to-market motions and intelligently segment, prioritize and personalize every step of the buyer journey.
MadKudu starts at $2k/month, rising with the number of leads and channels used (depending on package)
Increase web conversions by 70% with Wynter messaging testing
Wynter is a B2B messaging testing platform. Submit landing pages, user tests, value propositions, or even your whole website to be reviewed by a curated panel of your target audience (by title and industry). Receive actionable feedback within 24-72 hours.
Wynter is best for B2B marketing teams who are running regular tests with messaging.
Wynter tests start at $899 per test ‘pay as you go’, and increase with larger and more senior audience panels. Most teams opt for subscription plans with discounted credits from $1500/mo.
Increase your website conversion rates by 30%+ with Spiralyze Experimentation Data Service
Spiralyze goes beyond what you get from just a software tool or agency. They scrape 34,000+ B2B sites daily to find what tests work, catalog trends and conversion behavior, and customize effective tests to your site. Scraper data needed to know what changes to make is included, along the design, development, quantitative and qualitative analysis, implementation, and more.
Spiralyze is best for companies whose websites have at least 100 total conversions per month.
TimeDoctor saw 50% more conversions and revenue
Okta saw lists of 40-90% in page conversions
Podium saw 20-50% increase in page conversions
ServiceMax saw 30% increase in conversion
Most Spiralyze clients pay $15-25k per month and generate over 10x ROI. Spiralyze offers a performance pricing 3-month pilot. There are no upfront fees and cost is entirely tied to performance at the end of the pilot.
Increase conversion with a research and testing program with Speero
We help marketers and growth leaders increase revenue with better data decisions. Our main tools for this are systems for customer research, analytics, and website experimentation.
Speero helped ADP increase qualified leads 58% through progressive form testing
Speero helped JungleScout decrease data deficiencies from 15% to 1%
Speero's test and research service programs start at $5k/mo and rise with increasing velocity and support.
Single Grain increased conversions for Drift, SEMRush, & Nextiva
Single Grain leverages tools like Mutiny to A/B test different messaging and design elements to increase qualified B2B pipeline from your website.
Single Grain is best for B2B SaaS and services companies with 50+ employees. You can view B2B growth marketing case studies right here:
Single Grain’s services start from $7,500/mo.
Train your team in conversion with CXL’s courses and mini-degrees
CXL is a premium marketing training and education platform with 90+ courses taught by practitioner marketing instructors. These include focused ‘mini degrees’ which are collections of courses, including conversion. Successful students are awarded certifications.
You can buy marketing courses, mini degrees, and subscriptions for teams and for individuals. Those looking to learn conversion programs for B2B should consider:
Courses are best for students and teams willing to dedicate at least a few hours each week to studying a new skill via written, video, and quiz material.
You can test CXL with a 7-day $1 trial, then ~$1500/year per person. For teams, there are significant discounts for the 2nd person on your team to join a subscription. You can also buy individual courses and mini degrees.
Get started by choosing a course above, or booking a call to talk about training your whole team.
Train your team in experimentation with Reforge cohort-based learning
Reforge runs 4-6 week part-time, virtual, cohort-based programs by application only. Members get access to content from all programs, new releases, and a community of vetted peers.
People best fit for Reforge are experienced operators in a post-product market fit company.
You can join programs related to marketing, product, and engineering. Those focused on conversion should consider joining:
The next cohort at the time of writing starts on Jul 18, 2022.
Reforge memberships are approved by application only. Annual memberships cost $1,995 per person.
Your key takeaway: Now is the time to invest in conversion!
You can clearly see how investing in conversion — the second lever to growth — can drive significant revenue without costing the earth.
Budget for conversion programs like you budget for demand programs. Monthly spend to drive quarterly pipeline.
New to conversion? Start with an 80:20 budget, and see how you can drive at least 20% of the gap to your pipeline goals from new conversion programs.
If you have to pull from another area of your marketing budget, look at marginal ad spend, overspending on tools, and big brand bets.
Invest across people, programs, and tools to build successful conversion programs.
Go, invest in conversion!
And for more guides like this, subscribe to the Mutiny newsletter.
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