« Back to Blog

The 3×10 Method: How to Improve Marketing ROI 89% Without Spending More

B2B SaaS Marketing Tips

Sign up for updates delivered directly to your inbox.

Contents

    Most B2B SaaS marketers are dealing with companies where the economic outlook is uncertain and they are being asked to achieve the same pipeline goals or improve marketing ROI but with less budget.

    It’s only natural that companies are trying to outweather economic turmoil by reducing costs and, as we discussed in previous articles, marketing is one of the first expenses to be cut.

    But if you’re a marketing leader, even after you’ve made all the cuts and brought costs in house, you’re still expected to hit pipeline goals every month.

    While there’s a number of strategies to do that in a good time, there are fewer ways to do that in a bad time.

    In fact there are only three possible ways to grow your pipeline during a recession:

    1. Get more customers
    2. Get more revenue from each customer
    3. Acquire customers for less money

    Great! So you’ll just go and do that.

    But how?

    In this article we’ll outline:

    • The key reasons that marketers fail to predictably hit pipeline
    • A framework you can use to produce outsized returns by simply making small gains in each of the above areas
    • A set of examples for achieving each of those small gains

    By the end of the article, you’ll understand how to create predictable growth in a down market and deliver eye-popping returns with little to no additional investment.

    If you’d like to uncover strategic growth opportunities like this article outlines and grow with little-to-no additional investment in your marketing, book a marketing plan session with our team here

    3 simple and entirely avoidable pitfalls that stop marketers achieving their pipeline goals

    Before we dive in to look at a framework for achieving outsized returns from your marketing investment, it’s important to understand exactly why SaaS marketing teams are missing their pipeline goals in the first place.

    There are really three key reasons that marketers fail to predictably hit pipeline.

    They also tend – although not always – to be a cascading set of problems which means that if you have one of them, it’s likely indicative that you have another.

    The first of those reasons is simply that they’re focusing on the wrong levers.

    It’s not uncommon to find a SaaS business focusing on trying to spend more to grow. That’s because for many people growth and ‘more’ are exactly correlated.

    But when we start working with clients, we often discover that in their quest for ‘more’ they have made – or more often than not have been guided to make by another agency – deeply inefficient choices in the first place.

    Spending more is actually detracting from their performance overall and is preventing them from reaching their targets.

    For example, when we work with a client for the first time on their paid media, we often find that we can pay for ourselves right out of the gate by cutting 20-40% of their existing spend which is going to campaigns or ads that aren’t performing well.

    For more on how we’ve done this for clients, check out this case study about how we improved sales 5% with 30% less spend for our fitness SaaS client

    The second pitfall for marketing teams trying to achieve pipeline goals is diving in without a strategy.

    There are still many things you could be doing but it’s not unusual to find that a marketing leader’s idea of where they want to go is disconnected from the actions that their team are taking.

    It’s often business as usual for team members: they’re still focused on pulling the wrong levers.

    This is not really anyone’s fault, per se but more of a systematic error.

    It’s one of the reasons that we developed the SaaS Scalability Score – a system for identifying the weakest parts of your existing strategy so that you can optimize for predictable growth no matter the economic situation.

    The final pitfall is almost always linked to the first and second pitfalls: trying to win pipeline the hard way.

    An example of a difficult way to win pipeline would be to go after top of funnel traffic and hope that it converts into business.

    In our blog post on pain point content, we outlined a case study where early in my marketing career, I had worked with a SurveyMonkey competitor on their content.

    The tool was a mass market tool and so the strategy had been to write content for high volume search terms hoping that because the market was broad, we might ‘bump into’ a prospect while they were searching for a related term.

    This was incredibly difficult. Those terms are hugely competitive and the reality is that because they’re terms with high volume, only a tiny fraction of people searching for them will ever want to buy a tool like the one I was marketing.

    Instead, switching to bottom of funnel pain point focused content proved to have a much higher ROI despite the fact that there was only a fraction of the search volume.

    EmtCO7VWEAAK4EG

    Even if none of those prove to be true for you, it’s still extremely likely that you’re being asked to do more with less and so the framework that we use to decouple investment and return is valuable to.

    On that basis, let’s dive in together.

    Is it unreasonable to assume you can reach a 10% improvement in three main growth levers?

    In the last section we outlined a number of ways that marketing teams fail to hit pipeline goals. But how can you avoid that in 2023 when there’s so little additional money to fix your marketing system?

    We think the answer is actually relatively simple (although it might not be easy!).

    Related:  SaaS Research: 'Talk to customers' is good advice but it's not enough

    Crucially, the system we’re about to outline doesn’t need astronomical budget increases or require you to hit unrealistic growth targets.

    The 3×10 method is a framework you can use to produce outsized returns by simply making small gains in each of the above areas:

    • Only 10% more Demos
    • Only 10% higher ACV
    • Only 10% lower CPA

    Let’s take a look at how this works with a practical illustration by assuming that you currently have 100 demos per month.

    If that’s the case working out your ROI looks something like this:

    CleanShot 2023 01 16 at 14.46.19

    Now let’s plug in the following numbers (you can use your own):

    • Monthly demo volume – 100
    • ARPU – $1000
    • Cost per demo – $300
    • Demo to Closed Won conversion rate – 10%

    That would give us an estimated ROI of 400%.

    400% ROI isn’t bad by any means but when you really think about it, it wouldn’t take that much to get outsized improvement on your ROI.

    You just need a 10% improvement on three variables. Here’s how that would look:

    • Monthly demo volume – 100 – 10 more demos per month
    • ARPU – $1100 – $100 more per account
    • Cost per demo – $300 – $270
    • Demo to Closed Won conversion rate – 10% – no change. You don’t even need to improve your conversion rate to hit this ROI

    That would look like this:

    CleanShot 2023 01 16 at 14.53.32

    If you were able to successfully hit those 10% targets, you’d end up with 489% ROI which is an 89% increase.

    The popular tactics for creating 10% gains are not necessarily the best tactics to use

    The goal of this strategy is to produce outsized gains with minimal additional investment.

    The problem is that when you begin to think of how to achieve the results above (increase in demo volume, increase in ARPU and decrease in cost per demo), you’ll probably quickly arrive at the strategies like the following:

    To improve demo volume, we should increase the amount of traffic we’re getting

    That’s a good way of getting to the outcome but it isn’t the highest leverage way of getting to the outcome you want.

    Increasing the amount of traffic relies on making a bigger investment in content or paid media or any other channel that you’re using in order to get to the goal.

    Unfortunately, there’s no way of telling how long these gains will take to achieve and really that means it’s harder for you to budget for that growth.

    Even if you were able to effectively forecast the investment, you’d actually end up reducing the impact of the overall strategy because an increase in investment means that your return on investment must also increase in at least a linear fashion.

    Our recommendation is instead of focusing on popular tactics to focus on what we call 10x tactics – that is, tactics that have the potential to exponentially improve your performance if they are successful.

    Here’s a table illustrating what we mean by that where the yellow column is highlighted to show the 10x tactics for each of the accelerators we already talked about above:

    CleanShot 2023 01 10 at 10.43.10

    Let’s take a minute to look at how you may achieve some of those outcomes.

    Get 10% more demos by improving the click-through rate

    As we just discussed, the popular tactic for increasing the volume of demos is simply to increase the amount of traffic you’re getting.

    The idea is that if you put more in at the top of the funnel, you’ll get more out at the bottom all other things staying constant.

    But you know that this is a low leverage activity because it relies on a significant increase in the budget for acquisition.

    On the other hand, if you could only improve the conversion rate from anonymous web visitor to prospect, you spend a minimal amount of cash to produce a potentially exponential return – and remember, we are only after a 10% improvement.

    We recently helped a Fintech SaaS client to get a 67% increase in demos by improving their CTR just 34%.

    This was achieved by cutting inefficient ad spend on keywords that weren’t getting impressions, clicks or conversions.

    This is a tactic that we have used consistently with clients and is part of our regular cadence of optimization.

    As we outline in this case study with a fitness SaaS that we work with, we initially targeted the keyword ‘martial arts attendance tracker’, but upon analyzing data, we found it had a low clickthrough rate (CTR) of less than 3%.

    This was significantly lower than our average CTR of 6.07%.

    To optimize ad spend, we paused ads for underperforming keywords, resulting in improved conversion rates by focusing on keywords that generated more clicks and conversions

    By the end of that optimization, their average CTR was 15.7%.

    In this case, we actually saved the client money as well as improved their performance.

    Thinking in this way is a powerful way to assess your own strategy and allows you to achieve significantly better results.

    Get 10% higher ACV by improving the messaging

    The common tactic to improve ACV is to improve the targeting of your campaigns.

    This is particularly true for paid social and paid search where it is easy to change the parameters of your targeting.

    The reasoning behind this tactic is that if you are able to attract a ‘better class’ of buyer – read: has more money – then you can get them to pay you more.

    However, the problem with this is that by improving your targeting you’re actually not necessarily improving the performance of your spend. You’re might already be getting in front of the right buyers with your existing targeting – it’s just that they’re not buying.

    Related:  Self-reported attribution doesn’t work. You need an attribution narrative instead.

    Why aren’t they buying? Because your message isn’t connecting with them.

    On the other hand, consider what it would mean for your company if you were only able to get those perfect fit buyers to say: “Wow. These guys get me. I need this product”

    Not only would you be able to better convert those buyers but because they are good fit buyers who identified your product as a great fit for solving their pains, you’ll see that they have a high LTV as well.

    This is a core part of our methodology called ‘Pinpoint Pain’ and you can find out more about how we do that here

    Messaging is an omni-channel opportunity meaning that there are improvements you can make anywhere that you’re spending money. This is one of the reasons that we focus so heavily on messaging.

    Take the example of our client Rally.

    They were in a fiercely competitive market with extremely well funded competitors but their two main competitors (Bolt and Fast) both incurred huge reputational damage as high profile news stories about legal or financial scandals affected them.

    We revisited the messaging of their respective competitor comparison pages to align to this:

    CleanShot 2023 01 17 at 10.53.18

    Here’s why this works:

    1. We continue to address the fact that people are considering alternatives to Bolt with the headline
    2. We confirm the prospect’s own thoughts that Bolt did look good and that their assessment wasn’t wrong
    3. We lightly but directly address the elephant in the room that there’s some uncertainty about the stability of the business
    4. We offer Rally as a solution to the pain that they may be feeling: ‘How can I trust another vendor when the well funded competitors are not winning my trust’
    5. Explain why Rally can solve the problem

    This page very quickly became one of the best performing pages on Rally’s site and helped them win new high value customers.

    As well as launching this messaging on the their website, we updated ad creative and search meta tags to reflect this message, further multiplying the impact of the changes.

    Get 10% lower CPA by improving the offer

    We mentioned above that we regularly decrease wasted ad spend and that’s certainly an obvious and easy way to improve your CPA.

    If you spend less on low-performing campaigns or ads, then you automatically improve your cost per acquisition.

    However, there’s only so far that you can take it and remember that we’re looking for opportunities to produce incremental gains.

    The 10x way to decrease the CPA is by making the offer you make to prospects irresistible.

    There are many ways to achieve this. For example:

    1. Offering a more attractive pricing structure
    2. A more generous free trial
    3. Or a money-back guarantee

    However, all of the above are likely to require business model changes and will only have an impact at the bottom of the funnel where there are the fewest prospects.

    By making the offer more appealing at all stages of the buying awareness journey, you can increase the likelihood that a prospect will convert into a paying customer.

    For example, if your current CPA is $100 and you’re able to get more solution aware prospects to take you up on a lead magnet by improving your offer and offering better aligned next steps, that would decrease your CPA to $90.

    We have often used the example of a fintech SaaS that we work with who we helped to drastically improve their funnel performance by better aligning the offer that we made to prospects at each stage of their awareness building journey and then offering a meaningful next step.

    Example of a lead magnet thank you page

    To replicate our approach:

    1. Start by asking what problems your prospect is facing at each stage of their buyer awareness journey
    2. Then create an offer that could meaningfully address their problem – we have a number of different examples of content that tends to work at each stage of the buyer readiness journey in this post
    3. Ask yourself if there is anything you could improve in the way that you initially frame the offer that could de-risk the CTA for your prospect

    In summary, improving the offer you make to prospects is a key way to decrease the CPA, by making it more attractive, and testing different options to optimize your acquisition strategy.

    In Closing

    B2B SaaS marketers are facing economic uncertainty and being asked to achieve pipeline goals with less budget.

    Companies are reducing costs, including cutting marketing expenses. Marketing leaders are expected to hit pipeline goals despite these challenges.

    There are three ways to grow the pipeline during a recession:

    1. Acquire more customers
    2. Increase revenue per customer
    3. Acquire customers for less money

    But it’s important to remember that by simply making a 10% improvement in each of these results, marketing leaders can drastically improve the ROI as the investment and returns become decoupled.

    While there are popular tactics for doing this, we have identified a number of 10x activities that require less additional investment and produce better results overall:

    1. Get 10% more demos by improving the click-through rate
    2. Get 10% higher ACV by improving the messaging
    3. Get 10% lower CPA by improving the offer

    In 2023, the focus should be on continuing to produce outstanding results by increasing the leverage of every activity in the most cost-effective way.

    If you’d like to uncover strategic growth opportunities like this article outlines and grow with little-to-no additional investment in your marketing, book a marketing plan session with our team here