How B2B Marketers Can Contribute to EBITDA: 7 Best Practices

By Matt Heinz, President & Founder at Heinz Marketing

For many marketers working in B2B organizations, the primary goal is to generate new demand (leads, MQLs and the like).  And with many more advanced marketing teams, the goal is more focused on sales pipeline contribution and revenue influence.

And while early stage companies maybe focused on new bookings and top-line growth, companies looking to maximize valuation and accelerate growth are often focused just as much (if not more) on the bottom line.  Growth at the expense of profit no longer works.

How can B2B marketers deliver predictable sales pipeline impact while helping the company grow profitably?  How and where should marketers prioritize to impact EBITDA (earnings before interest, taxes, depreciation and amortization)?

Here are a few useful starting points based on what we’ve seen work well within the growth-phase companies we work with.

Know your CFO’s key metrics

The common marketing scorecard likely looks vastly different from the CFO’s dashboard, and that’s fine.  But there are likely key metrics your finance leaders care deeply about.  Take time with your CFO (or a member of her team) to understand those key metrics as well as what’s assumed that impacts them.  Then think about how and where your marketing activity (strategies, tactics, channels, etc.) might be able to contribute as well.

Know your target acquisition cost

Many companies haven’t accurately calculated what they’re willing to spend to acquire a customer.  Some look at sales commissions as the primary acquisition cost while spreading marketing budgets out across multiple business measures.  Ask your business’s leaders what the ceiling of an acceptable acquisition cost might look like.  This will help you not only deliver successful, profitable new customers, it will also help you develop a marketing strategy that focuses on the “body of work” impact of cross-channel efforts vs. obsessing about individual email sends and random acts of marketing.

Know your customer lifetime value (and how it impacts accepted acquisition costs)

Even if you are purely focused on customer acquisition, it’s important to know the total lifetime value of a new customer, as well as which customer segments are actually more valuable and more profitable.  This allows you to adjust your target acquisition costs accordingly.  For example, let’s say the average customer is worth $250,000 in revenue for your company, but customers in the health care vertical are actually worth $400,000 in lifetime value.  Would that change how much you are willing to spend to acquire a new health care customer?

Orient your strategy to a “body of work” instead of isolated tactics

For most B2B organizations that experience complex sales processes and long sales cycles, expecting individual marketing tactics to deliver pipeline and new business is short-sighted and inaccurate.  When you have calculated the maximum acquisition cost acceptable to maintain profit margins for new customers, you can create and manage a marketing budget that allows for greater flexibility in creating and delivering cross-channel, integrated marketing campaigns over time that have greater impact.

Focus more on sales enablement (increasing conversion vs new leads)

Increasing yield and conversion on existing leads and pipeline is always more efficient than generating new top-of-funnel leads.  And the longer you’ve been executing demand generation campaigns within a given category or market, the higher percentage of the addressable, qualified accounts are likely already in your database.  So instead of remarketing to them again and again in expensive external channels, put a focus on helping your sales team increase velocity and conversion of the current pipeline.  This includes lost opportunities that were lost to “not now” vs a competitor.

Use agile for tactics, not strategy and objectives

Spend enough time up front locking in your objectives and a strong, well thought-out strategy.  As you execute on that strategy, be agile about making changes based on program performance but limit those changes to tactics to decrease your “flail rate” and increase speed to optimization and results.

Invest in lead nurturing vs more leads

Similar to the above focus on sales enablement, the longer you’ve been in market generating leads, the more efficient your program will be at generating profitable new customers by increasing utilization of lead nurture strategies and programs.  This includes drip campaigns from your marketing automation platform and also means increasing the number of customized segments (addressing distinct members of the buying committee as well as differences in industries).  It could also include providing your sales team and channel partners with tools, content and processes to increase engagement with previous “not now” leads and opportunities.