5 Ways to Pay for Demand Generation

There are many marketers that value the role lead and demand generation play in their organization, but often times, coming up with budget to pay for the platform is often an issue. Value in an organization is placed on traditional things like PR, Direct Mail, Tradeshows, etc. The trouble is, these channels are difficult to truly measure in terms of the revenue impact they have.

The average Marketing Automation System runs about $60,000 per year. Companies can run these platforms internally and typically allocate 1/2 to 3 FTE to use the technology as part of their lead generation efforts. An average marketing technologist will make about $75,000 loaded. Other companies choose to outsource their demand generation efforts, and these fees can range from $5,000 to $25,000+ per month depending upon the services and scope required. So let's say, internal will run approximately $135,000 per year and external will run approximately $120,000 per year. Where do you get this money, and what kind of return should you expect?

1. Reallocate your PR budget. The average B2B company is spending $10,000 per month on retainer, and usually gets 1-2 speaking engagements, a by-line article, and a press release. Shift 50% of that and you just about have the software paid for. In return, you will be able to run unlimited outbound and nurturing campaigns, score and profile your leads, integrate with your CRM, and see a 3X increase on average in lead production. Assuming you have a 30 to 1 lead to close ratio at an average sale of $50,000, and you sell 1 new person per month, marketing automation will get you an additional $1,200,000 per year against the same spend you have now. That's a 10 to 1 return on investment for no additional budget.

2. Do one less tradeshow. The average tradeshow costs $30,000, and you are lucky if you get 2-3 good leads. You will have to run 3-4 tradeshows to get one customer, costing you $120,000 to gain $50,000. Hardly a worthwhile investment. $30,000 is 1/2 a year of a license. Using the math in step one, you will have produced $600,000 in the first 6 months with additional revenue, giving you more than enough to pay for the rest of the year and beyond.

3. Eliminate one direct mail campaign. Assuming you send out 10,000 pieces at a total cost of $1.50/piece, including design, print and postage, then you can save $15,000 and pay for 3 months of marketing automation. That 3 months will net you $150,000 and pay for the license for 2 years.

4. Reduce Google Adwords Spending. The average B2B company is spending at least $30,000 per month on pay per click. Trimming just $5,000 per month will pay for the license, generate an additional $1,200,000 in sales and allow you to double your Google Adwords Budget next year.

5. Reduce your Agency spending. A typical Agency gets at least $10,000 per month on retainer for creative services, but typically is not helping you with demand generation. Refocus that money on marketing automation. These platforms will repurpose existing content, drive additional traffic and convert more leads to sales. Shift your content strategy from agency created to user generated. This is much more cost effective and significantly more valuable in conversion.

There are probably a number of ways you can shift your budget around, but these 5 will be more than enough to get you started.