Focus on Conversion Optimization is critical to develop strategic revOps outcomes

Revenue operations is the newest functional role emerging in many of the fastest-growing B2B organizations. The revenue operations function is in its early stages and the market continues to evolve as organizations continue to test new models. At its core though – Revenue operations is a strategy (& a governance model) to unify sales , marketing, customer success and other GTM motions into a data-driven execution model .

The goal ? Grow revenue – of course! But, by focusing on customer at the center of revenue strategy & tactics.

Conversion Optimization – What is it? and how does it apply to your business?

Conversion Optimization, or funnel conversion optimization, is an adaptation of digital commerce metric – Conversion Rate Optimization (CRO) into a B2B lens. While efficient in a SaaS context, this metric is equally applicable to non-SaaS businesses. A significantly large % of businesses across industry segments now apply a mix of direct-sales with marketing-led funnel creation tactics.

Its relevance. Why now?

While direct-sales led business tactics often measure win-rate & velocity as a consequence of active deal funnel monitoring, businesses now understand that conversion is an end-to-end activity spanning different stages of a customer / acquisition journey*. This journey is typically categorized into 4 buckets –

A- Awareness

B- Interest

C- Desire and

D- Decision ( or Purchase)

This journey is further grouped into Top, Middle and Bottom funnel revenue motions.

Customer acquisition costs ( CAC) , conversion & revenue motion

CAC is another metric with roots in eCommerce. However, it is quickly becoming part of the B2B lexicon.Rightly so.

Broadly speaking CAC, is the total cost of sales and marketing efforts, as well as other incidental costs, needed to convince a customer to buy a product or service. i.e.CAC includes top, middle and bottom funnel costs.

Why focus on revOps?

Having gotten definitions out of our way , let’s dwell on industry CAC trends , our assessment based on specific data-points and why CAC & Conversion Optimization needs revOps attention in 2023 and beyond

1 – Customer acquisition cost (CAC) is a rising trend across industries. While B2B CAC is slightly higher, both B2B and B2C are up roughly 60% compared to five years ago

2 – A double-click on customer acquisition channels reveals a by-and-large on-line / digital acquisition lens – SEO, Paid Search , LinkedIn, Podcasts being the source of leads, customers and revenue.

3 – A potential causality exists between rapid growth in digital marketing spend , lower incremental conversion and rising CAC. Let’s triangulate from 4 data-points.

• Datapoint 1 : 260% growth in ad spend ( Paid digital / Earned Digital) in just 5 years

• Datapoint 2 : Paid & Earned Digital Spend constituting almost 43% of CMO budget as against 9.4% on partner and event led channels

• Datapoint 3 : SEO/ PPC conversion rates aren’t significantly better (sans CLV attribution) vis-à-vis email, webinar

• Datapoint 4 : Digital isn’t the only acquisition channel

Here is a quick take on typical conversion rates across channels based on stats collected by Adobe Marketo. Note the high partner and referral conversion rates.