Business Goals vs. Marketing Goals

Introduction

Here is a simple example of how two businesses in the same market target the same people but with different business goals. These different goals drive different marketing goals and, thus, even analytics and reporting objectives. Each has different ROI (return on investment) needs, as we shall see. Each hires mid-sized digital marketing agencies. Let’s outline potential plans for measuring, analyzing, and reporting criteria that will drive each.

Company A is a SaaS (Software-as-a-Service) company that is doing about $1 million annually and is bootstrapping growth (i.e., self-funded from cash flow). As is typical of SaaS businesses, they need to spend less than three times the monthly subscriptions generated to maintain positive cash flow and grow. So if they invest $30,000 monthly in marketing, they have to generate at least $10,000 in new subscribers and ones that stick around for more than three months, ideally twelve or more, to get compound growth.

Company B is also a SaaS company in the same market, targeting the same ideal customers. However, this company just raised $10 million in venture money with a mandate to grow as fast as possible. So they effectively have an unlimited budget compared to Company A. And their ROI period is of little to no concern. Most probably, their plan is to raise more money to fuel growth.

Understanding Business Goals vs. Marketing Goals

Both marketing agencies decided to initially go with the classic ad-to-landing page approach. Google, LinkedIn, and Facebook ads to start with. Company B will also do influencer campaigns.

Company A needs subscribers to be customers for at least 3 months, but ideally over 12 months. Therefore, they choose pricing of $300 per month to attract committed clients. Overall, they can afford to pay up to $900 per customer to acquire them so that they can achieve the 3-month ROI period goal. So, the two must-have marketing goals are:

1. $900 or less CAC (customer acquisition cost)
2. Customer LTV (lifetime value) is greater than $900. Thus, they stay customers for 3 or more months.

Company B needs as many subscribers as possible. They are less concerned about retention or overall subscriber value to start. Brand awareness and growth are priorities. (Yes, as a long-time SaaS person this screams to my heart…NO! But, VC backed businesses run very differently than bootstrapping ones.) They price their subscription at $99 per month in hopes of generating more customers. They literally have VC money to burn for growth, and their CAC is less of a concern at this point. They plan to spend $500,000 per month. Main goals:

1. Maximizing the number of conversions
2. Speed

‍Note: The article “One Metric To Rule Them All For Digital Marketing—ROI!” provides good information about why ROI is important and the best measurement for Company A. 

Case Study Comparison: Bootstrapped vs. VC-Funded SaaS 

Company A: 

Below is an actual screenshot of an agency’s client on SaturnOne’s landing page detailed tool. This is a real SaaS with real average values. The Landing page is a target landing page, of which they have many. The lifetime value is set as 3 months for analysis. (Their actual customer lifetime is closer to 3 years or 36 months, which is a great help for bootstrapping.)  You can see their cost per lead, landing page conversions was $217.39, of which 25% converted to paying customers or a CAC is $869.57, less than the $900 goal. 

This is an all-in cost for this agency, including their fee and ad spend, across all channels and campaigns. I happen to know that their lowest cost per lead (CPL) was ultimately their lowest long-term ROI channel. See the article “One Metric” article I mentioned above. 

Company B: 

They drove much more traffic and converted much more visitors into leads. However, their lead-to-customer conversion was much lower, less than 10%. Because of their budget and goals, they did indeed grow fast. The one problem they did have was low-quality customers and thus high churn. This was not a major concern at this stage as they were spending for this. Their cost per customer turnout to also around $900, thus, they were adding over 500 subscribers a month. But at $99 and high churn, about 6 months on average they were indeed burning money. 

Analytics and Reporting Needs

Both agencies for both clients will measure ad click-through rates, and landing page conversion rates, hopefully lead conversion to paying customers. Though, honestly, in my talks with agency owners and executives, few will track the lead-to-customer conversion rates of these sorts of things. Company A’s conversion to a Lead was “Book A Demo” and has salespeople in the loop. Company B’s conversion is a free trial. From there there is “so-called” activation, where the lead does anything beyond the initial sign-up. Then, after that, there is the conversion to a paying customer. 

Measuring the LTV is also important. For Company A, it was part of their job. Company B there could pull this data together in the end to help determine their best channels.

Conclusion

In today's rapidly evolving business landscape, distinguishing between business goals and marketing goals is more crucial than ever for marketing agency owners. This distinction not only clarifies the path to achieving strategic objectives but also optimizes the application of analytics to realize a more significant return on investment (ROI). As owners of small to mid-size marketing agencies, understanding and applying these differences can be the key to delivering unmatched value to your mid-sized clients, especially those navigating the challenges of growth and scalability.

This article aims to shed light on the subtle yet impactful differences between business and marketing goals, focusing on how these distinctions guide the analytics and reporting strategies that ultimately drive ROI. Whether your clients are bootstrapped startups or VC-funded enterprises, aligning your marketing efforts with their specific business objectives is paramount.

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