When you’re looking to grow your business, the sales and marketing funnel is a natural place to start. The sales & marketing funnel goes by many names such as The Purchase Funnel, The Conversion Funnel and The Customer Path to name a few. No matter what the name, the idea of the funnel has remained largely unchanged for over 100 years ago. Like all old things, your funnel may need a little maintenance. If you’re trying to figure out how to grow your business, there are at least five ways to improve your sales and marketing funnel.
The basic premise of the sales and marketing funnel is this:
At any time, there are lots of consumers in the market. Many of these people are interested in what you have to sell. These prospects have a lot of choice. They are bombarded with requests for their attention through all forms of advertising. A small segment of this group will consider your company and trust you with their time. Some of these prospects will love the experience you create for them, and prefer to buy the you solution to their problem.
This list is by no means complete, so I’d really appreciate your help adding your own ideas in the comments below. Without further adieu, here are the five ways to improve your sales and marketing funnel.
1. Align Sales & Marketing
A study conducted by Hugh MacFarlane of MathMarketing found several impressive benefits to aligning sales and marketing. Companies that aligned their two teams grew faster (5 % faster than their competitors), created more customers (closed more deals by 38%) and were better at keeping their existing customers (36% less churn). There are clearly benefits of working together, but the challenge has always been the different functions of each team.
The main function of a marketing team is to increase the number of customers and their lifetime value to your organization. The marketing team does this by making and delivering a promise that inspires your existing customers and new prospects to do business with your organization instead of your competition. The main function of your sales team is to convert prospects and keep customers.
Skirmishes often erupt between the two sides. The marketing team may blame the sales team for not converting leads. The sales team blames marketing for not providing any quality leads. These are common problems but there are ways to align the two sides.
Measure your sales & marketing team with common goals throughout the funnel.
1. Rather than count traffic, hold the marketing team accountable for the number of leads that convert to an appointment. This ensures that marketing is delivering quality leads to sales and provides a feedback loop to show if sales teams are taking action on their leads.
2. Hold the sales team accountable for the number of appointments that reach the proposal stage. This ensures that sales are getting your value proposition in front of customers and provides a feedback loop to show how good the leads are from the marketing.
3. Hold both teams accountable for the number of proposals that convert to sales. This metric provides an ROI on marketing investments and can help a manager coach salespeople to ask for the business.
4. Measure customer lifetime value. This metric can help direct resources to keeping a customer once you’ve created them.
2. Better Targeting
“We serve everybody” is a terrible targeting strategy. Even companies like McDonald’s don’t serve everybody. The average consumer is hit with 5,000 ads in a day. In order to have your message stand out as a signal from the noise, you’ll have to gain a deep understanding of their needs and motivations.
The best kinds of targeting strategies take time to develop. These are based on marketing personas that create a deep understanding of customer motivations, points of influence and communication styles. Once you create a marketing persona, you can then align your sales and marketing resources (time, people and money) to better influence your target customers.
1. Look at your existing client base. Identify your best clients. Identify your worst clients. Talk to your employees and look at your customer data to help you gain a deeper understanding of both extremes.
2. Use an empathy map to create profiles of customers. I’d recommend starting with three profiles. The first profile is for the most profitable prospect. The second profile is of your existing customer that you’d hate to lose. The third profile is of the type of customer who is most likely to recommend your company. The first two profiles address the kind of customers that you need to grow. The reason for this third type of customer profile is to make sure that you give consideration to a holistic marketing plan that includes leveraging earned media.
3. Shorten the funnel
Several years ago, while living in Brazil, a group of us decided to go out to dance and have a few drinks. We got to the club fairly early so the bar was empty. Literally, we were the only ones there. Once our group got settled in an area, I walked up to the square shaped bar to place our order with the bartender. The bartender informed me that I couldn’t order our drinks from him, that I’d have to buy tickets first.
I was a bit confused since I hadn’t noticed any ticket booth on the way in. I decided to ask the bartender where to get tickets. He pointed towards his left. I turned my head and still didn’t see any form of ticket sales in the direction he was pointing. So I asked him again where I could buy the tickets. This time he motioned to his left and moved to the other side of the square bar. I’ll admit I was a bit confused, but I followed him around the bar to its other side.
Apparently the side of the bar I now found myself standing on was the ticket sales side of the bar. The same bartender sold me a few tickets, handed them to me, then walked back to the side of the bar that we originally started our conversation. I followed him back, handed over my recently purchased tickets and received our drinks.
From that moment on, one thought occupied my thoughts for a few hours: Why are you making so hard for me to give you my money?
1. Examine your sales process. You could sit down with your team to itemize all the steps that a customer goes through from the time that they become aware of your company to the time that the customer has to decide to renew. You could also ask customers to map out their own decision process. Are there any redundancies you could cut? Is there a more efficient way to make and keep that customer? Are there any points where the customer might ask: Why are you making it hard for me to give you my money?
4. Patch the Leaks
The analogy to a funnel is actually incorrect. The funnel isn’t really a funnel at all; it’s more like a pasta strainer that leaks prospects everywhere. The reason most companies focus so intently on filling the funnel isn’t because they convert so many clients, it’s because they lose so many prospects.
One of the ways to patch the funnel is to view your company from the customer’s point of view. Within your organization, you may divide your staff and their responsibilities into separate departments like sales, marketing, management, engineers, service and manufacturing. Viewed from your customer’s point of view, all departments are perceived as one corporate entity.
I’ll use Apple as an example. Let’s say that I see (marketing) and buy (in store or online sales & designers) the new iPad mini (manufacturing). Shortly after I make the purchase, the iPad Mini breaks down. When this happens I expect Apple (customer service) to make sure that I’m taken care of (warranty). In the likely event that I am well taken care of, my story becomes a testimonial to my friends & social networks (earned media marketing). The sum of all customer stories like mine will either confirm or contradict Apple’s brand promise. When the customer stories confirm Apple’s brand promise, it makes the sales person’s job easier to convert prospects or renew customers.
Your brand is what guides your employee’s behaviour. The sum of all your employees’ actions play a role in creating my customer experience. When driven to deliver a consistently delightful customer experience, each staff member can find ways to improve their customer’s experience through the touch points they have influence on.
1. Assemble an interdisciplinary team to map your customer’s experience journey. This team should be able to find the touch points that your organization can use to create a delightful customer experience. Speak to customers and prospects to find out where their experience could be improved.
5. Listen to your customers
The reason why you’d want to listen to customers is to better understand them. When you can empathize with a customer, your business will be better able to understand their needs and make relevant offerings. By becoming more relevant to your customer, the customer will place more trust in your organization as a preferred solution provider. The trouble with listening is that it can mean so many different things.
Listening can have has a very broad description. For example, you can interpret listening as the process of hearing and processing what customers say to you in person or on the phone. It’s also correct to say that listening is the act reading online reviews. You could even interpret listening as the process of measuring the open rates of your newsletters or views of your latest YouTube video. Each form of listening is important and equally valid. There are several ways you can activate listening within your organization.
1. Define how your business listens to customers. Identify who’s job it is to listen. Train your staff to clearly understand how you’d like your brand represented. Distribute the decision-making authority to those on the front line of the customer interactions so they are empowered to take appropriate action when necessary.
2. Create A/B tests to find out which option your customers prefer. In your email newsletters you can test two different subject lines to see which gets opened more than the other. On your proposals or website you test the relative value of options like the Economist did when they offered a print subscription for $125, a print + Internet subscriptions for $125 or an Internet only subscription for $59.
Your turn now. Do you have any stories of companies who make it hard to give them your money? Are there any other ways to improve the sales & marketing funnel?