Category Archives: Funnel management basics

Is Your Sales Funnel Perfectly Designed for a Company in 1990 rather than 2013?

Buyers buy differently today and if your funnel doesn’t reflect how buyers buy, you’re probably falling behind your competitors. Indeed, the funnel management of many companies only covers about half of the actual stages through which a typical B2B buyer progresses. If you’re not properly managing the entire funnel a high percentage of potential deals are going to your competitors without your company even getting a chance at bat.

I recently recorded a webinar that is well-suited for Marketing and Sales managers. Click on the link at the end of this post to view the webinar.  It covers these topics:

    • Why it matters that you align your strategy, processes, and funnel stages to the Buyer’s Journey
    • The critical stages that are frequently overlooked
    • Funnel examples that align Sales & Marketing to the Buyer
    • Rebuilding your funnel model to learn the necessary funnel velocity

What can go wrong with funnel management – webinar

Lead Management vs. Demand Generation. A White Board Runs Through It.

With all the marketing and sales jargon floating around, it is not surprising that some confusion exists around what certain terms mean. Carlos Hidalgo, CEO of Annuitas Group, noticed that many of the clients he worked with were confused about what demand generation and lead management were, and how the two worked together. So, he did a whiteboard series with Marketing Automation Software Guide, an online resource that provides reviews of marketing automation solutions. Carlos explains the difference between the two, as well as how marketing automation is a powerful tool for supporting the strategy you build around demand gen and lead management.

Most of what he says is pretty spot-on. My only modification would be to point out that individuals who leak from the funnel should be recycled by marketing with a special program until they are ready to progress again. This can be done with your marketing automation system.

Check out Carlos’ great whiteboard session and be sure to leave your comments below.

How Long is Your Revenue Runway?

Many business managers I speak with don’t have an accurate view of how long their revenue runway is; or to put the metaphor aside for a moment, they are unclear about how much time is required for the marketing and sales team to create enough customers to achieve a revenue target. Almost without exception the estimated time to revenue is perceived as being much shorter than it is in reality. The misperception is dangerous. It leads to wildly inaccurate forecasts, wasted budgets, and unnecessary management turnover.

Ask any pilot and they’ll tell you with a high degree of accuracy the length of runway their plane needs for takeoff depending on weight of the aircraft and environmental factors. They can also tell you at what ground speed their plane achieves the necessary lift for takeoff. If their plane is a G5 it needs 5, 150 feet of runway to take off. If it is a 777-200 there better be at least 8, 300 feet of black top in front of it.

If knowing when a given level of revenue can be achieved is so critical, why do companies get it so wrong? It’s because they are only looking at the late stages of their funnel and ignoring the time necessary to find and nurture prospective buyers (the mid and early stages) to the point where Sales should engage. They’ve been trapped in the “Sales Cycle” mentality rather than adopt the “Buying Cycle” perspective.

Recently while creating an integrated Sales and Marketing plan for a client, I asked the management team to tell me the length of their sales cycle. They estimated it was 8-12 weeks. They had historical data to show that once a prospect was talking with them about the problem they hoped to solve it took 8-12 weeks to advance to a point where a purchase decision was made.

Unfortunately, if they had built their business plan and cash flow projection based on that information they would have crashed and burned just like a G5 with only 2,000 feet of runway.

What hadn’t been taken into consideration was the amount of time Marketing required to attract and nurture buyers. In the case of my client, once all the stages of the buyer’s journey were identified, they estimated that the early and middle stages of the funnel took 38 weeks. So the time it will take to find, nurture, and close a prospect actually will be 50 weeks–nearly one year–not 8-12 weeks.

This knowledge enabled us to build a realistic demand generation plan to support short term and long term revenue objectives.

The other factor impacting time to revenue is internal bureaucracy. For some companies the amount of time it takes for Marketing to plan and implement a program or campaign is ridiculous. Companies who want to be more nimble and aggressive must take a critical look at the approval processes for marketing budgets and content. Does an email campaign really need five managers to sign off on it? Why make Marketing jump through another set of hoops to get approval for a specific program budget if it has an approved budget for the quarter? Worse yet, why is that the president or the Board have to sign off on a $10,000 program? Tight fiscal restraints can choke the life out of Marketing momentum and extend the time to revenue. It’s far better to hire good managers, approve budgets well in advance, and let them manage to the budget.

Don’t let expectations be set that your revenue cycle is shorter (or longer) than it really is. Marketing and Sales have to collaborate in the planning process in order to create the right model for the company.

What Really Excites me About Marketing Automation

More of the right marketing activity to the right contact at the right time

Up to now I’ve been intrigued by how marketing automation systems can enable a resource-limited marketing department to execute more lead generation and lead nurturing activities, more systematically, with more rhythm, and do a better job of capturing metrics along the way.

To my way of thinking that represents a pretty strong value proposition—more of the right marketing activity to the right person at the right time. I can see immediately how a marketing automation solution contributes to revenue growth when the system is used to support a funnel management strategy agreed to by both Sales and Marketing. (I can also see how a system could fail if it was implemented before a funnel management strategy was in place).

All marketing automation solutions have an Achilles Heel. They need accurate contact information. Contact names have to be input from a database, or generated via some marketing response vehicle (800#, web form, etc.).

Marketing to the Anonymous Majority

Today’s marketing executive recognizes that there is an  “anonymous majority” of potential buyers for their product or service who are researching solutions and vendors online and in social networks in secret well into their buying process.  A multitude of buyers are out there, invisible to the vendor because they are concealing their identity and/or their purchasing role. Without a name, purchasing role, and contact info these valuable buyers cannot be systematically marketed to via Marketing Automation system and outbound tactics.

However, what is exciting me about Marketing Automation today (okay, call it 2.0 if you must) is how some solutions are able to reveal the identity of these anonymous majority buyers.

A caveat before I go further. I am not an expert on marketing automation tools or systems. Neither am  I a professional product reviewer.  I don’t live and breathe this stuff. I don’t make my living from within the category. This is not a product review round up.

Marketo , and Manticore Technology, to name just two of many marketing automation vendors, provide anonymous web visitor identification functionality.  By cross referencing the domain name of a web visitor with domain registration information and contact databases such as LinkedIn and Jigsaw these systems can basically point you in the right direction. You won’t know for sure who visited your site, but at least you’ll know that someone from a specific business location visited your site and it could be one of half a dozen people that work for the company and surfaced in LinkedIn and Jigsaw. This is great information for an inside sales team to use.

It’s also very valuable information to turn over to a company such as ReachForce who is extremely proficient at identifying people within an organization that have the right roles for purchasing a specific product or service, and can obtain accurate contact information for those individuals.

With Marketing Automation, a little data mining and elbow grease it’s  possible to continually harvest for the funnel fresh names who just days before were anonymously browsing your site.

This excites me. If your site receives 10,000 visitors a month and only 2% fill out a web form or send an email identifying them that means 9800 visitors come and go every month without electing to identify themselves. Certainly, not all anonymous visitors are worth chasing down, but shouldn’t we be interested in proactively engaging with those who spent, say, over 1 minute on our site and who visited a certain set of pages? If just 30% of 9800 anonymous visitors met this test, we’d have an opportunity to identify and add up to 2,940 new names to our funnel every month using Marketing Automation and our own inside sales team, or a lead qualification service.

LeadForce1 is a relative new comer (2008) to the Marketing Automation field. What intrigues me about their product is how it evaluates a visitor’s behavior and activity to assess the visitor’s intent. When the visitor’s intent is known we have a better understanding of what stage in our funnel the visitor should be placed (and how we should interact with the contact).

I envision using a system like LeadForce1 to:

  1. Automate the process of identifying anonymous web visitors (this can’t be completely automated; it requires some human touch and decision making).
  2. Score or classify each contact based on intent and behavior
  3. Place the contact in the appropriate stage of my funnel
  4. Automatically initiate outbound marketing/sales tactics to that contact that are appropriate based on the funnel stage level.

Chasing down anonymous web visitors must be done tactfully, with a good heart, and in compliance with your site’s privacy policy.

I’m looking forward to hearing from practitioners who are using Marketing Automation systems to identify and connect with anonymous web visitors.

Feeling the Impact of the 9-Month Year Yet?

I know some of you are sweating bullets right now. The end of Q1 is near. Your revenue and marketing objectives may be in jeopardy.  Here’s why the first fiscal quarter for a lot of companies is painful.

If Q1 is tough you’re probably feeling the impact of a 9-month year. The problem is you put the hurt on yourself. Yep, you caused the panic in Q1 if:

  1. The 2010 sales and marketing  plan/budget wasn’t approved by October 2009
  2. Marketing and sales funds for 2010 programs weren’t made available until January
  3. Sales and marketing were completely consumed in Q4 on moving buyers through the last few stages of the funnel
  4. Sales and marketing don’t know what the lag time is for each stage of their revenue funnel.

Any one of these things will throw a big wrench into the revenue-generation gears for Q1. Instead of moving the necessary volume of buyers through the funnel during the first quarter, many of you were just getting plans approved and starting to execute. No way can you impact Q1 revenue if the length of your average sales cycle is 8 weeks or more and campaigns are launched in late January or so.

Getting out of the blocks quickly with your sales and marketing programs  is only a part of the solution. The real focus has to be on maintaining rhythmic continuity of sales and marketing tactics through Q4 so each stage of the funnel has the right number of buyers necessary to achieve the Q1 revenue target. (If you don’t know how many buyers are needed at each stage you have an even bigger obstacle to revenue growth).

If it’ll take  the Board until late November or December to approve the operating budget ask for a reasonable baseline budget well in advance so you can commit to January-February programs.

Don’t let yourself be trapped trying to achieve a 12-month revenue number with only 9 months of runway.

Nearing Quarter End: One Flew Over the Cuckoo’s Nest

As I write this the calendar tells me there are 16 days until the end of March and the end of another fiscal quarter. For those responsible for revenue generation it is a tense time. It’s also a time for some healthy retrospection.

If your company didn’t experience a breakthrough in revenue performance, or even a healthy incremental increase, why not?

Could the lack of stellar performance be because different results were expected from doing the same old things in Sales and Marketing (only with fewer people and resources)? Isn’t expecting different results from doing the same thing the very definition of insanity that we all chuckle about?

Take a quick inventory. Call it an insanity test if you want, but if you answer no to more than two of the questions you will begin to see why revenue growth is caught in neutral.

  1. Are Marketing and Sales working from the same revenue-generation action plan?
  2. Is Marketing generating at least 24% of the revenue opportunities for the company?
  3. Is Marketing spending more of its budget on lead generation than on brand awareness?
  4. Are Sales and Marketing tactics aligned with the buyer’s journey rather than the company’s internal sales process?
  5. Are contacts and opportunities that don’t progress through the funnel being recycled systematically?
  6. Is the lag time of each stage in the sales funnel being measured and reported?
  7. Are Sales and Marketing in total agreement about when a prospective buyer should be handed over to Sales?
  8. Does the CEO, CFO, head of Marketing and head of Sales all know the conversion ratios for each stage of the sales funnel for the company’s major products?
  9. Does a Marketing manager attend Sales staff meetings?
  10. Does a Sales Manager attend Marketing staff meetings?

If you would have given the same “no” answers to these questions three months ago as you answered just now, welcome to the asylum. You’re expecting dramatic changes in revenue performance by doing the same things over and over.

Do you know your sales funnel like the back of your hand, or the back of your head?

If your CEO, head of marketing, and head of sales can all agree that the following information is known than step to the head of the class.  However,  I suspect that you won’t pass the test, meaning your company is like 90% of other B2B companies that are:

  1. Struggling to align marketing and sales,
  2. Struggling to hit their revenue numbers,
  3. Struggling to develop a believable plan and budget for 2010,
  4. Struggling to achieve a comfortable level of transparency into the sales forecast.

Often you’ll know:

  • The size of your market
  • How much revenue you need to generate out of that market

But do you, or the team, know:

  • How many deals you need to close each month?
  • How many proposals that will take – for each month of 2010?
  • How about first meetings (you know the one, the “Hi, thanks for making the time, tell me about your business”)? How many do you need in month 1,2,3 and next year?
  • And how many leads will that take from Marketing, and how many must Sales generate itself?
  • How about the market? Do you know how much of that market you need, and whether (and how tightly) you can (or must) focus?
  • Does everyone in Sales, Marketing, Finance and Operations have the same view of these numbers? Or are there disconnects?
  • How do these planned numbers compare to your current numbers?
  • Which of these do you know, and which of them are gaps in the understanding of your funnel?

So, how well do you, and your team know all of the numbers, and what does the future hold?
You need to have a simple, single model of your demand for 2010 (and beyond), outlining
your total funnel – top to bottom.

If you’re wondering where the gaps are in your ability to plan and execute a revenue plan effectively contact me. As a certified Funnel Coach in North America for MathMarketing there are many ways I can be of service to you this year, and some are even free.

My colleagues at MathMarketing in Melbourne have a nice habit of hitting the nail on the head when it comes to discussing funnel management, revenue planning, and marketing training, which is why I boldly lifted the above (in italics) from their literature. Thank you, mates.