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One Good Funnel Leads to Another
Both sales and marketing have their own funnels. Marketing must now connect the end of their funnel directly to the beginning of the sales funnel. Furthermore, the output of the sales funnel should be fed back into the marketing funnel. Every dollar spent on marketing should be measurable and show a clear return on investment. Every lead generated must be accounted for by the sales force.
Traditional marketing focuses on creating awareness in the general market. The problem with this type of marketing is that it is extremely expensive and almost impossible to measure. Companies with huge budgets tend to win this game. They succeed in building mind share for the sales team but they do so at an unnecessarily large cost. Moreover, they never know which specific activities led to their success. Today, CEOs and CFOs expect more from marketing and are questioning every dollar they spend. Marketing executives need to get ahead of this scrutiny.
They will do this by carefully planning their campaigns and setting clear measurement criteria to determine which campaigns are successful and how to increase their effectiveness over time. These metrics include, but are not limited to: total reach, number of inquiries, number of first meetings, # of proposals, # of sales, meeting-to-reach ratio, closing ratio, conversion rate, acquisition cost, cost per contact, cost per meeting, Profitability results and ROI. Marketers must clearly track all activities from the marketing funnel to the sales funnel. A marketing funnel should have three major stages:
1. Reach – The number of people in the suspect base who will be touched by a particular campaign.
2. Inquiries – The number of people who respond positively to the campaign by starting a conversation.
3. First Meeting – Number of people willing to meet with the seller to learn how the firm can address their specific challenges (ie, qualified leads).
All marketing today should be geared towards generating qualified leads for the sales team. Each campaign must be measured by the number of first meetings generated for the sales team. And every sales professional must be scrutinized for his or her ability to convert his or her first meeting into a sale.
The end of the marketing funnel is the beginning of the sales funnel. The first meeting should represent the top of the sales funnel. All activities prior to the first meeting represent part of the marketing funnel even if salespeople are involved. (Yes, sales and marketing must learn to work together.) All opportunities must be tied to a specific campaign to link all sales activities to marketing activities. Once the first meeting has ended successfully, the sales funnel should have three major stages:
1. Diagnose – The buyer is willing to work with the sales professional to help him or her understand the situation and develop a solution.
2. Propose – The buyer is clear about the challenge they face, what your firm can do about it, and is ready to receive clear documentation of a specific way you can work with them to solve their challenges.
3. Close – The buyer, ready to take action to resolve their challenges, is now negotiating with you and completing the necessary paperwork to begin the project.
Stages Vs. steps
Many organizations we consult with tell me they have more than a three-step sales process. I don’t disagree. Your sales process, however, is not the same as your sales funnel. Managing the sales funnel means managing the stages an opportunity goes through as it matures. Opportunities are not the same as the steps you go through to make a sale. By analogy, what you do to harvest fruit is different from the stages the fruit goes through as it matures. The fruit is raw at first, then ripens, then spoils if not eaten. The steps in fruit harvesting may include planting, tillage, spraying, screening, picking, etc. The steps you go through may be very different from the steps I’m going through but the stages the fruit will go through are universal. Same with funnel management.
Wash, rinse, repeat
The end of the sales funnel is the beginning of the marketing funnel. In other words, existing customers should not be neglected. Marketing must now engage in a distinct set of campaigns that reach the entire client base, field inquiries from existing clients, and lead to first meetings with the sales team to discuss new challenges/opportunities.
To get the most out of your sales and marketing investments, it’s essential to collect accurate metrics for each stage of the marketing and sales funnel. Getting a handle on these metrics and keeping them in a management dashboard is the key to ensuring that every dollar invested in sales and marketing delivers a growing return to the business. These metrics can be captured seamlessly if your CRM and accounting systems are set up correctly and your sales and marketing teams learn to work together. Once these metrics are tracked and managed, sales and marketing will be intertwined and you will have a consistent cash flow machine regardless of economic conditions.
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