How many times have you closed that big deal, had a great implementation, and then realized 2 weeks before project completion that you had nothing in the sales pipeline scheduled to close in the next few weeks?
That is the problem I hear most often from companies I talk with. Building a steady stream of leads to fill the sales pipeline requires discipline and strategy. Here’s what’s wrong with traditional marketing strategies. Companies define their Typical Customer Lifecycle. The Typical Customer Lifecycle has a few huge problems:
- It doesn’t properly reflect the way prospects want to engage with your company.
- It is incredibly inefficient and wastes a lot of money.
This is a typical customer lifecycle:
You spend time and money to drive people to your website. This usually involves some combination of paid search, Facebook, LinkedIn, email marketing and word of mouth. The goal is to get somebody to fill out a form to talk to somebody.
After some initial qualification (hopefully), the prospect is now in your sales pipeline. They move linearly through all of these very nice stages like: Qualification, Needs Analysis, Demo, Proposal, Negotiation, and finally Closed Won or Closed Lost.
Get the contract signed and hurry back as fast as you can to Step 1.
What’s wrong with this? Salesforce.com grew to a few billion dollars using this model. The book Predictable Revenue made this model desirable because it was relatively easy to scale. The math went something like this:
$1,000 in marketing would yield 100 interested prospects. Of those 100 prospects, 10 would turn into paying customers. If you wanted to double the number of customers to 20, you doubled your marketing budget. Every good VP of Sales knew the ratio from top of the funnel to closed business. Every good Marketing VP knew how much it cost to generate a lead. Improvements were gained with tweaking activities in the sales process and possibly more targeted marketing, but not changing the model.
What’s wrong with this model? There are 3 huge areas where companies are throwing away money.
On average, 99% of the people that visit your web site aren’t ready to engage in your sales process. You’ve spent all this time and money to drive people to your web site, and you don’t capture the information for 99% of those people. You’re missing a huge opportunity to engage with prospects.
On average, 90% of the people that engage in your sales process aren’t ready to buy today. I’ve worked for two different software companies that had a lead status of “dead”. It reminded me of my dad’s cousin who married outside the family religion. “He’s dead to me!” his parents proclaimed. He never got invited to another event and was cut off from all communication.
Some bad prospects you don’t want in your sales pipeline for some very good reasons:
• You don’t have expertise in their area
• They will never be able to afford your product or service
• You don’t like the person
• The prospect is too big or too small
There are a lot of prospects that aren’t ready to buy today, but could be great clients down the road for a number of reasons:
• Prospect is contractually obligated to another vendor for a period of time
• Budget hasn’t been approved yet
• New CxO is taking over soon
When a prospect isn’t ready to buy, do your salespeople ever say anything similar to “How about I put you on my calendar to call you in about 6 months?” What are the chances that the salesperson is still employed with you in 6 months, they still own the account in 6 months, the prospect is still working for the same company in 6 months, AND they actually get a call after not hearing anything from you in 6 months?
As soon as you get that signed contract, you concentrate more on getting new prospects than providing an amazing experience for your new and existing customers.
Scott Martineau, co-founder of Infusionsoft, put this best by saying “this is a tragedy.” According to Scott, 65% of all customers that leave one company for another do so because of “indifference”, not a bad experience. We’ve all heard about the amazing stats regarding money required to acquire new customers vs. getting more business from an existing customer. Yet, few companies spend significant resources on “wowing” their existing clients to get upsells, repeat business, and referrals.
The Perfect Customer Lifecycle
How sweet would it be if every prospect you talked to was educated about your product or service, knew pipedream, right? The Perfect Customer Lifecycle achieves this pipedream and provides a steady stream of leads by:
• Educating your prospects
• Empowering prospects to contact you on their terms
• Nurturing them so you can stay top of mind
• Addressing the areas of waste in the typical lifecycle described earlier in this chapter
Step 1 – Attracting Clients Using a Lead Magnet
Step 2 – Nurturing Clients and Calls to Action
Step 3 – Re-Engaging the Walking Dead
Step 4 and 5 – Wow Customers to Get Upsells and Referrals
Staying Top of Mind
I have some very good friends that slipped something in my drink one night and talked me into being partners in a mortgage company with them. When I joined the company, the average person purchased or refinanced a home about once every 3.5 years.
I identified 100 people in my circle of friends that I thought would refer people to me. My goal was to have those 100 people refer 1 person a year to me. If 80% of those referrals turned into client, I was making a really nice living without having ever to advertise or buy leads. As a side note, we experimented with buying warm transfer leads. We paid $100 every time the phone rang with one of these leads and our ROI was terrible.
Letters from the Heart
Every month I would send postcards to my network a touching story. For example,
“Recently, a young lady named Jenny was referred to me. She was recently divorced and a school teacher going for her PhD. A single-mom with a 7-year old, her dream was to play ball in the backyard with her son. After her divorce, she was wiped out financially and didn’t think she’d be able to afford a house, especially paying for her master’s. I was able to find for her a special loan program for teachers in the state of Georgia. Two weeks ago, Jenny moved into a beautiful new townhouse in Roswell with no money down. At her closing, she was in tears, thanking me for helping her move onto the “next chapter of her life.”
People remember stories. If there was anybody in my network that knew somebody going through the same life experience, do you think they would refer them to me?
Educate, Educate, Educate
I sent people monthly newsletters that were informative, not salesy. They contained timely tips for home repair, coupons for local businesses, trusted repair companies, and a personal thank you.
99% of all people that visit your website aren’t ready to buy from you. Missed lifecycle marketing, oopss…
There was a time when getting an email got me excited. Remember “You’ve got mail” and that little chime? Now, if I don’t get any emails in an hour, I think the entire internet must be down. It’s incredibly difficult to compete for people’s attention today.
Seth Godin defines Permission Marketing as “the privilege (not the right) of delivering anticipated, personal and relevant messages to people who actually want to get them… Real permission works like this: if you stop showing up, people complain, they ask where you went.”
I get over 1,000 emails a week, but there’s only a few I want to read. I love HubSpot’s daily blog. Their content is so good, I feel guilty that I don’t use their software for my own business.
Using a Lifecycle Marketing framework will provide a constant stream of leads by:
• Attracting prospects with lead magnets and nurturing them until they are ready to talk to you
• Long term nurture for qualified prospects that aren’t ready to buy today
• Identifying opportunities to get repeat business and referrals