Four Sales Funnel Misconceptions
The sales funnel is the lifeline of your business, representing future revenue that will allow your business to grow and be profitable. It is the intersection of the responsibilities of the marketing organization and those of sales. It can be a vehicle for effective business development, or a battleground between marketing and sales personnel. Too often it is the latter. Here are four common misconceptions that contribute to this unfortunate situation.
Misconception #1: A rented list is a good starting point for developing or enhancing a sales funnel.
This simply is not true. While the rented list is the most common information source marketers use when trying to enhance a sales funnel, using a rented list as a primary source of data for a direct marketing program guarantees mediocre results, at best. The list supplier cannot guarantee the list contains only those companies your sales force seeks. Worse, up to 50 percent of a list can be individuals with out-of-date contact information.
What the list actually provides is lost revenue. Every moment spent following up on a substandard lead is money wasted, raising the cost and lowering the value of the list.
The correct starting point for a successful direct marketing campaign is a marketing database that integrates current sources of prospects from company records that are specific to the company’s target market. Selected records, culled from rented lists based on specific pre-established criteria, can then be used to supplement the database.
Misconception #2: Marketing can come up with the sales-funnel strategy independent of sales.
Wrong. The danger here is not wasting company resources by targeting the wrong sites and individuals, but rather damaging the sales efforts already in progress. The last thing a sales person needs is for marketing to send a message to a current prospect that is inappropriate in content, target or timing.
Through dialogue between the departments, you can identify the types of companies the sales force sees as valuable targets, and establish clear priorities for which of those companies should get marketing attention first.
Misconception #3: Having a high-level description of your target segment is enough.
This is common. If a marketing team is satisfied with constructing only a high-level description of the target segment, this may be enough to get a list vendor started. However, we already know that approach is ineffective. Instead, create your own marketing database through consulting with your sales team.
The first step in building your marketing database is to increase the specificity of the description—e.g., SIC code, site size, company size, etc.—of your target segment. Do this until you are able to make accept/reject decisions on a record-by-record basis for site records sourced either from company records or third-party data sources such as Dun & Bradstreet. This has two dramatic benefits.
• You will be able to go to your sales team and have a detailed discussion about account/site prioritization.
• Visibility. My group’s experience with dozens of B-to-B Fortune 1,000 companies points out that prior to taking this step, these marketing teams had visibility to only 20 percent to 30 percent of the sites in their high-priority segments. Following this step, you should now be able to market and sell to 100 percent of your target segment.
Misconception #4: When sales is anxious for leads, send them all responders.
This is the shortest route to having the sales organization decide that marketing has no clue.
Even if you’re already only marketing to sites and individuals the sales team has validated as important, it is essential to establish clear criteria as to which responses truly are valuable to the sales organization, i.e., those that indicate current or imminent involvement in a budgeted acquisition project. If they are valuable, send the response out as a lead. If the response is not valuable to sales yet, hold onto it for a follow-up. Experience makes it clear: “B” leads and “C” leads from previous campaigns are the most likely to become “A” leads when approached correctly in the next campaign.
Kermit Yensen is CEO of Massini Group, a direct marketing company that provides sales-funnel acceleration solutions. He can be reached at (503) 640-9800 or via e-mail at email@example.com