Sales And Marketing Are Dissolving Into Each Other; Revenue Is The Only Metric That Matters
We’ve all been in these meetings where the question gets asked: What are our revenue goals for the year, quarter or month? The management team is meeting to make sure everyone knows the revenue goals for the company. It all starts there. You have aggressive revenue targets and you need to make sure you have all of the supporting pieces in place to help you hit and exceed these goals.
However, from there it’s usually a pretty big drop-off. The marketing team doesn’t share these goals, so it’s looking at lead generation, website visitors and content creation. The sales team starts reaching out on its own with little practical support from marketing. Any leads marketing generates are usually poor quality and all of the pressure for revenue attainment falls on the shoulders of the sales team.Any of this sound familiar? It should, because it’s very common today. It’s also dysfunctional, inefficient and likely one of the main reasons you’re not hitting your revenue goals.
But what if your sales and marketing team worked as one unified revenue team that used technology to optimize the entire revenue generation funnel? What if that same team had detailed analytics and metrics that gave you (the CEO) detailed data on the health and performance of your funnel? And what if you could see quantitative evidence that the marketing and sales teams are improving your close rate, shortening your sales cycle and driving new leads into the top of the funnel? You’d be in nirvana, I’m sure.
Here are adjustments to make today to transform your marketing and sales into a revenue optimization machine.
Consider A Full-Funnel Approach
First, stop thinking about marketing as lead gen and sales as closers. You want people who are looking at the full funnel. Just the other day we were talking to a prospect who had a giant bulge in their funnel. We call this funnel bulge. Yes, it’s a technical term. They had a ton of top-of-the-funnel leads that were not progressing down and out. Their funnel was bloated because they were missing the sales process piece to move the leads down as opportunities or out as unqualified.
Today’s funnel is a lot less linear than it was historically. That’s because people move up and down the funnel more frequently and because sales has less control over that process. Most buyers are moving down the funnel on their own, so that journey is not as fluid as when sales moved them through the funnel. They move on their own timetable, not yours, and this is why funnel optimization makes so much sense.
You’re going to want to know conversion rates at all five steps: visitor to marketing-qualified lead, MQL to sales-qualified lead, SQL to opportunity, opportunity to proposal/agreements and agreement to new customer. Each of these conversion rates offers high-impact opportunities to dramatically improve your revenue position.
Know Your Numbers
Marketing and sales is a scientific practice, and so in turn revenue is as well. It’s numbers-driven, it’s data-oriented and it’s 100% quantitative today. It has become a science. The numbers predict performance and the science of revenue is dramatically different than it was just two years ago.
Do you remember this forecasting methodology? You took 10% of potential revenue for deals in the early stages, 50% of revenue from deals in the middle stages and 90% of deals in the final stages. Add them all up and you got a monthly revenue projection. Do you still do projections like this? Are all deals created equal? Don’t you have a much higher chance of getting early deals that are referred to you vs. deals from people who found you on the web? Haven’t you lost deals in the final stages because the fit was poor? Of course. This projection methodology is antiquated and not scientific.
You have to know all of your numbers. That means knowing the funnel conversion numbers we discussed above in addition to pipeline health numbers, accurate revenue projection numbers, a lead quality number and a total value of the pipeline. If it’s a science, numbers are everything.
Apply Inbound Marketing And Demand Generation To The Top
Once your funnel is optimized from top to bottom, your goal becomes to fill up the top of the funnel, and you do that with demand generation and inbound marketing activities. You want to pull out all of the stops if budget allows, targeting people who might not be aware of you with awareness campaigns and making sure the people who are aware can find you at all the “watering holes” they’re already spending their time in.
By blending inbound and outbound, you’re guaranteed to exert the full power of your marketing might. Now, if you’re more budget-conscious and marketing efficiency is important to you, you’d weight the program more toward the inbound side than the outbound side. It’s likely to take less effort to market to someone who’s already looking for you than to convince someone not looking to consider your products or services. But the mix is up to you.
Apply A Guided Sales Process To The Bottom
If you get 1,000 leads a month but can’t turn any of those leads into new customers and new revenue, what’s the point? Optimizing revenue is as much about closing leads as creating new leads. It’s as much about getting a higher-quality visitor to your website as it is about improving your close rate on all of those high-quality leads. Improvements to the sales process help to increase conversion rates, shorten the sales cycle, drive up average revenue per new client and make a major impact on hitting your numbers.
To realize this type of gain, you must be open to a new way of selling, one that features your buyers and not your salespeople. You’re going to want to guide your prospects through a series of conversations, meetings and exchanges. You’re going to want to infuse content into your sales process.
You’re going to want video to be much more prominent and you’re going to need to deploy advocacy in a smart and innovative way. Consider the unsolicited email your best prospects get from other customers talking about you, your business and how you helped them. Wow! That’s how you increase your close rates and deliver the knockout blow to your competition.
Overlay An Ongoing Optimization Effort Across The Entire Funnel
Now consider a team working to optimize each stage of the funnel and all the tactics supporting the funnel. The team is looking at numbers, running tests and deploying best practices with an overlay of what’s already been proven to work for you. Everyone on the team is accountable for just one big number — revenue. That’s what a strategic revenue growth consulting company does. How big of an impact would experts like that have at your business?
The future of your business is the evolution of sales and marketing into one single revenue team. In 2012, we wrote the book “Fire Your Sales Team Today” as a signal to CEOs. The book goes deep into the idea of blowing up both traditional marketing and traditional sales, rebuilding both as a revenue team with a chief revenue officer, and then firing the traditional salespeople and rehiring them all as sales guides who actively work to guide their prospects through a decision-making process, not a sales process.
Almost five years later, those ideas are now starting to become a reality. You see the CRO job title more prominently executed and you see service-level agreements between sales and marketing. But these are still too few and far between. If you want your business to grow exponentially, these ideas need to become core to your operating strategy.
You’ll need progressive revenue growth firms like Square 2 Marketing to help, and you’ll need to leave the old thinking behind and start innovating. But most importantly, you’ll need to start thinking strategically about both sales and marketing. The tactics like blogging, content, email, web and social are not where the magic happens. It’s the strategy! If you get the persona profiles, messaging, stories, differentiation and buyer journey wrong, it doesn’t matter how much you spend or what you do — you’re going to be disappointed in the results.
Square 2 Marketing – Innovating Marketing And Sales To Match Today’s Buyer Behavior!
Posted By Author Mike Lieberman, CEO and Chief Revenue Scientist
Mike is the CEO and Chief Revenue Scientist at Square 2. He is passionate about helping people turn their ordinary businesses into businesses people talk about. For more than 25 years, Mike has been working hand-in-hand with CEOs and marketing and sales executives to help them create strategic revenue growth plans, compelling marketing strategies and remarkable sales processes that shorten the sales cycle and increase close rates.