Optimizing Your Sales
and Marketing Process
How to Increase Sales Without Spending More
Ask marketing people what a
company should do to increase sales, and most of them will probably say
that you’ve got to spend more money on advertising. Or they’ll come up
with equally expensive, complicated strategies that they think will
capture new prospects. However, the reality is that very few companies
obtain really good conversion results from prospect names they have
already generated. Most of those leads go to waste. The conclusion is
inescapable: the route to dramatically improved sales is properly
optimizing your marketing and sales process.
What usually happens within a
company is that the marketing folks generate the leads and then a bunch
of names are somehow handed over to sales. This process is problematic,
because it implies some sort of magical transition from marketing on the
one hand to sales on the other. There must be a combination of sales and
marketing directed at everyone in your prospect funnel. On a
per-prospect basis, sales effort is almost always more expensive and
labor intensive. Marketing provides a better opportunity to exercise
economies of scale and move prospects along.
Most marketing experts say it
requires between seven and nine “touches” before a customer will
actually make a purchase, so it’s vitally important to design at least
this number of communications or repetitions into the process whenever
you have direct contact information for a prospect. Lower-cost marketing
touches involve a one-time setup cost, followed thereafter by a very low
cost per prospect. For example, the automation of marketing through
computerized direct mail, e-mail, e-zines and other communications can
be a cost-effective, even free, method to educate customers and bring
them along in the sales process. E-mail auto-responders, which
automatically mail a sequence of communications to customers every day,
every week, or at whatever frequency you prefer, are a tremendously
cost-effective way to touch customers without any human intervention.
Auto-responders allow you to maintain a “perfect” scheduled contact
frequency—there’s no salesperson who might drop the ball due to
overwork, vacation or other distractions. By keeping your offering in
front of prospects, automated e-mails reduce the education burden placed
on your more expensive sales force and “soften the beach” for the time
when the salesperson can contact the prospect personally.
Some prospects will require considerable
personal contact to move along, but the additional automated contact is
not likely to hurt. These extra marketing communication touches can also
benefit your consultative sales.
Click Here For Higher
Companies often have trouble measuring,
optimizing and assigning responsibility for the sales process. This task
becomes much easier once the sales mechanism is broken down into its
respective parts. The following diagram shows a generic sales and
marketing funnel with three levels, designed to be implemented once the
prospect has been identified. The three levels are somewhat
arbitrary—your company may need a greater or smaller number—but it is
usually best to start with a few levels and add more as the company
becomes bigger and more people are involved in the sales process.
The steps to optimizing your funnel are
simple. You’ll start by capturing all the right data in order to measure
and improve upon each step. In order for the funnel to be effective, the
following questions must be asked at each level:
How many prospects come into this level,
and at what cost?
What are the key “leaks” (reasons that
people fall out of the funnel) at this level?
What is the conversion ratio for moving
from this level to the next?
What steps or tactics are available to
move potential customers from this level to the next (or to eliminate
them so expensive resources are not wasted)?
Because of the higher absolute numbers,
improvements at the top of the funnel typically have a greater impact
than those made at the bottom. Improvements at each level are
multiplicative, not additive. A 10 percent improvement in conversion at
one level can mean 10 percent more sales falling through each level to
the bottom. However, a 10 percent improvement in two levels could mean a
30 percent improvement in sales at the bottom level, depending on your
conversion ratios between levels. By doing the math and looking at the
cumulative conversion ratio as you move down your funnel, you will begin
to grasp the economics of your sales process. Unfortunately, most
companies do not have an adequate understanding of these steps and
ratios; they do not see the big picture and they can’t measure and
optimize the entire process well.
Once you understand the
development cycle of each sale better, it quickly becomes obvious
exactly how much it costs to get a prospect into the funnel and
ultimately move them through each level. This allows you to begin
looking at real costs and determine the benefits of alternative
strategies. In addition, you will be able to better rate each
lead-generation strategy you are currently using and know what can be
spent (or offered to partners) in order to bring in leads at each level
of qualification. You’ll still need to tag each prospect back to the
source of the lead and look at the overall quality of leads from each
source as you compare costs, but the initial decision is made much
simpler knowing what your likely revenue from 100 prospects is likely to
Earn $$ on sales of
StartupPlanet's books, CDs, DVDs and seminars!
To become a Startup Planet affiliate
visit us here.
This is a partial chapter from The Startup
a complete system for designing, launching and
growing early-stage companies on minimum capital investment for maximum
benefit to the entrepreneurial team. For the rest of this system
and how you plug leaks in your funnel and increase your funnel yield by
up to 500%, plus all our others models and systems for startup success
please go to: