Optimizing Your Sales and Marketing Process:
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.
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.
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 be.
This is a partial chapter from The Startup Manual, 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 check out the Startup Manual here.
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