Everybody who ever worked on the commercial side of a company knows the good old sales funnel. Leads from a variety of sources go in the top and out come paying customers.
If it only was that simple!
Hardly ever is a prospective customers’ trip through the funnel smooth, and almost always less swift than the company had hoped. In fact, a lot of effort has to go into nurturing the lead with just the right information at just the right time to move them from awareness to interest, to decision and action in the form of a purchase order (or in a less desirable case in the form of a lost sale).
From an internal perspective the funnel contains leads that turn into qualified leads and form there into opportunities and finally – hopefully – result in a paying customer.
Effectively managing the customer journey through the funnel is critical for commercial success.
The challenges with the funnel start right at the top: since attrition rates are generally high and delays in the funnel common, finding enough leads to go into the top is the first formidable challenge. Populating the funnel is achieved through one of the two approaches: inbound or outbound lead generation.
- Outbound lead generation relies on traditional marketing methods such as print, cold calling, direct mail advertising, as well as email blasts and digital or social media. With this outbound or push marketing you can potentially reach a large number of prospects, but in order for the message to be appropriate for the broad audience it has to be fairly general.
- Inbound leads come to you via webpages, demo signups, landing pages which prospective customers find compelling enough to reach out to you and ask for more information or leave their contact information in return for a valuable asset such as a white paper or eBook. Inbound leads come with more information, e.g. a person who requests a demo or downloads a white paper on a specific topic already tells you a bit about themselves.
In addition to inbound and outbound marketing activities, your sales or sales support teams are likely prospecting using LinkedIn or other resources. Despite of those tools, filling the funnel is a slow and often painful process that can take up a lot of time. Anybody who has ever used purchased email lists and has gotten an insanely high percentage of undeliverable emails and lots of “unsubscribe” messages knows exactly what we are talking about.
The next challenge is to move people through the funnel and keep track of where they are so you can provide them with the appropriate type of information. Detailed product specs are not what a top-of-the-funnel “awareness stage” person is looking for; on the other hand, the strategic overview slide deck will do nothing for the “decision” stage person, who is in the process of comparing your product to that of a competitor and really needs to dive into the technical details.
Knowing as much as possible about your leads as they move through the funnel becomes a critical success factor.
Three Main Drivers of Funnel Success
The three major drivers of funnel success are the number of leads that enter the funnel, the attrition rate in the funnel and the speed with which leads move through the funnel.
Let’s look at these one by one.
- Everything else being equal, the more leads enter the funnel, the more sales should drop out at the bottom. But marketing is not a scientific experiment where you tweak one thing and can keep everything else equal. While it is great to have a large number of leads enter you want them to be quality leads - else the only thing that you achieve is a marked increase in your attrition rate and a clogged up funnel that leads you to overestimate your sales prospects.
- With quality leads in the funnel your next challenge is to minimize attrition rate by carefully and deliberately chaperoning your leads on their sales journey. Lead scoring allows you to follow each lead as it progresses and enables you to provide valuable content that is custom-tailored to the lead’s needs based on what stage they are in.
- More complete information can also increase the speed with which a lead moves through the funnel. The more you know about each lead, e.g. their needs, their funding (= purchase power), or their trusted peer network the more you can tailor not just your message but also your timing and approach and the better prepared your sales team can be when they interact with the lead.
Given these three levers, the challenge for both the sales and marketing teams is to devise ways to add quality leads to the funnel and nurture them through the funnel in order to make end of quarter sales targets.
How to Have a Full, Clean and Efficient Funnel
Now that we know what to do, the question becomes how to do it. Here we introduce several approaches that can help with adding quality leads to your funnel and moving them through to – hopefully – a purchase order.
- Demo sign up, LinkedIn profiles, conference contacts are a good source of leads but acquiring these leads is costly and time consuming. The best way to leverage your existing leads is to organically extend based on your list.
- Each lead’s collaborators, network, colleagues, and publication co-authors are much “hotter” leads than a random webpage visitor or somebody who stopped by your trade show booth because you had Swedish Fish or Swiss chocolate out in a grab bowl. The trick is to quickly and painlessly identify leads similar to your hard-earned ones and thereby extending your opportunities several fold.
- Good leads are great to have but what’s even better are good leads which are physically close to other good leads. Enriching your funnel with relevant leads at a specific institution or in a geographic location allows the sales team to maximize their time by meeting several interesting leads in a short period of time.
- The more you know about your leads early on, the better. Information about funding, e.g. grants or techniques they use (and mention in the materials and methods sections of their publications) help you pre-qualify and categorize your leads so you can supply them with relevant rather than generic information.
- What is good for drug discovery is also true for lead nurturing: fail them early! With more information about each lead you can eliminate those that are never going to buy your products instead of continuing to nurture them along until they finally drop out by themselves. Eliminating irrelevant leads keeps your funnel clean and allows you to focus on your best prospects.
- Sales is a relationship business and the more meaningful a relationship the sales representative can build with each potential customer the better. Knowing your leads helps building that relationship: have they published a new paper, is one of the co-authors an existing customer, did they receive a grant, reference a new method or technique, buy a new instrument, present a poster or give a talk at a conference – all of that is crucial information that helps the sales rep better understand a lead’s needs and target the information and communications specifically to their situation.
More information is better – but how can you manage It?
Running an efficient sales funnel comes down to having a lot of information about every lead in the funnel. We are not talking proprietary information, in fact all of the information we mentioned in this blog is publicly available from sources like PubMed. The problem is that there is so much of it. And it gets complicated very quickly, e.g. a lot of interpretation, disambiguation and cleaning is required to establish a network of frequent collaborators based on co-authorship of papers.
While it is realistic, albeit time consuming, to hand collect that level of detailed information for a few selected key accounts, it is impossible to do that for the large number of leads in your funnel.
The good news is: you don’t have to. Machine learning algorithms have gotten very good at this type of task over the last few years and paying for access to a database that contains terabyte of cleaned up, disambiguated and structured data beats the DIY approach any day.
Big data combined with the latest algorithms are formidable tools that you can use to add new quality leads to your funnel, move them through the sales journey efficiently and can help your colleagues in sales close the deal.