How to Optimize Your B2B Demand Gen Funnel
Highlights from this Episode
Highlights from this episode
[0:00:03.7] ANNOUNCER:From deep in the heart of Galveston, Texas all the way to the gleaming shores of Jacksonville, Florida, it’s the Green & Greene Show. Here are your hosts, Dave Green and Jonathan Greene, ready to unlock the mysteries of scaling demand gen. The Green & Greene show is brought to you by LeadCrunch, which has reimagined how to find B2B customers at scale.
[0:00:24.2]JG:That is some sweet music on the frontend of our Green & Greene Show, you might be saying. We also have our sweet backdrops now. We got ourselves a Christmas present. My guest, J. David Green, welcome sir. Thank you for being here.
[0:00:40.2]JG: Optimize your B2B demand gen funnel today is something I think everybody needs to know about. What do you think?
Why Optimizing Your Demand Gen Funnel Can Move the Revenue Needle
[0:00:46.6]DG:I do. The thing you realize about B2B, once you get into it, is it’s darn complicated. The decision process is much more complicated than most B2C scenarios. There are multiple people involved. Sometimes companies have multiple locations. It can take a long time. What information they care about at the beginning differs as they move through the buying journey and all that stuff. All that complexity makes it very hard to get your arms around why this isn’t working more effectively.
[0:01:23.5]JG:My first experience with it was that the length of the sales cycle is so different. How long it takes to move people through the funnel is so significantly different. For the uninitiated, why do you think people should care about this?
[0:01:37.9]DG:Well, I think if you don’t care about it, you’re going to leak revenue—a lot of revenue. You’re going to waste money at the bottom line. If you want to get your arms around how to make more of a financial impact for the company, this is one of the keys. It’s not the only thing—I wouldn’t even say it’s the most important thing—but I don’t think you’re likely to be successful unless you master this particular discipline.
[0:02:03.1]JG:Yeah. It’s useful predominantly because it prevents leaking of the funnel. Is there more to it than that?
[0:02:09.0]DG:I would say it’s basically leaking of the funnel. There are a lot of other problems that can be associated with that, like conflict with sales because they’re unhappy with the quality of the leads, and you’re not really in any position to understand why the leads aren’t qualified. There are some things you can do to really tighten that up so you have a better relationship with the sales organization.
If you’re going to get budget, if you’re going to have a voice at the table with the executive team, you have to be able to drive revenue. If you don’t drive revenue, you’re just not going to be a real player. If you want to be a player, this is the ante.
[0:02:49.0]JG:All right. All the players came from far and wide. Okay. Walk us through a funnel, then. Let’s get a baseline understanding of what you’re talking about, if we can.
How Do Demand Gen Funnels Work?
[0:02:58.9]DG:. Can you put that e-mail funnel up? This is probably one that most people are reasonably familiar with. You send an e-mail, it either has a soft bounce, which means they tried to get it through but it’s hanging up. Maybe the IT department said, “Your mailbox is full. We’re not going to give you any more e-mails,” or you’re on vacation or whatever.
A hard bounce means you sent it there and there’s no one there like that with that particular e-mail address anymore, or it wasn’t delivered. Then, of the ones that are delivered, some of them are opened and you get clicks from some of them. There can be other metrics, like somebody opting out or replying and other things. This is the idea, and the funnel gets smaller and smaller. What you’re trying to do is look at these things and say, “How can I get more e-mails delivered? How can I get more of those that are delivered opened, and how can I get more clicks from those that are opened?” This continues right on through to a landing page, where there’s another funnel.
There are funnels all over the place. I believe there’s even a mental funnel that people have, the thought sequence of your customer. That is a funnel where, step-by-step, they’re trying to decide what you want them to do and whether they want to continue or not. You affect that with messaging and images and all kinds of things, friction. All those things are part of a funnel, but I think, when you drill down into it at the channel level, that’s what it is.
When you look at that across all the different forms of communication that you have, there’s a lot of complexity there. You get one for the phone and another for a landing page and your website, display ads, on and on and on. The other view of the funnel is more of a macro view of some key milestones. I first was involved in this quite a long time ago when we started closing the loop with some big tech companies. I was under the illusion that most of the people who raised their hand bought. When I finally closed the loop, I found that not that many did.
That you see here is my version of a funnel. You can see that there’s typically a marketing component and a sales component to it. These names are names that I use. Most people are probably more familiar with the SiriusDecisions funnel, which is somewhat similar.
I personally think mine is better, for a couple of reasons that I’ll talk about.
Target Market Definition
The idea is that you start with the target market. That is a combination of the accounts you believe you’re going to target and the decision-makers or influencers inside of those accounts that you’re going to target. One of the great things about that is it becomes a little bit of a sanity check on any media buy you might do. If your target market is 20,000 people and people are trying to tell you why you need to go reach 500,000, you might be asking yourself, “I’m paying for a lot of people that aren’t in my target market. Is that really wise for me to do?”
That’s one of those things which, if you’re going to start to build projections and forecast, knowing what your target market is and what’s reasonably possible in terms of penetration into that market is helpful.
Exchanges are the first interaction you have with people. Targeting them is a list, or some demographic. It’s an audience set of characteristics and exchanges where they are willing to give you some information about themselves in exchange for access to some content. They may subscribe to your blog. They may download a white paper. There are all kinds of things that they can do.
[0:07:03.5]JG:Sure. Lots of people would call it a lead gate, probably.
[0:07:07.2]DG:Yeah. An inquiry is really common. The funnel most people are familiar with is from SeriusDecisions. We’re subscribers; we totally believe in SeriusDecisions. They have a slightly different model. Even if you don’t subscribe, you’ve probably heard of some of the vernacular. They came up with the term MQL and SQL and SAL; all of that is SeriusDecisions lingo.
The idea behind this, though, is that you start to look at these milestones. The first exchange you have with them is a level of commitment.
Conversation Leads Definition
When you think they’re ready to talk to somebody, I like to call those “conversation leads”, because that is the description of what you’re aiming for. You want people who you believe will have a conversation with someone in your sales organization, ideally an inbound lead qualification team. If they’re not willing to have that conversation, they’re probably not ready yet. People who go on to our drift and request to talk to sales, or they go to the contact page or the pricing page, those are usually people who want to talk to somebody, or at least are willing. They may not want to, but they’re willing
First Sales Meetings Definition
Of those, there are some who turn into first sales meetings and some who don’t. It’s not a high percentage, but they don’t go any further unless they make that commitment of actually scheduling a meeting and attending. They’re now talking to someone in sales and it’s either qualified and turns into an opportunity, or it doesn’t and becomes pipeline and closed-one deals and right on down, until they’re buying more stuff from you over time.
What Constitutes Funnel Maturity?
That’s the basic idea. The value of these milestones is that it gives you an indication of the likelihood of purchase. The more commitment they make, the better chance there is that they’re going to buy something. One of the things I believe to be true about this is that marketers who are immature in their use of the funnel are usually focused on the top-end. They’ll focus on traffic, lead volume.
The marketers who are more mature begin to focus on pipeline, closed-one deals, sales qualified, to the degree that you can get deeper in the funnel. That doesn’t mean you’re managing sales people’s pipeline for them, but that you care about that and you realize that’s really the goal, not just to get a bunch of weeds and made a lead volume or a traffic volume goal that you have. Those things are fine, but it’s easy to have a lot of false positives there. That’s really the value.
If you follow a SeriusDecisions-type model, you’ll find that there are conversion metrics that you’ll discover. What percentage of the leads that are what I’m calling an exchange and inquiry convert it into somebody who actually wants to have a conversation? They’re qualified by your automation system, they score a certain level. What’s that percentage? Of those, how many have an actual sales meeting? Of those, how many do sales then believe they should continue talking to because they think they can win some business from them?
You just start to build up over time. It takes about six months to a year, depending on your sales cycle, to get enough data to begin to have confidence that you have a baseline there. You’re starting to look for trends. Can I dial this up? Show the next slide, because I think this is what I consider the money part of that funnel.
Where Most Companies Lead Revenue
When you get to handing something off, from marketing to a conversation lead and from a conversation lead to a first sales meeting, that’s the most likely place you’re going to leak money. That handoff process needs to be done well, and you need to really drill into it. A typical thing people might do, for example, and this is a sub-process here but it’s really important, is there’ll be an agreement, let’s say with your SDR team, about what constitutes something that’s worthy of being in a conversation lead.
It has to check these boxes, whatever those are. It’s got to have a business e-mail address. It maybe has to have a phone number. You’ve got to have a person and a title and a company name. Whatever those things are and however you get them, that’s the agreement. There may be other things, like it can’t be this small or can’t be that big or it has to be in these industries. Whatever those things are, sales can basically look at it and decide whether they’re going to put the effort into following up or not.
If it doesn’t comply with what you’ve agreed to, they can say, “Doesn’t comply.” You can go back and look at your lead scoring system, or any of your data enhancement initiatives, and see what you are doing. “How come these ones that I didn’t want are getting through? What can we do to tighten up the top of the funnel to make those a little better?
Likewise, between the SDR team and the sales team, there needs to be a similar back-and-forth, where sales can take a look at it and say, “Hey, you have to ask these two qualifying questions. You have to ask these background questions. You have to get this data in the lead.” If those things aren’t in place, also saying, “I’m not going to follow up with it, because you haven’t done your job yet,” that, again, gives management a way to go back in there, look at what’s wrong. Is this a problem with the SDR? Is it a problem with the sales rep? Maybe the sales rep has a misconception of what the agreement is. Maybe both sides have seen something that nobody anticipated
It’s that handoff process between your marketing automation system and SDR, between SDR and sales, where you tend to leak all the money and where you can get a lot of clarity on how to drive a lot more revenue by tightening that up.
[0:13:09.6]JG:I actually really like visualizing it this way. When you get into a position where you can benchmark every stage of this, it’ll literally show you what you suck at as a marketers, which is really, really telling. I feel a lot has been done in the space of optimization theory in the last few years. Lots of people are working on optimizing their marketing, but the overall approach, as I would characterize it, from upstarts is like throwing spaghetti at a wall.
Just a landing page? Well, why? Well, it’s ugly. That’s not really a data-driven decision. That’s a quantitative or qualitative approach to optimization. When you have your funnel benchmark from cradle to grave and you can really look at specifically where people are falling out and take action to optimize those specific steps, it actually cuts way down on the amount of wasted time as a marketer.
The Funnel and Account-Based Marketing: Not All Leads Have Equal Value
[0:14:09.1]DG:The other thing about it is, when you start to do this at scale, you’ll start to see things you hadn’t seen before. You’re tracking things in a particular way. I think the whole reason account-based marketing became such a big deal is people started to track this. They started to say that while leads may be generically class $50 each, that some leads were worth a lot more than other leads. Some leads were worth nothing and some leads were worth several hundred dollars.
They started to say, “Maybe I ought to put more of my resources against these sorts of accounts,” just like sales organizations do. They put their best reps on the really big global national accounts and get much bigger revenue streams from those accounts. Marketing can do the same thing and I think marketing began to get that insight because having a funnel like this lets them drill into aspects of it and look at how a market segment performs. What’s the ROI for that market segment? What can I do to get more connection with that market?
[0:15:18.9]JG:I think this is all an evolution of what marketing is and what it should be in a continuing progression. If you think about marketing 20 years ago, prior to any electronic attribution capabilities, it was, more or less, throw money at the market and hope something works. Then we developed electronic measurement capabilities and SeriusDecisions of the world came up with these funnels. People began to understand how to move people with marketing.
I think AVM really is the evolution of that, which is to understand who is moved and who has not moved and who matters and who doesn’t in the context of all of that. This is, again, a step beyond even just benchmarking your funnel, but understanding who’s in it and who should be in it and who should be focused upon it.
[0:16:08.6]DG:The one thing I want to leave everybody with is don’t go crazy with this. It’s not your job to manage salespeople and their funnel and how they’re doing their job. You want to care about it. You want to find out what’s happened with those things, but it’s not your job to micromanage them. You need to put a very light touch on the sales organization in terms of what you want back. We’d all like them to become data entry clerks and answer a million questions for us, but they don’t have time for it. They’re not going to participate in that, so don’t go there.
It’s really better to have a very light touch with them and realize the minimal information you need to get what you need in order to do your job effectively. Really think about it like that. It’s no different than designing a lead capture form. We’d like a million questions on there, but if you do that, you’re not going to get very many people to play along. You need to be judicious about what you ask people. Anything that you ask for, you need to be able to really use it.
[0:17:11.7]JG:Absolutely. Some great insight. I think we probably have jammed more into this episode than we should have. Let’s draw the line there. If you have any questions, go ahead and drop them in the comments below. We’ll try to remain attentive. As always, we thank you for joining us
This has been the Green & Greene Show.[END OF EPISODE]
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