A fundamental tool for growing a business is the funnel. A basic funnel has multiple stages:
5 mistakes companies make with their funnel:
Let’s look at each category each stage of the pipeline and see what kind of growth hacks we can apply.
These are actual names of people that you would want to attract to the business because they are representative of the target segments you are looking to sell to. First you need to know what your target segments are. Unfortunately most companies as I’m sure you know see their target segment is being the whole world, or something far too broad for their business and paradoxically end up bringing in far less business then if they picked one or two targets and focussed on them for a while
Most common pitfalls:
What you really need to do with suspects:
Do we have real target markets and if not let’s start finding them. Finding them typically means starting with some hypotheses of who your target segments would be, get it reviewed by some independent experts to make sure you’re not falling into pitfalls by accident, and then start talking to those folks and see what kind of information you can collect . So, start with a hypothesis, test for a while, get back data and analyze it and decide if you keep going. This is growth hacking!
Often the company already has target markets or has a hypothesis and so in parallel you need to start marketing to this until you have something better. Same approach, use a ‘growth hacking’ approach with short iterative tests to see what is working within those segments.
In both cases, the hardest part about suspects is actually getting the names. You either have to literally get lists of names that you can directly promote to, or make sure you have the right channel and venues where those folks go.
Best way is to start small, how can I get 100 names of people to promote to of which maybe 5-10 will talk to us? Some obvious places would be:
Assuming you have the right target markets and the right place(s) to find them (events, direct marketing, partner, etc.) the next question is how do I convert as many to prospects as possible, ie. get them to reach out and express an interest in buying something.
Typically this relates to the content and the packaging of the content.
Unfortunately most marketing tips and tricks I see focuses almost exclusively on the packaging, but the more essential ingredient is making sure the content is good. Especially in technical fields, marketing is often not technical and therefore focuses on communication tactics in isolation (video! SEO!) without deeply understanding what markets wants. The content is then developed as a favour by a subject matter expert or executive, etc. but without clear guidance as to what the audience wants to know. The biggest role for marketing to play is to actually listen and understand the subject matter in depth, even technical. Understand the nuances of the target segment, what they want to know and hear, what will get their attention, where they go, what formats they want to consume in.
Most common pitfalls when trying to generate prospects / MQLs:
What you really need to do with prospects:
First, identify “who in your company is the market expert?” “Who is expected to be the market expert?” By expert, this means understanding
- what the target buyers personas are and what their big unsolved problems are
- what their buying habits are
- where they buy, who they consult
- what a day in the life of the buyer looks like, etc.
In small companies, sometimes this is the CEO or one of the founders. Perhaps the founder worked for 20 years in the target space and understands it really well. Some companies implement Pragmatic Marketing closely and have certain product managers with this responsibility. Others have marketing managers or industry managers with this responsibility, some have a “strategy manager”. It doesn’t really matter who it is as long as they have time for it, are doing it consistently, and doing it very well.
Most companies don’t really have this and therefore I believe the most logical place is actually in marketing – a true “product marketing manager”, “industry manager” or “growth manager” role, as understanding this is fundamental to lead gen (and ultimately to the company strategy and product roadmap).
In fact, marketing almost has to own this by default because others will say they own it but ony own a piece of it. For example yes the CEO does understand the market but only through a certain lens and using informal methods. Or maybe product does understand the market but more the existing customers than the rest of the world.
Make sure then that this person’s responsibility is to:
Apply a growth hacking approach – run a campaign or two for an iteration, get the results, review the data, and plan the next one!
Marketing often thinks that once the lead is handed off to sales, it’s now sales’ job to convert that lead to an opportunity, and if they are not successful, well they’re just not selling hard enough! That is the wrong approach. Not only is it not collaborative, but 1) it very well could have been that the lead was wrong to begin with and this is something marketing should want to know about so they can refine 2) the person that really cares about growth doesn’t just care about 1 or 2 levels of the funnel, they are extremely curious and feel an ownership to the WHOLE funnel
Top 5 Reasons why Leads aren’t converting to Opportunities:
In general this should not be too hard to find out why, just ask the sales team. Often sales might not fully be able ot give you an answer because 1) politically risky 2) didn’t ask questions like “what brought you here”, etc. but more targeted sales “what’s your budget”. Bottom line is you’l have to ask many times, many different ways, different levels, and perhaps sit in on some calls as well.
Remember that pragmatic marketing says you need to solve problems that are 1) urgent, 2) pervasive, 3) people are willing to pay for (in the target segment). And the target segment obviously has to be large enough to support your growth goals. Is this the case? If your offering doesn’t meet all of these criteria, then no matter how much growth hacking you put into your business you are not going to fool customers into buying.
This is where things get really interesting. What is your growth strategy with existing customers? Selling something additional to existing customers is the fastest path to revenue. You have a trust relationship there already, you have procurement already in place i.e. contracts, approved vendor list, etc. and you have a captive audience who will tell you all about their problems and what they need and will pay for. And yet most companies focus their marketing, sales and strategy on new customers and new segments and treat their existing customers with the most mediocre of attention.
Top 5 pitfalls with growing an existing customer base:
By far, one of the most egregious and most common growth strategy mistakes that companies make is focussing too much on creating something brand new, winning new customers, when they could achieve nearly all of their growth goals by simply up selling existing customers
In fact, a great growth manager will look at the growth objective for the company, and do a breakdown first existing customers versus new customers, where is the revenue coming from this year and in the future? Then work the math backwards to understand what you need to do at each stage of the final to upsell and retain existing customers as well as bring in new customers
Understanding what customers actually need and will pay for it versus what customers say they want is also very challenging and usually could benefit from a user experience researcher or someone trained in use or interviews and ethnographic research. There’s a great talk given by the former product manager of LinkedIn who explains how she was sure the customers were going to love a new newsfeed because they were all telling her they wanted that, but when it ethnographer went in and asked more sophisticated questions like when’s the last time you read a newspaper, what was the article, what compelled you to read it? They uncovered that people Loved the idea of getting up in the morning and reading industry news but in practice they weren’t even able to read other sources of news today so it seemed very unlikely they’d be able to use a newsfeed feature after all.
Don’t forget referrals under the “prospects” section!