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The Results Leader
Fundamental to the success of any small to medium sized company’s marketing campaign and their marketing plan is understanding the concept of the sales funnel.
Yes, whether you like it or not, marketing your services is key to your success and just like any other professional service such as business consulting, legal services or even psychological counseling, your services oriented company is a business that needs to follow the fundamental rules of marketing in order to succeed.
The cornerstone of any successful marketing method begins with an understanding that not every person you or your firm comes in contact with, is ready to become a Client. In fact, many prospects will never become Clients.
In other words, your marketing efforts will generate leads and these leads go into the top of the sales funnel but only a small percentage will drop out of that funnel as Clients. If the percentage of conversions is greater than 50% then you simply need to market to a broader audience – the shape of your sales funnel in this case will appear more similar to a pipe than a funnel indicating that conversions are unusually high.
Many firms tend to concentrate (generally to the exclusion of all else) most of their marketing efforts on improving the conversion rate or closing rate which amounts to the percentage of prospects that they have converted to Clients.
This helps to explain the fascination with networking, luncheons, presentations, meetings, seminars etc. The idea being: “If we spend more time trying to build relationships we will close more new deals.”
So called ‘thought leaders’ tend to foster this approach and sadly it’s very misleading as a marketing concept. Please allow me to illustrate. Charles Green, author of the book “Trust Based Selling” has written an excellent article titled: “Why Your Sales Process Matters Less Than The Psychology Of Selling.” The article is well written with numerical analysis of an entire sales pipeline start to finish. Unfortunately it misses the whole point of what a sales funnel is supposed to do.
An ideal sales funnel is designed to generate the maximum amount of QUALIFIED prospects possible from within a given marketing universe. It is from that pool of qualified prospects that we might apply the concept of relationship building so that prospects are converted into new Clients over time.
Here is the point of today’s article.
Regardless of how skilled you are at relationship building, you simply will not close any deals if you don’t have anyone to sell to. Here’s the good part, the more people you have access to, the more new Clients you will likely acquire (even if your relationship building skills need work).
Here’s a simple example.
Suppose you are a sales superstar ‘relationship’ builder and you have 10 qualified leads to work with. Over the course of a year, you wine them, dine them, schmooze them, golf with them and literally do anything they want using the company’s marketing budget as your weapon of choice.
Let’s say that at the end of a year, you were able to sign up 60% of them and thus 6 new Clients were acquired for the firm. If the main success metric your firm used were conversions from prospect to Client, you would be considered a ‘sales genius’. In reality, the average sales professional closes around 14% of qualified prospects in today’s competitive world.
What if I, on the other hand, through my integrated marketing efforts have created a pool of 100 reasonably qualified prospects. I’m just an average person so I close 14% of these prospects over a twelve month period. This is not a bad ratio it is simply average.
Pop quiz: If all deals are of equal size, who made more money?
I will have 14 new Clients and you will have 6.
You are almost 330% better at closing (read ‘building relationships’) than I am.
Please reread the above until you understand it.
Even though your interpersonal skills are 3x better than mine, I have made more than twice the amount of money you made during the same twelve month period.
The lesson here is if you are able to cost effectively convert prospects into Clients, you need to open the flood gates and fill your sales funnel with qualified leads. Good examples of tactics that provide you with tons of leads are going to be the subject of upcoming articles. In the meantime, if someone were to give you 100 highly qualified leads, what would you do with them to improve your relationship building skills and make more money next year?
I don’t know how you answered the above question, but I’ll take those leads any day over solely relying on my relationship building skills and I think most of you out there would agree.
More highly qualified leads equals more money no matter what business you’re in.
That is called results.
No disrespect to ‘thought leaders’, but I’d rather be a results leader wouldn’t you?