Everyone knows about the lead funnel. Here at Ceros, we think of it super granularly, from the tip top of the funnel all the way down to the close. Most brands think of it similarly, although they might not control the point of sale, meaning they have to infer it. Regardless, the way a customer finds out you exist, and then takes the steps to learn more, engage, and become a customer, is essential to how marketers think about (or should think about) their strategies.
For us, it’s no different. But since we’re a startup that’s changing every day, the problems we face change every month or two. We’ve learned a lot over the past year about lead generation and conversion. Here’s how our lead funnel, from awareness through to purchase, has evolved over the past 12 months.
Stage 1: “The troops are dying out there!”
Sales people gotta eat, and marketers are in the kitchen. So you either feed them, or you deal with decapitation at the hands of the rioting masses—take your pick. When we started trying to create a real funnel, we had one thing that was working. Our Inside Sales team was doing targeted outbound emailing to people who looked like they could benefit from our software. That was where most of the opportunities came from. We also had a low volume of demo requests, from which a handful of real opportunities would emerge.
Our lead flow looked like this:
- Lead: Any name we had in the database. >
- AWAF: This stood for “Are We A Fit”, meaning we had scheduled a call to determine if we were a fit. >
- SQL: Opportunity created, and the salesperson would work it.
When we dug into the database, we found there were tons of people in it. Some were getting touched as part of the outbound prospecting, but many were not. So we took an extremely strategic marketing approach.
Just kidding. We wrote a couple blog posts, dug up some old eBooks, and sent them to everyone in our database. Then we tried to get in touch with everyone who had clicked on anything.
And it worked! The first time . . . and a little less the second time. But it did show that there were a bunch of ways to engage this database, and we just needed to figure out the optimal flow.
Stage 2: “Let’s rip out this broken tech.”
On the back of increasing the activity to our database and driving more activity—e.g. clickthroughs—you naturally want to start to get some benchmarks. For example, if we get a lead engaged, how likely are they to respond? How many touches does it take to make that engagement happen? How many leads can we respond to within a week? Did we follow up at all?
What these questions clarified was that everything about our HubSpot <> Salesforce integration was broken. It didn’t work right, and it was PAINFUL for everyone in Sales and Marketing to use. “Remember to manually update these 8 fields when you contact a lead” wasn’t a workflow that resonated with the team—especially not when updating a field like “Account” required going into a different view in Salesforce, creating the account, then going back to the lead record, refreshing, and selecting the new account. Ugh.
We deliberated on starting over with new tech. And we debated. And we talked about all the issues we were going to have if we migrated. Then we hired people to try and fix our existing system, which didn’t work. Then we deliberated some more.
Finally, we just said: f*ck it. Let’s rip the band aid off and start over.
We then rebuilt our lead funnel, using HubSpot for all of it. (You can read about that process in depth here).
What we got on the back of that was a whole new level of visibility. Sales adoption went through the roof, and the view was unified. We also made our funnel a bit more granular:
- Lead: Same criteria as before. >
- MQL: Someone who requested a demo or had been so busy engaging with us that their Hubspot lead score passed 50. >
- Meeting: A meeting with a Salesperson is set. >
- SQL: An Opportunity is created.
We then set out to understand how those numbers shook out on a monthly basis. Reverse engineering from our goals, we were able to set up weekly targets. We wanted to get to 60 SQLs a month. Our blended conversion rate from Meetings to SQLs was about 50%. Our rate of MQL to Meetings was about 20%. And our Leads to MQL ratio was around 10%. So we knew we would need 120 meetings, 600 MQLs, and 6000 active leads to reach our target.
The clarity was astonishing. It let us break those goals up by week, and set clear assignments for everyone involved. It was the dawn of a wonderful new reality.
Stage 3: “People like us! Find more people!”
As the numbers increased, the meeting to SQL number remained steady. It was a great sign—half of everyone we showed the product to was a serious contender to become a customer!
But we weren’t hitting that target. And there were not 600 MQLs being created on a monthly basis. We had way more than 6000 leads in the system, but only the new ones were converting at 10%.
So we looked at our funnel and identified where is was broken:
- Leads: not enough
- MQLs: not enough
- Meetings: consistently set as a proportion of MQLs
- SQLs: consistently created proportionally to meetings
It was pretty clear that, if we find them, the SQLs will come. So we put a massive amount of time and effort as a company into increasing the number of leads for us to convert. We invested significantly in Paid Social campaigns, content partnerships, guest posting, and events to drive the level of interest we needed to get those lead and MQL numbers up. There’s a bit more depth on that here.
Stage 4: “Stop booking so many damn meetings, I’m drowning.”
Referring back to the last stage: If you DO get to the target of 60 SQLs (keeping in mind once this works, we want to ramp up), that’s 15 SQLs a week, which is 30 meetings at a 50% conversion. We only had 3 sales reps at the time, which was 10 meetings a week per rep. At the same time, they were each getting 5 new opportunities a week to work. So after two months of this, each rep had dozens of opportunities they’re supposed to be working, and they were also having to find time for 10 new demos. And this number kept growing—at one point, we were targeting 50 meetings a week.
You can’t get to the end of the quarter, have 150 deals in the pipe that you need to close AND be doing 15-20 new demo meetings a week AND be on top of everything, right? We’d solved for an old problem—not having enough people to talk to—and created a new problem—too many underqualified people to talk to.
This, by the way, was a joyous problem to have. Too many people to talk to? Six months ago, we were email blasting 50,000 people, hoping to have a couple hundred click throughs to jump on. Now, we actually had inbound interest, that had been nurtured, and people who wanted US to call THEM.
But we still had a problem to solve so our sales team could close some deals. So we set a new goal for ourselves, which was to take the 50% conversion to opportunity up to 75%. In order to do this, we tapped our Inside Sales to do some additional pre-qualification. This was okay, since they were setting up first calls already. In addition, they would ask a handful of questions to get a sense of the lead’s role, the maturity of the company’s marketing program, and more in an effort to determine whether they were really serious, needed some nurturing, or were just not a fit for the platform.
We also decided to raise the bar on SQL qualification. If they weren’t sure they were going to be able to get a follow-up meeting, or felt like a few boxes needed to be checked before they could really feel comfortable making it an Opportunity, they would make it a Sales Accepted Lead (SAL). We assigned these SALs to the most tenacious, driven sales person we had, and made it their sole responsibility to get these fence-sitters seriously engaged.
So we had a new funnel with a lot more steps:
- Lead >
- MQL >
- Pre-Qualification Call >
- Meeting >
- SAL >
Stage 5: “Is it bad that when someone wants to see our product, we make them talk to us like 5 times before they can see it?”
And that brings us to quite recently. We have a process that’s really working from a sales perspective. We’ve achieved the 75% goal on Meetings to Opportunities, which means almost no time is wasted.
But the challenge has now moved to the middle of the funnel. (First it was at the top, then it was at the bottom, now it’s the middle—like I said, startup problems evolve rapidly.) Our awesome Inside Sales team is pre-qualifying everyone who’s coming in and continuing to source leads. Our top of funnel has continued to perform. We went from averaging 150 demo requests a month, to 300 in fall 2015, to 750 in January 2016. This exponential increase puts an enormous amount of strain on a team of 4 people to follow up with every single one and figure out who’s a fit and who isn’t.
This is a challenge for our organization, but it’s also a crappy experience for users too. If someone comes to Ceros.com and they’re interested in the product, they fill out a demo request form, which already is annoying. Then they get a call from someone who asks me a bunch of questions. That results in a scheduled call a couple days later. Then they get on the phone with a sales person and get asked some more questions, and THEN they finally get to see the damned product.
We wanted to find a way to make it easier for everyone involved. Our latest thinking has been to take the usual 30 minute demo—which covers the basics of how the platform works, who’s using us and why, what people are creating with it, and pricing—and boiled it down to a 7 minute video. Now, when someone clicks the “See Ceros in Action” CTA on our website, they can actually see Ceros in action. No call, no questions, no annoying hoops to jump through.
This lead funnel change should reduce the demo request volume significantly, but the hope is that people who request to talk to sales are much more informed than someone who asked to talk to us a week ago. We’re also optimistic that the conversations our prospects have sales will be much more engaging. They can get right into the tough questions and nitty gritty, as opposed to getting familiar with what the product does at a basic level.
Our new lead flow will look like our old flow:
- Lead >
- MQL >
- Meeting >
- SAL >
However, we’re hoping the people who become MQLs are much more educated and engaged that they were with our previous workflow.
I can’t tell you what comes next, but hopefully it leads to profit. Each time we’ve solved one issue in the funnel, it’s led to a different one. But at every step of the way, we’ve been able to tackle the challenges, become more efficient, and drive an overall increase in business.
I’m looking forward to sharing an update with you as we see how our video demo experiment performs over the coming weeks. I really can’t say what the outcome will be, but I know it will present itself quickly. Stay tuned and let me know what you think in the comments!