Achieve efficient growth by plugging these top 10 funnel leaks
You must have gotten the memo by now: growth-at-all-costs is over, and the era of efficient growth is beginning. Efficient growth is about getting more revenue from the same people, data, and technology investment: the good ol’ “do more with less” strategy. For most companies, especially one that has been growing quickly, chances are it has a very leaky funnel. A sales and marketing funnel becomes leaky when:
- teams are not aligned.
- processes have gaps.
- data quality is poor.
- technologies aren’t compatible.
Funnel leaks can take the form of leads that:
- fall out of the go-to-market motion.
- no one is paying attention to.
- choose to disengage.
To improve funnel efficiency, RevOps should find these leaks and plug them. Here are ten of the most common funnel leaks you can start looking for in your company.
1. Inactive CRM user
Sales teams have a constant churn of reps and that is just a fact of life. When reps come and go, it’s the RevOp team’s responsibility to make sure leads, contacts, accounts, opportunities, and tasks are all transferred to the right rep. Unfortunately, this process often fails, especially when it’s not fully automated. Too often when we assess a customer’s CRM data, we see a large number of accounts and leads owned by inactive users: sales reps who have left the company. A lead owned by an inactive user is a leak in the marketing and sales funnel.
While having an automated lead-routing solution is critical to ensure leads are routed to the right rep, many lead-routing solutions are deficient when it comes to reassignment use cases. Make sure you implement an automation solution that can:
route new leads and accounts.
- reroute changed leads and accounts.
- reassign all relevant CRM data objects, including opportunities, tasks, events, orders, etc.
- execute bulk changes to accommodate territory and policy changes
2. Leads that fell into a black hole
Every company has its own end-to-end funnel model, which can include:
- Marketing funnel
- Sales pipeline
- Channel pipeline
- Product led growth pipeline
- Geo and vertical funnels
A lead has to ping-pong its way through the funnel, including all these funnel fragments, before it can turn into revenue. Whether you use the simple SiriusDecisions Waterfall funnel from 10 years ago or the more modern but complex SiriusDecisions Demand Unit Waterfall, or even the very latest Forrester B2B Revenue Waterfall, a lead can easily fall into a state it shouldn’t be in and fall out of visibility; in other words, it could fall into a black hole. A lead that gets stuck in a black hole where no one can see it is a leak in the funnel.
While it’s important to automate your funnel’s state transitions, such as MQL → SAL → SQL, it’s also equally as important to handle the exceptions and close down the black holes. At a minimum, RevOps should get reports that identify leads that have incorrect or “impossible” states; for example:
- An account that should be owned by an AE but is owned by a SDR
- A contact owned by a rep that’s not the account owner
- A new account pending approval for more than 7 days
The better solution, though, is to have an automation platform that can identify these stuck leads and accounts and remediate immediately without human intervention.
3. Sales team not following up
A very common marketing complaint is that sales is not pursuing the hot leads that marketing has generated. There can be many different causes, such as:
- sales believes the quality of the lead is consistently poor.
- sales is confused as to where to find these hot leads.
- sales is not incentivized to follow up on these leads in a timely manner.
Needless to say, having a hot lead not pursued is a leak in the sales and marketing funnel.
There can be a combination of different reasons why sales doesn’t pursue marketing’s hot leads, or at least not consistently. Here are some tips to isolate the root causes and correct them:
- Make sure the sales team knows where and how the hot leads are made available to them. Is it a report they have to look at, do they get an email, or is it a spreadsheet that is sent to them? You will be surprised how often this confusion is caused simply by a lack of clarity and training.
- Measure sales’ follow-up so you can quantify the problem and not just rely on anecdotal finger-pointing.
- If sales thinks lead quality is too low, then tighten up the MQL process. It’s better to send over fewer leads that will all get followed up on than a bunch of leads that sales ignores wholesale.
4. Leads that have become stale
When a prospect is showing intent and engaging, a timer starts to tick. If the sales team can’t make progress within a relatively short amount of time, the opportunity generally evaporates. As communication slows, it can also fall into the “out of sight, out of mind” trap as sales instead focuses on what is hot. You then end up with a lead that is not progressing through the sales pipeline, and at the same time not getting any attention from marketing because sales is supposedly working on it. A stale lead that is getting attention from neither sales nor marketing is a leak in the funnel.
Every stage in the sales pipeline should have a service level agreement (SLA) assigned. For example, if a hot new lead is not followed up on within 24 hours, it should be escalated to management, or reassigned to the next rep if using a round-robin routing scheme. Alternatively, a surging lead that the sales team has not been able to make connection with after 14 days should not be considered surging anymore. Have dashboards set up to monitor all leads that are out of SLA compliance and, in some cases, implement automation to take corrective action.
5. Quality leads that are not being engaged
Negligence is not just a sales problem—marketing does it, too. Without diligent campaign design, marketing can easily miss some perfectly good prospects and cause them to fall through the cracks of nurture campaigns. If you’re not attempting to touch someone, there is little chance they will engage. A quality lead that is not being nurtured is a leak in the funnel.
Similar to setting up monitoring for leads that fall into the black hole or have become stale, marketing should also get reports that analyze whether campaign coverage is even and has no gaps. How many touches per month should a lead get? It’s equally bad to touch them too frequently or not frequently enough. Once you can flag which leads are not getting touched, it should be straightforward to figure out what gaps exist in the campaign design.
6. Good leads languish due to poor data quality
One of the costliest impacts of poor data quality is a great lead that fits the ideal customer profile but is not being scored properly due to incomplete or bad data. Most companies’ scoring models are based on data points such as industry, employee count, address, job function, and job level. When these key data points are missing or not segmented correctly, the scoring model will not be able to flag them as good leads, so they languish in the database, just waiting to be discovered. A good lead with poor data quality is a leak in the funnel.
Data quality should be foundational to everything RevOps does. Good data quality programs should include capabilities that:
- clean up bad data such as email@example.com.
- enrich missing data.
- segment data such as company size and industry.
- segment “job title” into the more usable “job function” and “job level.”
- standardize formats for phone, country, state, and postal code.
- remove duplicates.
7. Scoring model that can’t be explained
Many companies score their leads for demographic fit and behavioral signals before sending them over to sales as hot leads. With all the predictive analytics tools and intent signal data available to marketers today, this can get quite sophisticated—even too sophisticated to the point where sales doesn’t trust it. This is especially the case if it is using a black box predictive engine that no one can explain or using low-quality intent signals.
Every salesperson has a scoring model built into their head based on their own experience and beliefs. If marketing serves up a lead that runs counter to this mental scoring model and cannot offer a clear explanation as to why the lead is good, the sales rep may just ignore it. Having leads that are ignored because sales assumes marketing doesn’t know what they’re doing is a leak in the funnel.
Having a scoring model that can’t be explained is a major reason why most of the predictive analytics solutions that were so hot five years ago failed to sustain traction. Scoring is a powerful tool that should be leveraged to find the needle in the haystack, but you need to do the following to improve sales confidence in the scoring model and gain acceptance:
- Use a white box scoring model with logic that everyone can agree to.
- If using an AI/ML model, use one with an explainable AI engine that can show why the engine scores a specific lead with a high score.
- Intent signals can be noisy, so consider validating each intent signal with a validation campaign to see if you can elicit a good response when trying to engage the account with content that matches the intent signal’s topic.
8. Champions move companies
People change jobs. For certain industries and job titles, the moves can be frequent. Studies show the average tenure for CIOs, CMOs, and CROs is 18 to 24 months. If you have a strong champion, you want to track them and stay in touch as they move to their next job. Not being able to track your strongest champions is not just a leak in the funnel, but a burst funnel pipe.
At a minimum, track the champions and advocates from your customers, as they are the most likely to buy from you again when they move on. In addition, track any prospects that like your product but were not able to buy for some reason. A technology solution is definitely required to make champion tracking scalable. The earliest sign that someone has moved on is usually a LinkedIn profile update. However, enrichment vendors usually don’t get the update until 3 to 6 months after the move. Use a technology that can effectively detect LinkedIn updates and compare the person’s latest company and job title with what’s in your CRM. Once a move is detected, notify the new account owner and consider putting the champion mover into a special nurture campaign.
9. Poor routing of inbound leads
Inbound leads, whether it’s someone filling out a contact form or a request for a product demo, are the highest quality leads. A lead that’s properly followed up on can have a conversion rate that’s twice as high as an outbound lead. Poor lead routing can cause a high-quality inbound lead to become a lost opportunity or create a bad customer experience. Here are some of the most common causes of bad lead routing:
- Lead routing that’s still manual can cause unacceptable delay in sales follow-up.
- Lead routing solutions are hard to maintain, so routing rules are constantly out of date with reality.
- Most lead routing solutions can only work within one CRM or marketing automation solution. Companies with multiple CRM and marketing automation solutions often can’t route leads across solutions if the lead comes in through the “wrong” channel.
- Lack of data quality and enrichment means there’s insufficient data to route a lead accurately.
The inability to route leads quickly and accurately is another leak in the funnel.
Time is of the essence when it comes to inbound leads. RevOps must have a scalable and speedy process to ensure any inbound leads can be routed to the right sales rep within 15 minutes. This is hard to do without automation technology. The technology solution also must be highly manageable and scalable. A good-looking flowchart may have the appearance of ease-of-use, but if only a few people on the RevOps team are capable of updating it, the routing logic will likely quickly become outdated. Look for a solution that can enable a bigger team to maintain the routing rule without special product training and certification. For example, can the routing rules be simply maintained as a spreadsheet?
10. Excess attrition due to lack of segmentation
Acquiring a quality lead is both difficult and costly. For many companies, the total addressable market is also limited, so every quality lead is also precious. One can make the case, then, that the worst type of funnel leak is attrition when the lead decides to unsubscribe or worse, develop a poor perception of your company. Nothing leads to attrition faster than irrelevant sales and marketing communications that are viewed as spam. Spam doesn’t have to mean a malicious marketing practice; it’s usually caused by lack of segmentation, so it’s just sending the wrong content to the wrong people. For example, sending a technical whitepaper to a CFO or inviting an IT engineer to a demand generation workshop could be considered spam. Active attrition due to poor segmentation is possibly the worst type of leak in the funnel.
Good go-to-market should be based on knowing your customers: know what your total addressable market is, know who your ideal customer is, and know what type of content they are interested in. Building the right lead database and knowing what content can be delivered to whom requires the RevOps team to achieve excellence in segmentation. For B2B companies, segmentation usually includes:
- Company size based on annual revenue or employee count
- Job function and job sub-function derived from job title
- Job level derived from job title
- Buyer persona constructed from job function and job title
- Industry-specific metrics such as technology used, number of locations, number of devices, size of the fleet, etc.
For B2C companies, segmentation usually means dimensions such as:
- Education level
- Political affiliation
- Significant life events such as marriage, buying a house, having a baby, etc.
A good segmentation solution needs to be not only flexible and easy to use, but also supported by great data quality. After all, if the input data is bad or missing, there is nothing to segment.
If efficient growth is your focus, there is no better way to improve efficiency than plugging funnel leaks. Plugging funnel leaks improves efficiency by:
- minimizing waste in lead acquisition cost.
- increasing lead velocity.
- improving conversion rate.
A more efficient sales and marketing funnel can help you get more out of your investment in people, data, and technology. So get a bucket and start looking for those leaks.