Data drives sales.
Data also needs to drive your customer’s journey.
The issue is understanding which data to use when guiding your customer journey. In the last two articles, I reviewed managing, parsing, segmenting, and binning data to better understand your ideal customer profiles (ICPs) and personas. Now we bring it all together, layer on other data, and build an effective go-to-market and customer journey strategy.
When gaining a handle on your customer’s journey, the first step is understanding the hand-off of prospects and customers through their journey.
Table of Contents
A few years ago, Kenny VanZant gave a talk at True Ventures about the only thing a company should worry about; the hand-off of prospects and clients between departments. He called this ‘golden motion’. The first step in determining where those hand-offs are is understanding the customer journey. From the company perspective, I break it down like this;
- Sales, and
- Customer success
A company that can nail the hand-offs between each department is bound to succeed.
With the pillars of hand-offs established, they can be parsed even further to subcategories of each part of the customer journey such that;
- Customer success
Once broken down, it is time to superimpose those pillars with the data used to identify ICPs. What this does, at a minimum, is parse the ICP into different market segments or swim lanes, such that for a particular industry, you define the customer journey as;
Thus for each market segment within an ICP, you can define a prescriptive and custom customer journey. Now let’s dig into the individual blocks and their definitions.
Marketing is the action of getting your information in front of the people who would be interested in your wares. Marketing happens in two ways;
the direct method
messaging through emails, ads, or events(direct), or
via a channel
a partner brings a prospect in
There are pros and cons to each.
Running an effective channel marketing program is the quickest way to grow your business on a shoestring budget. From my experience dealing with software companies, as soon as you open your doors, someone will show up asking what the referral rate is. While this would seem incredible, no need to build any outbound sales teams, the referral channel could come at a high cost.
The first consideration is the types of prospects your channel partner will drive to you. The rubric above considers that a channel partner can drive SMB, mid-market, or enterprise prospects for a particular industry. While it would be enticing to partner with anyone who will help you drive business, you need some level of data to answer three key questions;
- Does the partner have the right network in the correct ICP?
- Is the channel partner wanting to partner to use your product or service as column fodder?
- Is the market segment within that ICP lucrative enough to support their channel efforts?
- Will this channel cannibalize your outbound efforts? Put another way, will it be more profitable to build an outbound sales team rather than pay a hefty commission to a channel partner.
Answering these questions is extremely important as they will help define a significant portion of your go-to-market strategy. It may not be worthwhile having any channel partner driving business for your SMB segment. In the enterprise sector, you may not want your sales locked up with channel partners who may be selling several competitive products without care of which ware they sell, as they will get paid one way or the other.
On the flip side, if you select a marketing channel partner, your direct marketing can be laser-focused on specific segments of specific markets, allowing you to gain mindshare within that group. While this would also benefit your channel partners, the dividends for your direct methods should be significant enough. Thus for several segments of a single ICP you could create a strategic marketing plan similar to the one illustrated below.
The value of something of this sort for a BDR team is enormous.
They are usually the first people engaging with any potential partners, so when one shows up on their doorstep, they can quickly and easily see where they stand.
“You only serve our ICP in the SMB sector? Sorry, we aren’t taking on any partners at this time.”
“You serve midmarket companies in our ICP? It looks like my VP of Sales has listed you as a vendor we’d love to work with. Would you like me to set up a meeting?”
“Oh yeah, thanks, I gotta talk to someone about whom we partner with, and they might get back to you.”
Once prospects are coming to your doorstep, it is time to qualify them.
Qualifying is a separate category for several reasons.
First, qualifying reps may be in either the sales or marketing department or both.
Second, qualifying and moving a prospect down or out of the funnel is a critical strategic move.
Finally, comparing criteria for why a prospect is qualified to their win/loss rate will determine if your qualifying standards are too stringent or lax.
In Aaron Ross’ book, “Predictable Revenue,” it was established that a best practice was to segment your sales team as much as possible. In this way, you’d be able to both have your reps focused on a singular task, such as qualifying inbound leads or hunting for outbound leads. A segmented qualifying team measuring each group’s success or failure is straightforward without having to disentangle it from their other activities.
As well, inbound and outbound leads are categorically different. More on this subject is outlined in Mark Roberge’s book “The Sales Acceleration Formula.”
The general rule of thumb is that inbound leads are qualified for fit, while outbound leads are qualified based on their need.
In more succinct terms, an inbound lead presents themselves with a significant amount of pain they are looking to solve. Your job is to make sure they fit the type of prospect that you can adequately help.
An outbound lead on the other hand has been pre-qualified on their fit, as they should be within the designated ICP and person; you need to make sure they have the pain your solution can alleviate.
At SkySync, we decided that we would make zero outbound efforts in the SMB segment, hit strategic clients in the midmarket, and mainly focus on the enterprise segment. If inbounds came in from the SMB or mid market segment, the BDR would qualify them as best they could before sending acceptable ones to the account executives. Enterprise prospects who showed up would be fast-tracked over to the appropriate regional sales rep.
Once a lead is qualified, it is time to move over to the selling team.
The selling team may or may not be the same as the qualifying team. If the selling is the same as the qualifying team, the hand-offs are transparent; if not, hand-offs need to be clearly articulated. From my experience working with several companies, I’ve consolidated the sales process into three stages; qualifying, demos, and closing.
Qualifying is the act of getting people into or out of the funnel.
Demoing is the act of providing an overview of your product and tying your product to a particular pain point that your prospect has. In short, your demo is a MacGuffin (more on that here*).
Closing comprises all the actions after the initial demo until the prospect has exited the funnel, one way or another.
The data-driven rationale for separating demoing from closing to different swimlanes is that different sized clients tend to have different technical needs and understanding of software to buy.
For example, if you have a small SMB company looking to implement a dashboard product, the entirety of their marketing, sales, and financial technology stack may comprise only five to seven different software packages that are all commonly used. In this way, the APIs are standardized, and the data flow is relatively direct. For these prospects, a sales rep, or even a technologically savvy BDR, could show the platform’s basic functionalities that would get the prospect to a thumbs up or down decision.
On the other hand, an enterprise-type client may have a dozen or more systems they use to manage their company as well as a data warehouse or two. Concomitantly, many of their systems may be older and have difficulty accessing APIs. Compounding the issue would be that larger companies tend to have a lot more data with more history. These issues tend to lead to more complex software deployment. While some enterprise companies may have simple technology ecosystems, it would not be wise to gamble having a clever rep run the demo, as nothing upsets a prospect more than an ill-prepared demo and a presenter who has less than fifty percent of the answers.
Once completed, the prospect would move to the closing phase.
While a sales rep should close, there are two confounding factors; first, different reps work in different market segments. Second, SMB prospects often close themselves through a self-serve portal if allowed. For this reason, the delimitation of duties should be made clear.
Once the prospects are closed, it is time to make sure you keep them happy to stay as a client and grow as a client. That is the role of customer success
While the hand-off from marketing to sales is cited as the company’s poorest hand-offs, customer success is a close second.
Sales and marketing are both on the customer acquisition side of the equation. For all their faults and combativeness towards each other, they are on the same side; bring in new revenue.
Customer success, on the other hand, is not.
Think of it, once a customer pays the bill, the sales rep has done their job, and any further interaction with the customer may cannibalize the sales reps time, limiting their working time on their pipeline.
The first step in the customer success process is onboarding them. The data that should determine how they are on boarded is their lifetime value (LTV) and churn rate. For reference, the typical LTV is calculated by the total revenue generated from a client over three or five years.
When customers of a particular segment show low LTV and high churn rates, an organization needs to look into the data to see why.
Are the metrics low due to the nature of the segment, such as poor product-market fit, or are they low due to an unmet need that your company cannot or is not willing to provide?
Once onboarded, the metric any company needs to review is the number of support tickets logged and the length of time it takes them to become resolved. Issues that pop up here are attributed to either a poor onboarding experience or a misunderstood user interface (UI). When the case is the former, you’ve built your software for more technical and savvy users.
The final two stages of customer success are selling actions; upselling and renewals. More explicitly these are farming activities. With data, it is relatively easy to identify verticals where upselling is either absent or widespread.
Case study: upselling leads to an exit
At FatStax, we sold a digital catalog system to enterprise clients. We discovered that as a small business selling to large multinational companies, such as Corning and ThermoFisher, frequently prospects would scoff at our initial high price. We found that they were willing to pilot for a lower fee to make sure our SaaS platform would perform as articulated.
The difference of adoption between different verticals post-pilot shocked us.
The mechanics of our sales and pilot process was that our sales team would close pilots and pass the clients off to customer success, never dealing with the prospect again. Our outbound team singularly focused on driving new logo business. Customer success was responsible for both the pilot and upselling the product.
We quickly saw a distinct difference between industries.
Life science and biotech companies, our bread and butter, would buy the pilot then sometimes slowly grow across the organization. Manufacturing companies, specifically HVAC and plumbing companies like Sharkbite and Reliance World Wide, would buy the pilot, then, when successful, quickly and in succession test our product in another division, then another, and so on. This action was very unlike the life science industry where they would buy the pilot; then it was a fifty-fifty chance if they would (or could) introduce us to their colleagues in different departments.
For this reason, we quickly dialed our outbound sales team into the manufacturing HVAC sector as we knew the LTV would be much higher than the LTV of the life science companies. Shortly after that, FatStax was acquired by BigTinCan for an undisclosed amount.
HubSpot: data built an empire
Hubspot won the war in the marketing automation sector as they knew that some of their SMB and mid market clients would grow; however, to canvas the entire sector, they would need to invest heavily into both the outbound sales teams and their customers success program. However, they also wanted to provide support to their enterprise clients as well as they could.
How could they support the needs of both those segments?
The answer was providing purchase-ready leads to marketing agencies local to their buyers.
This was the ultimate win-win scenario; these agencies provided all the customer success needs to their clients at no cost to HubSpot. HubSpot was assured a close to one hundred percent renewal rate, provided the agency survived. In this way, HubSpot built a massive network of adoring fans in the marketing agencies and their clients that allowed them to dominate the SMB and mid-market segments without doing anything outside their core activities. The result was that HubSpot was able to focus on their enterprise clients.
The data -driven customer journey simplified
Data should drive all business decisions.
Organizations that don’t have a handle on their data or are not data driven may survive and grow, however that growth will be significantly attenuated as compared to those that are data driven. In the series of articles, I’ve written about being data mature, organizing data, identifying market segments, and personas.
This article pulls it all together, data can and should be used to help you and your team define the marketing, sales, and customer success strategies that will help your business grow in a predictable and reliable way.
*Your demo is a McGuffin