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Unblocking Your Funnel to Deliver Growth

When faced with a growth objective, too often we hear of marketing professionals diving straight into campaign mode.

Creating advertising messages, booking trade shows, having a big push on SEO, hiring more salespeople, etc. 

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All too often, these actions are doomed for failure, as they are blind to the internal problems that are preventing them succeeding.

So, how do you identify these problems, and how do you fix them? We’re going to dive into the world of funnel metrics to show you how to spot and fix the things that are slowing down your growth.

What Are Funnel Metrics?

Funnel metrics are the number of leads or potential customers that enter your sales funnel in a certain period of time. They pass through your sales pipeline at various stages. The figures are presented as percentages.

Image of Marketing Metrics Funnel

For example, you can record the number of website visitors, the number of website generated leads, specifications generated, quotations generated and finally orders.

By understanding the dynamics in play moving from stage to stage, you can get a pretty good idea where your organisation is underperforming. And, more importantly, put a plan in place to address these issues.

Getting the Data to Build Your Funnel Metrics

Funnel metrics is usually done just using online data, but a broader picture can be built by also including your offline activity, including sales activity.

Finding and pulling all your data together can be the first hurdle. If you’re lucky, you have a modern, integrated CRM/Tech Stack, such as HubSpot, which can give you all of this data at the touch of a button.

If you’re not so fortunate then gather data from these sources:

  • Google AnalyticsObtaining reliable website traffic data from GA is easy. Make sure you’re excluding the IP address of your offices and any other stakeholders and partners, such as suppliers, agencies, etc. By reviewing the Acquisition data in GA, you can get a clear idea of where this traffic is coming from too.
  • Trade Shows & Advertising – Try to keep a count of how many people actually visited your stand or have called in/emailed you.
  • Sales Activity – Log phone calls made, meetings, and the outcomes to build a picture of the effectiveness of your sales activity.
  • Lead Notifications – Count how many leads your website has generated, what about trade shows, advertising, CPD’s, and other events, etc. It’s a good idea to get people to ask “where did you hear about us” when people contact you by phone or email.
  • Pricing Enquiries – You’ll want to establish how many quotations you’re producing, but also note how many enquiries you choose not to price because they are not a good fit for your business. This data may be on your CRM system or your ERP system, or maybe somebody in your organisation just updates a spreadsheet.
  • Value Quoted – You may want to break this down by product group, sector, geographically or by another segment, but this will enable you to track overall quoted value and average quote value if you divide this number by the number of enquires priced.
  • Orders Won – Record the number of orders won and the value.

Great, if you’ve been able to collate all of this data, you can build and analyse your funnel. If you don’t have it, start recording it. Within a week or a month, you will have enough data to start building a picture.

Analysing Your Sales and Marketing Funnel

Once you have got your data compiled, there are a number of simple calculations that you need to do:

  • Traffic to Lead Ratio – divide the number of leads generated in a month by the traffic/activity in the same period. This should give you a percentage. Don’t be surprised if it’s less than 1%. We call this VLR (Visitor To Lead Ratio)
  • Leads To Quotation Ratio – divide the number of quotations generated from these leads in a month.
  • Average Quotation Value – Divide the total value of your quotations in the month by the number of quotations produced
  • Quotation To Order Ratio – Divide the number of orders won by the number of quotes produced. This can vary quite a bit over a shorter period of time, like a month. So, we normally track a rolling average over 6 or 12 months. It depends on the gestation period of your quotes.

An example could be:

Monthly Website Visitors

10,000

VLR (Visitor To Lead Ratio)

1.2%

Monthly Leads

120

LQR (Lead To Quote Ratio)

50%

Quotations

60

AQR (Average Quotation Value)

£5,000

Forecast Monthly Quotes

£300,000

QOR (Quote To Order Ratio) 

35%

Sales

£105,000

Improving Your Funnel Metrics

In the example above, you may be tasked with increasing sales from £105,000 per month to £150,000, a 43% increase.

So how would you go about it?

At a very simple level, you could try to grow website traffic by 43% and if everything else stays the same, then bingo, the target is reached. To be honest, we see this rather blunt approach far too often.

Look deeper and you can make the changes without growing traffic too much, if at all.

Excel is a great tool for this part of the exercise. Using the Goal Seek function, you can get Excel to calculate what ratios you need to drive specific results.

So, looking at the above table, the number that stands out to me is the low VLR number. 1.2% is OK, but could it be better?

Is Your Website Pulling Its Weight?

Closer examination of the website shows that there are few CTAs, a single form on the contact us page, no content offers and little explicit promotion of lead generation activity.

If these issues were rectified, then could a 1.5% VLR be achieved? This could easily be framed as a SMART objective and this result would add £26,250 to the monthly result.

Do you need a building products website that generates leads and specifications? Click here.

Monthly Website Visitors

10,000

VLR (Visitor To Lead Ratio)

1.5%

Monthly Leads

150

LQR (Lead To Quote Ratio)

55%

Quotations

82.5

AQR (Average Quotation Value)

£5,250

Forecast Monthly Quotes

£433,125

QOR (Quote To Order Ratio) 

40%

Sales

£173.250

Can You Bump Your Average Order Value?

Assessing Average Order Value, what complementary products could be added to the quotation? If you could increase this by just £250 then you could add another £5,250 to your result.

Are There Problems With Your Sales Process?

Digging into the sales process, you find out that leads are not followed up for 2 to 3 days and sometimes not at all. You research the subject and learn that leads that are followed up within 5 minutes have a 4000% higher chance of generating a sale. So you take action.

A 5% upshift in LQR drives a £10,500 increase in monthly sales.

For lead nurturing support to help you develop leads and covert more into orders, click here.

Is The Customer Service Team Crushing It?

Finally, you look at the quotation process and discover that it takes 4 working days to produce a quotation. You get feedback from sales who follow up the quotes and they mention that they often find a contractor couldn’t wait and went to a competitor who quoted the same day.

You KPI this and get 95% of quotes out within 1 working day. The result is a QOR of 40%, boosting sales by £15,000.

Combine these actions together and you get a 65% increase in sales without increasing your traffic. Just by being more efficient and effective with the potential business you’ve always had.

Conclusion

In our experience, marketers are too quick to kick off awareness and promotional campaigns when the solutions can be far simpler and cost-effective.

Understanding your marketing metrics should be a foundational part of marketing management. Not only does it give greater insight into when you can unlock revenue, but it is a data driven approach which gives marketing genuine credibility in the board room.

We recommend pulling together data in a simple, central system such as HubSpot or any other 360 CRM/Marketing Automation stack to give you these numbers at your fingertips and enable you and your organisation to be more proactive in unblocking your funnel to drive sustainable growth.

For more information on how to understand and fix your funnel, talk to strategic marketing systems experts, Insynth.

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