Tuesday, September 24, 2013

Blockage Points, Conversion Rates, Throughput, Cost of Customer Acquisition -- Sales and Marketing Machine

It would be a mistake to think that once the process has been designed and implemented that it will not need further attention:
  • As soon as you fix one part of the process, you will move the blockage point to somewhere else in the process.
  • You may need to double revenue next year, and want to understand how the process can scale to achieve that.
  • You may be wanting to get a better yield out of the process
Like most things in business, this process needs regular attention and management. In this section, we will give you some ideas on how to structure a regular brainstorming process. This meeting should not be thought of as the usual weekly pipeline review. Instead it should be structured as a brainstorming session, where the goal is get the maximum creative thinking going.
I recommend holding a quarterly meeting that brings together the CEO, VP of Marketing, VP of Sales and any other interested constituents. The following topics should provide you with the key questions to get creative thinking going:
  • Blockage Points. Where are our blockage points? Brainstorm possible solutions using methodology in “Solving Blockage Points”
  • Conversion Rates. Review the metrics, starting at the end (Bookings), and working backwards. Look at each step, and review conversion rates. Brainstorm to see if there are creative ways to improve conversion rates.
  • Throughput. Ask the question “Why can’t we quadruple the overall throughput (number of prospects at each stage).
  • Cost of Customer Acquisition. Look at the overall cost of acquiring a customer, and ask whether there are cheaper ways to perform each step. For example, can we replace some of the outside sales function with cheaper inside sales people? Can we replace some of the inside sales function with cheaper telemarketing resources?
  • Duration. Look at how long it is taking to comlete the whole sales cycle, and ask if there are creative ways to shorten any of the phases.
As preparation for the meeting, it is useful to have the following documents:
  • The original diagrams that show the customer-centric Buying Cycle, and the company-centric Sales Cycle. These ensure that you have an easy way for all participants to see the overall process and remind them of where the issues are.
  • Metrics and reports that show the throughput and conversion rates for each stage, and the trend lines

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