Leaks are never a good thing. Whether it’s a slow drip under your sink or a pipe that bursts and floods your basement, leaks can wreak havoc on your life.
But that’s nothing compared to what a leaky revenue funnel can do to your business.
Growth-minded companies rely on a revenue funnel to bring in leads that represent the right type of buyers and nurture them until they convert to closed sales. If those leads leak out of your funnel at any point, you’re flushing marketing dollars down the drain.
If you want to grow your revenue aggressively, you need to know how leads are leaking out of your revenue funnel—and how to plug them before they cost you big money.
Why You Need an Effective Revenue Funnel
You might be wondering, “Why is a revenue funnel important to my business?” If you’ve never engaged in growth marketing, you might not realize just how essential a revenue funnel is in fueling your company’s growth.
A revenue funnel is the journey your potential buyers progress through on their way to making a purchase.
- The top of the funnel focuses on building awareness of your product/service and boosting interest in your offering.
- The middle of the funnel is where customers begin to consider your product and show intent to buy.
- The bottom of the funnel is when customers evaluate your offering and make the decision to buy.
Your marketing needs to attract ideal buyers to your funnel and actively nurture them through it, moving them along their buying journey until they become customers. A solid revenue funnel is key to closing more sales and accelerating your growth.
How to Spot the Signs of a Leaky Revenue Funnel
Just like water can leak out of a pipe for various reasons—like clogs, corrosion, or broken seals—a lead can leak out of your funnel in a variety of ways. The key is to spot the clues in time to limit the damage.
The following are good indicators that you’ve sprung a leak somewhere in your revenue funnel:
- Your rate of converting leads to sales is low or declining
- Your rate of converting identified opportunities to sales is low or declining
- You have lots of leads that no one has ever followed up on
- Your sales are running below forecast, even though your leads are increasing
- You have leads who get all the way to a product demo…but they never sign the deal
If these problems sound familiar, it’s time to take a close look at your revenue funnel, identify the leakage sources, and plug them up. Because there’s no point in devoting marketing resources to generating good leads if they leak out before you can convert them to customers.
How to Find and Fix Revenue Funnel Leaks
When leads drip out of your funnel, the source of the problem is usually your processes or technology, or both. Unfortunately, it can happen at many points in your buyer’s journey.
The Lead Generation Stage
File this under “hard to believe,” but some companies spend time and money attracting leads at virtual or physical trade shows or by encouraging them to subscribe to a newsletter list…then they never have a single contact with those potential buyers.
Why? It’s usually because there’s no defined process for what to do with incoming leads. For your revenue funnel to do its job, you need a process for nurturing leads all along the way, with content that maps to each stage of the buyer’s journey and keeps them moving further along.
For example, you’ll want to ensure that every piece of content’s Call to Action (what you’re asking a lead to do) matches the stage of the funnel they’re in. If a blog is intended to generate initial awareness, it’s too soon to link the reader to a Request a Demo form. But if your lead has downloaded a gated guide with detailed information that can move them to the evaluation stage, then encouraging them to schedule a demo may be the right Call to Action.
The Lead Handoff Stage
The point when marketing hands off a lead to sales is one of the most common times for a funnel to spring a leak, and a combination of process and technology issues is usually to blame.
Imagine you have a lead that’s reached the Sales Qualified Lead stage: That means they’re ready to be contacted by sales and in good position to buy. It’s time for marketing to pass that lead onto sales. But often the process isn’t well defined, or it isn’t followed consistently. Maybe the people involved don’t understand their roles. Maybe they don’t know what the process is…or they just haven’t bought into it. If your marketing and sales teams operate in silos or aren’t aligned, your odds of a poor handoff process are especially high.
Your marketing technology also could be contributing to the lead handoff problem. (Unless you’re running a small company that only attracts a handful of leads a year, you cannot manage your leads manually. Marketing automation is must!) Sometimes we find clients are using HubSpot or another tool, but they haven’t configured it properly…so there’s a literal, physical disconnect keeping leads from getting handed off properly. Other times, the culprit is a lack of training or awareness on how marketing and sales should use the technology.
You need a single up-to-date source of truth about your leads, properly configured, thoroughly trained on, with alignment and buy-in from sales and marketing. Without it, you’ll continue to lose leads during the handoff process.
The Intent Stage
Let’s say a lead makes it to the intent stage, in the middle of the funnel, and completes a form asking to arrange a demo. Woohoo!
But what if the form links to an individual’s email and that person overlooks it, or worse, they’ve left the company and now no one is monitoring their inbox? (Process problem.) What if the link to the form is broken? (Technology problem.) What if the form doesn’t automatically link to your marketing automation system—so you’re relying on someone to manually spot and act on those leads? (Process AND technology problem.)
Plugging up this type of leak is relatively easy. First, set up your website forms to link directly to your marketing automation system, to reduce your reliance on any individual staff member. Then
Lack of a Closed Loop System
Sometimes, no matter how well you’ve identified the ideal customer type, crafted relevant messaging, and developed content that addresses your buyer’s pain points and matches each stage of the funnel…you still have leads that just don’t go anywhere. It’s like dropping a penny down your sink drain. Odds are it will sit there for a while until it eventually flushes out.
Or maybe a sales rep is following up with a lead that went all the way through the product demo process, but now the buyer is ghosting them. (Ouch!) Something has clearly gone wrong.
Without a closed loop system that brings stagnant or dormant leads like these back into the funnel, those potential buyers run the risk of being forever forgotten. But assuming you’ve attracted the right leads to begin with, you don’t want to write them off too soon.
Plugging up this type of leak involves putting a closed loop system in place to move stale leads back into the funnel, at the very point that makes the most sense for each buyer. This usually involves:
- Establishing good reporting mechanisms that track a lead’s progress and status, so it doesn’t fall off your radar
- Defining the best next steps to take when you identify a stagnant or dormant lead, based on where they left off in their buying journey
- Documenting a clear process for who follows up on leads, how, and when (some companies even create a Service Level Agreement that defines concrete expectations)
It takes the right processes, technology, and alignment between marketing and sales to keep your revenue funnel from springing leaks. But who’s accountable for putting that all in place?
A Chief Growth Officer (CGO) may be the best fit for the job. A CGO is a growth catalyst—a highly experienced professional who works cross functionally, bridging marketing, sales, product, and customer service to ensure they work together to fuel your business’s growth. CGOs are experts at leading the revenue funnel, gaining alignment among everyone involved, making sure each function contributes to growth, and ensuring no one clogs up the works.
Middle market companies find it’s highly effective to hire a Fractional CGO, allowing them to gain a slice of an experienced growth catalyst who owns the growth strategy and keeps the revenue funnel working as it should.
Marketri offers Fractional CGO services that drive aggressive revenue growth by helping you close more sales and cross-sell more services to your current customers. Contact our CEO Deb Andrews for a free consultation about our Fractional CGO and strategic marketing services!