We all know that working in B2B marketing is tough. Your team busts it all quarter to pour leads into the funnel using inbound marketing, digital advertisements, direct mail, trade shows . . . The list goes on. Yet sometimes you simply don’t generate much revenue because so few leads — less than 1% on average — actually become sales opportunities.
So, how can B2B marketers increase revenue faster? When your lead-based marketing runs dry, it’s time to flip your funnel with account-based marketing.
This is the main point I addressed in my recent webinar, How Digital Marketing Can Drive Revenue for B2B Marketers. I joined the folks from AdStage to discuss what causes lead-based marketing efforts to fail, and how the funnel can be tweaked <to increase revenue using account-based marketing (ABM).
Check out the full webinar, How Digital Marketing Can Drive Revenue for B2B Marketers, here:
Marketing is what greases the wheel to increased revenue, but the same old strategies just aren’t working anymore. In order for B2B marketing to work, marketers need to look at them from another vantage point: account-based marketing.
This is what the traditional lead-based marketing and sales funnel looks like. We have lots of people at the top of the funnel as we try to generate leads as fast as possible. But then what?
Next, we analyze which of these leads are viable prospects. This used to be accomplished manually, but now we use marketing automation platform’s lead scoring and grading tools. So, the marketing team spends a ton of money to get data on anybody and everybody, and then we have to spend more money to determine which of those people may potentially buy our product or service. And that’s not all. Once we find out who the best leads are, we spend even more resources to determine whether they’re ready to buy. This is the inherent problem with lead-based marketing.
[Tweet “We spend big $ to generate leads and more $ to determine which leads are qualified. But there’s a better way.”]
As we all know, the funnel gets super skinny at the bottom. That’s how the traditional lead-based marketing funnel has always worked, but there’s clearly something wrong with this model.
The problem stems from the fact that this is a sales funnel with different stages of the sales cycle, and marketers said, “Okay, let’s adopt this funnel and use it so that we are in alignment with sales.” We’re using the sales funnel as our marketing funnel.
[Tweet “The traditional #B2Bmarketing funnel is out of whack if you’re not increasing revenue. #ABM”]
Now we’re finding ways to look at the funnel from a completely different viewpoint with account-based marketing. Hopefully, this will be something the average marketer can take and apply to their strategies.
My good friend Michael McEuen, Director of Demand Generation at AdStage, said this during the webinar: when we look at the traditional funnel in terms of status quo, there are many challenges which can cause lead-based marketing efforts to fail.
4 Lead-Based Marketing Challenges
Challenge #1: The sales funnel isn’t optimized for B2B marketing.
Because the traditional funnel comes from the sales process, it’s not optimized for marketing. This model is better applied to a B2C process, where the stages are well-known, there are quick sales cycles, and the progression is very linear.
[Tweet “.@forrester says only 0.75% of leads turn into closed revenue. This is why #ABM is essential.”]
Less than 1% of leads turn into customers, which is a huge time and budget suck. The modern B2B marketer has to think differently about what’s generating revenue and double down on those efforts.
Challenge #2: Marketing is focused on getting leads instead of accounts.
The VP of sales or the CEO will often say, “We need to double revenue!” In the past, that’s when the marketing executive would tell their team to crank up demand generation to double the amount of leads, adding more to the top of the funnel and therefore twice as much revenue.
Sadly, at the end of the quarter, the marketing team will have decreased cost per lead (CPL) and increased the number leads, but they’ll have hardly moved the needle on revenue produced.
[Tweet “If your #marketing team is increasing leads but not revenue, it’s time for #FlipMyFunnel.”]
Challenge #3: Lead volume is considered more important than precise targeting.
With lead-based marketing, it’s easy to look at your conversion rate and assume that you need to add more leads to the funnel to close more revenue. But that’s not quite the answer. Why do twice as much work when you can just work differently?
This is where account-based marketing can really come into play, as it helps you focus on the best-fit prospects and companies who fit your ideal customer profile (ICP) — and then engage with them on their own terms via channels like mobile, social, display, and video.
Challenge #4: We have assumed linear path for all customer journeys.
The traditional funnel looks it’s made up of logical steps in a progression, which isn’t always the case for a customer journey, No one wakes up and says, “I’ve got to solve this problem today.” Rather, your potential customers are busy working, doing occasional research to look for answers to their business problems.
We then create marketing content that (we hope) solves that problem and blast it everywhere, hoping to find people with whom it will resonate. That’s another reason why lead-based marketing fails; we’re putting our message in front of people who aren’t trying to solve the same problem we are.
Here’s the account-based marketing model we’re proposing with #FlipMyFunnel:
The whole idea stemmed from my frustration with the traditional lead-based marketing funnel. The stages didn’t make sense, so I rearranged and modified them until everything clicked into place.
In the flipped funnel, it all starts with accounts. Sales teams have always focused on accounts, and it’s time for marketing teams to get on the same page.
What does the flipped funnel look like? Here’s an example:
Let’s say you’re selling software to Fortune 500 financial service companies. With ABM, technology can get virtually all the information on the accounts you want to target in a matter of minutes. This absolutely beats hoping beyond hope that someone from those companies fills out a form on your website. That’s step 1 of #FlipMyFunnel: Identify.
Click here to learn about account-based marketing tools to help you identify best-fit accounts.
The second step of this inverted account-based marketing funnel is to Expand. Again using technology, you can expand your reach within these target accounts and get the contact information for decision-makers and the people who would be the end users of your product — in this case, IT employees.
Click here to learn about account-based marketing tools to help you expand your reach within target accounts.
Now it’s time to Engage with prospects in the third stage of our new account-based marketing funnel. As opposed to “spray and pray” marketing, ABM allows you to put your message in front of the people who’re interested in what you have to say. You can create customized content, like a webinar or white paper, and serve it to an audience that will care.
Click here to learn about account-based marketing tools that can help you engage with decision-makers at your target accounts.
This leads to my personal favorite stage of the funnel: Advocate. This is a topic I recently addressed in my interview with Jim Williams at Influitive. Turning your current customers into advocates for your product or service is the most organic type of marketing. Not only will they stay loyal until the end, but they’ll influence their connections to give your company a shot.
Click here to learn about account-based marketing tools that will help turn your customers into advocates.
I could talk for hours about #FlipMyFunnel and account-based marketing, so I’d love to hear your thoughts and questions. Leave me a comment below, or send me a Tweet at @sangramvajre.
Want to learn more about the flipped funnel? Click here to download our e-book to get a closer look at account-based marketing and the #FlipMyFunnel model.