At Revenue Accelerator, we work with a lot of B2B SaaS technology and services companies that are looking to scale rapidly. And whenever we speak with a company that is experiencing a plateau in their growth, in almost every case, they are making some (if not all) of the marketing mistakes we’re about to introduce you to.
If you’re honest with yourself, you may discover that your company has made some of these mistakes. If that’s true, don’t fret. The objective of this article is not to assign blame to anyone for making these mistakes, it’s to acknowledge them so that you can develop a plan to correct them and begin experiencing predictable – and eventually, exponential – growth in your revenue.
With that in mind, here are 7 marketing strategy mistakes you might be making that are preventing you from experiencing predictable revenue growth in your B2B technology or services company:
Mistake #1: Relying on Referrals For Growth
A lot of businesses are stuck in the referral trap. The referral trap is an over reliance on referrals to fill your sales pipeline, assuming it will lead to explosive growth.
Yes, it is nice to receive a warm referral from a trusted contact or client. In our experience, clients that are referred to us have higher conversion rates (most referrals convert at 60-75%), they buy more frequently, and have shorter sales cycles.
These factors make referrals a wonderful strategy, but it’s unrealistic to expect sales through other channels to convert at the same rate. CEOs often assume that inbound and outbound sales will mirror referrals. This misnomer prevents them from creating a strong strategy that utilizes all three channels effectively. (Inbound sales convert at 25%, and outbound 15%.)
The referral trap can also breed complacency. It’s pretty amazing when someone reaches out to you possessing an element of trust and an understanding of your product or service, thanks to their friend or colleague. However, if you’re truly going to grow your business to its fullest potential, you have to understand your prospects at different stages in their customer journey.
For example, through outbound sales, you can exponentially increase your revenue, but you’ll encounter prospective clients much earlier in their buying process. Converting outbound sales requires a different strategy than referrals.
Which brings us to the final drawback: referrals cannot exponentially increase. Your network—and your network’s network—can only expand so far, so fast. Referrals are based mostly on luck and timing. It’s not a repeatable, scalable process. The referral trap becomes a cyclical “feast or famine” fluctuation. Because we fear the famine, each referral carries the weight of the entire business. If this deal isn’t converted, everything is at stake. This is not an abundant or sustainable way to grow a business.
We don’t mean to discourage referrals. We acknowledge that they’re an important part of your holistic sales model. Some CEOs are even content with building their entire business slowly, leaning heavily on referrals as their main source of income, and there’s nothing wrong with that.
But if you want to push past the status quo into the realm of strategic growth, you can’t rely on referrals as your only customer acquisition channel.
Mistake #2: Not Knowing Lifetime Customer Acquisition Cost
Do you know how much it costs to acquire a customer for their “lifetime” with your business?
Your lifetime customer acquisition cost (CAC) is a critical number for your entire business. It will influence your marketing budget, and inform your marketing and sales strategies.
Some of our clients tell us they don’t have a marketing budget, or that they’re too small for one. The truth is every business has a marketing budget, whether they set one or not.
You spend resources to acquire customers. That might be money, employees’ time, interns’ time, or your time, all of which are valuable and finite. If not invested in a way that supports data-driven results, you’re adding fuel to an inefficient rocket, and you aren’t going anywhere.
Mistake #3: Using Inward-Facing Messaging
Every CEO understands their business. They know their product or service like the back of their hand. They can pitch to investors, explaining the idea behind the innovation and the need it fills in a market. They can get people excited about their vision—so much so that they’ll want to work for them, or invest money.
These skills are important for internal operation, but they don’t necessarily translate to customers.
All too frequently businesses use internal language in their external marketing and customer relations. You know the features and benefits of your product or service, but prospective customers don’t care about jargon-heavy language. Instead, they want someone to understand their primary pain points, listen to their needs, and share valuable information that will address their problems.
How well do you actually know your target market? What keeps them up at night? What are their biggest pain points? What is the conversation already going on in their head, and how do you enter into it?
Once you have these answers, you can offer a solution to your prospective clients, and here’s the great part: you don’t even have to “sell” them, because they’ll start asking to buy.
Mistake #4: Building Growth Projections from a Flawed Pipeline
A CRM is incredibly important when building an unstoppable sales machine. It allows you to manage all of your sales activity, and have a real-time view of your pipeline. Even more important is ensuring that the CRM is used properly by everyone.
We often see businesses suffering from inaccurate CRM reporting. If a CEO doesn’t have a clear read on their pipeline, they cannot make effective business decisions, like how much to invest in marketing, or if they can hire another SDR.
One of the culprits behind inaccurate reporting is a lack of clear CRM definitions. Something as seemingly straightforward as a “closed deal” could be interpreted differently by your team. To one person, a verbal agreement is a “closed deal.” To someone else, sending a proposal is a “closed deal.”
People are variable and idiosyncratic. Your employees want to please you. They want to perform well, especially if their compensation, or recognition, is based on performance metrics like closed deals. Or perhaps, in a more nefarious scenario, someone in your company might be trying to appear more productive than they are. They continue to command a high salary, boasting about how many connections they have in order to blow smoke, obfuscating the fact that they aren’t delivering on what they promised.
All of these variables impact your pipeline interpretations. How are you supposed to invest money with unreliable reporting? How can you make adjustments to your sales system if you don’t know where the leaks are located?
This is why we emphasize the importance of being systems-dependent over people-dependent. People are great. We can’t operate without them. At the same time, people can be unreliable. We have to plan for the human element so that our employees can do what they do best, while also helping us build a lean, unstoppable machine.
Mistake #5: Expecting Inbound Results From An Outbound Channel
Outbound sales is a powerful strategy. When deployed correctly, it is the main driver for 10xing your revenue. But outbound requires something that’s not often discussed: the right mindset.
Most business owners expect inbound conversion rates of 25% from an outbound channel. This is typically why so many declare outbound doesn’t work for them: because they don’t realize that average outbound win rates are 15%. Not only that, but outbound requires different sales techniques and marketing messages, and far more follow up that you might expect.
Seventy-five percent of deals are lost due to a lack of follow-up. And that’s only one of the possible leaks in your outbound funnel.
Mistake #6: Focusing On Vanity Metrics Over Conversations
At the 2016 Traffic & Conversion Summit, Ryan Deiss, CEO and founder of DigitalMarketer, said the new metric for successful marketing wasn’t views, form submissions, or reach. It’s conversations.
According to research conducted by Salesforce, 84% of customers say that being treated like a person, not a number, is important to winning their business. This is why a company like Drift, a “conversational marketing platform,” is doing so well. They enable real-time conversations between businesses and prospective clients. They humanize sales.
We know everyone is busy. Inboxes are jammed, and attention spans are short. If we can’t connect with our prospective clients through meaningful conversations, then no amount of “views” or “likes” are going to improve our sales.
It’s easy to get swept up in vanity metrics, which is why we always have to ask ourselves: is this marketing campaign ultimately driving towards predictable, measurable results? If you aren’t booking meetings and connecting through conversations, there’s no way your closed deals are increasing. The predictability of your sales machine will depend in part on how reliably you enable conversations through things like engaging copy, speed of following up, and education-based marketing practices.
Mistake #7: Operating Marketing and Sales Separately
Finally, the last mistake we see business owners make is assuming that their marketing department and sales department should operate separately. This couldn’t be further from the truth.
Every single person in your business is working to achieve the same goal, and they each hold a different piece of the puzzle. Your sales development representatives (SDRs) know which sales campaigns convert most effectively; your account executives know what questions are being asked most frequently; your account managers have a pulse on client feedback; and your marketing department knows the market research, like keyword analysis and prospects’ watering holes.
If each department keeps this information to themselves, your machine isn’t optimized. Furthermore, if each individual is incentivized to only focus on their individual performance measures, they aren’t going to put energy into adding valuable insights to team members.
Your business already has valuable information regarding what’s working and what isn’t. The question is, do you have a system in place for making that information widespread, so each department can operate with the most accurate, up-to-date data?
Action Steps To Correct These Marketing Mistakes And Unlock Predictable Revenue Growth
As you reflect on your own sales and marketing practices, if you’ve realized that any of these mistakes have been made, the important thing is to accept responsibility for correcting them.
Here are some action steps you can take to correct this mistakes and unlock predictable revenue growth for your company:
- If you rely too heavily on referrals: Commit to adding at least one other marketing channel to your business in the next quarter.
- If you don’t know your current Customer Acquisition Cost: Start by calculating what the average lifetime value of your existing customers are. Next, determine how much of that revenue are you willing to spend upfront to acquire that customer.
- If your marketing messaging is too inward facing: Train your marketing and sales team members to use language that speaks directly to the pain points and frustrations that your prospects experience, and to position your products or services as the solution to those problems your prospects are experiencing.
- If your growth projections are built from a flawed pipeline: Not all marketing channels are infinitely scalable. Evaluate your current marketing channels, and ask yourself if it is realistic (ie. within your control) to increase the number of leads from each channel, increase the conversion rate of leads from each channel, or if other marketing channels will be needed.
- If your expectations for outbound and inbound sales are not realistic: Establish benchmark conversion rates for both inbound and outbound sales that accurately reflect the benchmarks for your industry and product/service type, keeping in mind that the conversion rates from inbound leads are different from outbound leads.
- If you’re focusing on vanity metrics instead of meaningful conversations: Draw a clear distinction between metrics that are directly tied to the qualified sales conversions and metrics that do not directly contribute to the cost of and the quality of a sales conversation.
- If your sales and marketing teams are operating separately: Establish regular communication between your sales and marketing teams. Creating a feedback loop whereby information from your sales team is passed on to your marketing team can help your marketing team to optimize their campaigns.
Want some help to fill your pipeline with qualified sales opportunities? Schedule a free consultation to have us map out a growth plan that is customized to your business and revenue goals.