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Modern Lead Generation is Failing. 5 Critical Factors to Drive High-Velocity Customer Acquisition

by Doug Davidoff | Jun 8, 2018 1:00:00 PM

Imagine_Speed-Velocity Graph with TitleA couple of weeks ago, I introduced a chronic problem plaguing the growth efforts of companies, large and small alike. Lead Activation Syndrome occurs when the successful results of lead generation efforts aren’t translating to greater velocity of quality sales, opportunity creation, or new customer acquisition.

Companies can still drive growth--often at a very high rate--but the costs of such efforts grow at a faster rate than growth. As a result, the systems and people supporting growth must run at a faster, often non-sustainable, pace.

The cause of this problem is typically weak, or nonexistent, middles. The attention paid to lead generation and inbound marketing has greatly strengthened the top of the funnel, but little to no attention is paid to constructing a strong middle.

The Importance of the Middle of the Funnel

The famous Greek mathematician, Archimedes, once said that if you gave him a lever long enough, he would be able to “move the world.” Well, if you’re an executive focused on growth (whether you’re sales-, marketing- or demand-generation-focused) then you need to understand that the middle of the funnel is your fulcrum.

An even better metaphor than the fulcrum/lever is the engine of a high-performance jet. A strong middle of the funnel powers everything you do, and when done properly makes everything you do easier.

What’s sad is that so many companies have spent hundreds of thousands of dollars building out the tops and bottoms of their funnel, and have ignored the middle. They’re generating content consistently. They’ve invested in CRM, marketing automation, video, content and more.

These companies appear to have all the pieces in place, but flight never gets triggered. Investments continue to be made in technology, paid promotion, content, and headcount, but funnels remain clogged, backed up with non-activated leads putting even more pressure (and urgency) on the resources at the bottom of the funnel to generate revenue.

What’s worse, most companies attempt to solve this problem by optimizing activities at the top and/or the bottom of the funnel. This only makes them get better and better at the wrong things, and adds to the problems they are working so hard to solve.

The solution to this problem is building the engine that transforms the activity created at the top of the funnel into energy and, ultimately, into high-quality sales opportunities and higher velocity revenue generation.

The Five Biggest Middle Funnel Failures

The middle of the funnel is fraught with complexity. This is why it’s missing in so many companies. Creating repeatable processes at the top and the bottom of the funnel is downright easy compared to building a strong middle funnel discipline.

The middle of the funnel must be designed to manage numerous scenarios. It requires strong strategy, process, and technology. The middle of the funnel is where marketing and sales come together. You must balance the personalization & contextualization of your message and activities at scale.

A strong middle of the funnel creates a meaningful competitive advantage, because you can’t just “jump in” and execute. It requires preparation, focus and experience to perform.

Over the last few years, I’ve analyzed hundreds of companies’ engines and I’ve found five key areas that prevent all of the cylinders from firing. As a result, these factors place a drag on growth and revenue.

1. Poor Database Strategy and/or Setup

The database has always been important in marketing, so a focus on this is nothing new. Today, however, your database is absolutely crucial to building a high-performance engine of growth. What’s more, the database isn’t just for marketers anymore. Salespeople need a robust database (even if they don’t know it or won’t admit it).

A well-structured database, designed to align with a strong strategy, enables you to segment at will. It ensures you’re able to take the right action with the right person at the right time in the right way and track that action throughout the customer and revenue acquisition process. Done properly, this creates a reinforcing loop, strengthening action and insights at the same time.

A strong database design lets your demand generation team orchestrate actions in lockstep, creating a powerful experience for your customer and enabling you to do more, faster (and easier).

2. Using Technology Does Not Mean You Have a Tech Stack

Over the last six months, I’ve seen a meaningful change in the technology being used by companies in their go-to-market activities, especially in mid-market companies. This isn’t a surprise; after all, someone has to be buying all the new mar-tech in the market.

While the companies’ technology spend has multiplied and their marketing and sales processes have increased in complexity to support the technology, nothing’s gotten easier for them. In some cases, they’re able to do things that they weren’t able to do previously, but those actions aren’t translating into greater velocity. (More on that below.)

As I was writing this blog post, I realized that in my own small way, I’ve contributed to this problem. I’ve been evangelizing the importance of technology in sales and marketing for more than a decade, and have been writing about the importance of “the tech stack” for a couple of years.

What I haven’t done is explain a critical point, which is that simply adding technology does not mean you’re building a tech stack. The net result from most of these investments is that companies have built a system of random tech “solutions” behaving, at best, as a point-to-point system, rather than a coordinated tech stack designed to drive real results.

A couple of months ago we presented a session on the how to build a powerful tech stack that drives up revenue growth and drives down costs. You can watch it here.

3. Playbooks that Are Not Documented

You have a playbook; that is a fact. The question is “Do you know what’s in your playbook?”

A playbook is the manifestation of your organization’s modus operandi (MO). Whether you have the “no playbook playbook,” a notebook of processes and procedures gathering dust, or simply a series of methodologies written out (that no one can find), you have a playbook.

The problem today is that sales and marketing is too complicated to manage go-to-market efforts this way.

If you don’t have a true playbook--one that is documented, utilized, integrated, automated and regularly updated--your organization has to do too much valueless work and valueless thinking. You, and every member of your team, will work harder every day, but make a little less progress.

Playbooks are no longer “nice to have” tools or metaphors. Imagine running a complex manufacturing or supply chain without clear documentation and service-level agreements? It’s silly to even think about it. The same is true for your growth.

4. Poorly Structured Metrics & Analytics

It’s pretty easy to track what’s happening at the top of the funnel. The actions and outcomes are relatively simple and clear. It’s also not difficult to track what’s happening at the bottom of the funnel. By the time something becomes an opportunity, it’s logged in the CRM, has an “owner” and a limited number of paths to track.

However, the transformation from “lead” to bona fide opportunity is a black box to the vast majority of businesses, even those investing millions into their growth efforts. The gap between lead and opportunity is HUGE and fraught with challenges.

There’s a tremendous amount of “noise” in the middle of the funnel and it’s critical that executives like you, who are serious about sustaining or scaling growth, can separate the “signal” from the noise. Doing that requires a strong analytics- and data-driven approach. Things happen too fast (and the signal is often too faint) in the middle for the “eye test” to be enough to manage effectively.

The top of the funnel is all about measuring inputs. The bottom of the funnel is about measuring results. The middle requires that you measure something much harder. I call these outcomes. Outcomes are not results, per se. Instead they are influenceable points that have a high causal relationship to the results you are seeking. When you’re clear on your desired outcomes (which means you must have, at least, a strong theory of what causes sales), you can build the metrics and dashboards that enable you to make better decisions, faster.

5. A Focus on Speed Over Velocity

”I wanna go fast.” - Ricky Bobby

We’re addicted to speed today. Be first to market. Respond to a lead in less than five minutes. Be the first to initiate conversation. Do more, more, more. Do it faster, faster, faster. Executives bellow, “Move faster or our competitors will trample us!”

But is this focus getting us anywhere? Too often the answer is no. I recently had a conversation with the head of sales for a highly funded company. We were talking about building out a stronger approach to customer acquisition. He loved what I was sharing with him, but said, “Doug, this is great, but it’s not fast enough.” I replied that it would get him where he wanted to go more quickly, so I didn’t understand what he was saying.

His reply literally took the wind from me. I’d like to think this response is a rare exception, but I don’t think it is. Here’s what he said, “Doug, you’re missing the point. I agree that this is the right thing to do, and I know what we’re doing isn’t working. But my boss and his board want us doing more and want us working at a faster pace. Frankly, it doesn’t matter if what I’m doing is right or wrong; if I want to keep my job, I need to do things faster. How can you help me with that?” I told him, “Sorry, we don’t implement programs that we don’t think will work, so we can’t help you with that.”

If you’ve ever studied constraint theory or complex manufacturing, you learn there’s a BIG difference between “speed” and “velocity.” Speed is a measurement of how fast you’re moving. Velocity is a measure of how long it takes to get there. Speed is a measure of input. Velocity is a measure of throughput.

The problem with complex processes is that there’s a point where the “faster” you go, the less velocity you have. That’s right. The faster you go, the harder you work, the longer it takes to get there.

A strong middle of the funnel is all about managing and optimizing velocity. Spend the time to build it, manage it, and maintain it, and you’ll see gains in velocity that will enable you to slow down and really exploit the value and opportunities you’ve created.