Do you work in sales and marketing?
Have you been wondering why you can’t seem to make your quotas despite a ton of leads?
Well, a recent study says that you are not alone.
Despite plenty of leads and lots of technology to acquire and qualify those leads, fewer and fewer leads are converting into closed leads. Many leads are simply circling the sales funnel without dropping in. Millions of sales professionals around the world are a frustrated lot and many teams have had to go back to the drawing board. Sales directors are continuously auditing their lead scoring, redrafting at their sales and marketing communication and investigating the efforts of their sales teams to try and come to terms with this strange phenomena.
According to a study conducted by CSO Insights, a leading marketing trends research firm, “the percentage of salespeople making quota globally has dropped from 63% in 2012 to 53% in 2016, a 5-year period”.
The implication is that salespeople must put in more effort to get the same results. Maintaining the same effort moves you backward, it's like standing on a backward moving escalator.
Causes of the Downward Spiral
So, what are the causes of this clear downward spiral? Well, the jury is still out on that one but there are a few plausible explanations.
First, buyers are more informed and demanding thanks to new disruptive technologies. Buyers today have access to a plethora of product information at their fingertips. These sources of information run the gamut from websites, televisions shows and product reviews to social media sites and other online forums. Customers today can get all the information they need and reach a conclusion without speaking to a salesperson. This would explain why customers are constantly circling the marketing funnel. They are just too informed and will simply not engage with salespeople until they have satisfied their thirst for information from their own research. No amount of marketing communications will make these potential prospects budge. In fact, many have become ad blind and are scornful of advertisements. This would also explain the massive uptake in ad blocking software. Ads simply don't have the effect they used to have a few years ago. The ground has shifted and unfortunately, many sales and marketing people haven't caught on.
Secondly, there has been a lot of economic and political uncertainty in the world over the last five years. Uncertainty causes people to become more conservative. As a result, they spend less. Less spending means there are fewer leads available to salespeople. Furthermore, political and economic uncertainty leads to a reduction in real household incomes due to demand push inflation. Essentially, businesses invest less and produce fewer goods. A reduction in the supply of goods and services fuels inflation. Over the last five years, there has been a lot of political and economic uncertainty more so in the US and Europe. The US had only begun recovering from a biting recession in 2012 while Europe was rocked by the economic uncertainty of Brexit which remains unresolved.
The third possible cause is timing. Despite marketing departments generating numerous leads that fit an organization’s lead scoring algorithm, fitting the profile doesn’t automatically mean that the prospect is ready to speak to a salesperson. Think about your own life. Do you have the time or disposition to speak to a salesperson unless you are actively seeking a product? Of course not. If you aren’t actively looking, then the salesperson has an uphill task convincing you that the product is worth your time and attention.
The solutions aren’t easy. Sales teams must countervail the forces of change or else the natural downward spiral will flush them into oblivion. I offer a few ideas to arrest the downward spiral below.
Invest in New MarTech
I know this may sound like a contradiction having already stated that disruptive technologies have led to more informed audiences. But, the thing is, disruptive technologies are double-edged swords. In addition to putting information at the fingertips of potential customers, they also provide marketing teams with ways and means of better defining their audiences, finding their potential prospects and understanding the “why” people buy in the first place – literally getting into the minds of customers and prospects.
For example, there are numerous commercial tools that help businesses collect and make sense of big data generated from customer interactions. This data is then fed into the decision-making process to come up with better lead scoring and marketing strategies.
Our own tool, GetProfiles, is a list building tool that helps sales professionals find qualified leads, including their contact information, fast. With trends like these, there is no time to waste identifying prospects.
Leverage Content Management Systems
As mentioned earlier, one of the causes of the downward spiral is that customers have access to content sources where they can find product information without referring to a salesperson. So, one of the solutions is to provide prospects with a content repository where they can find accurate information about the product. For this to work well, the repository should be linked to a CRM platform so that customers must provide their details to log in and the product information must be unique and can not be available anywhere else. A sales professional would then have the prospect allocated to him/her for a potential future discussion. For example, if the company is dealing with household appliances, the content repository would contain all product specs, variations, testing results, competitor product information and independent reviews. Information that a third-party website would not have. The CRM platform would then track how prospects interact with the information. Such a repository would undoubtedly move prospects faster into the sales funnel and earn the respective sales professional the right to a first discussion and the opportunity to nurture the lead.
Unfortunately, many sales and marketing directors lack the mental vigor to adequately address the root cause of this trend. Instead, most have walked the beaten path by issuing memos, increasing quotas and asking people who are already overworked to work harder. If your business has been hit by this trend over the last five years, now is the time to explore some of these solutions.
What has your experience been like? Please feel free to share your thoughts with us in the comment section below.