Last week we talked about Customers and the Sales Process. That leads us to the top of the Sales Funnel and Prospects. Not all Prospects are created equal. We will talk about that as we get into the Sales Funnel, but first we need to talk about how they get there.
The job of creating Prospects is Marketing. Essentially, the job of Marketing is to create awareness of the Company, its Products and its Services. This can be done in a wide variety of ways. Print, Networking, Referrals, and Websites are just some of the many ways to create the awareness. Once people are aware they become part of the Audience. Audience members have at least some awareness of you.
Next, you try to impress your Brand on your Audience. This is done through the wide variety of messaging that is available. However if you have read my posts over the past couple of years, you will recall that when I talk about Brand it is an operational thing. That is partly because of the change in Consumer Feedback. You can call this the “Yelp Revolution”. In the past, generally reviews of your Business were controlled by you through testimonials/reference accounts. Any external feedback was local to a few customers and their friends. With on-line tools, reviews can be created and distributed broadly. So, to maintain your Brand you need to execute every time. Even a few bad experiences can be a problem.
So once an Audience member begins to show interest in purchasing your Products and Services, they become a Prospect (others can call these Leads – and the activity Lead Generation). We covered last time some thoughts about converting Prospects to Customers. However, there is another way you can use the Sales Process. That is to test the effectiveness of your Marketing. One way to look at Marketing is unto itself. In this case, Cost per Prospect is the way to go. But you can track the Prospect all the way through the Sales Process. Then you can look at a couple of other Metrics. The first would be the Conversion Rate by Prospect Source. If you know how a Prospect comes to you (and you won’t always know), then you can know what percentage of Prospects from any Marketing Mechanism become Customers. This can help you focus on the Marketing Mechanisms that work best for your business. You can also look at Average Prospect Value. How much is an Average Prospect from a specific Marketing Channel worth (you can do this by following the Revenue from Prospects and Matching this up to the Marketing Mechanism used). Again, this can help you understand the efficiency all the way through the Financial Results of your Business.
And this last, is the point of all this. If you understand how your Sales and Marketing activities convert directly to your Revenue. This means that you can convert this to a Return On Investment (ROI). Now you know whether it is worth it to invest in specific Marketing activities and how they impact Sales productivity.
Next up – COGS!
Focal Point Business Coaching
Business Coaching, Executive Training, Sales Training, Marketing
Change Your Business – Change Your Life!