Don’t Fill a Leaky Bucket! Improve Your Sales Funnel Before Adding More Marketing Budget

One persistent belief I encounter in my work as SVP of Growth at Smith.ai is the idea that to increase sales, you need to invest more in marketing. This makes sense in theory: To bring more leads into the funnel, you need a way to reach them.  However, a crucial and often overlooked aspect of improving marketing performance is the sales funnel itself. If you’re not optimizing your existing sales funnel, then you aren’t going to get the strongest return on investment for your top-of-funnel activities. By relying on inbound leads and the marketing team as the only channels for gaining new customers, you’re placing an untenable burden on your marketing team. The reality is that this is a shared responsibility. You need to think of marketing and sales as two sides of the same coin. This way, the leads you generate through marketing efforts are effectively converted into customers.

Marketing is an important but costly endeavor. In this challenging economy where lead costs are increasing and attention spans continue to nosedive, it’s even costlier. Leads are more precious than ever. The solution to this isn’t in your wallet; it’s in your internal processes. You don’t need another piece of software, you need to carve out time and to further develop your operational chops.

By carefully examining the different interactions and stages in the sales process, marketing and sales leaders can pinpoint specific areas that need attention and act swiftly to improve operations internally. Only after these changes should your focus return to “external” elements like ads.

Also Read: Customer Service is More Important Than Ever in 2024

So what are the key tactics to enhance your sales funnel performance before making more significant investments in marketing? As an executive who’s worked directly with thousands of small businesses in my years at Smith.ai and YourMechanic, this is my advice:

• Identify Bottlenecks: Conduct a thorough analysis of your sales funnel to pinpoint areas of friction that hinder the smooth flow of leads through the various stages. For example, do you have sales managers manually uploading leads to your CRM and assigning them to BDRs? Institute an automated rotator that assigns new leads to BDRs based on their place in “line” or their area of expertise. Speed-to-lead is your #1 priority.

• Streamline Lead Qualification: Implement strict lead qualification criteria to ensure that only high-quality, well-fitting leads progress through the funnel and are assigned to specialty teams as needed. For example, if you’re getting tire kickers booking sales demos for your B2B product, require a few upfront questions beyond the basic business name, number, and website, like average order value, industry, and team size, you can use this info to qualify and route leads. Those with low user counts may not be a fit, while your sales team may have specialists for particular industries or high-ticket prospects.

• Enhance Communication and Follow-Up: Effective and timely communication is essential to shepherding leads through the funnel. By leveraging automation tools and personalized messaging, sales teams can engage leads more effectively. I always say, if you want to know which communication channel to focus on, simply note the channel they used to reach out to you. If they called you, call them. If they emailed you, email them. Did they text you? That’s permission to text them! So many salespeople make the mistake of just running an email or phone “sequence” without taking note of the preferences a lead is showing you they have, based on the actions they took initially.

• Outsource Frontline Tasks: Consider outsourcing specialized tasks at the earliest stages of the sales funnel, such as lead qualification and appointment setting. Partnering with experts in these areas can free up internal resources and drive better results, especially if you invest a touch more in a solution that’s onshore vs. offshore.

• Measure, Inspect, and Iterate: Establish key performance indicators (KPIs) for each stage of the sales funnel, set up dashboards with sets of similar indicators (e.g., specific to time frame, lead source, inbound/outbound, etc.), and continuously monitor and analyze the data. As you start to see trends or anomalies, the fastest way to figure out the root cause is to pick a small set of records from the data to randomly inspect. I learned this approach from Smith.ai’s CEO, Aaron Lee, who taught me that you can stare at big data tables all day long, but where the learning really happens is in the details. Pick 10 records at random and see if you can spot similarities among them. You’ll be surprised by what you find, and how much faster you find it than through complex analyses.

Now you’re ready. With these strategies in place, you can proactively improve sales performance and stop pouring more water into your leaky bucket expecting better results. By fine-tuning the existing sales processes first, you’ll maximize the impact of your sales team, whom you can then justify putting additional marketing spend behind.

Ultimately, improving your sales funnel means ensuring that when you engage with new potential customers, there is a clear process to convert them. Not only does that solve problems within your sales organization, but it also helps marketing teams (and agencies) deepen their skill sets and expand their domain. Often, marketing folks get pigeonholed as experts in the systems they use, whether that’s social media, content marketing, or Adwords. By following the lead journey through sales, their range of skills expands down-funnel, their domain widens, and their relationship with sales leadership dramatically improves. The same benefits happen on the sales side, with expertise deepening up the funnel. And then there’s no more finger-pointing — the entire journey from lead to paying customer is a joint effort between marketing and sales.

With all this new attentiveness and wisdom internally, you better believe the effects magnify outward: The sales experience for leads is far superior; they’re happier in their sales journey with you. And happy customers mean referrals, which are by far the most efficient growth lever of all.