Pushing Marshmallows Through a Keyhole
By Bill Warner, EntreDot Executive Director and Executive Mentor
Entrepreneurs often come up short when explaining how they are going to achieve potential customer awareness of their new product or service. Generalities about social media marketing, widespread advertising, inappropriate trade shows and ill-constructed email campaigns will not impress potential partners and investors and will leave the impression that you really don’t know what you are doing. When explaining this aspect of your business, you need to bring your marketing programs to life with specific targets and expected results that are focused on the sweet spot of your target market.
The Purpose of Marketing
I am all in favor of creating a strong brand image and a positive public image, but the primary purpose of marketing is to create market awareness and identify qualified customer leads that will be approached with an effective sales presentation leading to the closure of a sale. Every marketing program you launch should have specific objectives for the number of qualified leads you want to create and should be designed and managed to achieve those objectives.
Pushing the Marshmallow
I am often heard to say that this is like “pushing a marshmallow through a keyhole.” This is actually pretty complicated stuff with so many moving parts encompassing your website, digital marketing campaigns, creation of rich content, advertising campaigns, email marketing and the whole process for meeting with potential leads to qualify them for sales. So, let’s see how to get these marshmallows through the keyhole.
Have Criteria for Qualified Leads
Establish the criteria for what a qualified lead is in your target market while being as objective as possible. Some of the elements of a qualified lead are that the potential customer has:
- A demonstrable need for your product or service
- The urgency to buy now
- Funds available to make the purchase
- A purchase decision making process
- The authority to make the purchase decision
You need to have a clear understanding about which potential customers you should be selling to and what the sales cycle will be so that you don’t waste valuable time and sales resources on customer leads that are not likely to make a purchase. Establish what the “must haves” are for qualification and stick to them. That means you have to ask qualification questions before you spend time in a lengthy sales process. Keep pushing these marshmallows through the keyhole. Of course, there could be some other mitigating reasons to go ahead with an unqualified lead to simply create awareness for some other benefit like getting referrals or some other form of visibility for your effort. For those potential customers who do not qualify now, politely move on, leaving open the possibility of them qualifying sometime in the future. Put these marshmallows back in the bag.
The Foundation of Effective Marketing Programs
At the heart of all marketing programs is a compelling set of marketing messages that bring to life the value that your products or services bring to potential customers. These messages are meant to show an understanding of the customer issues that your products or services solve and the quantifiable and objective benefits that will accrue to the buyer. These messages become the basis of what you say to potential customers when you qualify them, and appear in all your marketing collateral, like your website, sales presentations and marketing materials. All this is the lubricant you use to squeeze the marshmallow through the keyhole.
Creating Qualified Leads
You and your stakeholders want to know that you have the real possibility of generating qualified leads. You need to be very specific about where you will find them and how many there could be. Some of the primary channels for acquiring leads that will be tested against your lead qualification criteria are:
- A website that is optimized for searches performed by potential customers
- Social media outreach over media channels that are relevant to your buyers
- Specific trade shows that are attended by people who could be qualified leads
- Advertisements in trade magazines read by your potential customers
- Personal contact lists from people in your company
- Telemarketing campaigns to potential customers in your target market
This is shopping for good marshmallows. Whatever lead generation campaigns you employ, you need to have an objective plan for specific results. Such a plan is based on marketing lead generation productivity assumptions that help you determine the number of contacts you need to make in order to actually create the number of qualified leads that your sales team needs in order to make their sales objectives. Get enough marshmallows. You will need more than you might think. Not all will make it through the keyhole.
Manage for results
You need to be comfortable that your marketing programs will really be able to achieve your prospect awareness goals that will quickly become sales and then revenue growth. Be specific and manage for specific results. Track the number of contacts made, the number of qualified leads generated (conversions), and the sales results for each. Also track why qualified leads didn’t buy so that you can modify your qualification criteria accordingly or even change what you are offering. Track every qualified lead through the entire process of closing a sale. Count your marshmallows.
Add it all up
Know what it costs to generate leads and convert leads to a closed sale. You need to know your marketing and sales process is efficient and reasonable for what you gain in revenue from each sale. Calculate the cost of customer acquisition as the total marketing and sales expense over a period of time, divided by number of customers acquired (CAC). Compare that to the amount of money you get in revenue from those customers, so you are sure you are getting a reasonable profit. Don’t pay too much for your marshmallows.
Marketing plans should be managed through a defined process and the use of meaningful performance metrics to assure efficient and cost effective execution.
About the Author
Bill Warner is co-founder and Executive Director of EntreDot, a non-profit organization that helps entrepreneurs start new businesses. He is also a Fund Executive of the Inception Micro Angel Fund (IMAF-RTP), an angel investor organization and Managing Director of Paladin and Associates, a business consulting firm.