Are you concentrating your spend on the least probable marketing projects?
There are not one but four phases to the sales lifecycle. How many are you leveraging in your marketing plan?
One of my biggest frustrations as a B2B tech marketer is the way so many tech businesses put all their energy to winning new customers when there are so many ways to grow profits that are simpler, more predictable, and more sustainable.
There are four key phases to the sales lifecycle of a B2B tech business which we describe in detail through our SONAR2 Sales Enablement Model. These are:
Seduce – Attract new customers
Engage – Win new customers from ‘known prospects’
Delight – Sell more of your existing products and services to existing customers
Expand – Grow profits by selling new products and services to existing customers
Ask most marketing leaders what proportion of their marketing spend goes to each of these sales phases and few would be able to tender a figure. Those that do would probably accept the lions’ share of investments go into the front end of the lifecycle with little funding available for the tail-end.
This is a huge shame. We all know that it’s much harder to win new customers than sell to existing customers. And the common sense of this stands out:
- Sell to a new prospect that doesn’t know you and has no measure of trust in your delivery capability and your engagement is going to have to start with convincing them of your credentials and abilities.
- Sell to an existing customer and you won’t need to build that platform of trust. The customer already knows what you’re capable of; they only need to know that you are best placed to offer the product or service they need.
The realities of modern social media and online marketing make it more appealing to invest in your lifecycle tail
Attracting new customers to your door is extremely expensive these days. For tech startups, gaining visibility on the Internet—when there are so many well financed competitors from around the world vying for top spot in search results—well, it’s not cheap.
All the better to win business where it’s easier to find opportunity. That’s why so many mature tech companies are today investing proportionately more of their marketing spend into the latter phases of the sales lifecycle. How? By:
1. Bolstering their account teams to generate more profits from existing contracts (typically looking to renew contracts a year before their expiration, having made sure their customer service is delivering on its promises)
2. Installing account growth sales teams that are separate to the customer service department, and more focused on net new sales of new products and services. In some cases, larger tech companies have established co-innovation teams to encourage customers to work with them on new innovation areas and custom projects.
Final thoughts -Testing your own business
If you are in the management echelons of a tech business, it’s likely that you have the opportunity to influence how your business thinks about its approach to supporting each of the four phases of the sales cycle.
If that’s the case, a good place to start is to explore what proportion of your marketing spend is being invested into each. Then, debating with colleagues the efficacy of balancing your spend across all four areas makes for an interesting offsite workshop discussion.