Empower Your Security Business with the Average Lead to Opportunity Conversion Rate for Security

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ask any sales manager what their closure rates are and they tell you it might be something like one in four maybe one and three ask your marketing manager what clickthrough rates they get on emails and he'll tell you that it's you know something like one in let's say it's four or 5% of the total clean sense they'll know again Ask either the sales or Marketing Manager how many new names they need to add this month and how many Clos Deals they need this month and I'll give you a response a little along the lines of yeah good question ask them again what their closure rates are by stage and they'll smile and blink oops ask them what their conversion rate is by stage and the grin will fade ask them what the conversion rate is by staging the buyers Journey not the sellers and the grin won't even be there anymore I think you take my point if marketing and sales are ever to become respected management Sciences around the world we need to get really good at understanding our conversion rates and how we're improving them stage by stage in this week's blog that's what I'm going to show you how to do how to calculate your Effectiveness rate stage by stage your conversion rate stage by stage in the buyer journey and I'll show you why lag is deatha Funnel Vision is brought to you by math marketing creators of the funnel plan math marketing is the source of the 123 of B2B I want to begin this week's show by talking about leads and what a lead is there's a lot of debate around how you define a lead and what's a marketing qualified lead and a sales qualified lead in an earlier blog I'll include a link in the show notes we explained or we argued that a marketing qualified lead is as Q as s wants it that is it's as qualified as sales wants it to be you want names I'll give you names you want names that have done something I'll give you those you want names that have done something and have met some qualification criteria I'll do that and so on I can give you I can give you more or less cook leads depending on what you actually want but of course I can give you fewer at each juncture you get the idea so let's understand that uh that a lead is basically whatever you want to to to Define it as now unfortunately in your CRM that differentiation or that separation between a lead and an opportunity is hard wide most crms have got leads and they've got opportunities and they're different things you convert a lead to an opportunity let's for now though imagine that we actually need not just leads and opportunities or this artificial distinction or even the mql SQL marketing qualified lead sales qualified lead distinction what we really need is how are we going to move a buyer from who are you through to thank you very much that's the buyer's journey and we're going to talk about in in today's blog um we're going to understand what that the bio journey is we're going to talk about a little bit of research that we did recently in partnership with maretto where we understood the impact of renaming the journey stages in your CRM and your marketing automation platform to buyers Journey stages rather than sales process stages cover that briefly again today we're going to talk about how you move buyers effectively but particularly today how you measure how well you're moving them so you can work out what you need to improve in the conclusions I'll give you 10 concrete steps that you can Implement today to better measure and therefore better improve your effectiveness of moving buyers through each stage in the journey now if we're talking about measuring effectiveness at anything it really needs to not be at what we do but rather what effect we have what by that I mean I could measure how effectively I I move the seller from this stage to this stage but that's academic it's what we do all the time but it's academic it's silly what you really need to move is how well you've moved the buyer you need to measure whether you've managed to shift the buyer from one stage to another and so it's fundamental that you rename the stages in your CRM and your marketing automation platform to be buyers Journey stages not sales process stages doesn't matter what you do matters what effect you have on your Market just to back that little bit of theory up with some measured reality we you probably know we did a study into sales and marketing alignment with maretto last year published early 2014 if you haven't got a copy the report then go to math marketing.com one quick fact from that is that the companies that had renamed their stages in their CRM from those that came out of the box compared to those that had um um left them as they were got a 46% Improvement in the quality of them of their mqls more than that if they change those stages from sales stages the first change to buyers Journey stages there was another 28% Improvement available so 40 6% Improvement for changing them at all and a further 28% Improvement if you make those changes to buyers Journey stage so I've argued it from a theoretical perspective and there's the evidence that we need to do it frankly just do it change your stage names to buyers Journey stage so the question now becomes how effectively are we moving buyers from one stage to the next and what can we get better at the next challenge I want to lay out before we get to our conclusion is dirty data in the CRM and we've all got it and we need to clean it up there are several areas of dirty data that we can fix pretty readily I'll show you quickly how to do that and then I'll draw this back in the conclusions but basically um firstly only measure opportunities that have closed closed in or closed out if you've got three opportunities one you won one you lost and one you don't know well your closure rate's not one in three because the one you don't know might become a sale or it might become a loss you can't use that your closure rate in that example was one and two you won one you lost one so firstly on the dirty data perspective only take data from opportunities that have already reached conclusion in or out the other thing to think about in regard to dirty data is that we often skip stages last time I was in the CRM the bio was at let's say the third stage in whatever our hierarchy is and today I believe they're in the fifth stage or when did they reach the fourth stage now you can run a theoretical argument that if they reached the third stage last week and they reached the fifth stage this week then split the differ stage for was in the middle but that's as academic and as arbitrary and as inaccurate as any other what i' would suggest is that if you're in the CRM today and you've updated at Stage 5 today then stage four was at the same date I'll show you later on how to do that but basically if you skipped stages you've gone in the example I'm using from 3 to 5 then stage Four's progression was achieved on the same date as the stage five progression so in that example 3 to 4 took a week 4 to 5 took zero time at all it's not perfect more perfect would be keeping your CRM up to date but if you're going to make changes don't do average and arbitrary things like splitting the difference all changes occurred on the same date that's the first simple fix to make to CRM finally I want to talk about before we get to our conclusions is that we are optimistic people marketing and sales professionals we're always thinking about the positive and so that deal that's been stuck in your CRM for 6 months or even longer it's never going to go ahead it's very very rare that an opportunity genuinely still at a certain stage what's normally the case is that the sales person is unwilling to concede defeat they are going to buy from us they'll tell you eventually they'll tell themselves the buyer isn't stuck at that stage the salesperson is stuck at that stage if the buyer hasn't moved forward within a normal amount of time they're never going to move forward take them out leak them create a new task it's not even an opportunity create a new task to go back to that Prospect sometime later to rekindle and reignite rep prioritize the opportunity but right now if the opportunity has been stuck for an Unholy amount of time it's dead kill it concede defeat move on find a new opportunity one of the important reasons for doing that is as a salesperson I can own handle a finite number of opportunities however many that is in some businesses that might be two in some it might be 200 whatever the number is a salesperson can only do a good job of managing those opportunities if there are non opportunities counted in that list that is opportunities that have already leaked then I'm wasting energy on them rather put them into the nurturing program get me focused on those opportunities that I can do something about so rip out those old opportun ities if they're stagnated concede defeat mark them as leaked make a task to go back some later time and rekindle them make sure the lead is put into a nurturing program but as far as your data goes the opportunity is already gone leak them take them out market is closed lost shortly I'll show you how to do this in funnel plan but before that I'm going to do two things I'm going to share with you my conclusions and I'm going to invite you to receive other blogs like this let's get to the conclusion first so here are the 10 steps that you can take right now to accurately measure your conversion rates so that you can improve them step one set up the stages in your CRM to Journey stages I've already argued why you need to do that secondly ensure that the CRM is recording stage history now this is not automatic Salesforce does it automatically Zoho now does it we actually worked with Zoho to get them to make that change uh we're delighted to say that they've made that change now not every CRM does if it doesn't there's some workarounds that you can do that I can chat about offline but certainly want you want to make sure that everything you can do has been done to make sure that the CRM is recording the date that you reach each stage in the opportunity management system step three synchronize your CRM and your marketing automation platform so that you get the whole journey you're going to extract the data from the CRM but you want the crm's data to include the marketing automation data step four leak All stagnated Leads and manually leak stagnated opportunities the distinction here is that leads versus opportunities in most crms leads are manifold there are many of them and they're not so valuable opportunities are being managed by a salesperson normally so the leads you can afford to be automated in the way that you leak them if they've been alive for longer than is normal leak them immediately whereas an opportunity you want to do that by discussion and negotiation with the salesperson and that's normally a conversation for the sales manager to have with the salesperson number five extract only closed deals exclude every deal that hasn't reached closed one or closed lost yet step six fill in the date gaps um remember mentioned earlier that you need to um if if you've gone from stage three to Stage 5 assume that the progression was 3 to 4 today and 4 to 5 also today so fill in those date gaps and calculate your leakage rate also by stage and the lag now let me be really clear here for the moment you only want lag for deals that you've won I know we're going to use leakage to calculate our loss rates but for lag that is we only want to look at One deals cuz we're trying to set up a profile around how well we win and what it takes to win so how long does it take on average for deal one to progress stage by stage is part of Step six and the other part of Step six is how often do you fail to move them from stage to Stage average your lag step seven for the one deals and the lost deals just so that you can cry for a while it's really important that you understand the difference between your how long it takes to win a deal and how long it takes to lose a deal so that you have enough courage and strength to do step eight if you skip step seven step seven that would be you're not going to do step eight so look at your average for one deals your average for lost deals have a little little tear then move on to step eight update your funnel plan with the new average lag for one deals take your funn plan adjust the funnel math in your funnel plan I'll show you how to do that later on with the average lag for one deals then for each stage rank all of your one opportunities by lag length drop the longest that is the slowest 10% to catch yourself a bit of slack and set the cut off lag time as the time that 90% of your One deals take what I'm really saying there is you know what your average is but now you also know how long it takes to get 90% of your deals to closure so you've got now A Benchmark or or or a date when you start to say after this date after this time I need to scrutinize my opportunities carefully so step 10 automatically leak all future leads as soon as they reach this cutle flag that is the 90% Mark and set manager alerts for all opportunities that have reached that cut off lag now you're going to lose a couple of deals a year by being this aggressive but you're also going to stop wasting more than half of your scarce resources on deals that were never going to close anyway you will lose a few but you'll gain significant time to let you win many many more step 10 is the crunch well if you enjoyed this Blog then likely you'll enjoy others if you haven't already can I invite you to subscribe subcribe to receive this blog go to mathmarketing.com/blog and either subscribe to the twice a week blog or if you prefer the the the once a month which has a recap of all the key blogs from the month frankly what most people do is subscribe to both and you're welcome to do that now if you prefer you can also subscribe to the YouTube channel here and can consume these blogs in that way now if you have already but you've got a colleague who hasn't then now would be a great time to invite them and I'd be grateful if you do that why don't you do that now either subscribe or flick it along to a friend come back and I'll show you how we do that in funnel plan you're aware that your funnel plan has captured your objectives your strategy your tactics and in the middle of the Velocity that you need your tactics to generate for you in order for you to meet your objectives today we're really only going to talk about the velocity section because we're talking about measurement and we're talking about the rate of velocity that we are currently achieving versus what we need to achieve to meet our objectives in the plan so let's take a look in the funnel plan itself to how we adjust these in the funnel plan under the velocity section you've got simple funnel math that you can uh input basically how long does it take to go from top to bottom what percent of your proposals or leads will become proposals what percent of your proposals will you win and how many meetings does it take but in the advanced section those same numbers have been transposed so the the 13 weeks for example is down here in the 13 weeks but it lets us a portion it stage by stage now if we do what I'm suggesting in today's um session and we learn that it takes not one week to establish interest and then uh sorry one week to go from establish interest to Gap and then two to go from Gap to need but rather it takes two 2 weeks and 3 weeks then we just simply input those changes now we're now up for a a a longer Journey Through The Funnel plan I do what I said I was going to do sorry we've now got 15 weeks and we've got a bit of precision around where those um lags are occurring and if we if it turns out that Gap to need we don't lose 40% but we lose 60% then we can make that change in the leakage now how does that all of that play out well in the total velocity let me go back to the funnel plan while that's calculating the total velocity is calculating the threeyear outputs that your funnel plan is going to generate so total velocity which takes about 35 seconds to calculate it's a lot of Cals to determine this it's determined here that to make our 1410 sales we need 2570 prospects now we can go back to the funnel plan here origin we need a 2176 compared to 2500 and that's the fundamental difference by being a little slower and a little less effective we need to start with a bigger market now the problem with that of course is that your 1,400 customers are now coming from 2500 prospects before our, 1400 new customers were coming from 2100 prospects in other words our market share has been delete has been depleted when need a bigger Market to get our outcomes than we did previously because we're less effective and that's why I rrap it on as often as I do about how we need to not just measure but actually improve our Effectiveness let's drop those back to what they were before and again if we recalculate that what we'll end up with is the same calculations presented here in the funnel plan understanding how effectively you move buyers from stage to stage and conversely how often you fail stage by stage lets you work out which part of the puzzle you need to work on fixing next and that's why we're so hot on measuring Effectiveness stage by stage hope that helps in next week's show I'll show you a little more about measuring your Effectiveness stage by stage and how you can improve it and I'll also show you why you can't rush your buers until then may your funnel be full and always flowing