Do you need to stop this alarming trend?
Are you seeing your costs of sales and marketing increase, or finding your department working harder just to keep revenue flowing? We have observed this for some time with larger brands, because they are not evolving their sales and marketing strategies and tactics to match changing SMB buyer behavior.
We see many companies dealing with this issue, but the good news is that there are solutions. As you read, keep in mind that there are actually two ways to lower your cost of sales and marketing (as a percentage of revenue):
- Reduce marketing and selling expenses
- Increase revenue without an increase in the cost of sales and marketing
Depending on your company’s unique situation, there may be opportunities to pursue both approaches. Since cutting expenses is fairly straightforward, I’ll devote the rest of this post to the following four ways to increase revenue without much additional effort or expense—thereby reducing sales and marketing costs as a percentage of sales.
Go for Quality over Quantity
At many companies, pressure to increase the raw number of leads is at a breaking point, pushing lead quality down and resulting in higher costs. It doesn’t have to be this way. Others have found success by changing the emphasis from quantity to increasing quality, using lead scoring or some other means to determine which leads get the full-court press. The benefits are clear: lower conversion costs, since the focus is now on converting leads that are truly more qualified, and less frustration and time spent with weak leads, not to mention potentially lower lead gen acquisition costs. See this post for more on this topic.
Better Empower Sales
Are your salespeople armed with the right tools? If your salespeople engage with prospects early in the buying process, do they have the right foundational content to establish trust, educate the buyer, and even create demand? Do they know the best way to address the most common objections? Sales experts will tell you that 4 to 5 recurring objections typically represent 80% of all objections raised. Do they have bottom-of-the-funnel content that will help them get over the finish line? With the right tools, salespeople will have more success and produce more revenue with the same amount of effort—or less.
What are you doing with your leads that don’t immediately convert? Depending on your business and sales approach, a “loss” might be just a timing issue. If the lost prospect hasn’t bought a competitive product, they just might not have been ready to buy. This certainly can be the case with busy SMBs, who go in and out of the buying journey, since they are spinning many plates. An email lead-nurturing program could turn 3 to 5% of those losses into wins, because it enables you to keep in touch with prospects and ensure your brand is top-of-mind when they are ultimately ready to buy. Future sales, harvested in this virtually cost-free way, represent newly-found revenue that may help bring your overall cost of sales in line.
Establish a Floor
All customers are not created equally. For some companies, the costs of selling and supporting very small customers outweigh the lifetime value (LTV) of the customer. Unless there are compelling reasons to continue pursuing those customers, such as indications that they will grow and buy more, it might make sense to develop processes to have them opt-out of the buying process with your company. Companies with direct sales forces can empower their salespeople to question the fit of higher-end products for smaller buyers, and to steer them toward other ways of continuing to engage with the brand. In many cases, this can be doing the customer a favor, by preventing a bad experience with an expensive product that may have features they’ll never use, while the company avoids a money-losing relationship.
Many companies have done a great job of meeting sales targets using conventional approaches, but it is getting harder as sales forces deal with increasing numbers of lower-quality leads. Implementing the tactics above will help you avoid this trap. For more on changing the lead-quantity game, including fixing attribution and establishing a better nurture process through content, check out the post we mentioned earlier. And for guidance developing content for every stage of the sales funnel (among other topics), download our latest publication, The Definitive Guide to Accelerating The SMB Buyer’s Journey.
|Does your internal content team need guidance on understanding SMBs or ensuring that the content they are producing will accelerate the buyer’s journey? RSL Media editor-in-chief services can give you the peace of mind and results you need. To discuss, set up a call by contacting Jessica Benavides.|