Looking to buy a car, an insurance policy or software? In the first turn you would browse the Internet for relevant information, won’t you? After customer activity shifted in this direction, businesses had to acknowledge that the classic sales funnel model in sales and marketing is outdated.
Sales managers are no longer ‘pushing’ the future customer to the decision. On the contrary, it is now the customer that is ‚pulling’ – that is, looking for information. McKinsey’s report pointed out already in 2009 that marketing and sales organizations are standing at the threshold of a revolution. The Customer Decision Journey is now a complex process that includes multiple touchpoints between the business and the prospective customer.
THE CUSTOMER JOURNEY: A COMPLEX PROCESS
How can you pick up the customer exactly where they make their purchase decision? The solution lies in the medium that unleashed the decision: the Internet and the digital channels. Well-polished marketing automation software is in a position to deliver targeted personalized information to the prospect customer depending on their reaction – mostly by email but also analog. Example: a prospect at the start of the decision process needs information on the subject of his interest: how does the washing machine, the computer or the solar panel work? Which characteristics does the car have (room capacity, engine power, consumption)? In which ways is the competition product different? Only shortly before the purchase decision would the prospect require information regarding payment models, maintenance contracts, service etc. This first phase of the Customer Journey is assigned to marketing departments.
THE CUSTOMER JOURNEY HAS NO FINAL POINT!
The sales department – no matter in a direct or indirect sales structure – traditionally gets into the game exactly at the moment when a purchase contract needs to be signed. The problem: apparently most organizations would stop here. Is the contract to be signed and product to be ordered? Then the journey ends here. Hasn’t the deal been closed? Then it ends anyway! A recent study by ec4u shows that most organizations are still focused on winning new customers, with 49% to 50% of their marketing budgets allocated for that purpose. The moderate 31% share of the budget is destined for supporting existing customers – and the shameful 24% for the customer expansion in existing accounts. The reason: customer care is seen as a mere thing of sales and service departments. No more data is coming back to the marketing department (e.g. over CRM etc.) The Customer Journey becomes a one way street. As a consequence, customers are lost in the mid-term if they are not followed through every phase of the customer lifecycle. At the very latest when a more lucrative offer looms large on the horizon. What does that mean for the business? Cash is lost! Just because the rule of thumb says, to win a new customer is five times more expensive than it is to keep an existing one. The same applies to ‚lost’ customers. A customer that decides for a competition offer can be won back. Especially in the industries that run on temporary license agreements (like software, insurance, energy or telecommunications contracts) or in the case of goods that are purchased regularly (like cars).
How does that work?
DIGITAL PIPELINE MANAGEMENT IS MANDATORY
It has never been so easy to reach your customers and prospects – owing to smartphones, Internet, tablets and Social Media. Organizations can theoretically follow and reach their leads and customers digitally on a daily basis. So where does the whole thing get stuck? The ec4u study provides striking numbers here as well: especially the customer service runs entirely on analog communications – phone and direct mail. Another alarming factor comes to that: distributing leads to channel partners. 23% of the questioned organizations let the sales partners process every lead they have. And 14% distribute ‚handpicked’ leads. In both cases the problem is there: hand picking is very resource-consuming and simply lasts too long. Opportunities must be processed immediately. Every missed day makes your sales chances slimmer. And transferring the ‘green bananas’ is inefficient and uneconomical. Only 20% of the questioned organizations could boast a continuous pipeline from cold to close. The solution here is the same one: digital pipeline management – based on a strategically defined Customer Journey management concept. With a digital aid like a marketing automation solution to support. Don’t forget about opportunity management to integrate your distributors and channel partners into your lead process!
THERE’S NO CUSTOMER JOURNEY WITHOUT A CLOSE COOPERATION BETWEEN MARKETING AND SALES
Sales organizations with indirect sales have a huge difficulty: they get very few data back from their partners. Why hasn’t the deal been closed? Which leads were a complete failure? Which of them declared future interest but are still unable to decide? Which of them canceled due to budget restrictions – and which because of an attractive offer from the competition? A lost lead is never a lost lead. And a won customer is really never a won customer for a lifetime. The markets are too volatile – as well as the customers. It is critical for the organization’s survival to track the precious leads across the whole Customer Journey – AND BEYOND! Your sales partners are absolutely the key characters in that process. After all, they are the only ones that have direct contact to the customer. This knowledge absolutely should flow back to your CRM system, preferably automatically and in digital format. In reverse, sales partners should be in a position to get important information about each lead from your marketing as well. The information flow should never be interrupted. Only that way you can build the much-vaunted Closed Loop marketing!
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