There’s an old nugget of wisdom in the game of golf - presumably passed down through innumerable generations of wizened old Scotsmen called wee Tommy Campbell or similar - that you learn the game ‘from the hole outwards’. That’s a crisp and elegant way of explaining that until you can pop the ball into the hole from 2 feet there’s no point trying from 10, and until you can do both there’s no point investing time on the rest of the game.
It’s the same when it comes to your go-to-market strategy. It’s absolutely vital to start with the close, and only work outwards when you’re reasonably happy that you are closing effectively. But just as many golfers new to the game buy an expensive driver and spend hours at the range when they should be putting, so Saas companies often have a fatal attraction to the ‘sexier’ aspects of marketing: they start spending money on above the line advertising that generates leads they can’t convert, and waste they time and money as a result.
Let’s make that stop.
The Funnel
If there’s one bad analogy in the world of sales and marketing it’s the “Funnel”. Ask yourself this: apart from being wide at one end and narrow at the other, what is the defining quality of a funnel? Answer: it doesn’t leak. But if we think of the sales and marketing process as not having leaks we are a) making a huge and obvious mistake and b) in grave danger of assuming we can simply pour water in the top and not lose a drop all the way down.
A better analogy is a set of leaky buckets. We carry water from 'leads' to 'meetings' in one leaky bucket. Then from 'meetings' to ‘opportunities’ in another. We lose a lot of water along the way. And thinking of the process in terms of leaks isn't just a more accurate analogy: it really helps focus the mind. We get a little more hesitant about simply spending more money to add more water, and we get a lot more concerned about making each bucket as watertight as possible before we fill it up...
That’s why you need to ‘market from the close out’.
What 'Marketing From The Close Out' Looks Like
Here’s what I mean by that in a practical sense. The typical Saas business probably has a close rate of around 20 - 33%. Or at least that’s what you’ll read in the textbooks. In reality every business is so different, and has such different rules about what constitutes an opportunity (and so many sales people who don't understand the rules) that benchmark numbers like these aren’t too useful.
But let’s leave that to one side and take a number like 25%. That means that 3 in every 4 of the opportunities you create do not close. And if your number is worse than this - say 15% - almost all your effort should be focused solely and exclusively on identifying WHY you are not closing business, and if possible solving the problem.
I hope it is clear why this is the case. But to labour the point one more time, imagine having a close rate of 5% and spending large amounts of money on Google Ads or attending expensive events to bring new accounts into the funnel. That would not make a huge amount of sense.
If you’re not closing deals, chances are one of the following three things are in play:
You have a problem with product market fit
You are not clearly communicating in a way that ‘lands’ with a typical prospect
There is some competency issue around the people you have attempting to close deals
That in turn suggests a few potential courses of action you might want to take, including:
Look again at what you have, what the market wants, and talk some more with existing customers and prospects (remembering not to simply take them at their word in all circumstances)
Re-assess the story you are telling and focus relentlessly on what is relevant to the prospect, not what you happen to be able to do. Reflect any new understanding in your content, demo and so on,
Work on ensuring that everyone in the organisation has the skills, materials and training they need to succeed in their role.
Obviously there’s more to it than that, and it’s important to understand that within this single stage are a multitude of smaller stages, but the core principle remains the same: fix the close before you move out. Do whatever it takes to fix that particular leaky bucket and then look at the next one along the chain.
After The Close Is Fixed
What happens when you’ve ‘fixed’ the close? Well, it’s time to consider if your doing a good job converting leads to opportunities. Again, there are benchmarks you can look at here that will give you a guide as to what ‘a good job’ actually looks like. Making it happen is going to involve working to ensure you respond in a timely and appropriate manner to anything that comes in and have the processes built out to ensure nothing and nobody gets lost along the way.
When you have this covered, then and only then is it time to turn on the tap - knowing that the money won't be wasted and you'll do justice to everything that enters the pipe.
One final note. When you do start spending money (whether on inbound or ADR-based outbound) things will change. Volumes will go up, processes that worked fine with smaller volumes will break, and techniques that worked with organic inbound interest won’t work with paid-for leads. Be careful to keep checking and tracking your conversion rates from one stage to the next - because the work isn’t done.
Next week I’ll write about how those conversion metrics can help inform your business model, and how to build that model from scratch. See you then!
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