Are you an entrepreneur who knows how to generate leads but struggles to convert them into sales? Pipeline marketing may be the solution you need. Since it is important to our discourse, let’s define a lead and a customer. A lead refers to a person or an organization whose contact information you have and who is, therefore, a potential customer. On the other hand, a customer refers to someone who has given you or continues to give you money for your products. In short, a customer is a converted lead.
What, then, is pipeline marketing? It is a marketing type that uses sales and marketing data to convert prospects and leads into customers. It helps businesses make money instead of generating more leads, which makes it one of the best recommendations for businesses that need to make their sales process cheaper and more efficient. Pipeline marketing focuses on the entire sales funnel as opposed to strategies such as lead generation. Let’s review the sales funnel to help you understand what we mean.
The topmost part of the sales funnel is leads. This is where the business tries to get its products and services known by reaching out to as many people as possible. It can be done through several channels since the end goal is to generate as many leads as possible. Some ways of generating leads that have proven to work overtime include cold calling, email campaigns, and lead generation through social media. Here, the business focuses on harvesting as much information as possible about prospective customers. It’s also known as the awareness stage, given that potential customers are made aware of the brand.
The second part of the funnel is prospects. Here, the business focuses on nurturing leads to become prospects. Some of the proven ways of lead nurturing include an invitation to attend a free webinar, promotional discounts, or coupons. At the bottom part of the sales funnel are customers. This is where the business focuses on converting its prospects into customers. This is where pipeline marketing thrives since even though most businesses have no problem with the top part of the sales funnel, they may find it difficult to convert leads and prospects into customers.
How to Make Pipeline Marketing Work?
Now that you understand pipeline marketing, it’s time to find you can make it works. Before we look into the details, it is important to note that this type of marketing requires the business to set specific goals. Only by knowing what it wants can an organization combine its marketing and sales activities into a strategic plan.
Businesses then shift from lead generation to cost-per-opportunity monitoring since by lowering the cost per opportunity, they get to increase their cash flow. Afterward, they have to measure and monitor different sales metrics and refine their plans until they succeed. Let’s cover this in detail.
1. Set Specific Goals
A pipeline marketing campaign begins with defining the campaign goals. Your entity must have specific and measurable goals, which can be determined by determining what the business wants to achieve with its marketing efforts. Let’s walk you through it.
You should examine your past sales records to succeed in this step. How many products have you sold in the last 3-6 months? What is the number of sales per month? How many sales have you made vis-a-vis the number of leads? Once you obtain your conversion rate, make it your goal to increase it to a certain percentage. For example, if you have generated 6,000 leads a month and sold to 3,000 customers, your conversion rate is 50%. Your goal, therefore, should be to increase this percentage, say up to 60%.
You can also set concrete goals such as ‘Sell 1,000 products per week in the next 6 weeks or ‘Generate 5,000 customers in the next two months. Ensure that whatever you decide is reasonable, i.e., reflects your business and its history. What happens if you haven’t started selling yet? Don’t fret. Research your competitors and create reasonable goals based on their success. This type of research will help you determine the magnitude of your audience and how ready they are to pay for the products you will be selling to them.
2. Think of an Action Plan
This is where you determine the best ways to arrive at the goals you have set in the first stage. You must think of action steps that can help you achieve your goals. Remember, your focus should be on the entire funnel, not the top. Therefore, as much as we expect you to collect email addresses and reach out to customers through social media, remember that most of your effort should be channeled into converting prospects into leads.
Comb through the leads you already have and group them based on their past behavior. How many times have they reached out or interacted with your business? How did they reach out? Did they attend one of your webinars or email you to learn more about your products? Once you have this information, it’s time to qualify them, i.e., grouping them into prospects and more leads. This will help you focus on those likely to give you business.
You can use surveys if you don’t have the right tools or software to qualify your leads. The survey will help you find out if the customer plans to buy your products within a given period, the goals they intend to fulfill with them, and how it will help them in their professional or personal lives. Make sure that the questions the survey asks are open-ended, i.e., give your leads a chance to share more information with you, not just yes/no answers.
Review the answers and find out who can be easily converted into customers and once you do, focus your time and energy on nurturing them.
3. Consider Cost Per Opportunity
This type of marketing focuses more on cost per opportunity and less on cost per lead, given that every marketing effort is given weight by lead conversion. Remember, businesses use this outcome-based marketing technique to achieve specific goals that positively impact their revenues. Focusing on cost per opportunity helps connect the marketing and not sales efforts to the results.
In short and simple terms, focusing on this metric helps you identify the marketing efforts that have contributed to each sale so that you can weed out those that do not work and prioritize on the successful ones. This means you won’t waste too much effort on unqualified leads. Opportunities, in this case, refer to the leads that move into the sales pipeline, i.e., they continuously interact with your business until they purchase your product.
Focus less on the cost of every lead collected and more on the cost incurred in acquiring every lead that enters the sales pipeline.
4. Measure and Monitor the Metrics that Directly Impact Sales
This fourth step is equally important, given that pipeline marketing relies on big data unlike other marketing and sales strategies that solely focus on metrics. Instead of increasing the number of metrics tracked, select the ones directly impacting actual sales and revenue. Some of the most important metrics in this case include:
- Lead volume- This refers to the number of leads your business has gathered in a defined duration
- Revenue by channel- This metric focuses on the revenue obtained from each channel, which can be email, social media, etc.
- Opportunities by channel- This refers to the number of leads that have successfully been turned into customers by each of your marketing channels
- Revenue by lead source- This tracks the amount of money you have obtained from each lead source.
- Customers closed- This refers to the number of customers that have bought something from your store
- Marketing ROI- This last trackable metric refers to the total revenue each of your marketing strategies has generated
Since this type of marketing focuses more on lead conversion than its generation, focus on the metrics organizations track when closing sales. In short, focus more on revenue and less on leads.
5. Make Adjustments
Tracking the metrics mentioned above will furnish you with enough data to refine your marketing strategy, i.e., once you know what works and doesn’t, you will know where to focus more. For example, suppose you discover that your business generates fewer opportunities from email campaigns. In that case, the best thing to do is to scale back your efforts and focus them on a channel that actually works.
This is how to increase your revenue while lowering the amount of money your business spends on marketing and advertising.
Differences Between Lead Generation and Pipeline Marketing
We find it important to differentiate lead generation and pipeline marketing to help you understand this marketing concept. Even though we have hinted at some differences in our article, the main point worth remembering is that pipeline marketing is a testament that you can make money from your business without putting too much focus on leads. Here are some specific differences:
1. Speed of Sales
Pipeline marketing focuses on fewer leads, resulting in faster sales since they (the leads) move through the funnels faster. It gives businesses ample time to nurture leads through the entire pipeline process instead of focusing on generating others. Faster sales have a direct positive impact on the growth of the business, given that you will have more time to create new products, boost customer loyalty and make more revenue.
It also means that your leads won’t have time to reconsider their purchase decisions since you can cut right through the chase, tell them the benefits they stand to obtain from what you offer, and let them decide. With the right persuasion, many of your leads will be loyal returning customers.
2. Sales Funnel’s Focus
These two approaches focus on different parts of the sales funnel. While lead generation is concerned with the top, i.e., leads, pipeline marketing focuses on the entire funnel but more on the middle and bottom parts. The former is mainly used to bring in as many leads as possible into the funnel. It does not concern itself with converting leads into customers but rather with bringing them into the sales pipeline, hoping that some will be interested in what the business offers.
On the other hand, pipeline marketing takes a full-funnel approach, meaning it doesn’t stop at lead generation. The sales and marketing team must carry as many leads as possible throughout the funnel until they are successfully converted to customers. It is, therefore, a surer way of marketing since, regardless of the number of leads generated, the business can rely on them to be customers.
3. Metrics of Focus
While lead generation focuses on vanity metrics that can reassure the business, pipeline marketing is more concerned with revenue metrics. Vanity metrics prove brand exposure or success potential but are not the real deal, given that they do not put money into an entrepreneur’s pockets. This is one of the reasons why entities that focus on lead generation may be led astray, thinking that they are succeeding while, in truth, they just have the potential to succeed.
Revenue metrics, as the name suggests, are tied to revenue. You can refer to the second part of our article to find out what they are. These metrics are usually found at the bottom of the sales funnel and are concerned with prospects that become opportunities, thus entering the sale pipeline. A good example is a revenue by lead source, which will tell you how much your business has earned from the different lead sources. Tracking such metrics will tell you whether or not you are in the right direction.
4. Budget Difference
By now, you definitely know which approach helps you use your budget efficiently and which doesn’t. Pipeline marketing demands that all your efforts and money are allocated to qualified leads and opportunities, increasing your investment return. This is different from lead generation, which demands businesses spend money on generating leads, who may not even buy any products in the long run.
These two marketing approaches differ in results because while one focuses solely on making contacts, the other is concerned with making them customers. Lead generation plays a huge role in contact generation through different means, such as social media and email, which businesses appreciate since you must have led to get customers. However, it stops there, meaning other means must be engaged to convert these leads into customers.
On the other hand, pipeline marketing helps a business stay operational through revenue generation. It follows up on leads, walking them through the sales pipeline until they become customers. This makes it a healthier approach for any business to settle on, as time is not wasted following leads that may turn out to be disappointing.
6. Conversion Marketing Inclusion
Conversion marketing is one of the most important strategies for obtaining customers. It encourages business leads, opportunities, or prospects to go a step further, bringing them close to the bottom of the sales funnel. As you have rightly guessed, this only happens in pipeline marketing. The other approach, i.e., leads generation, excludes it, given its concern with creating as many contacts for this business as possible. The business doesn’t end up with a sizeable ROI in the end as a result. Pipeline marketing goes all the way out, encouraging leads and prospects to engage in actions that will yield revenue for the business.
Advantages of Pipeline Marketing
Here are some of the advantages you stand to benefit from by using this type of marketing to push your products:
1. Increases the Number of Customers
The main concern of pipeline marketing is customer creation. It goes beyond collecting contacts for future exploration and focuses on the customer throughout the pipeline, thus helping entities build large and loyal customer bases capable of increasing their revenue.
2. Leads to Business Growth
This type of marketing leads to business growth through revenue creation. Its main goal is revenue creation, which means that the number of leads generated is immaterial, provided that the sales team can convert them into customers faster and without using too much money. Also, by generating money faster, the business can grow fast and channel more resources into lead conversion while encouraging other customers to stay loyal.
3. It is a Full-Funnel Approach
This marketing strategy differs from others since it takes customers through every step of the journey and doesn’t stop at lead generation. The business gets to understand its ideal customer better, including the problems that must be handled. By focusing on the entire funnel, the business makes more conversions and increases its revenue generation.
4. Focus on Purchases
This marketing strategy focuses more on convincing the customer to make a purchase instead of committing resources to leads and conversion. It increases lead engagement, which also comes in handy in building customer loyalty in the long run.
Disadvantages of Pipeline Marketing
The advantages outweigh the disadvantages when it comes to this type of marketing, which is, by all means, a good thing. They can also be fixed with the right strategies. Some disadvantages worth mentioning are potential difficulty in identifying the right lead qualification process, the possibility of tracking the wrong sales metrics, the potential missing of appropriate opportunity data, and inefficient and faulty pipelines that may lead to revenue loss.
Pipeline marketing is the surest way to increase your customer base if you struggle with lead conversion. Unlike other strategies, such as lead generation, it is focused on the entire sales funnel. Please refer to our article if you decide on this marketing strategy.