Business leaders at emerging technology companies usually focus on building out traditional functional areas like engineering, marketing, sales, customer service, operations and finance. After all, engineers build products, marketers create leads, sales reps close deals and the other functions manage day-to-day operations.
The conventional blueprint for scaling a company doesn’t always pay off … but why not?
Even after staffing an organization with great people, many young tech companies struggle with one inescapable problem: There just aren’t enough quality deals in the sales pipeline to drive enough revenue to scale the business without additional investment.
They may execute brilliant marketing campaigns, diligently track sales opportunities, and rally every possible resource to propose and close a deal, but there’s still a big gap between the number of leads generated by marketing and the number of actionable business opportunities that are worthy of an expert and expensive sales team.
Most companies fail to build an effective “Customer Development Engine”
The marketing-to-sales interface is super critical and a well-managed customer development engine is essential for realizing a high return on your marketing investment. When I use the term “customer development engine” I am not simply relabeling the concept of an inside sales team. I am describing a highly focused cross-functional program that involves close collaboration between marketing and sales combined with executive oversight and management.
A customer development engine has a specialized role when compared to a traditional marketing and sales agenda. Its job is to take raw leads from digital marketing campaigns and turn them into qualified sales-ready opportunities that can be added to your pipeline. A customer development engine requires the right content strategy and the right people, process and platforms to measure and manage performance. Think of it as middleware for your sales and marketing systems, a bridge between the great sales and marketing divide, and a strong red zone offense for your customer acquisition team all rolled into one.
The relationship of customer development to sales and marketing:
The marketing team is ultra busy working on the challenge of building your brand, creating awareness and driving interest for all of your products and services. That means developing and communicating lots of compelling and targeted content to attract visitors to your website and convert them into leads. Many of these leads are potential customers ready to begin the buyer’s journey and to consider your solution for addressing their needs. The science of digital marketing involves the continuous measurement and improvement of content and conversion strategies to optimize this integrated marketing approach.
Customer development transforms this online customer experience into a personal relationship with your brand. This requires a different mindset from digital marketing and a dedicated function for outreach, engagement, education and qualification. It’s an inside sales function on steroids. Good customer development must understand the context for a buyer’s interest and then personalize the way your offerings are positioned to address those needs while leveraging the messaging and content contained in your digital marketing campaigns. Good customer development is not left to chance. It is a controlled and scripted process with well-defined nurture stages for tracking the customer development progression. It is based on criteria for determining when a lead is marketing-qualified and sales-ready, in need of additional nurturing or should be disqualified as a viable prospect.
The singular job of a customer development engine is to personally nurture and qualify sales-ready leads, allowing your sales team to conduct a more successful deal pursuit process. The efficiency of any sales team is highly dependent on keeping them focused on their role as experts in assessing customer needs and designing winning solutions – solutions that deliver value to customers and drive profitability for the business. Simply put, good customer development puts your sales team in the best position to propose and close more winning deals.
A Customer Development Engine Continuum & Maturity Model
The following chart presents a framework for building an effective Customer Development Engine. It’s a continuum that maps five key dimensions of a customer development engine across four stages of maturity. You can use this framework to assess the state of your own customer development function and identify some next best actions to advance to the next maturity stage.
Of course, not all of these characteristics will line up cleanly in each maturity stage for every application of this model. It’s more practical to use this continuum as a general guide for understanding where your customer development engine sits today and how to increase its efficiency by incorporating some ideas from the more advanced stages.
Stage 1: This is the most basic form of customer development and it’s a good starting point to build on. In this stage there is controlled messaging (scripts) and a formalized process for campaign follow-up. Outreach activities are tracked by a CRM system but there is no dedicated team of inside sales professionals working the program on a full-time basis. As a result, some pipeline opportunities are generated but the conversion rate is low.
Stage 2: In this stage, scripted outreach messaging is complemented by marketing assets that have been designed, or preselected, to amplify and validate the messaging. A dedicated inside sales team is in place but they are fairly junior and inexperienced. They use formal qualification criteria to score prospects and their outreach has been focused by segmented lists created in a marketing automation platform. The conversion of leads to pipeline opportunities is better but the results are unpredictable.
Stage 3: In this stage, an “actionable offer” has been developed as a tool for the customer development team to close the prospect on a meeting, demo, free trial, assessment, or other action. A more experienced inside sales team is in place and they use social media platforms to increase engagement and build relationships. The customer development process is tracked using well-defined lead nurture stages. This level of maturity is marked by a more predictable rate of lead to opportunity conversion.
Stage 4: In the most advanced form of customer development, performance is not only predictable but the nature of the opportunities identified are larger and more profitable. This results from more sophisticated content and messaging that reframe the customer’s view of their needs in your terms and justifies solutions that carry greater price and value. The effectiveness of the messaging is tested and optimized using a metrics-driven approach and delivered by veteran sales reps with deeper industry experience. High-value prospects can be digitally nurtured to maintain their interest and engagement until they are ready to invest in a major procurement.
Customer Development is a Resource that Drives Multiple Benefits
Once you have built a high performance customer development engine, your business will have a permanent resource that will drive multiple benefits. The power of this resource is grounded in the trusted advisor relationship that has been established and the human connection that results. Here’s a brief summary of some typical sales and marketing challenges and the impact of a well-run customer development process in overcoming them.
- Accelerate Pipeline Conversion: This is the principal benefit that has been the focus of this post – Customer development bridges the gap between high-volume lead generation and high-quality sales opportunities.
- Expand Your Account Coverage: Customer development can build powerful relationships laterally in the organization among influencers and stakeholders to increase your knowledge of the customer and expand the base of support for your solution.
- Re-energize Stalled Campaigns: Customer development can maintain relationships that can keep a sales campaign from stalling and look for ways to put a deal that has become distracted by internal delays or external threats back on track.
- Re-engage With Existing Customers: While your primary sales force is busy chasing and closing new business, your customer development resource can be reconnecting with existing accounts and be on the alert for new opportunities.
Growth acceleration for emerging technology companies comes from focusing on building and perfecting the organizational areas that matter most. For some companies, that may mean focusing on product development. For other companies that might mean establishing a basic foundation for sales and marketing. However, if you already have the basics covered, then focusing on the integration of sales and marketing and the performance of your customer development engine just might be the most critical factor for accelerating the growth of your emerging technology business.
Where is your company on this continuum? How can you advance to the next stage of maturity? If you would like to know more, let’s schedule some time and talk about HOW TO IMPROVE CUSTOMER DEVELOPMENT PERFORMANCE.