The Most Important Business Data That You Have And Aren't Using
Data is knowledge and knowledge is power. Knowing who your customers are lets you do all sorts of magic with conversion rates and marketing budgets: conversion rates balloon and marketing budgets shrink.
We are HUGE fans of all of that data meets marketing magic. But consider yourself warned: this no longer guarantees you win the race.
Sure, many businesses aren't monetising data at all, so segmentation and personalisation still places you towards the front of the pack.
But to be declared a winner you need something else, something far more powerful.
SaaS companies have been at the forefront of trying to figure out how to increase the buy rate of their products.
It's a significant pain point: the product, the delivery channel, everything is digital. They tried Sales Qualified Leads or SQLs (leads based on outbound research), then Marketing Qualified Leads or MQLs (leads based on inbound user activity), and then most recently Product Qualified Leads or PQLs (leads based on usage of a free product). If you're not familiar with these, here's a great summary.
The goal of any kind of QL segmentation is to grow the conversion rate by pre-qualifying users and decreasing resources to close a sale.
Doing so means that you're deploying the high-touch sales team in a more effective way and so you're decreasing the resources required for conversions. In 2017, a PQL approach to sales is still considered innovative, and the conversion rates are estimated to be circa 20-50%.
But increasing the probability that a sales call will cut through isn't enough.
And it also doesn't apply to non-SaaS digital businesses and to businesses without an outbound sales team. So what's the answer?
Enter the Golden Funnel: the most important business data that you have but probably aren't using.
We created the Golden Funnel for savvy clients who were keen to get a shoulder out in front of the competition on how they use and integrate customer and usage data but were out of ideas on how to do that.
The Golden Funnel describes the journey through your product that your most valuable customer takes.
As distinct from PQLs, who are merely leads with product familiarity who have self selected by using a free version, the Golden Funnel draws out the journey your most valuable customers take to a conversion. It gives you the information you need to drive as many visitors as you possibly can into and through this same funnel to get more people into that high value segment.
With the Golden Funnel you aim higher than a simple conversion: you aim to acquire, shepherd, and convert a customer into the highest value segment for your business.
Every business has its own definition of high value and its own journey into that segment. To identify your unique Golden Funnel you need to:
1. Identify the characteristics that your most valuable customers share.
This means different things to different folk. For some, value is a factor of frequency of usage. For others, it is aggregate transaction value. For others again, it is the number of referrals a user has made.
2. Segment your customer database and identify your most valuable customers are.
You'll want to know their names, contact details, and anything else you've gathered or they've told you. If you have nothing but their name and email, you can still do some amazing things by leveraging external datasets and deploying some reasonably straight forward machine learning algorithms.
3. Map the product journeys for this most valuable segment.
Where have they come from? How many times did they visit before they signed up? Which pages did they visit? How many times have they performed a particular action? How correlated are preceding actions with the achievement of your goal? Here, patterns emerge.
Once you have the data from steps 1 to 3, you are in possession of the most valuable information that your CRM and tracking platforms can provide in synergy with one another.
You can use the Golden Funnel to help other users who may be making their way through it, guiding them to the next step that you now know, has the highest value for your business.
The implementation of this (insight) is typically a job for the marketing and customer success teams, who armed with this insight can really do some fantastic work with awesome results.
To be truly cutting edge, you can also use the Golden Funnel predictively.
Profiling your most valuable customers you have demographic information that you can use as a filter to identify similar customers as they come onboard (or even just visit your website). There are tools that can mine publicly available data and provide you with all sorts of information about who these people are, where they work, and where they live.
Once your Golden Funnel Algorithm pre-qualifies them as Golden Leads, you can confidently spend some extra resources onboarding and converting them, and holding their hand through one end of the funnel to the other. This may mean a call from your sales team or if you don't have one, perhaps special offers that only they receive because you know with greater certainty what their ultimate Lifetime Value (LTV) will be.
Knowing how your most valuable customers use your platform, and using that information to guide everyone else through the same steps will put your business where it belongs: at the head of the pack.