During this very strange time in business, in which we will do our best to not use the term ‘unprecedented,’ it is more important than ever to make sure all your company’s processes are running smoothly in order to stop any potential sales from falling through the cracks.
Though your HubSpot sales funnel is just one tool and one part of the entire revenue engine, when one part of the process is leaky and inefficient, that leak affects the whole system. As our previous RevOps blog illustrates, patching up the leaks with duct tape isn’t a long term solution. Let’s take the time right now to improve the HubSpot sales process and get that portion of your revenue engine running smoothly.
Something to keep in mind when optimizing your revenue processes in 2020 is that the types and sources of leads currently entering your sales funnel may have changed recently. Techtarget says that during COVID-19, most marketing budgets have been cut and live events have been cancelled, which were many companies’ main sources for new leads in the past.
RevOps can help you optimize your revenue engine for the leads that remain and the new types of leads you’re attracting, by uncovering gaps (leaks) in your processes to make those leads more likely to convert and remain loyal customers.
This can also help maximize efficiency of your temporary or permanently-remote sales team. That’s probably enough about why you want to use RevOps right now; let’s get to the point of how to start using RevOps to eliminate any leaks in your HubSpot sales funnel.
1. Stop thinking in terms of a funnel
When optimizing your HubSpot sales funnel, the first rule in RevOps is: stop thinking about it as a funnel!
Actually the first rule may be to stop thinking of any activity as just for ‘sales’ since all revenue teams are aligned in a continuous cycle: marketing, sales, and service/success. Team Revenue FTW!
Anyway, a visual of a funnel implies that the number of leads decreases at a steady rate as the sales process progresses, as the leads get closer to a deal. HubSpot’s Sales Pipeline Guide says, “You may have a ton of prospects entering the pipeline — but the vast majority should drop off after the qualification stage. After prospects have passed the critical point, most should become customers.”
So that funnel visual illustrating a steady drop off in leads is incorrect, to start with. As much as we’d love to keep using it solely to help illustrate our metaphors about leaks and other liquid language (OK, and for SEO since many searchers haven’t heard of the death of the funnel yet) it just isn't accurate.
That’s just one of the issues with using a funnel-shaped lens to view your sales process.
For the subscription-based businesses who most commonly adopt RevOps, what happens after sales is just as important as the actions typically occurring before sales (where that ‘funnel’ is usually situated). So all teams who influence revenue — marketing, sales, and support — must be aligned in order to see any kind of success. Take a look at this great RevOps infographic from Clari to see what we’re talking about.
We’ll try our best to make these topics relevant to the sales teams’ contribution to revenue via their Hubspot sales funnel or whatever terminology you prefer! This alignment is another reason why the funnel visual is incorrect; it makes it seem like sales is the only part of the revenue cycle where leads come in at the top then some go out at the bottom as customers and that’s the end. It’s not true with most companies nowadays, especially XaaS companies!
Our BFF and promise-er of many a breakfast burrito, HubSpot’s Dan Tyre, says that the traditional sales funnel describes distinct stages from the first touch of a lead to a closed deal of a customer.
so much has changed in the modern sales process that the traditional funnel analogy is obsolete in 2020.
“The best part of the traditional sales funnel was that salespeople could move prospects through at their own pace based on their needs to close a deal. Today, customers are in control of the sales process. A modern buyer spends more time upfront researching a purchase before they engage with a salesperson, reducing the value of sharing information,” Dan says.
Salespeople now require different skills to sell to this buyer who is armed with an endless Google search worth of information about your product. If sales isn’t ready to help them reduce friction to buy at the exact moment this customer is ready to make a purchase, the lead could vanish abruptly without a trace. This is why HubSpot, Dan, we, and numerous other experts recommend thinking of your sales or revenue process not as a funnel, but as a flywheel.
A flywheel is a circular sales process with the customer in the middle, that leverages the inbound methodology, Dan says.
“This model lets your customers show the value that they have experienced to your prospects. Rather than having your sales team explain your product/service, it provides a credible third party with actual user experience to explain the value. A flywheel allows you to reduce SG&A costs, focus on the customer experience, and find better good fit customers. Using a flywheel, you can build a community or ecosystem of customers who help other customers. For a modern sales process, a flywheel is a better model than a sales funnel because it puts the prospect and customer at the epicenter of the process,” Dan says.
To learn how to build this flywheel, see Dan’s article on the evolution of HubSpot sales funnels.
So now that we understand that stopping the leaks in our HubSpot sales funnel means first understanding it is not a funnel at all, what’s the next step?
2. Realize why the SaaS HubSpot sales funnel, I mean flywheel, is special
If you found this blog searching for RevOps, there’s a good chance you’re a SaaS or XaaS company, the industries with a high adoption rate of RevOps. Understanding what makes the SaaS sales cycle unique is a key step in knowing where to look in order to find those leaks where potential sales are slipping through the cracks, as well as informing decisions on how to fix any broken processes.
“While businesses like e-commerce stores focus on generating new customer conversions through short-term marketing promotions, SaaS customer acquisition requires a much more delicate approach. Convincing someone to sign up for a new SaaS tool without building a relationship with them first is like asking someone to marry you on the first date — your chances are not too great and you're going to look desperate. Customers need to know how your tool will help them before they sign up, and demonstrating that value can be a long process.”
HubSpot goes on to illustrate how most SaaS sales cycles are nearly 3 month on average, which can be a long time to be chasing someone down to buy something, with a high potential of annoying them!
SaaS solutions can also have a higher overall cost since they involve an ongoing subscription payment, which is different than a one-time product purchase so the same sales strategies may not make sense. Using the same sales process as a one-and-done purchase would not make sense.
Privacy concerns, complexity of the tools, and too many options in the SaaS industry (which has exploded in the past 10 years) can also complicate the sales process compared to other types of companies.
All these barriers to acquiring customers mean you need to create a detailed map of your customer acquisition cycle so you can better understand all the steps potential customers need to take before they sign up for your product or service. Each of those steps could be a place where they are leaking, or exiting, your sales cycle. If you haven’t done that yet, now is the time! And it is a good first step to move towards the next item on the list. You can't identify leaks if you don’t know what your customer journey looks like to begin with.
3. Find out where your sales process is ‘leaking’
Let’s return for a second to the subject of building the flywheel. One step is to identify areas of force and friction in your customer-facing processes. Force moves the lead or customer closer to a new deal, friction slows the sales down and could prevent the sale altogether. Friction includes making the prospect jump through a lot of hoops before being ‘allowed’ to purchase.
Leaks in your sales process include the sources of friction mentioned above in the flywheel model. This could be any place in the customer journey where leads or customers decide to no longer continue towards a sale or a renewal.
One way to identify these leaks is what Funnelcake (software for lead and pipeline management) calls ‘pressure testing’ your sales pipeline, in their excellent guide for managing RevOps in a crisis.
Pressure testing your pipeline involves evaluating every deal, every sales channel, and every market segment for your product and/or service, to find out where the real risk lives in your process. Which of the ‘duct tape’ fixes you put into place and forgot about are going to hold, and where are those quick fixes going to burst to allow all leads and renewals to disappear from your pipeline?
Wouldn’t it be better to actually fix those leaks at this point from the ground up and not just slap on a temporary Band-Aid?
Yes, we are using our favorite gif again. No, we don’t get affiliate credit from Flex Tape. Though there’s an idea…
Funnelcake describes this pressure test in more detail and how to determine the risk of each deal, segment, and more. A good example of one risk to consider is that current economic changes may not affect who you sell to, but who they sell to, and result in a risk right now. For example, you may be a SaaS platform that sells to tech companies – but some of those tech companies service the retail, restaurant, or travel industries, which will increase your risks over time.
They also mention that while growth at the expense of profitability used to be the north star for venture-capital-backed companies, efficient growth is now more attractive to investors.
“What happens if you can’t raise money for 12-18 months because capital markets are risk averse? You drive for efficiency and profitability,” Funnelcake says.
Stopping the leaks in your funnel can create enormous improvements in efficiency. For an example to prove the point, they show the difference in two companies’ sales funnels is only 2-5% at each deal stage, but the difference in revenue potential between each company is nearly double (really, you need to download this guide now). Amazing!
Now that you have Funnelcake’s sage wisdom about pressure testing your pipeline to identify leaks, let’s tie in how to use HubSpot more specifically to help you.
4. Use HubSpot Sales Funnel tools and additional features to identify and fix those leaks the RevOps way
For a quick refresher in case you missed our ‘What is RevOps’ blog, the type of work RevOps does includes managing the tech stack, gaining real-time visibility into where revenue is leaking, and squeezing the most value out of every deal in the sales funnel, among other operational efficiency tactics.
Techtarget digs a bit deeper into how certain RevOps identifies tools that can send marketing leads to the right sales reps, clean up any leads from past marketing efforts, help sales enablement teams learn the exact places that sales reps need their assistance, and well as giving everyone analytics for forecasting and in retrospect to learn what is and isn’t working to generate sales and also to motivate sales reps.
HubSpot is your not-so-secret weapon for all these activities of identifying leaks and banishing them from existence.
What makes HubSpot sales funnel (flywheel!) management amazing?
In Hubspot CRM’s sales funnel tools, you can:
- Customize your deal stages and properties to match your sales process and give your team the info they need to close each deal. No IT department or excessive tech training needed. You can add, edit, or delete deal stages and properties until they match your sales process.
- Enjoy having an always up-to-date sales funnel, because the HubSpot CRM saves you time by populating most of the deal’s record info for you when you add new deals from a contact or company record.
- Drag and drop deals into the next stage of the sales funnel when you’re ready. It’s that simple.
- Get even more efficiency: Avoid any reps wasting their time figuring out what to do next. You can see where potential revenue is building up by looking at the Deals Board and Custom Views.
- Automate or personally schedule follow-up emails and phone calls to progress those deals along the sales funnel. Hubspot has a detailed timeline and alerts so every rep knows exactly what they need to do at all times.
- Spend more time selling and spend less time managing sales funnel tools. HubSpot CRM handles most of the work required to keep deals, tasks, and other sales metrics current to improve productivity and help your sales team reach their quotas.
- Track individual and sales team performance using your HubSpot sales dashboard to instantly view metrics such as the value of your sales funnel, the progress towards quotas, weekly sales activity trends, and the overall health of your sales pipeline.
Wrapping It Up
In short, now is the time to stop the leaks in your HubSpot sales funnel, which is actually a flywheel, using these four tactics:
- Stop thinking in terms of a funnel
- Realize more ways the SaaS HubSpot sales flywheel is special
- Find out where your sales process is ‘leaking’
- Use HubSpot Sales Funnel tools and additional features to fix those leaks
There’s a lot more we could write on this subject so we’ll cover more in future blogs on HubSpot sales funnels, pipelines, recurring revenue flywheels, unicorns, and more!
For more RevOps excitement, check out these articles for your viewing pleasure:
If you'd like to learn more about how to use RevOps to meet your revenue goals using HubSpot, click below to schedule a free call with us! No strings attached, promise.