“If money’s not a problem, then you have no problem.” In many ways, yes, there’s a lot of truth behind this statement because you can continue to spend and spend to make up for lackluster performance by team members. In theory, the more money you push in, the more sales you’ll push out. How much is too much? And how is it impacting your bottom line? The truth is, there’s not enough money in the world that can fix a conversion problem.
The sales funnel goes from traffic to lead, from lead to appointment, and appointment to sale.
If your conversation rates on the latter half of the funnel are poor and you’re not holding your team accountable for their performance, you’ll end up dumping more and more into the top half in an attempt to fix a broken system.
Let’s break this down. Consider these two scenarios: one company is converting at a healthy average based on 2023 industry benchmarks, and the other relies on inflated traffic and lead numbers, converting at a below-average rate.
Scenario #1 with national benchmark conversion rates and online contribution:
- Online Contribution 47%
- Traffic to Lead 1.0%
- Lead to Appointment 41%
- Appointment to Sale 20%
Scenario #2 with below-average conversion rates and above-average reliance on online contribution:
- Online Contribution 52%
- Traffic to Lead 1.0%
- Lead to Appointment 20%
- Appointment to Sale 10%
Now, let’s put some dollars behind these two different scenarios. Say your cost-per-lead is $100, and you already have 100 leads for the month. You’ve spent $10,000 already. In scenario #1, with a healthy funnel, you will only need to spend $1,000 more to achieve your goal. In scenario #2, you’re looking at an additional $40,000 to achieve your goal.
Which amount would you rather spend?
If money isn’t a problem, but your leadership is… then money is a problem.
Your poor leadership and inability to hold your team accountable for underperforming and lack of improvement shouldn’t be costing your company thousands of dollars, but it is. We proved that in the scenarios above. If we hold our team accountable for improved conversion rates, our need for additional funds to make up the difference drops significantly.
How is your leadership impacting this, and more importantly, how can you stop the cycle?
Stop blaming your marketing team for leads that die in the hands of your sales team.
“We need more leads. We need more traffic!” Or do we? The more you ask of your marketing team without properly assessing your sales funnel, the more you’re asking your company to blindly spend money to account for your shortcomings. We learned this through our scenario practice above.
As leaders, before running to your marketers with the alarms blasting, consider the following:
- How many leads do we have?
- How many leads do we need?
- Are we converting to appointments? Enough?
- How is our follow-up?
- Are we asking for the sale?
- In a successful month, what was different?
Then, go to your marketing leader and talk numbers. Look at the data, evaluate the ads, provide feedback from customer objections, and audit the website. Together, build a plan that not only budgets for what is needed at the top but also addresses opportunities we have once a lead comes in.
Marketers, you’re not perfect, either.
You need to step up, too. Stop taking simple data points or comments from other team members as gospel. It’s up to you to dig in, analyze, know your data, and be able to either tell the story of what’s really happening or get ahead of potential issues by properly assessing performance.
I cannot tell you how many times I receive an email from a builder partner that reads something like this: “Sales are saying things are slow…leads and traffic are down. We need to fix this ASAP! Can we run more ads for this community?” Then, once we actually look at the data, we find that the opposite is true. Traffic is up, and leads are hitting goal, but appointments aren’t converting to sales.
Now, in some cases, yes, we do need more traffic, but more often than not, the homework hasn’t been done, and the numbers haven't been analyzed. When someone comes into your office or to your desk ringing an alarm, it’s up to you to cut through the noise and evaluate the situation with data. Doing the homework, analyzing, and storytelling separates a good marketer from a great one.
When people are held accountable, so are the results.
Equally as often as the email example above, I get asked, “How can we make sure we’re capturing every opportunity?” when the opportunity is often right in front of them but lost and forgotten.
You seize the opportunity by making sure every dollar spent and every lead generated is cared for in a way that drives results. You train your team, review numbers, and dig deep every single day. Regular (at least quarterly) and thoughtful post-mortem reviews of team efforts, performance, and successes help drive positive and collaborative outcomes and allow your team to unlock and, better yet, reach their potential. When this occurs, conversion and contribution rates increase, not because they have to, but because your people are performing at a higher level. Double-win, these results add to your company’s bottom line.
It’s time to make a change.
Accountability and collaboration need to be operational non-negotiables in order for change to happen. Just as in the sales funnel, it starts at the top. Hold your team accountable for their performance and their improvement. Problems need to be discussed and evaluated closely as a group in order to generate actionable and realistic holistic solutions. Most importantly, leaders need to set the tone by setting the bar. Lead by example, do the work, and dig in alongside your team. Then, pass the baton of responsibility when appropriate. Allow them the space to grow, learn, make mistakes, and level up. The best leaders are the ones who are replaceable. Specifically, they can be replaced by someone on their team because their team has been coached, trusted, valued, and challenged. A carefully designed team that is held accountable and led by example will effectively move mountains for an organization, not just needles.
