Before You Spend More on Marketing, Find the Bottleneck
I've made this mistake before. Things aren't moving fast enough, so the first thought is, "We need more leads." So you spend more money on marketing, add another list, try another channel, and hope that fixes the problem.
But sometimes, more leads aren't what you need. Sometimes the problem isn't marketing at all.
If you're successfully contacting most of the leads coming in but very few of those conversations are turning into appointments or contracts, I'd start looking at what happens after the lead comes in.
That's the difference between a marketing problem and a sales or conversion problem. And it's an important distinction because you can spend a lot of money trying to fix one with the other.
That's why I like to break the numbers down instead of looking at the business as one big number. How much are we spending on each marketing channel? How many leads is each one producing? What's our contact rate? How many appointments are we setting? And then, how many of those appointments are actually turning into contracts?
Let's say you generate 20 leads and set 4 appointments. That's one appointment for every five leads.
But now let's take it one step further: 20 leads → 4 appointments → 0 contracts.
Now we have a very different problem. Buying another 20 leads might give us another four appointments, but if those appointments aren't converting, we're just spending more money to create more opportunities that aren't turning into deals.
That's why I don't want to immediately assume we need more leads. I want to know where the drop-off is.
If your contact rate is low, I'd look at the marketing and the lead source. If you're talking to plenty of people but not setting appointments, I'd look at the qualification and the conversation. If you're setting appointments but not getting contracts, then I'd want to know what's happening during those appointments.
Those are three completely different problems, and they require three completely different solutions.
That's really what I want the numbers to tell me. I don't need a spreadsheet with 50 different KPIs that nobody looks at. I want a few numbers that help me understand what's actually happening inside the acquisition business.
Because once you know where the bottleneck is, you can make a much better decision about what needs to change.
Maybe the marketing really is the problem. Maybe you need a better lead source. Maybe your qualification process needs work. Maybe you're having plenty of seller conversations but not converting those conversations into appointments. Or maybe you're setting appointments consistently, but something is happening between the appointment and the contract.
Those situations can look very similar when you're only looking at the number of deals you're closing. But they're not the same problem.
That's why I think one of the biggest mistakes you can make is trying to solve every revenue problem by buying more leads.
More leads can help when you have a lead-generation problem. But if your bottleneck is conversion, pouring more leads into the top of the funnel may just make the business more expensive without making it more effective.
Before adding another marketing channel or increasing your budget, take a look at what's already happening.
Where are your leads actually getting stuck?
That's the number I'd want to understand first.