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TODAY’S STORY
1 Nov
,
2022

Lubing up the sales funnel

Stoa Daily Challenge #13

Today's challenge holds a surprise for you. Will you step up to it and into the shoes of an entrepreneur? Or will you shy away from this call of duty?

Find out by playing the challenge here.

Trust me, completing it will need you to get out of your comfort zone. And your house.

Now, to today's issue.

_____

You have an excellent education product for school kids. Your elevator pitch to parents:

"Our product will make your child's base strong.

We use videos and animations to teach so that children like it and don't get distracted.

And it is much more interactive than the classroom. You don't even need school or teachers, where the classrooms are huge and your child doesn't get paid proper attention.

Our learning is customized according to the needs of your child.

Okay, now pay ₹50,000 for the app subscription."

As good as this sounds, to sell a large subscription in India, you have to resort to much more than just a plain and generic product pitch. Instead, you have to understand the needs and desires of your prospects better so you can finally convince them to buy your product.

And this is what Byju's Business Development Associates (BDAs) or as they call them — Counsellors — do, as they used to visit individual homes and convince parents about the company's offering.

"From the minute I walked into a pitch meeting, my job was to determine the spending capacity of these potential customers. From the make of the TV to the parents’ job profiles, I’d use every bit of information to position my pitch."

— Anonymous Byju's BDA, Source: The Ken

But the company has recently announced that they're firing over 5% of their staff.

This amounts to firing 2500 odd people over the next six months.

They will also be cutting down on marketing spends in India and focusing on global markets in the future.

As a part of the operational downsizing, the company is also planning to rely on inside sales: an approach in which sales are done from inside the office, as compared to having sales agents going out in the field and visiting homes to sell the product.

As you can imagine, inside sales is a lot more efficient when it comes to getting in touch with potential customers than having a sales agent visit prospects personally. But while the inside sales process can be scaled much better, it does come with its own downsides:

  • It is more impersonal
  • It is limited by the tool you're using to communicate
  • A virtual meeting doesn't build trust as much as an in-person interaction
  • An audio or a video call doesn't allow the sales agent to deeply prospect their target's financial situation and background like a home visit would
  • Consequently, it's harder to customize your pitch when you can only interact with your prospects online
  • Your prospects may not be good with the text medium or may not even be tech-savvy enough to use a custom online interface. You're limited to using apps and tools you know your target audience uses on a daily basis

If you're with me so far, I can feel the wheels now slowly turning inside your head. So, let me describe to you exactly why we are discussing this.

You see, businesses formalize the entire selling journey into what is called the "lead lifecycle."

In marketing-driven companies, the counterpart of the lead lifecycle is the marketing funnel. Both are kind of the same thing, really.

The lead lifecycle or the marketing funnel maps the journey of a prospect — right from the moment they officially enter your system by, say, dropping their contact details on the website, or you sourcing their phone number or email address from a third-party, or them joining your WhatsApp or Telegram group — to the point where they're now a paying customer.

The lifecycle is classified into stages basis the intent of the customer and what their level of engagement with the brand currently is.

Your job as a marketer: Make a prospect slide down this funnel with the least friction possible and convert them into a customer.

Naturally, as a part of optimizing this funnel, you're thinking about your prospects throughout the process of answering these questions:

1. What are the platforms they usually frequent on a day-to-day basis?

This will be the platform you will run your advertising on. These advertisements will lead them to your website. Your website, if persuasive enough, will make them drop their contact details on the lead form. Great, now you have a way to get in touch (pester) them.

Now the next question you'll ask is:

2. What contact details do I ask them to drop in my lead form?

For that, you will find out what apps or interfaces they use on a daily basis to interact with people? Is it phone calls, emails, SMS, plain old WhatsApp?You might find out that your prospects rarely open their emails but are quite active on WhatsApp or Instagram. Alternatively, can you invite them to a Telegram group or a Discord server instead of collecting their details on a lead form?

If you're selling via Instagram, Instagram DMs certainly seem like the lowest friction way possible to start a conversation with a prospect.

You can also think about if the product you're selling lend itself to a WhatsApp or Telegram group where you can put out updates, answer questions, and nurture your prospects collectively. If you can do that, you immediately make your process a lot more efficient. Now, your responses to individual queries are public and can help others make their decisions as well. As a bonus, these groups can also act like social proof: people can see and engage with others who are prospecting your product.

3. What are your prospects' current motivations, emotional drivers, and deep-rooted desires?

You will try to craft your pitch to account for all of these in order to be more persuasive. I know this sounds quite Machiavellian and manipulative but this is how edtech sales goes for the large part in a country like India. Speaking of the country...

4. What is the cultural background of your target demographic?

What languages are they comfortable interacting in?

Do they trust people easily?

What modes of interaction help them build trust better?

Is a WhatsApp text too impersonal? Does an email convey the right professional tone, or do you need a more personal touch?

Will they be more likely to respond over text than a phone call?

It's generally the case that the younger generation likes text over phone calls, especially for products that aren't very expensive. The older generation on the other hand might still prefer a phone call over a text message.

5. For synchronous communication like phone calls or video meetings, what time of the day are your prospects most likely to entertain you?

Is it in the morning, right after lunch, after office hours? To maximize efficiency, you will need to time them well.For example, if you're dealing with parents of school kids, you might want to call them around 4-5 in the evening, when they sit with their kids for their homework, when they're likely to be most receptive to your educational product.

6. What is the nature of your product? What is its perception in the market?

If you know this, you will know how to address your prospect's objections better. Education in India is seen as an aspirational product. But at the same time, parents are quite conservative when it comes to making educational product choices. Exam prep sells better than some alternative model of schooling that doesn't offer credentials or a degree. (Sigh!)

7. Is the product cheap or expensive?

The general rule of thumb is that the more expensive the product, the more your marketing strategy leans towards in-person sales, because that is the dominant mode of building trust with your customers.

8. How technically capable is the platform you're using at each stage of the lifecycle?

Do you need some documents or other official information from your prospects in order to seal the purchase? Is a KYC needed? Does the platform you're interacting on allow for easy sharing of documents? Or will you need the prospect to use a different platform to submit these documents?

In general, you need to ask: What is the call to action at each stage of the buying journey? Is the platform you're using conducive to that CTA?

Website chat conversations are untraceable once page visitors leave the website, so sales agents may lose valuable leads. As for sales phone calls, many customers consider them pushy and intrusive.

Email may not be an ideal choice either, as it is too formal and slow at collecting customer information.

WhatsApp for Business or Telegram channels can be good ways to nurture a lead and interact with them individually to answer their queries. These are also good warm ups to sales calls and setting up video meetings. Addtionally, they will allow people to casually share documents and payment links down the funnel. Even post-sales sharing of receipts and acknowledgments can be done on these apps.

In short, you need to technically evaluate the platform because technical hiccups can add tonnes of friction in the buying journey.

All of these factors, if not thought about carefully, can potentially add friction to your marketing funnel and extend your lead lifecycle.

In the case of Byju's, the company started with calls that converted into field visits or even inviting parents to the nearest Byju's centres. This made sense as they were selling a high-ticket-sized subscription in a low-trust society and the parents who were the chief decision-makers in this buying decision weren't very tech-savvy.

But now that they're already a pretty well-established brand — having sponsored some of the biggest sporting events in the world and hiring some of the most elite sportspersons and movie stars to feature in their ads — they're now looking to follow the inside sales strategy and bring the sales process online as much as possible.

A potential inside sales process for the company may look like the following:

  • Byju's sends app screens in a brochure format to parents on WhatsApp. Alternatively, it uses different marketing channels like e-commerce and quick-commerce apps to offer free educational content as a top-of-funnel marketing activity to increase leads.
  • Once the parents respond on a WhatsApp text, the sales agents may quickly get them on a phone call to pitch the merits of the product and help them download the app with a custom link sent over WhatsApp.
  • Post which, they can help onboard the parent on the app and them through it via a WhatsApp or Zoom video call. This is a good opportunity for the sales agent to interact with the kid and try to convince the parents that the kid can benefit from the subscription.
  • Currently, Byju's offers a 15-day trial period. So, the pressure is on the agent to convert the parent within 15 days to a paid subscription. For this, they may customize their approach and the interface they use to engage with the parent. If the agent feels that the parents are good in a vernacular language and not in English, they might try to convince them over a call versus a WhatsApp text. If they feel a face-to-face interaction is needed to build trust, they might choose video calls over audio to cement trust in the offering as people trust faces more than voices.
  • Once the parent is convinced, a payment link can be sent over WhatsApp itself or if the parent needs to take a loan to pay for the subscription, the agent can collect scanned copies of their documents over WhatsApp and sign them up for an EMI plan.

In summary,

while designing a sales funnel, you have to be deeply aware of all the little points of friction where prospecting customers drop out of the funnel and try to select the channels that can best minimize that friction.

Your decision to pick one channel or the other depends both on how your pitch is designed and what platforms your prospects use often; mostly the latter.

If you don't think about all these nuances, your conversion rate, i.e., the ration of total number of customers to total number of leads will be very low. And the higher the ratio is, the more efficient your funnel is in converting customers.

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