The inbound sales (and marketing) model explained

Saturday, November 14, 2015

Inbound-sales-model-by-Antti-Pietila..jpg

Inbound sales and marketing operation is quite different from your outbound operation. I’ll first concentrate on giving you the big picture of how the system works, but will show you how to mix inbound and outbound successfully later on this post.

The inbound operation is a funnel, so familiar with your sales funnel, but it’s actually quite much wider and longer than your usual one. Before a customer became a lead, you might have nurtured her months.

Inbound is not just different on the customer acquisition side. If you acquire customer via inbound channels, the relationship is likely to progress differently. If you are using outbound tactics your sales costs are likely to be high. Thus you have to aim for large initial purchase to cover customer acquisition costs, at least to some extend. But it does not stop on customer acquisition. To maximize the value of the relationship, your key account manager is calling customer on preset interval trying to call often enough not to miss any opportunities, but not too often that the customer does not get angry. It’s difficult to get timing right. Thus account management tends to be expensive and not very effective.

In inbound you are trying to help customer take small steps. Something she is comfortable with. You are also likely to aim for smaller initial sale. You have better chances of getting the customer that way. And as you have far lower acquisition costs, you can afford it. But you also have lower costs on the account management side. You know when a customer is getting active with your content indicating need. So your account manager is not calling on schedule blind, she is calling because the customer has shown interest.

So you have to work hard to grow the customer, when in outbound you tried to get large initial purchase to cover sales costs upfront. This changes your sales dynamics quite a lot. Thus we have another flipped funnel completing a time glass shape. It’s good to notice, that this does not mean inbound customers are likely to buy smaller or less, but that you maximise sales by allowing customers to progress in smaller steps. This leads to more customers and ultimately higher sales per customer. You end up winning in two fronts.

Let’s take a quick tour into the model before digging deeper:

On the left side of the hour glass, you’ll find your Customer Acquisition funnel. Further left you’ll find where you are attracting new visitors to your funnel.

In the middle is the crucial step of Conversion where a lead becomes a customer. It’s a psychologically a big step for both parties. This is where the customer gives you a change by trying you out. For online startups, this could be when the customer signs up for a free edition to become a user. So it does not have to be a paying customer.

On the right, you’ll find your Customer Success operation. This is where you onboard a new customer and help her get value out of your product. You essentially grow your customer from a newbie to a loyal advocate. Finally you’ll see an arrow going back to the acquisition funnel. This is your Viral Loop when customers are referring you to new customers.

On the bottom, you’ll find possible operations. Inbound is usually Content Marketing driven operation, so you’ll need an operation that creates content, I call it Content Factory. If customers move left to right, then content moves from right to left. You create an ebook, split it to blog posts and promote those blog posts to social media.

Depending of your business, you may need Inside Sales and Customer Success Team operations to convert leads to customers, and help customers get results. If Customer Success term is unfamiliar to you, it’s proactive customer support with main focus on helping customers to get value out of your product(s), not just waiting for customer to call when they have a problem. Inside Sales refer to sales people who do not travel to customers.

If you are selling complicated or big ticket items, you may have a field sales operation hence Corporate and/or Enterprise Sales.

If you are in a pure no-touch online business, you may not need sales or even support.

And finally if you are into Growth Hacking, that’s an operation that goes all the way. A growth hacking team tries to optimize the whole customer journey developing e.g. onboarding and  customer experience.

If you wondering what the high of the hourglass means, it is the number of customer at each step. On the left, your funnel is likely to be fat from the left where many enter the funnel, but relatively few converts to a customer. On the right side, customers progress quickly through initial steps and pile up on the right as loyal customer, unless of course you have lost them earlier. On the right side, the height of the shape also represents the value of a customer.

Your game as a entrepreneur, marketer or salesman is to attract as many visitors as possible to your inbound system, keep and move as many as possible one step at the time towards right. And finally you end up piling up loyal customer base on the right.

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Antti Pietilä

Written by Antti Pietilä

Antti is the founder and CEO at Loyalistic (Simple Content Marketing Software for B2B Companies) who loves to help SaaS-companies to grow at Software Entrepreneurs (@ohjelmisto_ry) and cycle. Say hello to him anytime @anttipietila.