When you look at different marketing strategies and departments, there are usually common moving parts and with that, some areas cause marketing departments to stumble. These challenges pose risk to dragging out growth and will leave most businesses stuck in a pickle when they should be scaling. Today, we’ll look through five of the most common problems companies face, plus a bonus issue that can throw even the best-laid plans off track.
Bad Revenue Retention (Gross/Net)
The heart of this issue usually lies in product-market fit. If you’re losing customers faster than you can acquire them, then it’s most likely because your product isn’t solving the right problems – or isn’t doing it well enough. The key here is improving customer understanding and aligning product development with customer needs. Your marketing can be product-focused and with that, it’ll play a key role in translating those needs into great features and experiences that keep customers coming back.
Declining Expansion Rates
Once a customer is on board, you don’t want them to just use one feature or stick to one plan. So, the fix here is to expand their usage through cross-selling, upselling, and adding more seats should be your go-to path to growth. However, many companies miss out on this opportunity. This problem boils down to ineffective customer marketing strategies. To make sure you’re making the most of expansion, you need to focus on the existing customer buyer journey and nurturing your existing customers with offers that will take their experience to the next level. Try implementing pricing strategies too which can help further buy-ins.
High Customer Acquisition Cost (CAC) Payback Periods
A sneaky pitfall is exactly what CAC is. When it becomes a bad habit of paying for customers more than they spend with you, you’ll have a wacked out revenue model. This problem is often a symptom of an inefficient Go-To-Market strategy. If you review your processes for this, you might realize you’re targeting the wrong customers or that you have leaky targeting. The quickest fix is to optimize each stage of the funnel which can ultimately lead to faster CAC payback and a healthier business overall.
Low Lead-to-MQL Rates
If this is an issue that you have, your nurture programs need to step up. You may be getting leads, but if they stop at one specific stage in the funnel, something is messed up. You need to fix this, you need to educate each prospect better at each stage. This will help users or potential customers to understand your value proposition and why it’s a right fit for them. Nurturing programs which are top tier will increase your lead-to-MQL rate by warming prospects up to conversion.
Poor Lead Quality
You might be getting leads, but maybe they’re not converting. This can correspond to the issue mentioned above, but the problem usually stems from poor targeting. You’ll be focused on the wrong audience or something else. Reassessing your ideal customer profile and refining your targeting efforts can lead to higher-quality leads that convert at a higher rate. Quality over quantity is the name of the game here.
Bonus: Not Enough Traffic or Leads
You can update and optimize all of your funnels, operations, workflows, nurturing systems, EVERYTHING in the business. However, none of this means a thing if you don’t have enough leads to work with. A lot of this is just an issue regarding not investing into demand generation. If your marketing budget isn’t fit to driving more awareness and pushing traffic to your top of the funnel, then you’ll fail at generating the volume needed to hit your goals.
Allocating more resources to activities that drive net-new pipeline – whether through paid campaigns, content marketing, or other awareness strategies – is crucial.
Takeaways
The key takeaway from this should be that you need to begin with the fundamentals: ensure you’re bringing in the right people and then keeping them engaged. From there, you can make sure to optimize each stage of your marketing and sales funnel, improving retention, expansion, and conversion rates while keeping costs down.
