Bumped on a new tide - Growth loops!
And, suddenly "funnels" feel like a '80s kid crush on sales. So, what's this buzz word Growth loops all about? In a single word – Compounding!
Why Growth? "build & they will come" doesn't work anymore!
Growth is zero-percent organic in today's #hashtag-crazy world. The concept of "build, and it will sell for itself" doesn't apply in a overtly single serving generation of millennials and Gen-Z. "Word of mouth" simply does not happen overnight, and yes - its too a growth loop, perhaps the immaculate version how true engagement works for brands. A very few products tend to pull in crowds, and it happens rarely. Pushy sales people did get a strong slap on their face with new-gen viral mediums – Not every product/services align with "pull strategy". Time to forgo linear funnels, perhaps?
In reality, funnels don't look as simple as they always have been perceived by designers! The hardest work goes down the end like a pipeline. And, it takes a constant "push" to acheive conversion! Whether its TOFU, or BOFU, sales conversion doesn't happen until engagments reach a "critical mass". Sales are hard to realize without client objections. Here's the big question being in sales – Who has the upper hand in conversation? Sales is not about showing off your brass balls! (Ref. Glengarry Ross). Getting the ball rolling is determined by a multitude of experiences that just won’t fit comfortably into either a funnel or loop. No customer buys from sales representatives who waste their time. Engage in dialogue, not debate or intimidation, early on a conversation. Most prospects seek engagement to get their credible answers for their thought provoking problems, and meeting them face-to-face to understand their business needs and wants – simply put, explain what's in it for them.
“Life's change. Growth's optional. Choose wisely.” Karen Clark
One example is how companies engage sales loops with content loops (Ex. Hubspot), user generated content loops (Ex. Pintrest/Instagram) and with partner programs (You become a partner/franchise and resell services). Companies world-wide adopt programs to onboard small startups, medium-segment partners and make them sell products, with a focus on generating them more visibility. Many high ticket sales usually don't see traction over factors like price vs value which often disconnects the engagement.
Do traditional funnels suck?
Audience saturation & buyer disconnect are common when you fail to really "connect with buyers" or, you aren’t really targeted at that point of leverage. Identifying sales touchpoints that engage directly and builds an impact is your point of leverage. In the grand scheme of things, its hard to understand how to identify areas that drive numbers by tweaking few steps in the first place.
Why are funnels considered out-dated?
- Islands of information. Funnels can create strategic data repos. There is lack of sync between product, marketing, & monetization strategy.
- Marketing owns acquisition, product owns retention. Since each strategies work independently, they end up optimizing their own goals.
- Funnels grow linear. The more you feed, the more conversions which is not sustainable in the long run. More the burn, the less sustainable is the venture.
Most SaaS business follow sales funnels religiously and begin to perceive the whole business as a funnel. Dave McClure wrote in-length about AARRR Models – acquisition, activation, retention, referral, revenue. The traditional layman narrative is "If you drive X leads at the top, you get Y% conversion out the bottom". But, a critical challenge awaits – The more mud you sift through, longer the pipelines, longer the learning cycle, and such effects hammers down the sales! With growth loops, whatever comes from BoFU, can be reinvested to generate back to the top for more sales.
The goal is to create a self-sustaining feedback to scale product-fit. This loop dynamic will help teams build more traction. Talking re-investment, its more to like "pay-it-foward". While companies are busy optimizing funnels, growth loops encourages sales teams to think upselling its basic $49/month customer to upgrade to a $149/month package. "If they pay, don't forget them". Loops help you engage existing customers, and driving engagement will make them feel not be forgotten for good. Understanding growth loops is not hard. As a sales representative, you need to find your relevance where you fit in loop metrics and help your prospects invest wisely. If you are a sales manager, figure ways to control or influence the dynamics - Engage with who you are selling the product/service, and garner relevance with who are already your customers.
Loops are closed systems where inputs through any process generates more of an output that can be reinvested in the input. When it's growth focus on funnels, loops, and conversion. When it's all about retention focus on cohorts and regressions. The most supportive families, & productive teams are looped.
One of man’s greatest inventions: compound interest - Einstein
Most sales teams engage in funnel optimization as tweaks to defeat an exisiting system, to put it in simple words – like buying backlinks to make it #1 in search. But, what comes easy doesn't stay for too long, and loses purpose! Optimizing sales funnels are a siloed approach, and aren't always the answer to driving more steam to sales. Data-driven value creation takes time, and "short-term, dopamine-driven" results to fuel the engagement, which often doesn't work!
Loops are powerful. They provide compounding growth. You reinvest the output of one cycle into the next cycle, and is perhaps the best way to mix how your product, channel, & monetization model work together in a single system rather than silos.
Investing in tools.
Sometimes its wise to invest in tools that help us better understand what motivates people to buy. Predict user intent and start optimizing ROI of every user journey. Tools like ClearBrain works on tracking user-intent, MadKudu - lead scoring, and Amplitude works with analytics. Also, tools like HotJar, MixPanel help understand your visitors better. If you're looking to automate sales, try OpenBrace.
What's wrong with Growth loops?
Network effects, perhaps! Loops generally depend on engagement of users in its platform. Simply said - Growth is a team effort! You grow only if the balls get rolling. Who you engage with matters a lot in sales. If your product helps HR managers, you don't spend money pitching to those in Marketing/Finance, you invest resources building dynamics within the HR network. There's more to focus about investing time with HR recruiters, HCM managers, Atrrition Handlers, Employee Auditors, Payroll team, In-house CIOs, rather than spend time with Marketing/Finance leads. Loops are more about domain consistency and who buys your product largely is influenced by competitors within same niches. Niches matter!
Growth loops thread a fine line between technical, data-oriented versus strategy – being quantitative, but also qualitative! Customer engagement helps strengthen and balance loops, and chances are with constant churn your engagement gets involuntarily amplified. There are many influences to growth – timing, target audience, the model. With Growth loops the focus is more on bonding with the client's expectations, feature requests and "ease of consumption". Growth loops help build trust and influence within the network – something quite difficult to organically derive. Keep calm and refactor sales strategy to drive feedback!
Closing the loop
Talking about how to re-invest in sales, build complementing N-sided buyer/seller communities that mutually benefit from trade. Motivate sales team. Motivate brokers or sales agents. Incentivice them and however hard to actualize, try investing for better! Sales is not a job, its an investment. Motivate customers. Offer them crazy and best discounts and referral programs. Give them more what you can offer. Build connects that transfer strategies. Invest back in your community to build strong value-chain. Right from onboarding experience to the refunds, if your process is seamless, a one-time customers convert to retainers.
Keep hustling folks.