The Funnel is actually The Tube - Part 2
This is a follow up on last week’s The Funnel is actually The Tube- Part 1 with how maximize revenue from The Tube.
Build from the base upwards
For early stage tech companies in the biopharma industry, it’s best to learn how to sell first before marketing. Finding not only product-market fit, but also product-sales fit is essential for more consistent long-term revenue growth. At The Abstract, we recommend having 2-3 AEs selling regularly alongside the Founders before considering Top-of-Tube lead generation. This is because the core team needs to not only know how to sell well, but also why customers tell you they want to buy your product and who tends to actually drive the deal. This “why” will become the core of what Marketing will eventually take advantage of: activating new leads most efficiently with confidence in the target personas and creating content with perspectives they actually want to hear about.
Success rates and ASP
If you’re building from Bottom-of-Tube upward, focus should be on systematically increasing success rates at each stage moving up The Tube. At the very bottom – deals won! – your win rates should be quite high at over 30%. Plus the Average Selling Price (ASP) should be fairly significant. After all, we are in a small but well-capitalized market. There aren’t an infinite number of deals, but those deals should be large and differentiated enough to prove there is a strong business model to what you’re selling. If win rates are not above 30% or the ASP is quite small, the team needs to do some re-strategizing before moving upward on optimizing the Mid-Tube qualification process by:
Reconsidering the primary Buyer you’re pursuing
Adjusting the Sales process
Or considering a product pivot if you’re getting feedback pushing you in a particular direction that they would value more (i.e. pay more money for or have a greater urgency to buy)
Mid-Tube qualification should be high as well to confirm that you’ve identified the right type of folks to sell to. Sales qualification around 30-40% is a strong indicator that your target personas are on point: they have a need your product can address, a timeline established to address the problem, and an ability to influence or directly authorize a purchase.
With this Mid-Tube success, then you’re ready to start generating leads Top-of-Tube with marketing tactics. You’ll be able to establish some high-return marketing programs highly targeted at the leads most aligned with your product offering. The success rates of The Tube mean you’ll be able to engage the right contacts with a lean and focused marketing practice, wasting little extra energy as you do.
As always, if your team wants support in increasing these rates or you’re ready to stand up Top-of-Tube, reach out: kate@theabstract.group
