How would you feel if when trying to get a problem solved you feel the company that could help you is not interested in your needs or is not responsive to their inquiries?
The world is rapidly changing and so are our buying habits. As technology is pushing humans to have what we want in an instant and as our brains are getting used to this new reality, it is only natural that our expectations when buying a product or service moves in that convenient direction too. This is perhaps obviously true for B2C businesses, but as important in B2B or other business models.
In other words, we don´t want any friction when we are looking to purchase what we need. As we can watch a movie with almost no friction anytime anywhere, or buy from Amazon evermore easily and quickly; our marketing and sales processes must evolve in that direction.
Why? Well, the data speaks for itself:
From any angle you look at it, by reducing friction and improving the customer experience, businesses can increase their chances of closing deals and retaining customers.
So, what is friction? Friction can be defined as any obstacle that prevents a potential customer from completing a purchase. For example, in a traditional business, friction in the marketing and sales process can take the form of:
For e-commerce businesses additional friction sources can be:
All these can cause frustration to our customers in the best case, but many times end up losing a deal, thus reducing conversion rates, increasing the customer acquisition cost (CAC), and impacting our bottom line.
Moreover, many times these pitfalls will happen for bottom-of-the-funnel (BOFU) deals –typically highly motivated leads to make a purchase. We have already spent a lot of acquisition resources on these deals as they have walked their purchasing journey and are almost ready to close. When we lose a BOFU deal because of friction, we do not just have an opportunity cost, but also a lot of direct costs wasted.
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On the other hand, if we reduce friction in our marketing and sales process and any obstacles that may prevent a customer from making a purchase, we will have higher conversion rates and sales efficiency, lower customer acquisition costs, increased customer satisfaction, increase customer retention, accelerate our growth flywheel, increase brand trust, among many other benefits that impact directly our profit. And there’s better news, as improvements compound to the result.
For example, assume your current sales and marketing team could reduce friction and hence increase 50% their conversion rate and 50% their retention rate. This will generate earnings after customer acquisition costs of +208%.
| Current | New | ||
| Leads | 100 | 100 | |
| Average sale | $500 | $500 | |
| Conversion rate | 5% | 7.5% | +50% |
| Closed deals | 5 | 7.5 | |
| Revenue | $2,500 | $3,750 | |
| Retention rate | 10% | 15% | +50% |
| Retention revenue | $250 | $563 | |
| Total revenue | $2,750 | $4,313 | |
| Sales & marketing cost | $2,000 | $2,000 | |
| Customer acquisition cost (CAC) | $400 | $267 | |
| Earnings after CAC | $750 | $2,313 | +208% |
It is imperative in today’s fast-paced, high-expectation, convenience-centered environment to thrive to be the best you can be, not once but continuously. Some ideas to get started include the following:
These are all strategies to increase sales. It is an investment that will certainly reduce risks for your business to being the worst out there compared to your competition, but also render quick results in your revenue and profit.
It might seem like a mouthful, but it can be easier than you think with the right tools. As the old passage reads, you can’t improve what you don’t measure. So, a great first step is to measure. Everything starts with a good software platform, as HubSpot CRM, that can enable you to achieve most of these goals. Once you have that, then you always need to keep in mind the three pillars of change management:
If you only strengthen some of these pillars, your building will sooner or later collapse.
In conclusion, reducing friction in the marketing and sales process is crucial for businesses that want to maximize conversions and minimize costs. By doing so, businesses can improve their bottom line, increase customer satisfaction, and build a positive reputation in the marketplace.
References:
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HubSpot: "The Ultimate List of Marketing Statistics for 2021." Retrieved from: https://www.hubspot.com/marketing-statistics
Salesforce: "State of the Connected Customer." Retrieved from: https://www.salesforce.com/content/dam/web/en_us/www/documents/e-books/state-of-the-connected-customer-second-edition.pdf
Baymard Institute: "Cart Abandonment Rate Statistics." Retrieved from: https://baymard.com/lists/cart-abandonment-rate
Aberdeen Group: "Customer Experience 2016: Personalization Builds Loyalty." Retrieved from: https://www.aberdeen.com/research/13707/13707-rr-customer-experience-personalization/content.aspx