Healthy top of funnel is the key leading indicator of sales success

An effective go-to-market motion requires mastering the top of the funnel. Early on, most of your time as a founder is spent closing your first customers. Close rates should be high because these are usually people you already know, connections through investors, or rabid early customers dying for your solution.

But that doesn’t last forever. After your first 5-10 customers, you need a robust top-of-funnel strategy for consistent demand. If you spend all your time closing deals, one day you’ll look up to find an empty calendar and empty funnel. And if done right, your top of funnel activities can make closing deals easier and faster.

Top of funnel disaster

The quantity and quality of leads entering the rest of your GTM process is the primary reason why companies succeed or fail. High volumes of high quality leads that are in your target ideal customer profile lead to success–more closed opportunities at favorable pricing and higher retention (and growth, for land-and-expand sales motions).

Low volumes result in higher stress and more mistakes. Reps or founders are reluctant to really listen and disqualify a lead–because if they do they’d have to acknowledge they don’t have any pipeline left. It’s hard to be firm in your sales process if you know that if you screw this lead up, you don’t have another one. Even if the leads are high quality, you can run into real trouble. Including not knowing they are high quality because you don’t have any to compare.

Low volume is particularly dangerous when you are hiring salespeople. It will take much longer for a salesperson to become proficient in selling your product if they don’t get repetitions to practice. And it will take you longer to figure out if they are a good performer or a poor performer.

Low quality can be just as bad–and even worse at high volumes. There are many ways a lead can be low quality. Of course, they can simply be unqualified–a college student looking to do research, or a company looking for something you don’t have. But the ones on the margins can be worse. The wrong role at the right company. The right company but without budget, pain or urgency. Or the right person, right company, but on a hunt for the cheapest solution.

Here are 5 key top-of-funnel considerations for building an integrated demand generation engine that leads to high margin, closed-won deals.

1. Define Your Brand Identity

The top of the marketing funnel is where you communicate with the most people of anywhere in your GTM process. There is no better place to begin to articulate your brand identity–what you stand for and why you do what you do. This permeates all other GTM activity, and it should even permeate your product and culture as well. It’s worth getting it right early, and revisiting from time to time as your company evolves. This is how you differentiate. Do it well from the very top of the funnel, and you’ll close more deals at the bottom. You’ll shift from competing on a feature-by-feature basis to having leads already “Sold” on your value when they show up on your doorstep, having bought into your brand identity.

2. Leverage SEM, Social and Display Advertising

Search engine marketing and display advertising are key ways to drive leads to your front door. SEM reaches people who know they have a problem and are looking for solutions. Social advertising can create demand–everyone spends time on Facebook, LinkedIn and other networks. By reaching prospects where they are with punchy media you can make them aware both that they have a pain and that you solve it. Display can also create awareness, and uniquely display can re-engage people who visited your site, but did not convert, which can be key in driving down your cost of acquisition. 

3. In Person and Virtual Events

In person events like conferences, dinners, golf outings, and online events like webinars can unlock growth. In person events are especially effective for new products, especially in new markets. By attending conferences (you don’t have to sponsor or exhibit!) you can make connections with prospective customers and partners. If the market is young, establishing yourself and your company as a thought leader is much easier than in an established industry, and conferences are the place to build those relationships. Between conferences you can hold your own virtual events or participate in other people’s webinars. Any event creates a sense of urgency because it happens at a certain time; cold outreach around events can dramatically increase impact.

4. Product Led Growth

Product led growth (PLG) is where your product leads to more usage. For example, users use Dropbox to send files–and the recipient then knows about Dropbox, and many recipients become customers, sending more emails. This is a “growth loop”. Hellosign or Docusign experienced similar growth loops, where the very nature of existing users using the product led more users to discover it. Unlike events, product led growth can be an evergreen source of growth–build once, and then watch as users act in their self interest to bring more users to your platform. This works well when you have a use case that leads to organic product growth, but be careful not to force it–if your application is fundamentally a “single player” experience, just adding an invite feature won’t lead to growth on its own. Growth loops or PLG aren’t restricted to sharing: for example, Canva’s extensive library of templates generates a lot of free SEO traffic, so by signing up more users who create more templates, Canva has created a PLG growth loop.

5. Partnerships

Partnerships can be effective to drive growth, though most early stage partnerships underdeliver. Partnerships can be as simple as an informal referral arrangement, where a partner sends you qualified leads (think of the real estate agent who refers clients who are closing on a home to a mortgage broker). Be aware of where you exist in the value chain and be realistic in your expectations. Risks to avoid include separating yourself from direct customer interaction too early, giving up control of pricing or sales, exclusivity arrangements, and complex deals with ambiguous goals. Some partnerships can be company-making, but these are exceptionally rare. Ensure you have metrics built into your partnerships, or the investment by you is as low as possible so that if the partnership doesn’t work, you haven’t lost time or money. Preferably, do both. 

You don’t need to be great at or even try every top of funnel strategy. You just need one to work consistently, and preferably one or two more as a backup or experiment in case things change (e.g., Google changes the algorithm, Facebook ads get expensive, etc.). Though many of these tools may not work in your market, some might, and finding the one that does could be a company-making unlock.

Each top of funnel area requires specific expertise. Experiment. If you can, hire experts to make sure you run experiments successfully. Vet them and then trust them, but verify and take responsibility for the results. A successful GTM process requires success in the marketing top of funnel. 

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