Salmons die after reproducing. Leads survive after creating new demand.
Most fish spawn several times over their lifetime. Salmon doesn’t: a salmon’s life cycle ends when its offsprings’ life cycle begins, soon after its migration. Similarly, if you see each customer purchasing from you as a fish laying eggs, you will have customers buying many times before using up their lifetime value, and some salmon customers disappearing after only one purchase. Many of us might consider the latter to have much less lifetime value.
For B2C markets, it’s fine to say that one-time customers are of little value if each purchase doesn’t differ much in revenue. However, if you are working in B2B, you need to look closer. Are the one-time customers individual decision makers or organizations? Can your lead management tool identify the reappearance of a decision maker even if he no longer belongs to an existing company account? Does your lead have to start over his engagement funnel whenever he begins a new sales cycle at another company?
These decision makers, even when changing jobs, should be treated as long-known leads. Unfortunately, automation tools can’t recognize such changes and thus record these returning leads as raw leads. This is a waste of time and money, and it harms new sales opportunities.
Buyers are migrating from companies to companies
In the past, it was common that you have a job for over 15 years, and continue to buy from the same vendors all that time. Vendors then had a customer base to keep although it was harder to attract new customers without generating new market demand (those who were new customers to you might have been familiar customers of your rivals). Most companies, with the same long-lasting decision makers, were loyal to their vendors.
Now, employees are also heading towards the free agent trend by not committing to any specific company, for a variety of reasons from seeking for new opportunities to avoiding effects caused by company restructuring. In fact, an average person is predicted to change jobs eleven times during his or her career. Even key roles like the C-suite change their employment every few years. These individuals don’t really belong to any organization. They work for and contribute to organizations, but don’t necessarily make the same decision and stick with it as their predecessors did.
It’s even more relevant if we take into account that B2B technology purchases are becoming more consumerized than ever. Subscriptions get as short as a month, value of each purchase get as low as a manager’s discretionary budget, and decisions can be made without holding a series of meetings. Any mid-level or high-level personnel can be a potential buyer, and any new hire for such positions can too.
B2B customers are not newborn salmon
In fact, customers are never salmon if you clearly identify buyers as individuals. Individual buyers always have new demand for their favorite products, no matter which company they work for. For example, a VP of Marketing selected a vendor of email automation software for his company. He renewed the purchase whenever his quarterly subscription ended to continue using the product. At a point in time, he moved to another company and developed a need to use the same product.
Did he start a new buying cycle as a new person just because he changed his working identity (employee of another company)? If you think so, then the VP must have been a newborn salmon without any memory of previous purchases and had to spend time to mature. Those conclusions are all wrong. The VP was a mature lead, and he remembered the vendors he used to work with and that influenced his final decision.
The occurrence is better demonstrated as he continued his own buying cycle as an evangelist at the new company – the mother fish didn’t die after migrating, it just spawned at another place.
Why is it important not to treat B2B customers as salmon
1. Avoid wasting time on unnecessary lead nurturing process
Just as newborn salmons take time to mature and nutrients to grow, raw leads cost you time, money and effort to nurture. If your database cannot distinguish job changing leads from raw leads, you will spend more than necessary to get a worse result. Why is it worse….
2. Improve customer satisfaction by remembering their details
We’ve always seen automation software providers reminding us how important it is to remember leads’ names, locations or behaviors in order to personalize their nurturing paths. Those who used to be your buyers won’t be happy if you greet them with emails meant for strangers or send them elementary material to generate demand they’ve already had.
3. Avoid losing opportunity costs
If you fail to gain new sales from these job changing leads, you lose more than a sale. The opportunity costs include advantages gained by your competitors and brand new leads that you should have generated using the expenses spent on nurturing job changing leads from the beginning.
A case study of our own
Last April, we worked with a manager of this company on their campaigns in Marketo. The manager got to know us for the first time through a friend’s referral, and sent us an email. We replied to the email and offered some help. We gained a new customer thanks to referral, and the project went well.
In July, we recognized that the manager had just recently moved to a new company, holding a relatively similar position. Realizing that it would turn out to be a prospective sales, we contacted her through her new email address. A couple of calls followed that, and we won a new customer. No lead generation effort was spent, no referral was needed, and no marketing material was sent. Despite all this, we know that the happy manager is among the most valuable lead we’ve got.
If we didn’t treat the manager as a familiar lead, would the result have turned out that well? It’s an easy answer.
Don’t treat your leads as salmon
Don’t, because there’s no point doing so. It doesn’t gain you any sales but also demonstrates a level of incompetence in leveraging customer happiness. While it’s easier to ignore job changers in your database, you will have to face annual lead losses and diminished lead engagement whenever you try to get them back to the top of the funnel again.
Running your lead funnel on the Salmon Principle today not only shows that you are not really aware of the real buyer lifetime value, but it also proves that you don’t care enough about customers as individuals. Just don’t do it.