CHAPTER SIX: TOP-DOWN OPTIMIZATION
by Frank Cowell | Updated Dec 21, 2023
This is a chapter from the best-selling book
Building Your Digital Utopia by Frank Cowell.
When most people think about developing a marketing and sales system, they think of it as a funnel, with the top of the funnel representing the early stages of the relationship with customers. As customers move closer to becoming committed buyers, they move deeper into the funnel. Strangely, this evokes the image of someone spiraling down a drain.
I prefer to think in terms of elevating relationships, where the ground level is strangers, and the pinnacle is raving fans. In the Digital Utopia Methodology, we’ve identified seven relationship levels. From lowest to highest, they are: stranger, visitor, lead, qualified, opportunity, customer, fan.
Rather than focusing on the lower levels, I encourage top-down optimization—put most of your focus into your fans. Let’s face it, your fans buy more from you, they buy your best stuff, they talk about you online positively, and, in so doing, they help you grow your brand.
This perspective is flipped from the norm, and the buyer persona is key. Everything you do is built around that buyer persona, not just marketing and sales but your offering, your organization, and everything else. Your focus on the top is about figuring out what it takes to create raving fans. If customers aren’t becoming raving fans, then you need to start optimizing there. When you start there, you will end up bearing a lot more fruit for less money than if you focus most of your effort on trying to turn strangers into visitors.
Suppose your brand gets 10,000 clicks on your digital ads, and out of those 10,000 clicks, you gain one customer. If you set a goal to gain ten customers by focusing on increasing the number of clicks, now you have to get 100,000 clicks. That’s going to be very expensive.
However, if instead you simply optimize what it takes to create a customer, you might be able to get ten customers out of 10,000 clicks. Even if you only get half of your goal, you’ve still created far better ROI by optimizing from the top down.
Additionally, if you don’t start at the top, then you’re driving people into a system that will never convert at an optimal rate. No matter how much you invest in elevating visitors, having a bad offering in the mix will act as a constant hindrance to creating committed fans. Ultimately, you might as well just set your money on fire.
Working from the top down means fixing your product or service, doing whatever it takes to create raving fans by going above and beyond what is on the invoice. I’m not suggesting that you should stop marketing. I’m recommending that you focus first and foremost on optimization at the very top.
FIXING THE PRODUCT BEFORE FIXING LEAD GENERATION
I spoke to Ronn Cort, COO and President of SEKISUI Polymer Innovations, makers of KYDEX Thermoplastics. Surprisingly, his company doesn’t have any salespeople in their organization, and their sales funnel is an hourglass. In a sales hourglass—as opposed to a funnel—the process doesn’t end when the customer signs a contract. Instead, the company continues to engage customers to create a deeper relationship by continuously adding value long after the sale is completed. The primary goal of SEKISUI is to show their target buyers that the cost of doing business is higher without them, and they provide an impressive list of reasons why this is true. Their actual product offering is at the end of that list.
They have embraced a process called Quick Response Manufacturing (QRM), which is a strategy that greatly reduces lead times in all phases of manufacturing, enabling them to provide customer-engineered products much faster. It’s a model built entirely around the customer.
Their competitors require orders of at least 5,000 pounds, and they have lead times of six weeks to four months. SEKISUI has flipped this on its head, creating customized orders that can be as low as 600 pounds and shipped within twelve days.
They have entirely rebuilt their business around “digital natives,” customers who are fully indoctrinated to use technology in every area of their lives. They recognize this as the new normal, so they raised capital to redesign every aspect of their company accordingly. Anyone can go to their website and figure out the cost of goods and materials. The company values time above anything else, and customers are thrilled to pay more to get their order sooner.
According to Ronn, “Ten years ago, I would have said no one would pay more for shorter lead times, but today, it is baked into the DNA of buyers thanks to companies like Amazon.”
Although they are a boutique manufacturer, large companies are seeing the value in what they do. Leaders of multi-billion-dollar companies have approached SEKISUI to learn how they’ve reinvented the way they do business, so they can emulate SEKISUI’s growth model.
They have baked innovation into their culture. Whereas most organizations simply respond to customer requests and call it innovation, SEKISUI proactively innovates and then takes their ideas to their customer base. They put their money where their mouth is.
As a result of this approach, they are enjoying 40 to 50 percent market shares—even as high as 80 percent—in key markets. Their customers have changed their own business models as a result of the way SEKISUI does business, which has reduced overall costs for customers. Consequently, even though SEKISUI’s products cost more than their competitors, customers are actually saving money as a result of the transformation.
Retention at the company is extremely high, with less than a 1.2 percent return rate. Their on-time delivery rate is an impressive 99.2 percent, and their employee turnover rate is 10 percent (compared to the average of 30 to 40 percent). Three years ago, the company made $149 million, last year they had grown to $186 million.
Bear in mind, SEKISUI’s core product was invented in 1965, and it hasn’t changed much. However, by focusing on the way they do business around the customer, they have radically changed everything. In a B2B manufacturing company, they have created an unparalleled experience for the customer, and it has made all the difference.
The most fundamental change they made was to pull all of their sales and customer-facing employees off commissions. Once employees stopped worrying about things like territory and splitting commissions, they could work together for the entire company. Instead of training people to be “hunters” or “harvesters,” they start with their existing customers and leverage what they already have. This flies in the face of how everyone else does business.
As Ronn Cort says, “Client problems are almost never about the offering. Most of the time, they have to do with their systems and approach. If you can help your customers become better at their systems and approach, you will win. Let your products become a vehicle for bringing out those fundamental changes.”