CSO Insights Blog Posts

Funnelology Part 2

Final Stage: Constipated

This funnel condition follows hard on the heels of the Trade Show. Your funnel now is figuratively, if not literally, filled with crap. (See Fig 4) Having chased anything and everything and accepting them as opportunities to pursue, there is no more room for anything, good or bad, to get in. This is a very common, and very painful condition. Everyone is busy, everything seems to be working, but nothing is happening. This funnel needs some relief and it's the sales manager's job to do it.

The best formula for sorting through the mess in a constipated funnel is to rigorously hold each opportunity up to your Perfect Prospect Profile. Those that depart in any significant way should be moved out. These questionable "deals" should be sent back to marketing for nurturing/incubation if they're a good fit but bad timing. Those that are a poor fit should be eliminated. Those deals falling between these extremes should be reviewed carefully; the rep and manager should agree on what must happen next and-if it doesn't-the lead should be dumped (or recycled as appropriate).

Sound extreme in these challenging times? Here are the extreme stats to back it up. In our 2009 Sales Performance Optimization report, 22% of forecast deals (i.e., not general pipeline but forecast) resulted in No Decision. 30% were lost to the competition. This means 52% of forecast opportunities (i.e., down in the neck of the funnel) leaked out the side (see Fig 5).

A deeper dive shows for those companies (10% of the total survey population) who's qualified leads result in an initial call less than 25% of the time, things are really not fun: 50% of reps make or break quota and only 35% of forecast deals are won. Two-thirds of these firms are operating in an Ad Hoc or Informal sales process environment (see pie chart).

In 60-70% of these same companies six of six areas of sales planning "need improvement'. Similarly, five of seven areas of sales execution and seven of the eight areas of sales management also "need improvement." So what's the number one initiative for improving in these companies? Revising and enhancing our lead generation program.

The best place to start? Look at what did and especially what did not close that went through your sales funnel. The stuff that leaked out the sides, especially near the bottom (again, Fig 5) are full of insights if you analyze them. You've paid the tuition to pursue (and lose) these opportunities-now learn the lesson they have for you.

This is the stuff of sales analytics and firms that are applying these concepts can radically improve the health and performance of their sales funnels.

Sell Well.

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