The sales funnel is an unholy grail, according to Forbes author

According to Forbes magazine, the sales funnel is not working as it should for most companies.

“The funnel has always been a convenient idealization to try to drive sales process improvement. We attempt to improve the shape, remove friction, and constantly feed the funnel. We’ve even tried to define more evolved shapes or lifecycles to better understand and affect revenue outcomes.

There’s a more fundamental issue to address here, “Does your funnel give you a way to maximize your chances to hit your targets and desired outcomes?” For most companies, the answer is firmly no.”

says K.V. Rao, incidentally the CEO of Aviso.  And is discarding all the success of companies (and efforts) like salesforce.com, too. As a matter of fact, Harvard Business Review is backing him up, they

“asked some of the leading marketers in the world — from companies like Google, Intuit, Sephora, SAP, Twitter, and Visa — to assess the relevance of the marketing funnel.  What we found says as much about the future of business as it does about the future of marketing.

According to these marketers, the primary problem with the funnel is that the buying process is no longer linear. Prospects don’t just enter at the top of the funnel; instead, they come in at any stage. Furthermore, they often jump stages, stay in a stage indefinitely, or move back and forth between them.”

 

growth-share-matrixThe results speak for themselves, the funnel is a flawed concept and its probabilities are far from reality. In the last 10 or more years in marketing management and business development, I have seen this to be true in many cases. The big wins often had a high degree of serendipity to them, while cases that were labeled “must win”, “big rock” and caused massive investments were seldom won. Now, whatever the (good) outcome, it can always be labelled result of a great strategy – we all know that. But more often than not, when the front-end marketing and customer relationship staff are busy turning as many leads as possible into opportunities, the general line top-down is “to focus”, and not divert too much from the path of truth (meaning spending too much resources on too many potential clients).

On other occasions, the general rule asks for an increase in the customer base and getting new-names clients, while the business developers are working frantically on keeping or winning back lost territory. Strategy, if taken from the funnel viewpoint can be the opposite of helpful for the front-end market-force.

If we look at it in at least marking two dimensions, the dichotomy can be resolved, though. The old Boston Consulting Group growth matrix may help: Defining leads and opportunities into revenue generating assets and positioning them in a matrix of stars, cash-cows, dogs and question marks, may help in assessing the nature and quality of an opportunity in a sensible way. Each client relationship manager grows their own portfolio of revenue assets and is responsible and accountable for their respective outcome. After all is said and done, companies do not live from quarter to quarter, their life-time growth is measured in percent per year and year on year. If incidentally a short term stactics shift happens, the front end team has to think in long term assets and manage their portfolio accordingly.

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