Tuesday, July 06, 2010
Maybe it's not a sales funnel; maybe it's a bowtie
The problem I’ve always had with sales funnels is that they’re completely inaccurate. What gets qualified and converted at the bottom of the funnel is by no means everything you’re going to get from the opportunities and/or leads that start at the top. It may be what you get most quickly, this month or quarter, but it’s just the beginning.
For every qualified and ready-to-buy lead you generate, you likely also meet 3-5 qualified but not-ready-to-buy leads. In a traditional sales funnel, you ignore these and go for the right-now sale. But we’ve seen again and again that those 3-5 other leads are going to buy…eventually. You want them to buy from you, so you need a strategy to stay in touch and engage them more actively when they’re ready. The funnel doesn’t allow for that. So at minimum, the traditional sales funnel is far too narrow.
Traditional sales funnels also only reflect half of the story. What about repeat purchases? Referrals? Word-of-mouth opportunities that turn one sale into four? That first sale may be the narrow part of the funnel, but if you know what you’re doing it widens again significantly from there. Renewals, repeat purchases, referrals, etc.
Flip the funnel on its side and you’re getting somewhere. Worry today about how much you can naturally drive through the middle of the bowtie for immediate closed business, but put even more focus long-term on expanding each end of the bowtie. That’s the trick to long-term revenue leverage, and it’s likely a far better way of managing current and future sales.
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