Sales Funnel or Sales Colander?

Which of these two items resemble your sales process? Frequently sales consultants, vice presidents and managers refer to their process as a “Sales Funnel” when in fact; it more closely resembles a colander. If 100% of your marketing efforts go in the top and only 10% of them come out the bottom, what is it? A “True Funnel” (it is called “True” per this definition of the word: “exactly or accurately shaped, formed, fitted, or placed, as a surface, instrument, or part of a mechanism.”) will capture all of your marketing generated leads, get them in a structured, strategic process (with solid walls and only two holes), focus efforts and increase the velocity with which they pass through the device. Any seepage will take place at the top of the funnel as overflow spills out.

One can’t simply patch the wholes in a colander and call it a funnel. Both are fundamentally different. Just imagine that you have both a colander and a funnel sitting in front of you with a bucket of water. Pour some water in the colander. The water will go straight through with quite a bit spilling through the side walls. Now pour some water in the funnel. You will quickly notice that the water starts to spin in the top of the funnel, gaining momentum and velocity as it enters the smaller neck area and eventually shoots out the bottom in a more refined stream of water. You should also notice that in order to get more water directly out of the bottom of the colander, you need to increase the amount of water that goes in at the top. Not so with the funnel. The funnel itself either needs to be expanded or the speed of the water needs to be increased in order to get more output.

Let’s look at a traditional sales funnel.

You will notice that the leads go in the top and new customers come out the bottom. That is the goal. It is the process of taking an input, interacting with it and getting a completely different output. Naturally there will be some waste in that process, right? The first step in creating our True Funnel is to think of it on a linear level. Define the natural progression from lead to customer. You may include some marketing steps in the process as well if you would like. The True Funnel should include demand generation and other marketing practices.

Now that you have that linear process mapped out, let’s apply some lessons which we have learned from industrialization. The first is specialization. Keep the Sales teams selling. Keep the Marketing teams marketing. How do you bridge the gap? Lead Generation and Lead Qualification teams. Let’s not kid ourselves, sales reps don’t want to become telemarketers. They don’t want to “Smile and Dial”. They don’t want to make more than 30-40 phone dials a day. Which means your leads are not being worked effectively enough. A Lead Gen. or Lead Qual. team can be used to contact new leads within an acceptable time frame and/or continue to attempt contact beyond the standard 3-4 attempts performed by a sales team. Once contacted, that team should simply perform a quick pre-qualification to make sure they are talking to the right person and there is some level of interest, at which point, the lead is sent on to the next station in the assembly line for further fabrication.

The second lesson to be learned is automation.

Look at the picture above. Notice the harmony of man and machine working together to build something wonderful. In an assembly line, machines are often used for repetitive simple tasks, complex precision task, quality assurance, and to report on the status of the line. Technology can be used in similar ways on a sales assembly line. Simple repetitive tasks which can be automated are dialing numbers, leaving voice messages, sending emails, logging activities, scheduling events, and setting reminders. Technology can also be used for precision tasks such as lead capture, lead routing, de-duping, neglected re-routing, immediate response, and campaign strategy.

At a minimum, you should employ some level of analytics for tracking your demand generation activities, a lead response management system for facilitating your response strategies and a customer relationship management solution for managing your pipeline and beyond. It is highly important to have these and other systems communicate or integrate one with another. A key benefit of using technology is oversight and reporting, and if your technologies don’t communicate well, you will lose many key metrics.

Finally we need to address the seepage. If you notice, in a funnel, water that is not ready to leave the bottom stays in a swirling pattern in the top end of the funnel. This is such a perfect metaphor because your leads shouldn’t fall out the sides of your funnel, they should swirl around in the top end until they are ready to slip through the selling end. This is accomplished by nurturing activities. Nurturing activities will take a lead, where its progress is halted, and reinforce it with marketing and educational material. Additional touches by a representative within your organization also help prepare the lead for progression. If these activities are completely automated then the only reason why a lead should ever leave the funnel is if it is disqualified and asked to be removed from any future correspondence at which point it spills out the top of the funnel and stops taking up space.

Fatal Flaw #4 -Term Lead Response Strategy

The fourth fatal flaw involves how sales and marketing continue to pursue old or dead leads. Does your sales team just throw them away? Does your marketing resort to sending a monthly email as a part of a “nurturing” campaign?

Take the current closing rate of all qualified leads and subtract from one-hundred. This is your failure rate. The percentage of people that have expressed interest but didn’t buy. These are marketable leads that continue to dwell in your database.

A local company that we worked with struggled with throwing away leads. After two to four weeks of calling on their hot leads, they would be placed in a pile, which stacked up in one of their offices. When we walked in, there were stacks and stacks of paper leads collecting dust.

What are the reasons that qualified leads say no?
1. Lack of Budget
2. Competition
3. Wrong Timing

One thing remains constant...CHANGE. Circumstances change. Businesses change. Your competitors will undeniably fail keeping clients happy. Prospects return to the marketplace when they are ready to buy. Some businesses are successful and need a better solution, sooner rather than later.

When change happens, who gets the business?
One thing is for certain, if your leads are sitting in a back room, it’s not you.

Why should you care?
If you’ve found a way of growing your business without the help of money, then you should be presenting this seminar. Every lead that you generate that is not sold, adds to the cost of each one that is sold. Would you believe me if I told you that there are five deals sitting in that stack of paper in your office? Would you believe me that it will cost less to find those five deals than it would to go find five new deals?

How do you guarantee that you get the business?
You can hope you get it through the “top-of-mind” program of nurturing. The real problem with most nurturing programs is the content. Most monthly email correspondence is all about YOU. They already didn’t buy from you. Why would they care about your press release? Why would they care that you won a product of the year award? Why would they care about the addition to your board of directors? In short...they won’t. They care about themselves, not you.

In order to be truly successful, nurturing must meet three criteria.
1. It must be a collaborative effort between sales and marketing. Marketing has the message, sales has the relationship. Often, a marketing department will take the leads away from the sales team in order to nurture them. If that nurturing is not done on behalf of the individual within the company that has spoken with the prospect it will lose power. Whether that individual is a sales executive or a lead qualifier, he or she is a person and it is always easier to say yes to a person than it is a company. On the flip side, it is always harder to say no to a person as well.
2. The content and approach needs to be about the prospect and not about you. You must identify and create content that is desired. Content that will bring people back to you time and again even if they don’t currently have a need for your product. You can learn a lot by watching television. A television network’s product is its advertising. They sell Tide, Budweiser, Coke, McDonalds and Wal-Mart. Yet their content includes sports, talk shows, day time dramas, sitcoms, and news. I watch ESPN almost on a daily basis, not because I am in the mood to buy Doritos or a new car but because the content of the show is applicable to my interests. ESPN has earned the right to pitch me their products because they deliver content to me that I love. How do you develop this content? If you have a smoking gun, or a unique selling point then you have the basis for content. Your product or service solves real problems. Make your prospects aware of those problems in an education format. Have real concern for them and try to help them. One way of doing this is creating educational material around problems that exist in your prospect’s industry or personal lives that has nothing to do with your core product or service. If you provide quality content that keeps people coming back to you, you will earn the right to pitch them when they are in the proper mindset for buying.
3. It must be consistent, frequent and through multiple media types. I recently visited a website with a product that I might be interested in at some point in the future. As part of their registration form, they asked if I would like to receive a monthly newsletter from them. I agreed. I have been receiving this newsletter for just under a year now. How many of those newsletters do you think I’ve read? I don’t have any control when it comes. It interrupts me in the middle of my busy day and is usually deleted or put aside to refer to later. How often does later come? Now imagine if that same company sent me articles relevant to MY business, not theirs. Imagine if they sent over a fax every month with a tip that would make my life easier. What if they offered a free dinner if I performed a simple task such as register to view a webinar on a subject that I am already interested in? What if they sent me a little trinket attached to a flyer that uses humor to relay information that is for MY benefit. Can you see that I am now looking forward to correspondence from this company? I can’t wait to open the next email, or read the next fax. I’m still not going to buy right now, but when I am looking for the solution, who am I going to buy from? In fact, after so much time and relevant, interesting content, they would earn the right to pitch me on their product as many times as they want. And, since every piece of correspondence came directly from the person I spoke with 9 months ago, it is much harder for me to say no to him. How much did it cost, over the course of twelve months, to send me emails, faxes, direct mail and receive multiple phone calls and a gift certificate? These are just examples and I am sure that you can come up with free offers that are just as powerful. The consistency component applies to both your message and your delivery. If you are not automated, then you will undoubtedly lack in your follow up and miss excellent opportunities to build your relationship with your clients. This is why automation is the first fatal flaw of marketing and sales teams.

In summary, there is money in your dead leads. That same company that had stacks of paper collecting dust is now pulling more than $250,000 per month in sales from those same leads. It just took a paradigm shift and a focused effort to collect money from marketing dollars that they had already spent. Have marketing develop your message but deliver it on behalf of an individual that can develop a relationship with the prospect. Send content that is relevant to your prospect. Send it frequently and send it from every angle possible.

Fatal Flaw #3 Response to Web Leads

Number three in this series addresses your response to web leads. More and more, companies are driving prospects to their website with the promise of a free trial, demo, webinar, whitepaper or other in order to capture contact information from the visitor. This is where productive marketing gives way to poor follow up. In a recent study, Insidesales.com visited five hundred of Alexa’s highest rated websites and filled out web forms. Eighty two percent of those companies failed to ever call us and forty eight percent failed to send a simple email. Of those that did call, the average first call came almost 24 hours after we visited their website.

What can happen in 24 hours? Think about what you do when looking for a new service provider. Do you look at one website then wait to be contacted or do you look at multiple sites, compare features and pricing then call the one that you think will be the right fit for you.

One of our clients works in an industry where there are several lead vendors that supply hot, real-time leads to their clients. A person fills out a webform and that information is immediately sent to four or five competitors. When asked about the importance of a timely response, he told me that 80 percent of sales in his industry went to the company that contacted the prospect first. I then asked, “If you were always the first to contact the lead, how much of the market would you own?”

As demonstrated in our study mentioned earlier, emails are used 250 percent more often than a phone call for a first contact. This does little more than suggest you have an email auto-responder. You get a few points if it contains valuable information (valuable to them, not you). But emails are used because they can be automated. A phone call takes work capturing the lead, routing it to the appropriate person checking to see if there is a duplicate in the database and then making sure your rep makes the call. One client of ours used to give a rep a seven day window to contact a web lead before it would be reassigned to someone else.

Why do you want to contact your leads first?
If the example mentioned earlier doesn’t persuade you, we recently conducted a study with the help of MIT and Northwestern Universities to see the effect early attempt has on the contact and qualification percentages of a web lead. The study suggests that the odds of converting a web lead are twenty-one times greater if you attempt to contact that lead within 5 minutes compared to 30 minutes. Without increasing your ability to close, your marketing budget or your product offering, if you could contact 210% more of your leads, what affect would that have on your bottom line?

How can you improve your time to contact?
There are three steps that you should follow:
1. Create a lead response strategy. Set the goals of when you should contact a lead by, who should contact them, how often should they try and what methods should be used.
2. Hold your sales reps accountable to meet these goals.
3. Automate the entire response strategy, including the lead capture, routing, email, fax, calling and rerouting (if lead is neglected).

To sum this up, most companies do not focus on early response to web leads but the studies indicate they should. A car salesperson does not allow the prospect off the car lot to go to the competitors before they attempt the initial contact. In order to decrease your time to contact you should create a lead response strategy, hold your sales reps accountable and automate the entire process. That company mentioned earlier with the leads going to four competitors at the same time they get them. Well, they tripled their contacts and qualifications within the first 45 days of following these steps. Can you business handle that kind of growth?