Are You Ignoring Half of Your Sales Funnel?

Some days I feel like there are two types of B2B companies: those that only worry about their sales funnel and those that only worry about their marketing funnel.  Ideally these need to be tracked as one integrated pipeline.

The Back End Camp: It’s all about selling

Most of your classic B2B software companies selling big ticket items would fall into this camp.  These folks will have weekly pipeline reviews with every single sales rep in the organization religiously and could tell you at any moment of the day exactly what the monthly forecast is.  Interestingly, these types of organizations rarely spend much time on the front of the funnel – i.e. what’s happing with prospects and leads, the exact things that ultimately become opportunities that end up in that glorious pipeline.  In these organizations, “sales is everything” and what happens to create opportunities isn’t nearly as important as what happens after the opportunity has been created.  These companies generally have a good grip on short-term revenue forecasting but longer term trends sometimes catch them by surprise.

The Front End Camp: It’s all about marketing

These are more new-school companies that are well-schooled in in-bound marketing tactics but usually do some out-bound stuff as well.  Just like the folks in the above group can tell you exactly what the monthly sales forecast is, these folks can tell you exactly how many hits the website is getting, their email open rates, their conversion rates from visitors to sign-ups, etc.  Where there is zero direct sales involvement (i.e. low dollar value deals where the entire transaction takes place online without interaction with a sales person) this seems to work OK. Where there is sales involvement however (even if it is just inside sales), I’ve seen companies where that sales process is treated like a black box that is almost irrelevant. What happens between an opportunity being generated and it being closed isn’t really tracked or scrutinized. In these companies the prevailing attitude is that “the product sells itself” and the deal is either won or lost based on factors that are out of the sales rep’s control.  These companies tend to be the opposite of the companies in the first group – they have a good grip on the longer-term trends in their business but they are sometimes surprised by how much (or how little) short term revenue gets closed.

Bringing both sides together

Ideally, the two sides need to be treated as one integrated pipeline and flow needs to be tracked from start to finish.  That means you will have to be tracking the numbers, actions and conversion rates around suspects, prospects and leads as well as tracking the stages and success rates across your sales pipeline.  In my mind this needs to be managed together as one exercise and any pipeline or forecasting meetings that talk about one end of the funnel must also cover what’s happening at the other end.   It’s the only way you will be able to ensure both your short term and longer term business is healthy.

35 thoughts on “Are You Ignoring Half of Your Sales Funnel?”

  1. Once again, an insightful post. I feel that the critical phrase is in the middle of the section titled “The Front End Camp:”. Working in a place that has a direct and indirect channel, as well as a couple of MMR’s it can be frustrating as a product manager to get my arms around the details of that sales cycle. Another indicator is when sales can’t tell you who they lost an opportunity to, or why they lost (or, they scream “price”).

    By bringing it back to the pipeline that feeds the funnel, and providing transparency to the steps a lead evolves into a prospect, through opportunity, and then into an order, Marketing and Sales can work together to groom and improve the process. Without cooperation and trust, nothing ever changes.

    Thanks for posting this!

  2. Good strategy post April. I like the way you show how things should flow between sales and marketing in B2B. What do you think stops the strategy from happening in companies?

    We spent years designing software to support these types of activities occurring in large scales companies. Even so, I have consulted to many Insurance companies where it seemed like the left hand of sales never knew what the right hand of marketing was doing. In order to scale efficiently and react to market changes, I think there is no other strategy than to integrate and measure leads from the very beginning of the marketing cycle through to sales execution in order to drive growth. Closed loop lead management, saves time and makes more money. There’s an app for that 🙂 rob.tyrie@nexjsystems.com

  3. Great post April. I have trouble understanding it all, but I do recognize that I’m probably one of the ‘…new-school companies that are well-schooled in in-bound marketing tactics…’, and that school is Hard Knocks. I’ve subscribed to your blog to continue my education.

  4. Salesforce.com fed that divide by having two separate entities of leads and opportunities. As soon as a lead converted to an opportunity, you had to switch to a different method of tracking them. Not sure if that is still the case but it did create a brick wall between the two processes.

    I expect that the critical inflection point now is not when a lead converts to an opportunity but when a prospect registers as a lead. In the newer marketing paradigm, I expect the person registering as a lead means they are creating themselves as an opportunity.

    Gary Read, CEO at Nimsoft, was speaking last night at the Silicon Valley Cloud Meetup and he is changing how Marketing gets measured and compensated because he sees 30% of the sales process happening in front of that lead creation event (I would argue it’s more).

    In the end, it goes back to communication and seeing the big picture. Neither Marketing now Sales can be a black box if you want to be successful.

    Thanks for another great post.

    1. OMG – Someday I will write the most insane ranting post about how AWFUL salesforce.com is in this regard. Like seriously, it drives me completely NUTS! Doing something as simple as tracking how many leads move from unqualified to qualified is almost impossible to do without doing it all by hand. Even the marketing automation tools out there that integrate well with Salesforce (I’m using Marketo these days) and give me all sorts of other great data, completely break down when I try to cross that (COMPLETELY IMAGINARY) gap between a “lead” and an “opportunity. I don’t usually write about brands and products here but one of these days I am going to write the “What marketing wishes SalesForce didn’t suck at” post and it’s going to be EPIC.
      See, even just that little comment rant made me feel better 🙂
      April

  5. Great article – short – specific – chock full of advice on the right things to do – and doing it is hard. We use software for much of this – all of it inside Salesforce.com with our own lead scoring data. I consistently meet with my marketing peer to make sure I know what he is doing, he knows what I am doing and we constantly evaluate the quality of each lead source, each sales enablement piece and every closed won or lost deal. It is hard, but the insight we’ve gained and our ability to pivot as needed allows us to do much with limited resources. My guess is your readers are in much the same boat.

    Thanks for a great post.

    1. Hey Sam – thanks so much!
      I never want to go back to the days when we didn’t have decent CRM applications. That said, SFDC requires a lot of work to make sure you can track everything properly and the division between leads and contacts drives me completely NUTS. Someday someone will build a CRM system that gets the marketing side of the equation (crap, I should do that!).
      April

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