Welcome to the first blog in a series authored by Stu Schmidt, in which he looks at how business leaders can scale their sales organizations to new heights via increased control, visibility and emerging new tools that can fundamentally transform the selling process. Look for subsequent blogs in this series coming soon.
Despite wide consensus on the importance of a defined sales process, very few companies, by their own admission, have a defined, documented and adopted revenue process in place. CSO Insights recently reported that only one in five companies have a sales process that is consistently used by at least 90 percent of their sales reps.
Process is the key to forecast accuracy and predictable revenue – two foundations for scalability. Why then are so few companies successful in their efforts to implement a repeatable sales process? Because thinking about it as just a sales process is flawed – and destined for failure. We need to think about it holistically; as a marketing and sales process that needs to be tightly integrated and measured fanatically.
In fact, rather than thinking about just the traditional sales funnel, the most effective way to think about the revenue process for the typical B2B company is in three distinct funnels:
1. The universe to MQL (marketing qualified lead)
2. MQL to SQL (sales qualified lead) or opportunity created
3. Opportunity to close (the traditional sales funnel)
Let’s take a look at these and, more importantly, some of the most common pitfalls that plague each of the funnels (…not in sequential order for a reason).
The universe to MQL
While there is substantial science around this funnel, the typical problem is the lack of a coordinated definition of an MQL. Marketing and sales leaders together must collaborate on the definition and be willing to dramatically alter the definition as metrics begin to deliver insights. Clear definition of your MQL characteristics is a prerequisite to effectively define your profiling and lead scoring processes.
Opportunity to close; the traditional sales funnel
Everyone has an opinion on how to optimize this funnel. We’ve been talking about it for years. Yet, barely anyone talks about what really matters to make this process scalable: the measurement of movement and change. Let’s look at an example. Imagine we have a defined process map for this funnel with six stages. We are in week 10 of the quarter and our pipeline looks something like this:
What can we learn from this view about how our pipeline has progressed in the past week, and what is likely to happen in week 11? Unfortunately, absolutely nothing. How can you determine if something moved from one stage to another? Or if you lost half of stage six and simply replaced it with some stage three and four? Has the same $500K been sitting in stage six for two quarters?
The good news is that there are now tools that allow visibility into what I call Shape and Velocity of the funnel. More on that in an upcoming blog.
MQL to SQL; the creation of an opportunity
While considerable science and tools exist in the other two funnels, the dark forces of chaos rule this funnel. Ironically, simple conversion ratio math shows that minor improvements in this funnel massively boost overall productivity in the entire revenue funnel.
As an example of the kind of waste that happens daily in this funnel, let’s imagine you have designed a multi-touch, multi-modal process consisting of five contact attempts per MQL, each with its own unique messages, email and voicemail script. (This is a good thing, by the way). Your new sales development rep has completed training and is ready to go – with messages, scripts, CRM, her 500 bright shiny new MQLs and maybe even an automated dialer to increase productivity.
If I’m a rep, my life looks like this:
Day one is no problem. I make her fifty dial attempts, drop the voicemails and emails and get five actual conversations (if I’m lucky). The other 45 require the prescribed second follow up in two days as well.
Day two is also quite simple. Another fifty attempts on the remaining 450 with similar results to day one…some follow-on activities scheduled for the future.
Day three begins to get complicated. I have two follow-up activities from day one that I can’t forget; I have 45 from day one that need their second call with a different email and voicemail; and I must take a bite out of the remaining 400 untouched MQLs.
Can you imagine what day 10 looks like? Chaos. Inevitably, reps cherry-pick leads, never make the full number of attempts and don’t get to every MQL, meaning they waste precious demand generation money and potential.
Think of your revenue funnel as three distinct processes. Design not only the individual processes but also the linkages between them. Put measurement tools in place that measure conversion ratios inside each of the processes as well as the conversion ratios between processes.
We’ve now honed in on some of the most likely challenges plaguing your sales process. In our next blog, we’ll talk about some with specific methods and tools to turn the chaos into order.