Symptoms of a Sick Sales Funnel

Can you believe that the sales funnel is 112 years old? Hmmm. Seems like a lot has happened since then. No wonder the ole� funnel is showing signs of wear. IDC research shows that the time it takes for tech companies to create a B2B customer has increased by 15% in the past year. Is it time for a fresh approach?

The sales funnel first appears in a 1925 book by Edward K. Strong called The Psychology of Selling and Advertising. Strong attributes the funnel�s invention in 1898 to Elias St. Elmo Lewis, a sales manager for National Cash Register (NCR). St. Elmo Lewis, who later helped found the Association of National Advertisers, called his sales funnel AIDA for the four stages of �awareness, interest, desire, and action�.

The traditional funnel uses an industrial era paradigm that treats a buyer like a widget. With the right machine, a vendor can manufacture that widget into a product called a customer. In the industrial model, the marketing team works awareness at the upper funnel when buyers aren�t too interested. As soon as there is serious interest, marketing sends the �lead� down the assembly line, handing off to a sales rep whose must fabricate an opportunity and produce revenue.

The problem is�the traditional funnel doesn�t work that well anymore.

Alarming evidence of sick sales funnels show up in the data. Tech vendors now take an average of 19 months to create a large account customer, an increase of 15% in just the last year. Some of this lengthening is certainly due to uncertain economic times. Greater risk aversion has increased the size of the average buying team from 5 people to 6. But we can�t blame everything on the economy. Buyers, IDC finds, don�t like this slowness. They want vendors help to shorten the cycle. According to the IDC Buyer Experience study conducted earlier this year, buyers want to push for a 40% reduction in the time to buy.

Poor funnel health also shows up in unsustainable conversion rates. Research from IDC�s 2011 Tech Marketing Benchmark and 2011 Sales Productivity Benchmark reveals that it now takes over 1000 marketing awareness targets to get one sale.

Symptoms of a sick funnel. Beyond the data, tech vendors are experiencing the effects of their sick, out-dated, funnel approach. Here are some common symptoms companies complain about. Does your company experience any of these symptoms?

1. Bickering: Sales and marketing teams bicker over the number & quality of leads.




2. Bad Data: You don�t have the right data to judge performance, predict the pipeline, and refine strategy




3. Wrong Tools: Sales people don�t have the tools needed to sell, in spite of the fact that they have access to a tonnage of content.




4. Failed sales: Sales people fail to convert most leads. Marketing has no idea what sales plans to do with leads.




5. Funnel Gaps: Prospects fall out of the pipeline, but you�re not sure when or why




6. Silos: Sales team thinks it�s a waste of time to provide feedback to marketing and your marketing team rarely seeks input from sales.




7. Missing Messages: You can�t nurture buyers because you lack the right content
   

We need a new funnel framework. Much has changed since the sales funnel�s 19th century invention. Business is far more sophisticated. The Internet and social media have dramatically changed the way buyers buy. IDC CMO Advisory has guidance for a funnel makeover in the form of a new Customer Creation Framework.

Here�s an introduction to that framework in an IDC webcast called, �Transforming Lead Management: How the new buyer is killing your funnel (and what to do about it).� (The webcast is recorded. Register and you can get the replay.)