Throughout your sales education – from sales rep all the way through sales management to become the VP of Sales – you are taught that the sales funnel should look like, well, a funnel!
As prospects travel progressively from the top of the funnel through various stages, you’d expect less qualified prospects to drop off at each level, until only the most qualified ones remain. Those are the ones that are most likely to buy. There should then be a natural gradation from one stage to the next, without too dramatic a distance or too steep an indent. You should be left with something that looks like this:
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Well, we’re here to tell you that the traditional sales funnel is dead, at least for high-growth sales teams. In it’s place, we are proud to present…
The Martini-glass shaped sales funnel.
“Vodka Martini – Shaken, not Stirred”
Martinis are more commonly associated with Agent 007 James Bond, rather than sales pipeline management. Yet, our research into 100s of companies – including some of own customers – revealed some interesting insights and benchmarks that prompted our creation of the Martini glass-shaped sales funnel.
Chief among our findings was that while high-growth sales teams typically generated 40% more leads (than their slow-growth counterparts), they created 60% fewer opportunities. There are several possible explanations for this:
As fast-growth companies ramp up their marketing efforts to scale quickly, lead quality suffers. The top of the funnel casts a wide net that attracts a ton of leads, many of which might be a poor fit.
Sales reps at fast-growth companies are not processing their leads as quickly as their slower-growth counterparts. Many leads might very well convert into great opportunities – they just haven’t been worked on yet.
Fast-growing companies are qualifying leads more effectively and stringently. This means that while there might ultimately be fewer opportunities, the ones that remain are strong ones that are very likely to buy.
The combination of generating so many more leads, but converting far fewer of them into opportunities and ultimately closing fewer deals (than at slow-growth companies) creates the Martini glass-shaped sales funnel – wide at the top, narrow in the middle and really narrow at the bottom. Such sales funnels look like they belong comfortably in James Bond’s hand, with an olive sitting inside.
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Martini glass-shaped sales funnels suggest that high-growth sales teams close fewer deals each month than average or poor sales teams. This is a hypothesis that was supported by our benchmarking research and data. But, if that’s the case – that high-growth sales teams close fewer deals – then why are they still considered high-growth sales teams?
Because of the size of the deals they close! On average, these companies won deals that were nearly three times (2.8x, to be exact) the size of deals at slow-growth companies. These incredibly valuable deals ultimately made up for the fact that these companies closed fewer net deals altogether.
It all goes back to the sales funnel, and how it’s shaped differently than traditional sales funnels. With fewer opportunities converting from a wealth of leads, you can be certain that a vast majority of these opportunities are really good ones, coming from only the highest-quality leads. These opportunities fit your Ideal Customer Profile, already have a demonstrated pain and need for your product and are more valuable (in raw dollars). Sales VPs are comfortable with their reps closing fewer deals…as long as the deals they do close really impact the bottom line!
If you aspire to be a high-growth sales organization – and who doesn’t? – you should strive to create a sales and marketing process that produces a sales funnel that looks more like a Martini glass than a traditional funnel. That unique shape means that your company is well on the right path toward sustained and scalable success.[image source_type=”attachment_id” source_value=”33453″ width=”632″ height=”250″ align=”center” quality=”100″ link=”https://offers.insightsquared.com/pipeline_mgmt.html?blog_source=Organic&blog_medium=Blog&blog_campaign=Pipeline%20Management%20″]