On Funnels, Incubators & Out-Of-Context Metaphors

By January 11, 2011Process Thinking

I’ve been in a running debate with my colleague, Stone Payton, for about a year now regarding the value and continuing applicability of the “funnel” metaphor for B2B sales.  Stone emphatically states, “Forget the funnel!”  (See this post, especially point #5 and the comments.)  I just as emphatically disagree!

And I think I finally understand the nature of our disagreement.  He and I think of “funnel” in dramatically different contexts.  I’m guessing there’s a whole lotta’ contextual confusion out there.  I’m also guessing there’s way too much reliance on over-simplified and/or passé sales process thinking.

First key point…  Thinking about people and companies as prospects is obsolete and dangerous.  It can do all kinds of short and long term damage to your business relationships.  It reinforces a “me-and-my-company-centric” focus.  (Do I really need to convince anyone that an intense customer-centric focus is critical?)   Thinking in terms of “prospects” also leads to thinking about moving human beings through a funnel; rejecting some, keeping others.  That’s nuts!

Move opportunities through your funnel, not prospects.

This leads to the second key point; consideration of a few realities of context for 21st century business.  Today’s sales pro needs to think in terms of Accounts, Contacts and Opportunities.   An Account is defined as an organization that might, maybe someday have a need for what I’m selling.  A Contact is a person, a human being who works for that organization and potentially has some role in the decision process for buying or not buying your stuff.  An Opportunity is the potential for you and your company to deliver a very specifically defined value or set of values to the Account and (at least some of) the Contacts within.

(Note the symbols in the diagram.  For any account, a rep will have from zero to many contacts and from zero to many opportunities.  Over time, the number of contacts should grow.  The number and size of opportunities will fluctuate over time.)

Accounts and Contacts are forever.  Put them into your “incubator.”

Relationships and credibility with Accounts and Contacts are hard to establish and hard, not to mention time-consuming, to maintain.  They must be nurtured with a long term mind-set.  Think about it this way…  Career time spans are really stretching out and usually involve multiple employers.  Flush a “prospect” out of your funnel today, and that same human being at the same or a different account, might just flush you into oblivion ten or twenty or thirty or even forty years from now.

Opportunities, on the other hand, are dramatically different in three ways:

  • They’re things, not people (Think of Tony Soprano saying, “It’s not personal.  It’s business.”)
  • They have a finite, relatively short life span
  • They have an “expiration date” (…calculated based on the typical sell cycle for your products and services)

I’ll take it even further.  An opportunity should have a pre-defined “expiration date” for each stage of the funnel portion of your sales process.  You want a “leaky funnel!” One that “leaks” in a controlled fashion according to your rules.

The core responsibility of a sales rep is to identify value-producing opportunities for each of his or her accounts and contacts.  LOTS of value-producing opportunities.  Some will be losers.  Those loser opportunities must be flushed out of the funnel quickly.  Otherwise you’ll waste your contacts’ time and annoy the daylights out of them.  If you don’t even have an opportunity funnel defined, how can you possibly keep yourself from wasting their time by repeatedly pushing loser ideas at them?  And damaging the hard-earned relationships you’re nurturing?

Conversely, the “winner” opportunities must be defined, sold to all stakeholders and implemented ASAP! Without a defined sales process, i.e., opportunity funnel, how on earth could anyone possibly do that efficiently and effectively?  By winging it???

So am I right?  Or is Stone right?  What do you think of the funnel metaphor?

Join the discussion 8 Comments

  • Of course one forecasts and manages “opportunities” differently from establishing and nurturing relationships in one’s territory. This is not new, or am I missing something? Prospecting is working in one’s territory to find new opportunities amongst one’s universe of accounts with individual contacts at those accounts, trying to turn them into prospects. I don’t think any sales person confuses contact, account and opportunity – do you?

    • Glenn,

      Didn’t mean to imply that the notion of managing opportunities differently than establishing and nurturing relationships is new. It isn’t.

      I do hear a lot of discussion, though about “moving prospects (i.e., people) through a funnel,” which does NOT make sense. Laying out the definitions of Account, Contact and Opportunity makes it all extremely straightforward and eliminates treating people like things.

      Todd

  • Rick Howe says:

    Todd,
    You are right. Stone is wrong.

  • Tom McKeehan says:

    Well I hate to vote against Stone but, Remember to old saying,”FRIENDS BUY FROM FRIENDS”? The relationships you form during life always have a way of helping your career. The Friend might end up at numerous companies before he is able to help you. But one should never go into a relationship expecting anything, then it is always a pleasent surprise when things go your way.

  • Shawn H. wrote…

    Todd,

    Great topic and your points are dead on. I think we all need that reminder that its about the opportunity and each is unique, even when its with the same company or contact. Too many times the other stuff clouds the issue and distracts from a salesman driving to close or kill. I am always amazed at how easy it is for us sales people to spin a tale around an opportunity just to justify or minimize it. Most of what comes with all that drama is irrelevant or non actionable, but yet that is where all our time goes. Sales is a process and a funnel is the best measure to know that process is working. Without it there are too many distractions and red herrings that pull us away from closing sales.

    Shawn

  • There is another reason not to abandon the funnel. The opportunity should be approached as a process versus a discreet or batch process. If you accept this premise then you have to have a funnel or pipe or opportunity path. If you do not put a structure in place that monitors, measure and updates status, then achieving a forecast with credibility is nearly impossible. What you can measure can be controlled. What you don’t or can’t measure is out of control.

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