Without a doubt the sales funnel is at the heart of lead generation. The understanding of how you move leads through the funnel is crucial to any successful marketing campaign and more importantly to the company's ability to sell more products. But before we talk about that process, the first step is for sales and marketing to work together and define the sales funnel for their organizations.
In general, the stages of the sales funnel may include: prospects, leads, qualified leads, serious opportunities, trials or evals, call-to-close phase and closed deals. And while the concept is similar across most sales processes, it's imperative that each stage be clearly defined and agreed upon by all parties so that it can be consistently applied, analyzed and adjusted as appropriate. Above all else, agreement on the stage where marketing passes leads to sales and the definition of these qualified leads is imperative. I'll have more on that in a subsequent post.
Once the stages are defined, then it's important to understand the number of leads from all prospects (10-20%) and the ratio of qualified leads to closed deals (15:1-20:1) so that marketing can generate sufficient leads to meet the revenue requirements for the year. Of equal importance, you need to understand the time it takes to move from one stage to the next (1 to 2 months per stage depending on market maturity).
While everyone would love these ratios and timelines to be smaller and shorter for their industry, I've seen time and time again that these are quite consistent in technology companies and can be even longer when selling to certain verticals. This means it's pointless to use unrealistic ratios or timelines when planning but only adjust them when you have concrete metrics and evidence built by carefully tracking this information in addition to other ROI metrics.
Since I strongly believe the sales funnel is the heart of lead generation there will be several additional posts on this topic. For now, it's important to understand that the concepts mentioned here are more scientific than most traditional marketers would like to admit so you need to accept them and work for improvement rather than ignore the process.