The reality is the top of the sales funnel is a veritable “death zone” for leads. On average, only about 17% of leads make it out of the top of the funnel to become genuine sales opportunities. I started using the “death zone” label after realizing the majority of the time and effort spent by many of the inside sales teams I was talking with is wasted on leads that never become opportunities (see The Bridge Group for great comparables on funnel analytics).
It turns out if you start out climbing a big mountain (a.k.a. the Next Quarter) too high up, you can’t make it all the way to the summit. You get sick, have to leave, and never get to the goal. That’s why mountain climbers call it the Death Zone.
Apply that paradigm to the sales funnel and what do you get ? Same thing – - a selling Death Zone. Since only 17% of leads convert from being qualified leads – - meaning they met some minimum qualifying criteria when they were collected – - that means 83% ! – - eighty three percent ! – become casualties of the selling Death Zone. It’s alarming to think most sales managers take 83% of their sales budget and conduct calling campaigns that result in $0.00 of sales !
Try applying some sales funnel “situational awareness”. A lot of sales managers are focused on improving the 17% yield a little bit, maybe to 18% for example, and view that as a HUGE win.
Change your viewpoint here and what happens ? Suddenly things don’t seem quite so productive. You start to see that a great deal of sales time and effort is being wasted. Same funnel, same metrics, but an alarmingly different viewpoint. If the majority of sales resources are being used-up calling, waiting, and chasing prospects that perish in the Death Zone, it makes it hard to scale any sales operation cost effectively, especially if your lead generation is growing quickly.
Also watch out for compounding the Death Zone affect by rewarding small incremental increases in opportunity creation with disproportionately large incentives. Instead, why not address the big problem and refocus resources being wasted in the Death Zone by setting some aggressive objectives for putting them work in the Opportunity area of the funnel. That’s where time spent selling has a much better chance of creating a closed deal.
Over the next couple of posts we’ll look at ways of avoiding the Death Zone by changing the game and putting those wasted resources to work for much more productive yield, so stay tuned…..