Why the CFO Should be Funnel Savvy
As an interim marketing executive I consider myself a part of the revenue-generation team of my clients. In this role, together with the sales executive, I frequently have conversations with the company CFO about the sales forecast and resource requirements within the marketing and sales departments.
I’ve found that in companies where a sophisticated revenue funnel is in use for planning and performance management, and the CFO is very familiar with the model and its metrics, these conversations about forecast and resources are shorter, smarter, and frankly, less contentious.
On the other hand, in companies where a sophisticated funnel model is not in use and the CFO is not privy to the metrics and assumptions that drive the model . . . well, let’s just say the meetings aren’t much fun.
The revenue funnel isn’t the sole domain of sales or marketing. CFO’s should be as familiar with their company’s funnel structure and metrics as any sales executive or marketing executive. Here’s why.
- Funnel modeling tools provide the best way for marketing, finance, and sales to talk the same language during planning and reporting.
- The variables of the funnel make up the actual metrics of the revenue engine. These variables are the levers and dials over which management has control.
- The funnel, over time, enables the sales forecast to be made with higher and higher degrees of accuracy.
- Requests for more resources from Marketing and Sales can in part be justified or refused based on funnel economics
CFO’s should be trained in the use of sophisticated funnel modeling tools right along side their marketing and sales colleagues.
An excellent source of this training is the FunnelAcademy(tm), which includes comprehensive training on sizing a funnel and measuring progress. It also includes the most robust funnel modeling tool I’ve ever had the pleasure to use.
Read Full Post | Make a Comment ( None so far )Deep in the Heart of the (Sales) Funnel
When the going gets tough, the tough fine-tune their sales funnel processes for greater efficiency and effectiveness.
So many companies today find themselves trying desperately to succeed with fewer marketing and sales people and with less budget. I like to think of this situation as having to step into the OK Corral with only four bullets in my gun instead of six. Every bullet has to hit its mark. No room for waste or ineffectiveness.
Marketers and sales people realize this, but it does raise two questions:
- What should we be doing more of?
- What should we be doing less of?
If a company’s sales funnel has been designed around the buyers’ journey, and if both Sales and Marketing have aligned their strategies and tactics to this journey then they will find the answers to both questions in the metrics that result from a well managed sales funnel.
If there isn’t alignment around the buyers’ journey then sales and marketing are likely working at cross purposes to one another and there is an unacceptable level of trial and error in the tactics.
Research* has proven that companies who have aligned their marketing and sales activities to the buyer’s journey win 38% more of their proposals, lose 36% fewer customers each each year and grow 5.4 points of growth more than companies who aren’t aligned.
Not all sales funnel processes are equal. Most are too simplistic or are centered on the seller’s journey not the buyers’ journey. A rock-solid funnel model factors in lag, leakage, and recycling–there’s nothing “simple” about the dynamics of a funnel.
There is a way to mine the sales funnel expertise of major corporations around the world. You simply need to plug into the minds that developed the processes for these global brands and built the tools to support the processes. That is easy. The world’s leading authorities on sales funnel management and performance are at MathMarketing. They now offer black belt workshops that teach companies and marketers how to do this. Known as the Funnel Academy(tm), these workshops are now available in the U.S. CEO’s should make these programs mandatory for every B2B marketer and sales manager. For that matter the CEO’s should participate, too. This is the best B2B marketing training on the planet.
Contact me for additional information about Funnel Academy modules and schedule.
*Source: MathMarketing alignment benchmark study 2004/2005 : 1400 professionals : 84 countries
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