The Bowtie Sales Funnel, Part 1

Pushing leads through a sales funnel is as effective as swinging a bat with only one hand (not very).

The well known and often cited inverted pyramid-shaped sales funnel is a useful tool for many types of sales motions. It works for SaaS platforms, gardening tools, used cars, and everything else for sale. It’s familiar and easily understood. Pour leads into the top, qualify them as good or bad, and close the deal.

But I’m here to tell you that strategy is less than half the story. If you’re trying to make money (and you are), this motion leaves so much on the table and by itself is an incomplete picture. Let’s consider the typical sales stages in a tech SaaS platform approach using standard Salesforce nomenclature:

1. Gather Marketing Qualified Leads (MQLs). I define a MQL as a company that appears to be in the market for my product. That means they could benefit from what I offer and my product addresses a need I think they have. But I have not yet met the decision maker nor have I verified they may be interested. They merely look good to me.
2. Qualify MQLs into Sales Qualified Leads (SQLs). Here defined as a decision maker at the company where I have established minimal contact AND crucially, has indicated some measure of interest. This comes in the form of a scheduled meeting or demo, request for a deck or presentation of standard commercial terms. Something has indicated they are open to a true sales meeting.
3. Negotiate -> Closed Won. There are many intermediate steps between SQL and Closed Won which often include in person or video demos, multiple meetings, objection handling, commercial term negotiation and only then, Closed Won. These steps differ depending on the product you are selling. Sales cycles differ too from days to many, many months. Some deals never close no matter how well qualified. But this path is the common, well trodden route to selling almost anything.

But if we are trying to build a business, that is only half the story. MQL>SQL>Closed Won>🍾 is NOT the fastest way to building lasting revenue. Again, it is less than half the story. Let’s review:

Half Bow Tie (simplified common sales funnel, turned horizontal)

A useful trick to proceed from one stage to the next, is to ask yourself the right question. At the MQL stage, can you honestly determine that the target company looks like a potential customer? Do they buy products like yours? Can you at least identify who might be the right decision maker? Can you find their contact info? Any shared professional connections? Based on research, do they need your product (you may be wrong about this question but be honest and don’t stretch too far- or else you are just spamming your MQLs). I believe sales leads are not even MQLs until I can affirmatively respond with YES to these criteria. When you ask yourself if the lead looks like a MQL and the honest answer is Yes, then move them forward.

Great, now you’ve culled down your list of sales leads to a magic number of 40 MQLs. Why 40? Because it’s just right. Not too many that you can’t keep track of all your communication and research. But not too few that after your close rate shakes out, you still have enough deals that will likely be won so that you can hit your revenue targets.

With our 40 SQLs, (qualified MQLs where the decision maker has indicated some level of interest), you must ask yourself if the SQL has “asked for more” as you move through the demo to negotiation and then into the closing phase. Each of these steps is a highly specialized stage customized for the product. Sometimes the product is just so well designed that only the price matters. Other times the product is complex and requires a demo or in person sales meetings with various stake holders. Often a senior leader needs to approve the purchase and all these stages take time, drawing out the sales cycle. You’ll get there eventually. Not all the time and not with every SQL. But hopefully often enough such that the time and effort are offset by the revenue you bring in from the deals.

Seems like Miller Time, right? Not so fast. If, as we said above, the goal is to generate meaningful revenue, then the Close Won stage of our sales funnel is not even half way to the finish line. Only now does the hard part begin, which is the second half of the sales funnel: Onboarding, Assessing Value & Impact and Finally Grow Share of Wallet. Another inverted pyramid that when put on its side with the two points of the funnels face to face, forms the complete Bow Tie funnel.

In part 2, we’ll cover the second part of onboarding, scaling and expanding SOW.

Spoiler Alert: The second half is where the real dollars are made.