22 January 2021, by

The sales funnel is a familiar concept which tracks the conversion of new contacts from suspects to leads to prospects and then to customers.  This is typically represented as a cone with lots of leads being fed into the top of the cone and a much smaller number of customers resulting at the bottom.  The trick with successful business is to have as steep sided a cone as is possible since this will mean that resources are not being wasted.  Many suspects are usually contacted using relatively inexpensive mass marketing in an attempt to gauge interest.  The resulting leads that are fed into the sales funnel should be carefully qualified since vastly more expensive resources are likely to be expended on each one.

Typically a business will have a working knowledge of the ratios between leads received and proposals made and between proposals made and actual sales achieved.  Also and importantly in cashflow terms an expectation of the length of the average sales cycle or time taken for a contact to move through the sales funnel.  For a given number of expressions of interest (leads) there are many reasons why no actual sales proposal is made nor demonstration done.  So for example there can be issues of timing or the lead’s seniority in the decision making process and so on.  Issues like these mean that there is legitimate interest but not the likelihood of a sale within the typical sales cycle period.  Some of these leads may result in future sales but most will just turn out to have been folk information gathering, perhaps as part of their own due diligence prior to committing to a purchase elsewhere, or just simply tyre kickers.

Qualifying the leads and prospects actually in the sales funnel is, of course, a key sales skill.  The intention is to focus the sales resources on the leads that might actually become buyers within the normal sales cycle time-frame.  Perhaps this is best done by seeking some sort of financial commitment prior to actually preparing a detailed proposal.  If the price of producing a proposal is to be set off against the ultimate purchase there should be few complaints from a legitimate buyer.  It is also a good way to put a value on the sales effort being made in the buyers mind – remember that the sale is seeking to solve a buyers problem in some form. 

The concept of “low hanging fruit” referring to those customers it is easiest to acquire is useful in focusing sales resources effectively.  It makes business sense to target these potential customers first to ensure profitability is established.  ie it makes sense to target those most likely to purchase (first or indeed at all) and then later to consider introducing more marginal new leads into the sales funnel.  So over time a general widening of the sales funnel might be desirable but initially efforts should be made to identify and focus on the proven but presently unserved market with the best potential. 

An efficient qualification process which identifies the suspects is the key here.  Established businesses will have target markets based on experience both in terms of type and potential of their existing customers.  Lead building should be focused on finding other potential customers most like the most desirable of the existing customers.  In B2B sales for example adding new customers who are themselves growing would be an excellent strategy.  A system such as USP Data which can accurately profile existing customers and use that analysis to pick the most promising from the multitude of suspects will be key to keeping lead building costs down.

At all times the cost of generating a lead should be borne in mind and compared with the lifetime value to the business represented by a new customer. The appropriate sales methodology will be determined by the customer order value and the conversion ratios or slope of the sales funnel sides.  Cash may need to be invested in the lead building if customer lifetime value is large but extends over many years.  This difference between profit and cashflow should certainly be accounted for in the campaign projections.  The number of suspects who might be interested in a proposition needs to be determined to establish credible sales targets bearing these points in mind.


A profitable sales funnel will be likely to focus on identifying new leads which most closely resemble the best existing customers. A system which provides contact details of lots of suspects and a means to sift the wheat from the chaff such as USP Data will be a very useful addition to any lead generation activity.

Contact us now to find out how USP Data can improve your B2B Lead Building

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