Building Business or a Funnel of Doom?

My customer leaned back in his chair and sighed: “Look at this drawing the engineering department at Company X created.”  He opened a folder, took out a drawing of a funnel-shaped spiral, and pushed it across the table.  The top of the funnel was labeled “RFPs.” The bottom of the funnel, the narrowest part, was labeled “Doom.”

Here was the Owner of a small, family-owned business – a manufacturing company –  with multiple divisions and gross annual revenue we had grown into hundreds of millions USD.  Yet the only people generating business were his two sons, a few sales reps at one of the companies, and a “well-connected individual” who went to a lot of local and regional meetings and “made connections”. The Owner had no sales force or manufacturers reps. He wasn’t actively involved in the sales process, either, since he felt “everyone knows who we are.”

Hmmm…. There was more than just a Funnel of Doom going on here.

The Owner asked the engineers at Company X  to help generate business. The way he saw it, they needed to start earning their keep more effectively.  He also knew if Company X didn’t start generating more revenue, he’d have to sell that division. The Owner didn’t want to create hardship for these employees, but they were an underperforming division. And he suspected there was more than one reason for why customers and prospects didn’t want to do business with them.

The employees figured they had the boss over a barrel. So they dug in their heels, made a few feeble attempts to generate sales, drew their Funnel of Doom to document their failure…. and wagged the dog. The Owner was not pleased.

“Can you teach these guys to sell?” he asked me. “Root causes can have really big contexts,” was my reply. “There’s some psychology going on here and not just a failure to sell.” We decided to tackle the problem incrementally and sat down with the engineers. Here’s what we found out:

1. The engineers-turned-sales reps called their peers at legacy companies asking for RFPs to respond to. That was what these engineers thought was “sales” because an RFP was the only document which resulted from someone else’s “sales” efforts at their company. So this was their status quo perception of their company’s sales process.
2. The amount of business legacy customers conducted with Company X had diminished over the years.  But there were always RFPs they threw at Company X.  So it “looked” like they were still interested. In reality, they weren’t. Company X lived – and was going to die – by RFPs/RFQs.
3. The engineer-reps were so thrilled to have “won” the right to respond to these RFPs / RFQs – due to their own efforts – that they continued calling peers at their customers’ shops in order to generate more “sales.”
4. The engineer-reps were now spending 90% of their billable hours – yup, you guessed it – responding to requests for quotes. They hadn’t been awarded one contract yet, but were asked to refine drawings as the contract award date was pushed back. These guys were obsessed and consumed by the demands of their Funnel of Doom.

Does this sound like the churning and burning and dialing for dollars that goes on in sales organizations, where there’s no target, just a Ready-Fire-Aim numbers approach? (e.g., if you call enough prospects – or respond to enough RFPs – someone will buy from you).

For starters, I asked the engineer-reps to think about:

1. How easy it is to get someone off the phone by telling them to complete an RFP , which would go nowhere.
2. How it feels to be the “third bid company.” Because their company had become, over the years, an RFQ-mill, nothing more.
3. Which legacy / current customers were the best targets for their efforts, when the goal was NOT to be invited to provide an RFQ, based on one phone call.
4. Whether pulling financial data from the past three years would help the engineer-reps (and the Owner) identify existing customers generating the biggest positive impact on revenue stream – and the best initial targets.
5. Collaborative business development was part of everyone’s job description, from top to bottom in the organization.

The engineers reached for their Funnel of Doom drawing, which they carried with them, and crumbled it up.  They looked at the Owner. Clearly, we had some homework to do. However, this time around, they were going to do it. Together.

Babette N. Ten Haken, Founder & President of Sales Aerobics for Engineers®, LLC, brings entrepreneurial mojo and business- and revenue-producing collaboration and communication tools to small and mid-sized businesses and startups. Download her newest White Paper at her Free Resources Page. She was named one of the Top 50 Sales & Marketing Influencers 2013. Her book, Do YOU Mean Business? focuses on technical / non-technical collaboration strategies and tools.