The Focus Fallacy: Why You Should Widen Your Sales Funnel

Principal of Global Sales Mentor and VP of Pharmajet. Zach has sold in 135+ countries over 30 years, building 9 sales teams in the process.

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There is a story that CEOs like to tell each other about a dinner party in 1991 when Warren Buffett and Bill Gates were each asked what the most important factor contributing to their success was, and they each said focus. These two men, and countless other successful CEOs and businesspeople, are ruthlessly focused. It stands to reason, then, that any CEO should consider focus a key element of succeeding in and growing their business. There is, however, a fallacy in this obsession that some CEOs have with focus. As a sales leader, I see this all the time. After interacting with dozens of CEOs over the years, I would say that 90% of my arguments with them have come down to understanding the place of focus in growing a company. Very few CEOs have an extensive background in carrying a sales territory, and they often struggle with the basics of sales and sales management.

I’ve heard that Bill Gates focused for months, nearly every hour of the day, to produce his first product. Then he turned around and focused, every hour of the day, on the next product. Warren Buffett focused on the idea of understanding the investment market and what could influence his investments.

While they were both focused, I am sure that they would be familiar with spreading risk and with the fundamentals of project management. As with many stories and slogans, when a strong statement like “stay focused” winds its way down to the practical level, it can be misunderstood and abused. Very often, CEOs with little sales experience believe that the path to success is to focus on a very small number of prospects or a very small market or niche and put a full-court press on that small target until they see results.

There is a fundamental rule that applies to all sales efforts: Not every sales interaction will result in a purchase order, no matter how good a sales process is, how excellent a product is or even how clear an ROI it has. Sales success is dependent on a balanced funnel and a wide funnel. Just to provide a very simple example, you have a 10-month sales cycle with five stages to the sales process, and you are losing 50% of the prospects over those five stages and 10 months. If you want to produce $1 million, you need to have $2 million enter the funnel. More importantly, if you want to produce $1 million the following year, you need to be feeding new prospects into the funnel over the course of the year, not focusing all of your efforts on one prospect as it makes its way through the funnel.

Of course, those are dumbed-down numbers, and we also aren’t taking into consideration yet that our whole goal is to grow. In reality, a sales funnel will look more like this: “I have an 18-month sales process with 12 stages. The conversion ratio from stage one to stage two is 50%. From stage two to stage three, it’s 75%. From three to four, it’s 10%, etc. I need to produce $5 million next year, but I need to produce $8 million the following year, and I am expected to produce $12 million the year after that. The primary benefits that my customers perceive they’re getting from my product are related to weather, so major changes in weather could impact buyer behavior. I have two solid competitors right now, and I understand the advantages I have over each, but I know that one of them is working on an improved product, and there may be another company entering the market.”

That is usually the level of complexity that a sales leader in a startup faces. To achieve my three-year goals, which will impact our ability to sell the company, start the initial public offering (IPO) process or drive later-stage investment, I need to balance the monthly input into the funnel (new prospects), and I need to manage the customers’ buying journey (all the customers) through the various stages of the funnel. I also need to be careful not to fall into a trap of low customer diversity. As with farming, if all of my customers are too similar, one adverse event could clear out my funnel. In 2012 and 2013, my company’s biggest-producing customers were from oil-based economies. They represented 60% of our international top line. My CEO at the time argued, extensively, that our selling expenses were so much lower in those countries that we should shift all of our focus there and ignore countries that were not extraction economies.

I pushed back, vehemently, with no knowledge of the oil market. I based my stance on the guiding principle of not putting all of one’s eggs in one basket. In 2014, the oil market tanked, and we lost most of the revenue from those markets. If we hadn’t had a strong position in other markets and time to pivot our efforts, we would have been seriously hurt. What we need to understand is that when we all stand together on the bridge and try to guide our company to success, we need to balance the real world with what we read in books and get in school. We can quote the greats all day long, but taking those quotes out of context or not understanding the ramifications of blanket statements won’t help us achieve our goals. We need to balance focus with the understanding of how a sales funnel works and the risks of putting all of our eggs in one basket.


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