Align Your Business To One Revenue Funnel

Ball FunnelOne challenge I hear (and frequently observe) in early-stage companies is: “How do you get marketing, sales and account services to work together?” Similarly, “How do you overcome conflict between these different groups?”

These questions make me cringe, because there really should be one revenue funnel that aligns key groups responsible for bringing in prospects, converting them into customers and maximizing their profitability. The sooner this misalignment is dealt with, the sooner performance unlocks.

The solution should be simple. Businesses tend to perform better when there is a single revenue funnel, with deliberate prospect and customer life stages that can be measured and optimized. This enables greater predictability of performance, so resources and investments can be continually deployed to maximize growth. (By the way, while customer journeys are more complex and dynamic than ever, revenue funnels don’t die – they adapt.)

To get marketing, sales and account services (and any other function) to seamlessly work together, the company’s leadership must precisely assign accountability to specific stages of the revenue funnel and customer lifecycle. While teams and individuals are accountable for specific stages, their performance also must clearly connect to macro performance goals.

For example, marketing may be on the hook for generating qualified leads, but that function should be partly evaluated and rewarded for the quality of leads converted into customers, as well as customer lifetime value. That will almost guarantee sales and marketing work together to maximize outcome; it also incentivizes marketing to apply its power and influence toward making services successful, including maximizing existing client profitability.

Managing teams and resources to a single revenue funnel is a simple concept, though disciplined execution is not always easy. Tracking performance across teams and the customer lifecycle can be resource-intensive. Additionally, if your company grew organically into silos, then restructuring teams and incentivizing them based on one revenue funnel will cause discord and company attrition, often throughout the ranks. New risks and dependencies make people uncomfortable. However, these are necessary short-term sacrifices that ultimately unleash revenue potential. This is a top-down commitment from the CEO.

Indeed, my portrayal of a single revenue funnel is somewhat simplistic. Companies often have multiple lines of business serving different market segments. However, the aspiration of simplifying to one or fewer revenue funnels, with clarity and alignment over responsibilities and performance, will result in a better-performing organization.

This essay also ran in MediaPost. Photo by Joe Shlabotnik

Published by Max Kalehoff

Father, sailor and marketing executive.