For all the moaning about tight customer budgets and slow buying cycles these days, it may turn out that the answer to your sales woes lies within your own company. That’s because in many organizations, the sales funnel acts more like a sieve than a funnel with as many as 75 percent of leads leaking out, according to Derek Karam, CMO and head of program architecture at OnPath Business Solutions, a company specializing in demand generation and funnel management. Patch up the holes, he adds, and you could as much as triple the amount of revenue coming in from any given group of leads.

It’s an issue that makes sense from a cost standpoint as well. Karam says it costs about one-sixth the amount of money to nurture a lead that has fallen out of the funnel than it does to find a brand new one. Most sales managers know this but are so quarter-driven that funnel leakage tends to hold a low priority on their to-do lists. And until recently, that’s worked just fine. Prior to the recession, sales teams could "focus on the hot stuff and they’d make their numbers. Well, now there’s not enough hot stuff," says Karam. In light of all this, he adds, "there’s been a lot of attention recently on recovering leakage and re-mining or re-farming leads."

It all comes down to how well and how long a lead is "baked," as Karam calls it. By way of example, he cites a case where OnPath worked with a company selling an enterprise-class storage product. It was an ideal scientific experiment in funnel management because the organization took its geographic list and split everything in half, using its traditional marketing/sales handoff approach on half the leads in each territory and OnPath’s approach for the other half. The first model called for marketers to nurture a lead until it met certain criteria and then they’d hand it over to sales and be done with it. In the second model, OnPath baked each lead down to an actual appointment, briefed the salespeople before they walked in, and then debriefed them after the appointment. If the appointment didn’t go well, says Karam, "we went into a post-mortem and in most cases were able to recover the lead."

The results were astonishing. With the same market, same message, and same product, the OnPath approach generated three times as much revenue as the company’s traditional handoff approach. "When we simply handed the lead over the fence to their criteria – budget, timeline, etc. – it generated one-third as much revenue. And only two of the 10 leads we handed over the fence were followed up on, even though every lead we handed over was red hot," recalls Karam.

The bottom line: "If you’re going to improve your revenue situation, you’ve got to improve the leakage in your funnel," concludes Karam. That means baking leads longer, recovering them if a meeting is unsuccessful, nurturing them if a prospect isn’t ready to buy, and otherwise plugging the holes in your sieve so that it can truly be called a funnel.

For more information, visit www.onpath.com.