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Book Review - "The Leaky Funnel Earn More Customers by Aligning Sales and Marketing to the way Businesses Buy"

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by Hugh Macfarlane

2003, Bookman Media Pty Ltd

(available on www.amazon.com)

Submitted by Michael J Webb:

HardBits (a mid-sized company in a maturing industry) is struggling because its products are being commoditized by competitors from around the world. Customers are slow to buy, often delaying decisions until the last minute. Yet they expect miracle delivery times and cheaper prices in the bargain. This is the setting faced by Frank McInroth, HardBits' General Manager at the beginning of Hugh MacFarlane's "The Leaky Funnel, Earn More Customers by Aligning Sales and Marketing to the Way Businesses Buy"
(2003, Bookman Media Pty Ltd).

The remaining 216 pages of "The Leaky Funnel" are reminiscent of Goldratt's "The Goal" published in 1986. They tell the story of people inside a company struggling to solve a critical business problem. "The Goal" sold millions of copies, became a classic in the genre of business novels, and has been credited with revolutionizing operations research and the management of manufacturing companies.
Although "The Leaky Funnel" may not achieve quite such a stature, its ideas and insights are similarly revolutionary.

Why does it seem so much harder than it used to be to get the customer orders we need to make money? Why do customers seem not to be loyal any more? Why does it seem ever harder to get them to act at all, much less to act rationally? How can we find a middle ground where both our company and theirs can still operate profitably?

"The Leaky Funnel" is the story of HardBits' struggle to solve these problems. The solutions involve some pain (General Manager Frank McInroth gets fired early in the book, for example), but result in substantial gain. The book's central argument is that a new framework is needed for managing the aggregate Sales and Marketing force. That framework requires surprisingly little "pain" from the company's standpoint (no large amounts of capital or "bet the company" decisions, contrary to expectations of the board of directors). Instead, it requires something even more challenging for the executives themselves: a re-thinking of how their marketing and selling roles are orchestrated with respect to the customer, and how their
results are measured.

While this book is not a great novel, it does an effective job of illustrating the perspectives and the blind spots of marketers and sellers in taking the new process-oriented approach. It is more didactic than "The Goal," in that it is obviously written around the important principles it is trying to convey and makes less of an attempt at characterization and romance.

The story is told largely through a series of monthly project meetings where the facts of the company's situation, what the characters have learned through their investigations, and the results of their efforts are thoroughly hashed. The reader observes a fairly detailed example of how to understand the customer as they go through steps to solve their problems, and how to recast the tactics of marketing and sales to more effectively assist them in that effort. The result is an excellent template of the issues, concepts, obstacles, and solutions for following the same steps in their own company.

One of the more powerful elements of the book, in my view, is that most of the changes required in marketing and selling are a redeployment of existing resources (and not requiring new ones). This is driven by the (new) general manager in a logical and appealing way. It reaffirms the truth that many of the problems of business are rooted in our own thinking. Once that is fixed, many of the roadblocks are removed fairly easily.

Hugh MacFarlane was responsible for the Internet business of Digital Equipment Corporation in the South Pacific. At Digital, Hugh's team of sales/marketing, technical support and consulting personnel helped Digital's customers and partners capitalize on the potential of the Internet and its commercial capabilities. In doing so, Hugh grew Digital's annual revenues from this segment from $2 million to $35 million over 18 months. He is founder and managing partner of MathMarketing (www.mathmarketing.com), the Australian sales and marketing effectiveness company that advises AAPT, Aviva, AXA, Citibank, Colonial, Compaq, Computer Associates, GE, IBM, Optus, Oracle, Perpetual, Telstra, Zurich, and others. Hugh has now led over 160 marketing strategy projects for businesses pursuing growth.

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