"Many senior sales executives are still looking for a predictable flow of leads at the end of a lead acquisition and nurturing 'funnel,'" says Francois Gossieaux in a post at the Emergence Marketing blog. But there's a problem with that expectation. "[T]he funnel metaphor," he argues, "is broken."
Here's why:
- Your customers no longer make purchases in a linear fashion.
- They no longer rely on your company for advice: instead, they look increasingly to peers and friends who use your products or services.
- They have more choices than ever.
Gossieaux cites a McKinsey Quarterly study that found companies now control only one-third of the touch points in a buyer's evaluation process. "DID YOU HEAR THAT?" he says. And, putting a positive spin on the situation, adds: "You still control 1/3rd of the touch points!"
But to make the most of those touch points, he says, you must rethink how you handle lead generation by:
- Ditching the funnel concept
- Ensuring consistency among the touch points you still control—for instance, in-store displays and packaging
- Making your company as visible as possible to potential customers during the buying cycle
The Po!nt: Don't use outdated models to drive your lead-generation efforts.
Source: Emergence Marketing. Click here for the full post.
Tradeshows and conferences are great places to meet your customers and get to know them better. Check out "Six Steps to Forging Customer Relationships at Tradeshows and Conferences" for a step-by-step guide on making the most of these venues to engage with potential customers.
by Christina "CK" Kerley
Comments
by profmurph Thu Sep 3, 2009
Silly article. A funnel is symbolic of the universe of suspects-to-prospects for selling your product to other businesses. As you qualify prospects, some fall away and others offer more potential. To say that the funnel concept no longer is viable--is stupid.
by Rob Tue Sep 8, 2009
profmurph, I agree.
In tough times the funnel concept is what will bring consistency and sales.
Provided your meesage and approach are on point the more prospects you target, the more leads you will get and the more sales that will come about as a result.
The funnel concept should be a key plank in forecasting the potential of any campaign or other marketing activity.
There should also be a focus on increasing conversion rates between stages to steepen the sides of the funnel, thereby increasing efficiency and the effectiveness of your sales and marketing programs.
by Hugh Macfarlane Sat Sep 12, 2009
The funnel has indeed sprung a leak. But that, in itself, is not news.
As the author of 'The Leaky Funnel' (2004), I might be tempted to be somewhat defensive, but let me try to not do that as I explain a few things about the way businesses buy that are not explained in the McKinsey article, which is about consumers, not businesses.
Firstly, businesses and consumers buy differently. We don't buy on emotion, we buy to meet needs. But we have many needs which go unfulfilled. Sometimes, the pain of acting (money, work, distraction) is greater than the pain of not acting. So we don’t act to meet all needs. So need is key, but so is problem. And benefits? Well they come AFTER you buy. Preference? Probably somewhere in between need and buy, when we are considering our options.
So as you can see, many of the elements of a purchase that we often market to (pain, need, preference, benefit) are somewhat sequential. I coined the term “the buyers’ journey” to describe this sequence of thought for a business buyer.
Now to the leaking bit. Sure, we all knew that the metaphor was flawed (not all the names you tip in the top come out the bottom). The key is not that buyers leak, but knowing where they leak, in what proportion, and how long they take to leak. Because when you know these metrics then you can model what the future will look like, and use this to decide what to change. We made a little model you can use (for free) at www.mathmarketing.com/sales-funnel-calculator.
Final thoughts on leaking. Most if us do a good job moving buyers through our funnel. But how well do we manage the way they leak so that we can get them back into the funnel? This ‘recycling’ of leaked buyers is key to making use of your past efforts. Don't ask me one time to read your whitepaper, ask me ten times. And if you want to ask me ten times, maybe make the request itself valuable so that I WANT to read each invitation.
You'll see an example of this too at that address I posted above.
So the funnel leaks, but it is also full, flowing, and very healthy. Thanks for asking.
by Chris Blackman Sat Oct 3, 2009
I have to concur with Hugh. And to me the orginal article dos not support its own case for ditching the funnel.
Because whether you call it a funnel, a pipeline, a drip system, database, forecast, call sheet, whatever, the fact is consumers, as with businesses, research, discover, check, compare, budget, resolve, cull, analyse, decide and then, maybe finally, purchase.
The point is for any business and any customer, G, B or C, the buyers journey is always a unique, albeit formulaic experience.
The issue is not, as Hugh says, that the funnel leaks, but where, when and how much it leaks. Which you have to know, accurately, so you can change things and improve the final productive flow rate.