McKinsey: Shooting holes in the “Sales Funnel”

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The latest McKinsey Quarterly carries a great article on the consumer decision journey – and shoots holes in the now outdated “sales funnel” metaphor. Whilst the piece focuses primarily on B2C buyer behaviour, our own observations suggest that many of the principles are equally relevant to the process of B2B buying.

The authors explain that the linear process concept implied by the “sales funnel” – although attractively (and deceptively) simple – no longer reflects the complexities of today’s customer decision journeys. It fails to capture the many touch points and two-way interactions that are a consequence of an increasingly well-informed, networked and discerning prospect community.

Ease of access to internet information, and the increasing importance of word of mouth, recommendation and reputation in the B2B buying process has transferred information power into the hands of the prospect. It’s no longer unusual for the group of potential solutions being considered to expand, rather than narrow, at some stage in the decision journey before the choice of what (or if) to buy is made.

Trigger Events

McKinsey highlight the importance of trigger events – something we’ve written about before – that kick-start the customer decision journey in the first place. As we’ve pointed out, in the world of B2B, these trigger events can be internal to the organisation (such changes in staff, responsibilities or circumstances) or external to the market (such as major changes in technology, legislation or the balance of competition).

At first the prospective buyer may either be unaware or unconcerned – but then something happens (the trigger event) to raise their awareness that they have an issue that they need to deal with – and the search for a solution gets underway. McKinsey see the B2C process as a circular, rather than a linear journey, with four potential battlegrounds where marketers can win or lose: initial consideration, active evaluation, closure through purchase, and post-purchase.

McKinsey Customer Decision Journey

These are closely analogous to the four key stages we have identified in the B2B customer decision journey: get connected, get considered, get chosen and get recommended. McKinsey point out that once they have defined an initial vendor consideration set, consumers then tend “shop a category” which may result in additional vendors being included in their evaluation – exactly the behaviour we have observed in B2B, and highlighting the critical importance of being found in the right categories when prospects start searching for solutions.

At each stage in their respective buying processes, both B2C and B2B customers face the choice of continuing, pausing or abandoning their decision-making journey, and adding, continuing with or subtracting vendors from consideration. Prospects of both types seem to have a strong preference for “pulling” the information they need to make these decisions rather than having it pushed at them by vendors, and to place greater trust in third party validation than in vendor messaging.

B2Both

So, although the McKinsey survey focused only on B2C behaviour, we should not be surprised to observe similar things happening in B2C, or to find that McKinsey’s recommendation – that vendors align their marketing efforts with the customer decision journey – are equally relevant to the world of B2B sales and marketing.

We’ll be publishing a series of connected blogs over the coming weeks, but I’m interested in your perspective – what can we as B2B marketers learn from this study? What other parallels have you observed?

Bob Apollo
Bob Apollo is the CEO of UK-based Inflexion-Point Strategy Partners, the B2B sales performance improvement specialists. Following a varied corporate career, Bob now works with a rapidly expanding client base of B2B-focused growth-phase technology companies, helping them to implement systematic sales processes that drive predictable revenue growth.

4 COMMENTS

  1. Bob: thanks for bringing this up. After conducting sales effectiveness workshops in Canada, Asia, and Africa, the salespeople I worked with shared insight about the limits of the funnel metaphor:

    1)There is no “gravity” in sales. The downward direction of the funnel implies that sales opportunities move through the funnel on their own accord, which we know is not true. In actuality, the funnel should be represented upward, as with a fountain, representing that resources (time and money) and effort are required to move opportunities through.

    2) There is not a single “entry point” into the sales process, as the traditional funnel model implies. Prospective customers can enter the sales process at multiple points. Furthermore, exit points are virtually unlimited.

    3) The taper of the funnel (or fountain) represents risks, and not every organization’s funnel has the same taper. Organizations that are better at identifying and mitigating selling risks will have a sales funnel that more closely resembles a cylinder (although I haven’t seen one yet).

    I’ve read about trigger events, and after over twenty years in sales I recognize that they undeniably occur–especially in B2C (when my washing machine breaks or begins to fail, I buy a new one. Generally, not before). But in B2B, I’ve experienced complexity to the point that McKinsey’s model doesn’t hold up. What, exactly, constitutes a “trigger event?” Are they the same for the shipping manager as they are for the CFO? What about multiple, disparate events that, when they occur simultaneously, create a significant failure–but not when they occur individually?

    Such conditions make tracking trigger events infinitely more challenging–and riskier, since they reflect forces and trends that some salespeople overlook.

  2. As the creators of Trigger Event Selling we have a unique grasp of the events that trigger (Trigger Events) that shift a decision maker’s satisfaction with the ‘Status Quo’, rearrange their priorities and VERY often result in a change in suppliers.

    What David Court says in the report applies to multi-million dollar B2B deals as much as it does to $50 B2C sales.

    Where B2B marketers can benefit is from the understanding that outbound marketing can be used to identify those who have experienced a ‘Trigger Event’ and create a first mover advantage. It is important to separate outbound marketing from inbound marketing.

    The challenge the majority of organizations, we talk to, have with inbound marketing is that the buyer has entered the buying mode of ‘Searching for Alternatives’ (I know what I have no longer fits my needs and I am talking to a number of potential suppliers about it) vs. outbound marketing that gets to decision makers who are still in the ‘Window of Dissatisfaction’ (I know what I have no longer fits my needs but I am so busy solving other problems that I have not gotten to this problem yet).

    Our research shows that the typical close ratio of getting to decision makers in the ‘Window of Dissatisfaction’ is five times higher than buyers who have already started the process of ‘Searching for Alternatives’.

    So “Understand Your Prospects Trigger Events” and you’ll understand the Tipping Point at which a decision maker is no longer happy with the Status Quo but has not done anything about it yet. Then you can put in place ways to repeatedly get to these decision makers before they start talking to your competition.

    For those who want to be able to identify the best Trigger Events for what they sell we have a Trigger Event Analysis (aka Won Sales Analysis) template and instructions that can be downloaded at http://www.TriggerEventAnalysis.com.

    Good Luck!

    Craig Elias
    ———————————————-
    Phone: +1.403.874.2998
    Twitter: @CraigElias
    Skype: Craig.Elias

  3. Bob, I agree with the title of your article but I agee for a different reason. Many sales theories were developed by analyzing a successful sale(s) process. I call this “trowing the dart and then drawing the circles.” The problem is with all these theories is that customers are not static and since they are the ultimate decision makers, customers, they don’t fit the formula as they have never been told their job is to conform to the formuula or theory. The end result, as you have written, is that the funnel has become a collander and it leaks from day one.

    What is common is not in the selling of products or serices but why causes customers to buy or not to buy these products or services. When customers/clients do not believe they can talk with confidence and intelligence, the fear of embarrassment or critisism comes into play and this is why they don’t buy or buy into what they are being asked to do. One could say that customers/clients are the resources “unpaid” salepeople who, btw, have never been taught to sell (get confirmation of their decision or justification of why they made their decision.)

    The task for any business is to look “inside the box” i.e look at what goes on both before and after the resource makes their presentation (audible, physical, visual).

    I guess there will have to be a lot of work trying to plug the holes in the funnel. Thanks for starting a discussion on the how to do it.

    Alan
    Alan J. Zell, Ambassador of Selling, Attitudes for Selling
    [email protected] http://www.sellingselling.com

    You are invited to suggest to your associates, acquaintances, family, friends, customers/clients to read the business articles on http://www.sellingselling.com to learn why they, like you and I, have something to sell.

  4. Two years after the original post and discussion we’re witnessing the rise of Social Business and the blending of Social Media and email marketing, CRM and websites and more.

    In all this complexity, the simplicity of the Sales Funnel model, recognising a buyer cycle and a selling cycle is still helpful.

    If it provides some structure for analysis and decision-making then it still offers value, even though there are clearly mutations, exceptions even completely different models.

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