The end of The Funnel

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End of the Funnel Mark Hocknell 2

Yes that’s right – The Funnel that is used by some of the best marking organisations on the planet – has long passed its use-by date. The Funnel that we so often use to describe leads-to-converts (social media, marketing and sales), has stopped being useful at all, in fact I believe it actually hinders engagement with our future customers. Let me explain.

1. Firstly, The Funnel had its origins in the early days of the last century when knocking on doors was key to making sales. Then we evolved to making phone calls to get sales. So what happens today, in this age of the customer where we have information parity..? Our future customers are doing their research online and within their social networks (up to two-thirds or their buying journey). So all we have done is translate the front end of The Funnel to now include visitors on websites, or people that download a report or ebook and sign up for an email newsletter. Not what The Funnel was designed for. The customer environment and context has changed and yet we are still using the same tool. Does not make any sense.

2. Following on from this first point is that fact that using The Funnel, means we need to qualify the various stages and make individuals responsible for each stage. The Social Media Manager and or Marketing at the front end, and middle. Then Sales at the lower end. We develop complicated qualifications and then internally trade between these definitions to ensure our numbers balance. The use of The Funnel is fostering internal horse-trading. Rather than managing the whole system, we are focused on the parts and dealings with ourselves.
A Forrester Report (The New Physics of Lead-Revenue Management) demonstrates the inappropriateness of The Funnel (to me anyway) by showing the conversion rate from the top end to a customer is 0.75% (B2B in the west). Yes, 99.25% of people we bring into The Funnel reject your offering. Surely this is not what we are trying to do…

3. Language. The language of The Funnel is a shocker. Let’s think about those people that might be wanting to engage with our brand and offerings those people that we would like to become our customers, who love what we do and will become promoters of what we do. Now, let’s call them Leads and then give them definitions like marketing qualified, or sales qualified. Now let’s see them as unenlightened individuals that need to be converted. The sales team then approach these people like evangelists on a mission. Is this really how we want to treat our future customers. I think not. We should start the customer relationship the way we want it to be forever. How we communicate with our marketing and sales teams has a huge influence on how they ‘think about’ and ‘talk with’ the people we want to be our awesome customers.

Okay, so there is the top three from me on what’s wrong with the way we use The Funnel.

So here is an alternative way to think about what we are doing.

Surely our goal is to engage with our customers. We want to ensure we have value exchanged between us, and we would love our customers to be promoters. So let’s talk about Engagement Flow.

End of the Funnel Mark Hocknell 2

Image a pristine stream, up in the distance are some potential customers, we don’t quite know them yet, can’t quite see them clearly. As they are drawn towards us we start to see and understand them more clearly. Our role is to remove the obstacles that prevent them getting close to us. Draw them towards us. And, if the value exchange between us is right, and communicated well, then those customers will join our pool of customers who are also our advocates.

Today we live in the age of the customer and information parity. The Funnel does not sponsor customer engagement, it never did.

The management tool of The Funnel is outdated, it prompts internal debates and de-humanizes potential customers as Leads that need to be converted.

Let’s look to how we influence the Flow of Engagement with our customers.

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Images by Mark Hocknell

4 COMMENTS

  1. I agree that a worthwhile role of the sales organization is to remove buying obstacles – and there are many. But I don’t see funnels as an inhibitor. There are known limitations to the funnel metaphor. 1) funnels assume that buying and selling are linear processes. They are not. 2) funnels assume that there are distinct stages in these processes. Often there are blurry lines in between. 3) funnels connote that sales passively move from top to bottom, drawn by gravity, as opposed to pushed through the conduit using effort.

    But I like funnels because of their ubiquity. In a sales context, the concept is easy to explain and easy to grasp. It aptly illustrates a sales reality: closing a specific quantity of deals requires finding and nurturing a larger quantity of leads. If I took the time to delve into the convoluted pathways involved in most B2B buying and sales process, and how pipeline math works, most people’s eyes would glaze over. To open conversations, I accept that the funnel model is not perfect. Hearing a client say, “yeah, I get that” provides confirmation that I can progress to the next level of complexity.

    In addition, the language associated with funnels does not trouble me. The funnel model expresses very well that there are different concerns, issues, risks, and opportunities that must be addressed as sales – and buying – opportunities progress. And funnels illustrate a crucial revenue issue, because the delta between the opening at the top and the opening at the bottom is a rough proxy for marketing/sales efficiency. A severe taper possibly represents wasted marketing spend in the early stage. And no taper (cylinder) represents a nirvana that very few companies achieve – or even can achieve. Funnels provide a useful model for conceptualizing relationships and variables that can be extraordinarily complex and difficult to unpack.

    I think you are right to be concerned about what hinders customer engagement. But I don’t think funnels – or thinking about them – are a culprit.

  2. Thanks Andrew for your comment and engagement..!

    You are right the funnel is exceedingly easy to use as a communication tool – but for me I really feel that this ease is part of the trap. Selling has completely changed in the last decade or two – and what has mainly changed is how customers buy (B2C or B2B), but sales practices (in general) have not changed to maintain pace with the customer.

    I believe we are in need for a refreshed approach to sales (that is: customer engagement) that recognises that selling is better as a centric centric function, and build upon the fact that buying and selling is a mutual exchange of two-way value – not a situation where the sales person wins.

  3. Hello Amy – thanks for your comment, perspective is everything when we are communicating – and I feel the perspective of engagement flow gets the message across to the sales team in a far more centric centric, outside-in perspective.
    There is an image for engagement flow – I have updated the post so hopefully the right images comes through soon.

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