Is the funnel still a relevant metaphor for the b2b sales and marketing process?

I'd call it an hour glass. Adding as much weight to the bottom that there is on the top. Prospects these days are influenced by other buyers. The more emphasis you put on customer nurture programs, and customer success, the more likely you are to have customers become evangelists, and actively sell your product/service for you.

And, it's less of a "sales" funnel and more of a "buyer" funnel. Your internal sales process needs to be informed and developed around your prospects buying behavior. They will not conform to you, the "what do we want them to do" question is now obsolete, so don't even bother. The question you should be asking is "what do they want us to do"?

It's really less about the funnel per se, and more about understanding and acting on how people buy.

The buying process for some target groups can be generalized into a specific flow, which might approximate a funnel. But more important than what shape this all takes is the need to understand who your customer is, how they want to buy, what stages they go through, what catalysts and accelerators push them along, etc. Your job as a seller is to translate the buyer insight into a sales process that operationalizes all of this into a process that can be repeated, automated (where possible) and scaled.

Allow me to start with some key trends that describe the modern marketing evolutions. There is an abundance of communication channels, people have increasing opportunities to gather information in the buying cycle, we live in a cross-and multi-channel reality which makes it more difficult to determine exactly how people become customers and what steps they are taking and finally: there is a shift from selling to buying.

The purchasing process is complex for companies and advertisers. How do email messages, online advertisements, offline advertising, peer influence, online and offline word-of-mouth, social interactions, recommendations, sales efforts, visits to trade shows and all the other contact moments interact with one another?

Traditionally we have always looked at selling, buying and lead nurturing as a funnel. Furthermore, this image of a funnel was a very linear one. However, it has been an image to understand how things work but it doesn’t reflect reality, especially today.

It is obvious that the purchasing process is everything but linear, as many marketers who specialize in a certain field still seem to believe. How often do you have an immediate conversion or direct road from a search engine ad to an online purchase for instance? Every company also has a different business model, go-to-market strategy and selling/buying cycle (from very short to very long). Here is an example that I have established from my own buying behavior. During the holidays I often try to get away for a few days. I just booked a short vacation online. Through my favourite travel agency. I did not type the URL of the travel agency; instead I typed the company’s name into Google. Why? No idea: the force of habit. The first thing that I saw as I typed the company name into Google was a text advert of the company, right at the top of the list. I clicked on it, was directed to the site and I booked my trip.

Now let’s look at it from the companies’ point of view: in their dashboards I appear as a customer who immediately purchased something after clicking on a Google ad. Or in other words: they attribute the turnover directly to their text ad activities. This happens thousands of times per day. Often it is much more complex. How many people search for something via Google after they have heard about it from a friend? If they then also click on a text ad, the lead or sale resulting from this should actually be attributed to “referrals” or “word-of-mouth” and not to search engine advertising. This is only one example.

Conclusion: the funnel is everything but linear and was it ever linear to start with? Only when you can track someone you can draw some conclusions with the necessary reserves. This applies for both B2B and B2C, although there are some differences. It is however clear that the way to a purchase is ‘nonlinear’ and not a simple funnel.

Businesses apparently start to realise this. Econsultancy recently wrote an article, titled “Shoppers Take a Nonlinear Path to Purchase”, wherein the results of a global retail study from Microsoft Advertising and Carat were summarized. Quite simply put, the report looked at the way in which different ‘media touch points’ influence the buying behavior of the consumer and found the complexity of the ways in which people gather pre-sales, sales and post-sales information and discuss their purchases with others. Therefore, it concludes, the conventional funnel from awareness to sale has changed

The non-linear buying behavior and the limits of the funnel metaphor have existed for a long time; they are only becoming clearer and more pressing as we move further in the direction of a cross and multi-channel reality.

I think it's a matter of explaining the whole process to people who aren't always familiar with the terminology. A funnel is a shape that's easy to understand, easy to draw, and as Terry Pratchett said - 'it's incredibly helpful while at the same time in accurate in every possible way'.

Yes, there are more people coming through the sides, not just the top. And yes, as Barbra pointed out, there's more weight on the people on the bottom - even in the funnel model, today we strive to get these people back to the top of the funnel. But it's still the easiest way to show that you need to get more people into the top. What happens on the way down, and the ways that more people are added to the flow, and some people leave - well, that changes from company to company, as each have a different goal and objective.

The notion of the funnel has been around for a long time as we all know. It was very relevant when sales people were the intial source of information for prospective buyers. As this becomes less and less so, the relevancy of the funnel as a metaphor is diminishing. With multiple channels of engagements now available, the concept that all opportunities enter the same entry point of a funnel is obsolete. So what next? I'm not sure however I have noticed a growing use of cyclical representations and these may prove to be a more appropriate metaphor.

I think the funnel metaphor, with accompanying clearly defined stages, a concept of progression (and issues of stalling / aging), primary ownership (marketing, sales, joint), and the ability to map tactics, content, tools and influences to each stage, is incredibly powerful.

Socializing this model, with hard conversion and cost per metrics & data has been one of the key drivers of relevance of Marketing at the executive level in many organizations over the past 10 years.

I agree that expressing the funnel as a vertical does implicitly assume that there is momentum / automatic progression, so a horizontal layout is a subtle but important point that Ardath makes.

I agree with Barbra and Tony that a downside to the funnel is the lack of a representation of a continuous flow or cyclical flow. In too many B2B companies, the majority of effort and marketing focus is on getting the most opportunities successfully through the funnel to close.

I think the best return on marketing effort that exists today is to prioritize the post sale customer experience and and follow on interactions so that customers become engaged and loyal. And continue to purchase, expand and deepen the relationship.

Investing in customer experience and voice of the customer programs, tying back to CRM and MAP platforms, executing campaigns that leverage the customer voice, and representing the buying cycle in a way that emphasis lifetime value is an exciting next phase of the journey.

I’m not predicting the “death of the funnel” – it will be with us for a while. But as a metaphor it does have some shortcomings. There can be a tendency for some to conflate the properties of real-world funnels, which adhere to the laws of nature, with the properties of sales funnels, which are governed by human nature.

The laws of nature are predictable. Human nature has no hard and fast laws, and it’s much less predictable. We will be hard-pressed to find a metaphor, in the physical world at least, that adequately represents the way the modern buying process works.

Let's say the funnel is not a relevant metaphor for the B2B sales' process but more for the marketing process mainly because it neglects the client's emotional cost in the sales' process (Gord Hotchkiss, The Buyersphere) and so the fact that B2B sales' process is not a rational process. Concept such as fear that stands for the risks the client might be ready to take must fit in in the funnel to get a better perspective of the sale's process with a greater meaning for B2B sellers once or if they decide to apply it.

I believe that the effectiveness of marketing automation software depends on the view of the sales and marketing processes taken by that company. An insight can be gained from Craig Rosenberg’s recent work on sales funnels. The version put forward by Steve Woods of Eloqua was very traditional – the sort of funnel which CRM vendors have designed their products around. As have most marketing automation vendors.

That has changed. A large number of buyers are now researching on the internet, validating through social media and presenting a fully researched and costed project to the board before they even fill out a vendor’s web form. The decision making is now going on in a large cloud, hovered over the vendor’s funnel but separated from it (see Mike Damphousse's cloud in the same series). CRM solutions and most marketing automation systems are useless here, with nothing to go on as the buyer hasn’t identified him/herself. They often compound this in B2B environments by assuming that the chooser, purchasing decision maker and buyer are the same person when in many organisations there are dozens of people all with an input.

This changes the requirements from a marketing automation solution. What is needed is a system for tracking web visits and social media behaviour and aggregating this into an insight into buyer behaviour before they connect. By analysing their behaviour (which search term did they use or which thread on which LinkedIn Group) you could find out which channels they are using to make their decision and you could then put relevant information out there where they are likely to be picked up and entice prospects to connect. You could also see whether it is from one location in a multi-site organisation and an analysis of which product pages they have visited would give you a good idea of what they are interested in. All of this needs to be done before anyone gives you an email address, phones anyone up or signs up for a seminar.

That to me is true marketing intelligence for a B2B company. I've only found one vendor who can provide it though - LeadFormix.

If a sales professional and/or manager understands what their industry success analytics are in todays market then analyzing a funnel can be extremely useful. If you are gathering information for information sake then of course they're a waste of time.

There are many opinions on how to successfully manage a team. I have never been able to do my job as a manager without some sort of funnel/pipeline information. I have, however, been able to get sales professionals to change their focus to a more successful end using a funnel.

I my industry we have three group/levels that we focus on all based on size and proposed amount. Keeping a watchful eye on the amount of activity in each segment is a prerequisite to success. Too many small deals and waiting on the elephant is an example of a failure about to happen.

Chris Lott
http://www.lottspace.com

One flaw of the funnel metaphor is that in a case of the physical version, anything that enters a vortex-shaped funnel will eventually go through the hole at varying rates (depending on centripetal force and gravity). That is simply not the case with inquires and leads where most will never make it through. You get leakage due to claw backs and exits, and you get feeders, and you have omnipresence since many of your leads are also in your competitors' funnels which affect their movement through your funnel. As for other analogies; dating, flypaper, and black holes come to mind but are also suboptimal.

Too many are taking the funnel too literal. There is another way to look at the funnel. The funnel just repents a shape. It sounds better than upside down triangle and it has an opening at the bottom. Take it for its representation.
The reality is that most marketing and sales systems move people through a process where you get inquiries that turn to leads that turn to sales opportunities that turn to sales. Each step of the process you reduce or loose some of the potential clients. That reduction is represented well by the funnel. The real power of the funnel is in the ability to quantify those steps. It takes this many inquiries to get this many leads that end up with this many sales opportunities and that many sales.
If you can measure each step you can work to improve each step.

Marketing and Sales Funnels are still very relevant today but like anything else they need to evolve based on industry trends, changes in marketing expectations from sales (numbers and science oriented) and technology. As an example, the adoption of Campaign Marketing Systems like Eloqua or Marketo focuses more of our day-today efforts on automation, drip, re-market and nurture campaigns. With this incredible capability we can now rely less on the funnel and sales doing its work naturally via standardized conversions (ie MQL's to SQL's) and have more work being done by these campaigns outside of the funnel...So maybe we need "intentional leaks/holes" in our funnels to take work out of the funnel and re-route to these systems to enable even higher
conversion with these campaigns. Then based on the effectiveness of each prospect in these campaigns they need to re-enter the funnel at the appropriate point.

Funnels forever but always changing!