I’ve been reading a lot of articles, some from people who should know better, declaring the death of the funnel. I have to admit, I get frustrated and tired with a lot of this talk. But more importantly, I think it demonstrates a complete misunderstanding about what the funnel really is.
The funnel is simply a representation of a process. People choose to label or represent the “funnel” in different ways. I interchange the words pipeline and funnel, but mean the same thing. Some times, I use the concepts of selling cycles or buying cycles. Pictorially, it sometimes looks like a funnel with stages in the funnel (I guess that’s how you tell I’m a sales guy – because I draw those pictures). Sometimes I represent it as a circular sequence of steps or stages. Sometimes, it looks like a flow chart or a decision tree.
When I talk about the funnel, depending on the client or audience, it may have different steps/stages, and the labels of those stages may change. For example with one customer I might call the proposal stage “proposal,” (duhhh), with another I may call it “quote.” Only because it helps convey the concept or the key objectives of that sub-process more effectively to that group of people.
Where I “start” my funnel or “stop” it depends also on the audience and their perspective. I prefer not to distinguish between a marketing funnel and a sales funnel. It seems to me the processes must be integrated so, we should be talking about an integrated set of process flows. But very often, I talk about a sales funnel, because the audience I am addressing are sales people and we are talking about the set of processes they focus on. Equally often, I may talk about a buying funnel when I am focusing on understanding and aligning with a customer buying process.
But whatever words, whatever pictorial representation I choose. The funnel is really a description of a process. Everyone’s “funnel” will be different, because our processes for working with customers and their buying processes are different.
But all we are talking about is a way of expressing a set of processes. It’s odd, when I read about the “funnel being dead.” Often what the authors go on to explain is something that represents their version of a process with their usually trademarked label for the process. Others just demonstrate their blissful ignorance, because they focus on the label, not understanding that it is a convenient way for us to represent and talk about a set of processes. These folks seem to understand neither the underlying process, it’s importance, or the principles driving those processes.
The processes of engaging communities, prospects and customers will be called various things. The processes of communicating with them will be grouped in differing ways. The processes of attracting new customers, retaining existing customers, helping them buy will have different labels. As long as the we understand what those labels represent, they are convenient in facilitating the discussion.
However, make no mistake, the most impactful discussions are about the process. They are about how we tune and refine the processes to be as effective as possible. They are about how we align those processes to have meaning, value and impact on our customer. They are how we design our processes for inclusion. They are about how we execute the processes with precision and how we measure our effectiveness in execution and the results we produce.
I have no interest in engaging in discussions about which label should dominate, I’ll choose whichever is expedient for the moment. Labels are fundamentally unimportant. The only meaningful conversations to me are about the processes underlying these labels.
Am I being too cranky?
Not too fast Dave.
There are uses of the funnel metaphor which can be outright devastating for a business. One that comes first to my mind is trying to represent ones business in one single funnel, despite the fact that customers buy in different ways. With one and only one funnel model in place, this means that deals can enter at different stages into this funnel. What can happen then is that the ideal shape of deal flow to assure sustainable growing business is no longer the one of a funnel. If this is ignored, Management draws wrong conclusion and taking decisions pointing the business in a wrong direction.
Does that mean that the funnel is dead. No. It just means that the use might be inappropriate in certain contexts. Declaring that the funnel is dead grabs though attention to articles warning of inappropriate use of the funnel metaphor.
So when working with models with my clients I always tell them the quote of George Box, an industrial statistician, who said “All models are wrong, some are useful”. With this mindset, discussions on applying models to understand business situations become much more productive.
Thanks for the comment Christian. A bad process design or model does more harm than good. As I mentioned, the “funnel” concept is just a convenient short hand for describing your sales process and reflecting the progress of all opportunities through the sales process. It’s critical to have the right sales process in place–not to overengineer it—not to force fit something that’s in appropraite. We couldn’t be in stronger agreement. Thanks for your contribution to the discussion.
David,
I agree that the processes funnels represent are at issue and not the funnel itself. I like what you said about sales beginning in different stages, each of which deserving a different process. Also, there are sales processes in use that I think are ludirous and create equally absurd graph images.
One thing all sales processes have in common is they begin with a higher quantity of leads than closed sales and retained customers at the end. How we develop, cultivate, and nurture potential customers and maintian existing customers deserve more attention and than geometric infographics.
What I have most trouble with, and what deserves severe scrutiny IMHO, is dropping in leads at the top and running them through a pipeline with a food processing mentality that drips a few dollars out at the bottom.
Shifting focus from graphics and metrics to customer experience and customer life cycle can change the funnel into a valuable visual to aid for review of the results and planning.
Gary, thanks for the comment. You cover a lot of territory here. Some thoughts:
1. I think there is an error when “guru’s” propose “the process” to replace the “funnel” or all ofther process. I’ve never seen two companies (even head to head competitors) have the same sales process. The sales process is unique to the organization. Anyone proposing an altternative, one size fits all, doesn’t know wht they are talking about. (This doesn’t speak to the quality of the process design–I’ve seen too many bad sales processes).
2. There’s the popular notion of two “funnels,” a marketing funnel that some how produces sales qualified leads, and the sales funnel to which these leads are input. I think this notion is outdated and holding organizations back from being truly effective in aligning wiht the customer buying process. I think there should be one funnel with different stages and differeing activities(sub processes) within those stages. Within those activities, there will be different roles–marketing will lead in some, sales will lead in others. This is not an unfamiliar concept. In many organizations, telesles focuses on the top fo the sales funnel, turning opportunities over to other sales people. The customer doesn’t care which funnel they are in, they have their buying process. I think we need to look at one common funnel across sales and marketing and start integrating the functions to reflect a more appropriate customer engagement model.
As always Gary, you provoke a great discussion.
Hi David,
No you are not being too cranky.
I agree with your position in describing the “funnel” as a set of sales process’s that relate to an organisation getting its products and/or services to market.
Regardless of its label, my frustration is the senior managers that use their internal sales process (sorry funnel) as the measure to “forecast” sales.
I often have wondered how salesperson X can attribute a % to winning a deal based on the progression through their own internal sales cycle (oops funnel). Sure the prospect has stuck around long enough to progress them through a number of stages, however how do you know that the prospect is not doing the same with your competitor/s?
You do know! You are speaking to a friend of yours at the company? its a decision maker! they really “need” what you have developed for them, they understand the “benefits” of your “solution”, terrific!.
Obviously you have a better PROBABILITY of success….
A little away from your topic David, however not too far.
Dear Senior Manager, whilst being infactuated with where the opportunities lie in your funnel, can I politely suggest that you develop some measures around probability that encompasses “customer” feedback and reference points. Perhaps your sales people can then focus on drawing opportunities through the funnel that are more likely to result in a deal than those that are not. This may stop you wondering why the sales person can’t close all the those deals down at the pointy end of their funnel…. they actually may not be there to close at all!
Thanks for the comment Darren, you’ve opened another Pandora’s box with the probability of winning. Too often the thinking behind this is just measuring progress through the process, not whether the customer is going to buy. We have to remember, at least two get to the final consideration–and one has Zero probability, the other has 100 percent. Reread the forecasting white paper I sent you—we cover this in the last few pages. Thanks for raising the point, you’ve got my juice flowing on a new article.
Hi David,
I totally agree with you on the usefulness of the funnel or pipeline, representing different stages within a process.
It is a perfect tool to monitor and assess performance, and is an important part of our weekly Key Performance Indicator meetings.
Also, I think it is a waste of time to discuss the actual name giving of each step in the funnel. The funnel is just the frame and each person using this tool needs to identify and personalize the steps within the funnel to make it fit to the individual situation and purpose.
Cheers,
Ninja
Ninja, thanks for joining the discussion. I think the funnel–as a representation of processes key to sales and marketing will continue to be critical. The one slight disagreement I might have with your comment is that each person personalize the steps within the funnel. I would tend to suggest the need for a set of standard processes—based on the organization’s best experience. Having said that, these steps should not be so detailed or formulaic to remove creativity and innovation from people in execution. They should provide general guidance to keep people focused on executing the process sharply–but not overly prescriptive.
If each person has their own process and steps, it is difficult to assure they are executing the best experiences and performing at the highest level possible. But this is just a picky point about your comment. In generaly, we are in complete agreement.
The Sales process/ funnel/ pipeline to me is a depiction of the way customers want to buy, not how sellers wish to sell. Looking at the process exclusively from the sellers view is antiquated at best. To me there is always need for a defined process but based on how clients want or need to be serviced. No longer is the pipeline/ funnel a purely linear experience. From my view there are defined stages and effective processes seek to engage customers at each stage in the most appropriate way. Managing the sales process or funnel requires an integrated effort and must consider all aspects of communication and engagement with potential and existing customers.
Brent, it’s great to see you here, commenting. Too often, I see people losing sight of what the funnel/pipeline is–a set of processes. These processes will vary from organhization to organizations (and even within an organization).– because the buying processes of their customers will vary. There are a varieyt of ways to represent the processes pictorially, whether as a funnel, pipeline, circle, or as has been suggested, a set of rings, surrounding the cusotmer at the center.
One of the important things when you start aligning around the customer buying process, you no longer have two different approaches within the organization (marketing and sales funnels), but you start looking at a single integrated set of activities, with differing roles and responsibilities. Customers don’t care about our marketing funnels or sales funnels. They just want to buy.
I really appreciate you joining the discussion. Hope to see you here frequently. Regards, Dave
I can see where you are coming from. The funnel can still be used in a sense, but some of the characteristics are dead. The process is not the same as it used to be. People can not do more research along the buying journey and there needs to be much more engagement along the way then was necessary in times past. The funnel may still exist, but it looks more like an hourglass now. To help in the process one must anticipate the consumer’s actions. Things like positive customer reviews, an active social media presence, online reputation management, and product information in the form of pictures and videos are necessary to keep potential customers engaged. Funnel may not be dead, but is most definitely not the same.
Thanks for the comment I think you’ve hit on an important issue that many fail to recognize. The “funnel” will always be changing. If we haven’t reassesses our process for engaging customers, then we aren’t aligned with how they buy and how we can maximize our impact. Today’s funnel is different from yesterday’s, and tomorrow’s will certainly be different.
But regardless of how it looks, it’s a powerful tool to understand how our customers buy, how we most effectively engage them, and how we measure our progress in doing so. So the funnel allows us to be very disciplined and focused on producing results for our customers and our organizations.