Author: Ian Meharg | Reading Time: 7-8 minutes
To fully embrace this statement, let us first expand what we mean by a “sales funnel”. In most businesses operating in the B2B arena, i.e. businesses selling directly to other businesses, there is an established sales function and usually a team of salespeople following a defined process and methodology.
The role of the sales funnel
As part of the sales management role, each sale or opportunity proceeds through a series of stages or gates which is often called the sales funnel. The purpose of this is to control the opportunity from the time it is first identified to the point at which it finally “closes” and the customer completes the purchase. As opportunities move down the funnel, they are subject to qualification -is this real? – and to differentiation – are we better? – by the sales team, such that the ratio of leads added to successful sales delivered changes at different points. You always need more in than you get out.
How could this be wrong?
Firstly, the word “funnel”. Think of a funnel as a simple device that allows a vast quantity of stuff to be poured into it at one end so that a small dribble of better stuff comes out the other, perhaps with a bit of filtration along the way to remove some of the bits you don’t want. The challenge this view brings is that, combined with the sales process itself, the metrics that drive it are mostly focused on the seller and not the buyer. The pressure to deliver means that sales teams worry more about their activity levels than they do about the outcomes the buyer needs. The linear, target driven approach may well suit vendors but increasingly it is being rejected by buyers. If this is what is actually happening in business why persist in calling it a funnel?
Secondly, the word “sales”. Sales is what YOU do. But for the sale itself to happen, the customer also has to BUY. Obvious, right? Well not if you look at the way a lot of corporate B2B sales processes are conducted and the manner in which many salespeople are incentivised and managed. You could be forgiven for thinking that the customer was merely an irritation to be dealt with, so that the much more important job of “selling” can forge ahead. But if you take the customer out of the equation, there is no sale and therefore no sales process that is going to work. So, the focus surely needs to be at least as much on the customer buying, as it does on you selling.
Maybe it’s time to call it something else
Another reason why this approach may not be relevant any more is the presumption inherent in it that the buyer understands the problem or the opportunity he is trying to resolve. This understanding enables the buyer to either go out to the market to assess potential suppliers of a solution or for inquisitive sellers to probe and find out if there are problems they can solve or opportunities they can support with their offerings. The trend alluded to above that savvy buyers are now able and willing to completely bypass a vendor’s sales function is because they can readily and cheaply get all the information they need from other, less partisan sources. Vendors relying on sales teams to provide that information will start to struggle. And with this type of engagement model and the attendant sales funnel very much dependent on the vendor being able to qualify his chances and differentiate his offering, it isn’t hard to see why the “normal” sales funnel may no longer serve your needs.
The exciting, yet also scary, aspect of this is that there is in fact another funnel in operation which the vast majority of typical B2B sellers are blissfully unaware of or unable to access.
The exciting, yet also scary, aspect of this is that there is in fact another funnel in operation which the vast majority of typical B2B sellers are blissfully unaware of or unable to access. That funnel is the one operated by the customer long before he gets to a point of understanding the problem or opportunity. It often starts with an idea, or a serious business pain, and progresses these through an internal decision- making funnel to a point where the problem or opportunity is well enough understood to engage the outside world.
Vendors who are able to engage with the customer’s funnel at the very early stages will find themselves helping the customer define the solution and therefore increasing their chances of being the one who provides it. But that approach differs dramatically from the one needed if you only manage your own sales funnel on the basis of waiting for leads to fall into it. Rather like the spider’s web.
The Value lens
Accepting that assertion for a moment, you would rightly and properly ask “what should I be doing instead?”. Before you attempt any changes, first you need to step back and look at your approach through a very different lens. The lens of value. And most importantly, value as the customer perceives it, not you.
As with the term sales funnel, let’s look at what “value” means in the customer context. We could define it as “results over time”. What that means is that by using the thing you provide, be it a product, a service or a combination of both, they improve their business outcomes in a way that can be measured by them and drives their business forward. Consequently, to make this sustainable for both of you, it has to happen again and again – over time. That way the customer is able to determine that, by using your stuff, his business is getting better in ways that matter to him and he is therefore much more likely to continue to do business with you.
It should not be too much of a quantum leap, therefore, to recognise that working to deliver measurable customer value over time will require a significant shift in the way you manage your “sales funnel”. And what feeds it. You should probably call it something like “customer value repository” instead, just to make the point.
How customers see value
But there is one other important shift you need to make in order for this transformation to really work. The reason is this. There is more than one kind of value recognition. We have posted an article here previously that explains the 3 different ways that B2B customers understand and recognise value.
As Bob Dylan sang in the sixties, “the times they are a-changing” and they still are. The pace of change is accelerating and the impact of change is getting greater by the day. Reinforced by the current pandemic situation there is a fundamental shift in buying patterns in the B2B world.. This was initially powered by the huge amount of information readily available to buyers which enables them to bypass the traditional vendor sales team.
If opportunity rather than fear is what motivates you, then you will see that a move into a sales model that aligns with how your customers buy could bring massive benefits, as long as you set yourself, your offerings and your sales approach up to be effective in that method. Trying to crack the inside world of decision making in your customer with a sales force managed through targets, incentives and linear sales processes of qualification metrics and differentiation techniques-in other words, a normal sales funnel- simply will not work. I know because I tried it.