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In the old days, sales and marketing could rely on a predictable sequence of events for turning customers into prospects.
Marketers would send out broad print- or email-based messages to a wide audience. Potential customers would respond. Marketing, and then sales, would try to capture their interest and turn them into buyers. Thus, the broad-based messaging would narrow as marketers and sales teams identified qualified leads or customers. Otherwise known as the sales funnel process, this inverted pyramid was the go-to map for how companies identified potential buyers and closed the deal.
Today, though, the inverted pyramid is only one possible pathway of a customer lifecycle, or journey, to a sale. Buyers are savvier and better educated through online research, peer opinions found on social channels and other means of self-service. For enterprises, the buying team has also expanded to include a wider array of decision makers. So, too, the channels of communication have proliferated dramatically, and the signals regarding customers' propensity to buy have become more complex. Finally, business-to-business (B2B) and business-to-consumer (B2C) customers expect a level of personalization in their journey that indicates that companies understand their needs and preference. The combination of these newfound pressures with the volumes of data that selling organizations have at their disposal has forced sales and marketing teams to adjust, prompting some to wonder whether the sales funnel is even still valid.
The sales funnel process in 2016
"Does the funnel still work in a digital, social, mobile age?" Mark Boncheck and Cara France wrote in a May 2014 Harvard Business Review article.
One thing is certain. With 67% of the buyer's journey now occurring digitally, according to some studies, "most buyers don't engage in a sequential process of information gathering," said Kerry Cunningham, research director at SiriusDecisions Inc., a global B2B research and advisory firm.
Kerry Cunninghamresearch director, SiriusDecisions Inc.
In the old model, a prospect would enter the funnel at the awareness stage. Marketing would nurture it along until it became a sales lead and, hopefully, a buyer. Today, however, prospects are just as apt to show up mid-funnel, perhaps after discovering a white paper that they want to download from a search, said Liam O'Connor, a principal at marketing and sales strategy consultancy Lenati LLC, where he's leader of the customer acquisition team.
O'Connor added that what used to be a funnel is now an erratic progression through channels of a customer's own choosing, including offline research, online search, peer referrals, social media, online communities, third-party reviews and competitive comparisons. Not only does this make their needs more difficult to anticipate, but these customers are also better informed and thus highly expectant of the interaction itself.
New customer journeys, new data input
Making matters even more complex, only a small fraction of the buyer's journey is visible through traditional marketing automation platforms, Cunningham said. Even though 75% of B2B buyers and 84% of 760 executives recently surveyed by IDC use social media to make purchasing decisions, many businesses can only see what buyers do on their own website.
"That is what's deceptive about the buyer's journey when seen through the lens of marketing automation," Cunningham said. "Buyers still really utilize conversations with vendors and sales people, both early and late in the buying process, but they're also engaged in a lot of self-directed online research all through the buying process." As a result, mapping the customer journey has become more difficult because customer paths are less linear and sequential.
But just as increased online activity is upending marketers' jobs, businesses can now use the burgeoning volumes of data generated by online activity to their benefit. Indeed, the explosion in sales and marketing technologies over the past few years has given customers more options to engage with vendors, which only increases the amount of data available, whether directly or through third parties, O'Connor said.
"B2B is finally arriving at a place of having data about buyers that B2C has had for some time," Cunningham said.
The new data volumes are increasing interest in predictive analytics. The aim is for marketers and sales teams to make efforts more efficient and productive -- whether that involves serving up the most relevant content for a prospective buyer, predicting which prospects are most likely to become valuable customers, or determining which actions would be most successful in converting a prospect to the next step of the journey.
"Lots of statistics show that over 90% of people on a business's website are not in buying mode," O'Connor said. "It's important to be able to serve up the right message at the right time, and convert the prospect to the next action along the journey, and not necessarily a sale." Early in the journey, prospects might value expert information on the product category, for instance, while demos, webinars or ROI calculators might be more applicable further along in the buying process, he said.
This shift is also leading marketers to invest in new content types that are more interactive in nature, such as surveys, pop-up infographics, embedded video and quizzes, O'Connor added. Not only do customers get a more personalized experience with the content, but by tracking their interactions with it, marketers can also gain more insight into what customers value and where they are in their journeys.
"Customers can decide what's interesting and what isn't, and it's all tracked," O'Connor said. The data can also be used for lead scoring, a tactic to apply value to individual prospects to help guide sales teams in prioritizing their efforts. "If someone downloads this content and then moves over here and comes back to the site this many times, they'll rank higher than a company that only engaged slightly or only comes once," he said.
Predictive analytics systems need to incorporate cookies and other tracking mechanisms to include what buyers are doing both on and off your website. "You want to deliver content based on where they are -- not where they were when you last saw them on your website," Cunningham said. "Over time, we expect predictive analytics to be built in, so that instead of deciding, 'Here's a sequence of four communications,' the business can say, 'What's the next best thing for that prospect based on who they are and where they are on the journey?'"
Another development is for systems to track not just a single buyer, but also the efforts of multiple people within the organization who are researching the same purchase. After all, according to IDC, the average deal today involves more than eight decision makers, a 43% increase from three years ago. "This would involve using big data to help me understand when one of my buyers has three or four colleagues who are also engaged in researching the solution," Cunningham said. Systems are emerging that can sew together evidence that people working for the same organization are researching the same topic, as well as tools that combine search data with information from LinkedIn that reveals who works for whom and what the organization looks like. "When you bring this all together, provided you have the data science chops, you can better understand who your buyers are and how they're grouped together," he said.
This capability is used in account-based marketing, which B2B businesses often use for large accounts. While this approach has been around for some time, it is more scalable today. Instead of the traditional sales funnel process that involves casting a wide net and nurturing those leads down the funnel, the funnel is basically flipped. "Marketers get a few qualified leads for sales to close, targeting senior buyers and then expanding to broader committees," O'Connor explained. "When they land a sale, they try to expand the account."
No matter what shape the sales funnel and marketing take in the future, O'Connor said he believes the traditional model will continue to be useful as marketers track and measure how well their content fares with constituencies. This is particularly relevant today, with at least a third of marketing dollars spent on content by both B2B and B2C businesses, according to the Content Marketing Institute. "The path customers take isn't as linear as it once was, but it's still useful to measure how content is working and how it's helping in moving customers through the process," O'Connor said.
About the author
Mary Brandel is a writer and editor, focusing on business-tech and IT career issues. She lives in Newton, Mass., and can be reached at [email protected].
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