Taking a close look at the Sales Funnel
By Luandri Smith
I recently came across an article entitled “Why the sales funnel is the cockroach of marketing concepts”, written by Tom Roach. In it Roach makes several thought-provoking observations about how the sales funnel came to be, its limitations and further suggests an adaptation to better fit the landscape of marketing today. This in turn led to me questioning how the sales funnel is in fact used specifically within the B2B marketing context.
Let’s start with some quick history.
First introduced by William Townsend back in 1924, the AIDA (Awareness – Interest – Decision – Advocacy) model was (and in many instances still is) predominantly used by door-to-door salespeople as a method to lead people towards a sale in a single engagement. Whether you know it by the AIDA model, or as some interpretation of “Awareness – Consideration – Conversation”, the sales funnel has survived through the ages and still to this day finds its way into the content of final exam papers and maintains a presence in boardroom conversations across the globe.
The Sales Funnel in a B2B World
Largely regarded as the holy grail within the context of B2B marketing, its popularity is well justified, as it is used to organise and simplify increasingly complex product offerings to an increasingly cluttered marketplace.
Not only do we use it to plan campaigns and set KPls, but it also forms an important part of how we determine what the gaps are and what the next steps should be. Without a doubt, as a philosophy and as a tool, it has proved to be incredibly useful. But perhaps it’s time to reconsider whether its principles are still appropriate for the landscape we now live in. Upon closer inspection, I have come to the conclusion that the sales funnel as we know it, may have a few…issues.
Take for instance the fact that in the world of B2B, there is no such thing as a single engagement. And while the AIDA model is great for steering a conversation where the aim is to travel from introduction to purchase relatively quickly, we must consider the reality of B2B businesses: long sales cycles, large buying committees, complex business problems, with a solution that needs to be found hidden somewhere in a sea of sameness.
The sales funnel assumes that the journey from identifying a need to purchasing a solution is linear and logical. Most of the decision-makers I know however, don’t tend to gently drift from awareness to interest to decision to advocacy. And assuming they do, even then you’re still missing a critical piece of the puzzle: decision-makers are human. They jump and bump around. They reconsider. Learn. Unlearn. Adapt and adjust.
Further to that, a B2B decision is not made in isolation. It is made via a decision committee, or a decision-making unit (DMU). Here each member of this DMU has their own agendas, pain points, and expectations. And none will move through a sales funnel in exactly the same way.
The sales funnel is, at its core, a sales tool. It is an inward-facing framework that often fails to account for moments that matter in a B2B relationship. Unfortunately, the sales funnel ends as the relationships begin to deepen. As relationships are nurtured, we are better able to propose solutions that add value to our clients’ worlds.
Here, upselling and cross-selling take centre stage and are only successful if there is a solid bedrock of trust and strong relationship, together with an ongoing commitment from us B2B marketers to continually lean in to discover how we can add value to our clients’ worlds. The sales funnel assumes that there is a market ready to purchase at any given time. This is true…but that market may be smaller than we would like to believe. Up to 95% of businesses are not in the market for most goods and services at any one time (Professor John Dawes, Ehrenberg-Bass Institute). Companies change service providers around roughly every five years. So, each year, 20% are in the market for the services being marketed, with roughly 5% being in the market in a given quarter.
Now, we could run multiple quarterly campaigns to target that 5% to achieve the objective of driving sales, but I feel there is an argument to be made for building brand connections. When the need for a service arises, those associations will be key for a decision-maker to come to you.
And this leads me to the next point: the foundational aspects of the sales funnel are no longer truly representative of the world we live in today.
Let’s start at the top of the funnel: Awareness.
A word that can make any marketer shudder. A common ask and an everlasting problem. But it isn’t about broad awareness anymore. In a world where buyers have evolved to ignore marketing messages, simply due to their sheer volume, mental availability is far more critical to purchase than awareness is.
It’s not enough to make people aware of you. They need to be able to remember you. If you’ll allow me to use some B2C examples, most South Africans can automatically and accurately sing the Oros song (Mango, Fruit Cocktail, Mango, Lemon). We walk past the Cremora logo and think: “it’s not inside, it’s on top”. We see a Corsa Lite barrelling down William Nicol Drive and whisper: “Corsa Lite: the lite side of life”. Now, with the proliferation of social media and always-on digital communication, not nearly as much sticks in our minds quite as successfully.
Some sticky examples do come to mind, though. Take Volvo Trucks’ Epic split. The sight of Jean Claude van Damme skilfully performing the splits balanced precariously between two reversing trucks to the ethereal tones of Enya is not one you’ll easily forget. And if you need to purchase a truck, now and in the future, that image would spring to mind. That is the true value of mental availability.
Let’s move down the funnel to consideration
In B2B communication, we tend to fall into the rational trap. We try to persuade with facts. I believe it’s because that’s what we feel we can control. We can invest and develop capabilities that are quantitatively the “best”. But what we run the risk of missing is being able to answer the question buyers are constantly asking: is it right for my business? B2B businesses often operate in a commoditised market. When you and your competitors are communicating on proof points that are nearly indistinguishable from each other, there isn’t much to base your consideration on.
We also tend to forget that most purchasing decisions are made with emotional preference. Even B2B decisions. B2B decision-makers are people. And people buy from people – especially people whom they like.
At Demographica, we take what we call an “outside-in” approach. We use business anthropology
to gain a deep understanding of decision-makers’ mindsets and behaviours. This human insight is invaluable as it shapes the way we design communication.
It shines a light on what information is key to the decision-maker, and how to deliver this to them in a way that sticks. For some decision-makers, they do need rational proof points. Others need a guarantee of a partnership, while others need the security of knowing they made the right decision.
In the B2B world, I don’t think consideration is continuously touting ‘reasons to believe’ to key decision-makers until they show signs of being ready to be converted into a buyer.
Rather, consideration is based on us considering our audience, and what is important to them. And then proving it to them in a tangible, authentic manner. We can throw the words “partnership”, “expertise”, “quality” etc. around as much as we like, but if our customers don’t feel it, they will never consider us.
And, at the bottom of the funnel, we find conversion.
Conversion, in my opinion, is not a separate stage but rather a consequence of many things done correctly. Being able to hold and maintain mental availability and to convince buyers that our offering not only meets the needs of the business but the (often emotional, subconscious) needs of the humans who will be entering into the relationship with us.
However, there is a piece of the puzzle here that is often overlooked: the decision-making unit. We may have been successful in convincing the main decision-makers, but if they are unable to gain the necessary buy-in from the powers that be, we will be unsuccessful in converting them.
At this phase of the journey, we should look at buyer enablement. What do they need from us to convince the broader decision-making unit that we are the best possible choice? Is it content? Is it collateral? Is it expecting the sales team to form additional relationships to get it over the line? Whatever it may be, and it varies, this is a puzzle piece that cannot be ignored.
Adapting the sales funnel
Despite its limitations, the sales funnel remains useful. And I don’t believe we would be able to discard it completely as it is a frame of thinking we use automatically. However, instead of force-fitting our thinking into a well-accepted model, let’s adjust the model accordingly to meet the overall objective: making sales. Rather using it as a means to organise and simplify the complicated, while adapting it to reflect the needs, mindsets, and behaviours of the decision-makers we are communicating to.
Tom Roach suggests the following adaptation:
Shifting from ‘Awareness – Consideration – Conversion’, to ‘Building – Nudging – Connecting.’
Where ‘Building’ is defined as:
– ‘Building and refreshing brand memories and associations amongst all future prospects to help the brand come to mind in decision/buying moments.’
– Nudge the decisions of in-market prospects by refreshing relevant associations closer to market.’
And ‘Connecting’ as:
– ‘Connecting buyers to brands with signposts that makes it easy for them to find and to buy.’
This adaptation is one that I personally believe will work extremely well in the B2B landscape. Not only does it allows for more agility in the type of communication we take to market, from a long-term and a short-term point of view. But it will also help us consider how our marketing budgets could be better spent while eliminating the need to go back to the drawing board. Most importantly however, is that it reflects the reality of the market we currently operate in.
So, long live the sales funnel! May it continue to reincarnate into the best most relevant version of itself possible, as and when we need it to.