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September 21, 2021 by Market-Partners Inc.

30-30: Myth and Magic of the Sales Funnel

On September 14th, Market-Partners Inc. CEO and Founder, Martyn Lewis, hosted a virtual micro-workshop covering the myths and faulty assumptions behind most sales funnel structures – and demonstrated the true magic of what this tool should do for your business!

This free micro-workshop followed our 30-30 format. The first 30 minutes were an interactive presentation of the content summarized below. Afterwards, those wishing to explore the topic deeper were invited to stay an additional 30 minutes dedicated entirely to questions and discussion.

The first 30 minutes have been summarized below, covering everything from the origin of the sales funnel, how it is being misused, the myths and truths of this tool, and how you can improve it for your business.

You can also watch the video replay here.

Summary

The concept of the sales funnel was first proposed in 1898 by advertising executive and Advertising Hall of Fame inductee, E St. Elmo Lewis. He outlined what has since been coined the AIDA model, an acronym for the four stages of the purchase process – Awareness, Interest, Desire, Action. It cannot be over emphasized that even in its original form, the sales funnel had nothing to do with sales process or forecasting, only the customer’s perspective and decision making.

Fast forward to today, and the sales funnel remains one of the most important and strategic business tools. It informs sales teams how to effectively manage a portfolio of opportunities. It provides the business radar allowing for coordination within an organization. It matches supply to demand, serving as a critical planning and diagnostic tool for understanding where revenue is coming from and what is changing in projections.

However, this is rarely how the tool is used in today’s businesses. In fact, investments into the sales funnel often yield meager returns. But if it is so critical for all the reasons above, why is that the case? For starters, the sales funnel is not only being misused as a forecasting model, but it is cumbersome, gamed, and sandbagged to suit a sales team’s needs. This results in a funnel that’s more time than it’s worth, and tactical at best.

So how can we fix these broken funnels? We believe it is best to start from the ground up.

First, let us begin by dispelling the common myths and misconceptions surrounding sales funnels, and from there, uncover the truths of how to make this tool work for your business.

The Seven Myths

1. The stages in the sales funnel are not forecast probabilities

2. The stages in the sales funnel are not your sales process

3. The stages in the sales funnel are not “won,” “shortlisted,” “no decision,” or any characteristics of an opportunity either

None of these three “stages” represent a meaningful or grounded progression of an opportunity for your customer. They are the status of the opportunity, not the step that it is at.

4. Stages in the sales funnel do not directly correlate to forecast probability

Forecast opportunity is an attribute of a sales opportunity. For example, there is a huge difference between probabilities when you are selling an add-on to an existing customer versus when you are trying to convince a customer to switch to you from their incumbent. For this reason, you should not try to force a forecast probability onto a stage. As a result, the sales funnel will simply become a forecast classification system.

5. It’s a myth that the sales funnel should be three times the quota

This is for three main reasons. First, different businesses require different funnel metrics. It could be more or less depending on your offering or market.

Second, funnel size is not a useful metric – what you actually want is flow through the pipeline.

And third, if you ask for 3x the quota, you will get 3x – but it will most likely not be real opportunities!

6. There is rarely one sales funnel within a business

If you have multiple offerings, you need more than one pipeline, as different products come with different cycle lengths, number of prospects, conversion ratios, and order sizes.

7. The “sales funnel” is not always funnel shaped

As stated before, you don’t want to manage funnel size or shape, as you want leads to be passing through the early stages very quickly.

The Seven Truths

1. The stages are the stages of the Customer Buying Journey

The Buying Journey gives firms both observable and objective behavior and exit criteria to categorize the meaningful progress of their opportunities.

2. Divide the business into sub funnels

Pipelines have different metrics based on the different areas of the business they represent. Therefore, the total business must be divided into its sub-components, or funnels, for there to be meaningful management.

3. The missing element is time

Time is the main factor to consider, because as stated in Myths 5 and 6, you want your Sales Funnel to flow. The movement of opportunities into and through the funnel has to be the primary concern.

4. There are four vital funnel metrics

Input: how much is being put into the top of the Funnel

Time: how much time does it take to go from step to step, from lead to order

Conversion: how many opportunities from each step do we convert to the next?

Order Size: what is the order size coming out at the end of the funnel?

5. You do need these opportunities during the course of a year – but not all at one time

So, what should your funnel look like at any one time? You can calculate this using the four vital metrics mentioned above, telling you how many opportunities need to be at each stage to close the desired number of orders.

6. Don’t manage the size of the total funnel, manage the input, time, conversion, and order size

7. Effective funnel management is at the heart of productive selling

Gives sales teams a direction of where to invest their time, the ability to discover best practices, and is at the heart of performance coaching

The sales funnel, or pipeline, should be the most valuable tool for sales professionals, sales managers, and anyone else dependent upon the development of revenue through sales opportunities. There is no such thing as “above the funnel;” every opportunity that is known to an organization must be tracked. It is only by managing the sales funnel that businesses know what is happening, what is about to happen, and what they need to make happen.

September 10, 2021 by Martyn Lewis

Time to Move on from B.A.N.T.

Seems strange to me, but recently I have been hearing more about B.A.N.T. from sellers and sales organizations. For those that may not be familiar with this selling approach, you’re lucky. It is supposedly a simple way in which to qualify sales. B.A.N.T. is the tool that is used to determine if time should be invested or not. B is for Budget, A is for Authority, N is for Need, and T is for the Timeline. The idea being that if any of these are not apparent it is not a qualified lead and thus not worth investing your time. In some applications you can accept three out of four of these qualifiers as making the lead worthy to pursue.

Let’s look at the origins of this approach. B.A.N.T. was first used by the IBM sales force in the 1950’s. That was when IBM was a powerhouse selling very expensive computer hardware to buyers that were totally dependent on them. The salesperson was the only source for a prospective buyer to discover required information about their products, specifications, configurations, and pricing. Just like today, those salespeople complained that they were spending a lot of time doing unproductive activities. Unlike today, though, those unproductive activities were talking to prospects that wanted an endless stream of information. And thus B.A.N.T. was born. It was a way of testing to see if their prospects were serious and ready to buy, or if they were just educating themselves on IBM’s equipment. A case of “Don’t start worrying me until you are ready to buy, and then I, as the topflight IBM sales professional, will invest my time with you.” In those days, the competition was practically non-existent, and the buyer was captive to the salesperson and their sales process.

Times have changed – no kidding! Buyers are buying very differently than they did in the 50’s. They no longer need to bother salespeople for information. A mere click of the mouse brings them everything they need to know. In fact, we know that buyers today often progress through more than 50% of their Buying Journey before reaching out to a salesperson. Our research also highlights that the days of a single decision maker (the A in Bant) are long gone. Today’s decisions are made by a dynamic network of influencers.

If you only want to engage late in the buying cycle, then go ahead and use B.A.N.T. By the time the prospect has defined their budget, worked out the authority (if they ever can these days), defined their need, and have a timeline. You can then be assured of a few things:

You are connecting late in their Buying Journey
You will have little chance to influence how they are solving their problem and defining their need
They are already talking to your competitor(s)
You will have very little chance to differentiate, sell value, or act as a “trusted advisor”
It will likely be a short sales cycle with big discounts and low win rates

Professional selling today is about meeting the buyer where they are – ideally early in their Buying Journey. We need to reconnect sellers to buyers, and B.A.N.T. is a great way to stay disconnected, or connect at the RFP stage.

Buying today is definitely not the same as it was in the 50’s. It’s now time to let go of selling approaches from a different era. You have likely moved on from the rotary dial phone. It’s also time to move on from BANT.

August 20, 2021 by Martyn Lewis

The Futility of Speeding Up the Sales Cycle

Whenever we talk to folks, one of the most common goals we hear across every industry is a desire to speed up the sales cycle. This typically comes in the form of either shortening the cycle as a whole or increasing the velocity of their sales process. On the surface, these would both appear to be logical and effective strategies. The faster you’re selling, the more money you’re making – who wouldn’t want that for their organization? Yet when we dive deeper into this ambition, it can prove more complicated than many initially realize.

Upon evaluating which approach is best, there are two key factors to consider: current cycle length and current cycle velocity. First, how long it does it take your team to sell today? We find most businesses do not really know. When asked, front line salespeople are fairly accurate with their estimates. But we have found that as you go up the levels of an organization, for some reason, the envisioned length of the sales cycle decreases! This might be influenced by what parts and how much of the sales cycle executives see on a regular basis, on top of when one decides to “start the clock.” If you think of your sales cycles begins when you first engage with a prospect, you are missing all of the activity that went on in the Buying Journey before that moment. If aiming to be objective, we believe the timer should start from the first time a buyer recognizes a need or a desire up until you receive the order. This means one of the best ways to shorten the sales cycle would be not talking to customers until they are ready to buy.

Although I say that in a tongue in cheek manner – how many MQLs are rejected because the prospect does not have a budget? In all likelihood, these leads are not being coy with you, but are actually just at an early stage of their Buying Journey. Therefore, you will only increase the length of your sales cycle if you’re spending time selling to someone who doesn’t know if or what they can buy yet. However, before you dramatically change the way you qualify leads, making contact earlier can have its own set of benefits. So where else could you save time? The honest answer is… nowhere. At least not practically speaking.

It is very unlikely your salespeople are intentionally leaving their prospects hanging for days or weeks, procrastinating endlessly on returning calls, scheduling demos, or sending out proposals (if they are, you might have a bigger problem!). So even if you wiped the whole sales team’s calendars clean of any internal meetings and equipped them with every conceivable resource to manage a single account, your efforts might save you a grand total of a few hours or days on your sales cycle depending on the product or service.

When laid out like this, it should quickly become apparent that the majority of your time to sell does not take place within your corporate office. And this simple fact ties directly into the second key factor, velocity, and where the delays and hold ups actually are.

The counter intuitive truth is that the only thing yielding business is the buying process – not your organization’s selling process. As we have said many times before, buyers cannot be pulled through any form of sales process, but rather go through a specific set of steps, headed from interest to adoption based on the particular market and offering. Our fifteen years’ worth of research show that buyers do not even connect with sellers until they are 50%, or more, of the way through their Buying Journey, and more importantly, that salespeople are actively involved in less than 10% of buying activities. In no uncertain terms, this means that 90% of your “sales cycle” is controlled by the customer. You can certainly feel that imbalance when you are waiting for multiple departments to approve a proposal, no matter the rate of your selling.

If at its core, your goal is to see more profits sooner, then what you really want to do is speed up your customer’s buying. Like we said before, if you engage early in the Buying Journey, the sales cycle will lengthen; yet if done correctly, this comes with the added benefit of increasing win rates and average order size. It is phenomena such as these that are exactly why positively influencing your customers Buying Journey will give you the results you are after – and why speeding up your sales cycle is ultimately a futile venture.

Like with any business problem, the answer must always start from the Outside-In™. Managing and then accelerating the Buying Journey begins with gaining an in-depth knowledge of your market’s specific buying process. What happens across the entire end-to-end spectrum of activities? who gets involved? what do they value? where are the anxieties and concerns? and how are decisions made? Though at times the Buying Journey can be meandering, the opportunities lie in discovering where you can help your customer buy, thus speeding up the buying, not simply by selling faster.

August 6, 2021 by Martyn Lewis

Straightening the Customer Buying Journey

For many, the path a customer takes from initial interest through a purchasing decision into successful adoption can seem both circuitous and unpredictable. However, though it may appear to diverge for no rhyme or reason, our fifteen years of research show that a specific market’s Buying Journey actually has many common elements.

Regardless of the industry, buyers within a specific market share common goals and motivations when acquiring a particular offering. On the flip side, these customers also worry about the same things. And the same key players, or personas, will come in and out of the Buying Journey, bringing with them these similar agendas and concerns. As the deal progresses, these decision makers and influencers become more educated, and what they seek might change in turn. Consequentially, what they need and how they decide to buy will shift in a congruent way.

Despite appearing confusing on the surface, the key elements that dictate if, when, what, and how your customers will purchase have a striking resemblance. We call these patterns the Buying Journey DNA.

Although they share the same genetic code, buyers can still take a less than optimal route. They may loop back in their journey upon discovering something new, taking time to re-examine their needs. For example, your customer might suddenly recognize the importance of a requirement that they had not previously considered, such as the need for end-user training when buying a software application. Perhaps they will become hesitant given the change management required for adoption and decide they want to explore other options.

Whatever the case, this realization causes them to rethink the effort, backtracking to secure additional funding, extend the timeline, or change the scope of the project entirely. At times like these, if we imagined our customers as travelers, they might appear completely directionless.

Meandering is unfortunately normal during a customer’s first time acquiring and adopting a particular kind of offering. Buyers who are new to a market don’t know what they don’t know. Therefore, as they progress through their Buying Journey, they are simultaneously on a voyage of discovery.

So how do we redirect these wandering customers?

As we have said many times before, the new role for sales and marketing is to positively manage the Customer Buying Journey. Salespeople can no longer expect to pull a prospect through the stages of some internal sales process, because that is not how customers buy anymore. Since the advent of the internet, buyers have not been dependent upon salespeople to learn about a company and its offerings. Our research highlights customers are typically well over 50% of the way through their Buying Journey before they even connect with a salesperson.

The irony – and the opportunity – comes from the fact most salespeople have already seen their customers traverse their Buying Journeys. They should know what their prospects get hung up on. They should know what is around each corner. They should know where the “surprises” are.

Where most salespeople fail is not making the crucial transition from educating prospects on the offering’s value to helping the customer buy. A salesperson should act as the harbor pilot boarding a large vessel when it navigates a foreign port; these veteran sailors have the maritime experience, know the local tides, and can maneuver the ship safely into a dock. In the same way, the salesperson needs to be the guide for their prospect, steering them through their Buying Journey.

The successful salesperson develops a level of trust with their client and sets the course from the first idea of solving a problem, through acquiring the offering, and onwards to being a satisfied customer.

July 2, 2021 by Gordon Hogg

Your Buyers Need Your Help

Buyers need your help before they need your solution.

If “need” were the criteria for making a purchase decision, wouldn’t more folks be buying?

Maybe the problem isn’t about what you’re selling.

Making a buying decision is hard!

More than three-quarters of the customers Gartner surveyed described their purchase as very complex or difficult.

Indeed, more than 83% of your buyer’s decision making is spent getting internal buy-in from colleagues, bosses, and budgets to decide to make a change figuring out how or what will be included in the change, and agreeing how to move forward.

That’s 83% of a buyer’s time independently focused on internal change criteria (ie: criteria that has nothing to do with buying anything).

That means buyers spend less than 17% of their journey interacting with your sales people.

You’re seeing a very small part of the decision you need to influence.

Rather than “understand needs” to find prospective buyers and pitch solutions, facilitate willing buyers through their Buying Decision, to the point where they understand exactly what they want/need, and how/when they will buy – and then sell.

All buyers must do this anyway, with you or without you. It might as well be with you.

Why not use your industry knowledge to help them figure out how to traverse their decision steps efficiently?

Using the decision steps that we codify, you can facilitate them quickly through their process and be right there with them, when they’re ready to buy.

June 18, 2021 by Anthony Rocha

Cutting Through the Noise with Precision Marketing

In today’s world, buyers have become so overloaded with marketing material that most is deleted without a second thought. Even content about offerings they are actually interested in still fail to impress, focusing too much on what the customer already knows instead of bringing new insight or value to their situation.

Sales and marketing technology platforms often compound this issue. While they have the potential to be the most powerful tool in any organization’s arsenal, in many cases, they only enable businesses to do bad selling and marketing faster. So how do we fix this? how can we get the right message to the right role using the right channel at the right time?

In order to cut through the noise and deliver relevant, valuable content, we must start by developing a deep understanding of the target market’s end-to-end Customer Buying Journey.

The Inaccuracies of Modern Marketing

Our research shows that sales and marketing are typically engaged in less than 10% of any Customer Buying Journey. That short effort is disproportionately focused on raising awareness and gaining interest using readily available information, assuming commitment, acquisition, and adoption will naturally follow. However, gaining organizational alignment, commitment, and managing the change and anxieties associated with any new approach is the most effort intensive part of every Buying Journey for customers. This is especially true for complex offerings involving multiple decision influencers.

Although they are necessary to advertise, your offering details and associated benefits should only be the tip of the iceberg when it comes to your messaging. However, most firms do not sell this way. More than 70% of marketing energy is directed at proving value, while 90% of buying concerns slowing and stopping purchases continue to go unaddressed. That is why there is an urgent need to rethink marketing and adopt a far more targeted approach based upon how the market buys.

Sharpening Your Approach with Outside-In™

Understanding who your customers are, how they buy, and where they are in the Buying Journey should directly affect how you position your product and engage with a prospect. Without that knowledge, any investments in your marketing projects are subject more to luck than design.

Here are four key factors to consider when planning around your Customer’s Buying Journey:

1. The Right Message: harmonizing your messaging to your customer’s decision-making style is key. You should always align your marketing to their values and the way they see your brand, not what you think their values are or how you may want to be seen. This will help you more effectively manage buying concerns as they arise.

2. The Right Person: equally important is getting your message to the people who count. Not everyone willing to listen to your message is going to be a customer or can help a deal progress. That is why it is crucial to not just know who your customers are, but who plays what role in the overall decision-making process.

3. The Right Channel: a great targeted message is only helpful with the proper delivery vehicle. This involves both the form of the message and how it is delivered, such as a new white-paper in your newsletter. Regardless, your message needs to be delivered how your customer wants to see it or be available where they are expecting to find it.

4. The Right Time: this is where the Customer Buying Journey really comes into play. Everything from your customers concerns to the way they perceive your brand can change as they move through their buying process. New people can be involved while existing players have changing roles and levels of authority over the acquisition.

Bringing it all Together

This interplay does not simply end with the right timing, as none of the four elements are ever isolated. All key players cannot be appealed to in the same way, just like one channel might naturally be preferred for a specific type of message. Even so, these granular details are still a major aspect of the Customer Buying Journey that we like to call the Buying Journey DNA. Though it can seem complicated, it’s worth untangling when you know specific markets purchase in predictable ways and that it will likely be the same buying concerns, key players, and touchpoints at the specific steps.

With all that in mind, what we are recommending is a far more precise and engineered approach to developing marketing messaging and content. Your strategies are most effective when centered around positively influencing the Buying Journey. Instead of underscoring what your customers already know and focusing on why they should buy, help them through how they buy and actualize the value they are seeking from the offering.