Whether vertical, horizontal, or some other fanciful design, everyone who works in or manages a sales and marketing organization recognizes the above images of the Pipeline Funnel. The funnel graph is clearly intended to indicate that some effort is taking place to move people and businesses that don’t currently purchase goods and services into customers that do. Many people see these graphs and misinterpret the funnel shape. This is because the typical physical funnel that many are familiar with is a delivery mechanism in which every particle or droplet that enters into the top of the funnel, comes out of the bottom into the receiving container. Often, as in the above examples, the funnel graph is shown in a 3D rendering. Therefore, the casual observer is led to believe that the sales and marketing effort will convert all who enter the funnel into customers.
The reality of the ‘funnel’ chart is actually just the opposite! It is intended to indicate that only a small fraction of the people and businesses that enter into the process eventually become customers. Implied in the funnel graph is the idea that there are mechanisms in place to not only get people into the funnel, but also to get them out! It is vital to your organization to recognize that getting people and businesses out of the pipeline efficiently, at the lowest cost possible, is just as vital to the success of your business as getting people and businesses into the funnel in the first place.
“Marketing” is getting people into the funnel from the entire universe. Many times these entrants are called Suspects. This blog doesn’t deal with getting businesses and people into the funnel, but deals instead with getting them through it. Here is a set of ‘agreements’ that can be incorporated into your sales methodologies that quickly determine if a person or business should continue on in the selling process.
Agreement One: The Suspect agrees to enter into some form of discussion with you. This is often called interest. Examples of this:
- They take a phone call
- They agree to an appointment
- They click on an offer in an email or on your website
- The respond to SEO or SEM
- They meet with a sales representative on a cold call
This is the first agreement that you should strive to achieve – the sales process doesn’t continue with those Suspects who don’t reach this agreement with you, they drop out of the ‘funnel’ and it narrows to Prospects.
Agreement Two: You and the Prospect mutually agree that you can help solve a problem or take advantage of an opportunity the prospect is facing. You have gathered information from the initial discussion, usually centered on BANT (Budget, Authority, Needs and Situation, Timing). You have established guidelines for BANT assessments to indicate quickly whether or not you are interested in continuing with the selling process. Your Prospects have their own criteria which you have researched in general and understood. If you can’t reach mutual agreement here, the Prospect drops out of the ‘funnel’ and only Leads remain.
Agreement Three: The Lead agrees that by taking your proposed action, his or her problem will be solved or s/he will be able to take advantage of a new opportunity. This is the very subtle agreement that many methodologies miss. The Lead isn’t agreeing to take the action (e.g. Buy the service at the quoted price) only agreeing that the correct proposal has been made. If you can’t reach this agreement, the Lead falls out of the ‘funnel’ and only Hot Leads remain.
Agreement Four: The Hot Lead agrees to take your proposed action (i.e. commit resources to acquire a product or service). This is, of course, where most of the focus falls in the ‘funnel’ because it is the commitment of that one-time Suspect’s resources that makes the process appear to be successful. If you have obtained all of the other agreements in the correct order, agreement four should be much simpler to obtain. All of the Hot Leads that reach this agreement with you become Customers (of course, you have to do the appropriate customer service follow-up to keep them, but that’s the subject of another blog!).
So I advocate for 2D or 3D ‘pipes’ that are horizontal (or even slightly uphill, indicating real effort), that clearly show the agreements that must be reached as the best graphic for that purpose…
Let us know if this is successful for you, or if you have some additional refinements that you believe to be even more effective.
This blog was written by Jim Lindenfeld, who has been actively involved in customer relationship management during his entire professional career. He is a certified sales and sales management trainer. He has been involved in the implementation of CRM systems since 1987 and is currently a principal consultant in our CRM practice.