The Evolution of the Sales Funnel

As technology and techniques have improved over the years, the concept of a customer lifecycle has evolved over and over again, moving from the “spray and pray” funnel method, through a relationship model, to a continuum of engagement and re-engagement. Modern marketing and sales organizations have become successful because they understand the value of true relationship building through targeted, relevant, and timely content.

The simple funnel

The customer lifecycle model began as a funnel, where a company selling products or services loaded the top of the funnel and various prospects qualified or disqualified themselves over time based on behaviors and attributes, until you got to the sale — the narrow end of the funnel — losing a lot of contacts along the way. It was a quantity-over-quality approach.

Once the sale was made, retention was a problem in this model: what do you do with them? How do you support them? How do you retain them? There wasn’t a formal answer; it was largely guesswork, more art than science.

The detailed funnel

Along the way, many organizations realized that the process of qualifying and disqualifying leads differed between the marketing and sales sides of the business, and that the process of closing a sale was a little more complex than simply stuffing a funnel full of as many names as possible. Competition had to be considered, objections needed to be addressed; both behavior and demographic profiles, budget, timeline, business flow, technical considerations, and even executive preference all had to be taken into account. So the funnel evolved a bit to fill in some of these details. As the supporting technology grew in sophistication, many of these details could be identified and automated, but the question of customer retention, support, and influence were still not part of the formal picture.

The sideways funnel

Some years ago, Marketo decided that gravity no longer worked, turned the funnel on its side, and began incorporating their understanding that the lifecycle didn’t just end with the sale. In addition, they realized that there were additional branch points before the sale was complete, where companies were leaving revenue on the table. Chanting the mantra of “no lead left behind,” they incorporated additional contact points for leads who had been disqualified somewhere along their lifecycle path, suggesting “recycling” programs that would pull a few more names back into the fold.

Along with the sideways funnel, Marketo developed their Revenue Cycle Model, a revolutionary approach to the customer lifecycle using an automated functional model. With it, organizations could automate their leads’ movement through the lifecycle, listening for specific conditions and using those as triggers to advance leads along the path.

This changed everything! Organizations now had a visual model for the diversions a lead might chase along the way, and they were finally prompted to create programs that would capture and restore leads that might otherwise have simply fallen by the wayside.

RCM could be customized to suit a business’ specific process flows and requirements, giving them an incredibly flexible (and potentially enormously complex) method for modeling a lifecycle unique to their needs and those of their customers.

The hourglass

RCM and its underlying philosophy had a wide reaching effect, even for those companies not using Marketo.

Organizations figured out that there was a whole untapped stream in the form of lead winback, customer retention, and influencer marketing. Recognizing that post-sale activities such as surveys, upsells/cross-sells, and other types of retention were important to the business, many companies began working through pre- and post-sale activities, and generating entirely new revenue streams in the form of repeat business and referral business — delight your customers, and they will share their delight with others.

Even in the face of all this, many companies still concentrate their efforts on customer acquisition, however, giving short shrift to existing customer base. After years in this business, we can tell you that if you ignore your customer base, you ignore a significant potential revenue stream.

The continuum

We at RadHaus.Solutions believe that the customer lifecycle is actually a continuum, with branch points for high-value activities such as product evangelism, social shares, recycling of lost leads, and so on. Think of it like a three-dimensional expansion of all the previous models.

It’s in constant motion, as this animation is, where leads are constantly branching off, expanding, and being fed back into the flow from various points along the journey.

The Infinite-Flow Funnel

We present a new model, the Infinite-Flow Funnel, which represents the continuum of the customer lifecycle through qualification, sale, retention, evangelism, back around, and beyond. There are countless touch points along the way, where individual lead/customer sentiment can be influenced, and where those individuals can become influencers themselves.

In this model, we incorporate all of the phases of the lifecycle previously illustrated, but we also work with our clients to examine the possibilities that exist outside of traditional channels.

Where a decade ago a model like this might have been impossible to maintain on a daily basis because the tools simply weren’t available, we can manage the increased complexity now by listening for certain trigger activities, building complex yet flexible filters, and so on. As technology has improved, it has become feasible to build and maintain this continuum through well designed and well executed automations, and most of the competitive marketing automation platforms provide robust metrics and feedback about the success of the programs and their branches.

Social media, for example, has opened up entirely new avenues for marketing to a wider audience. Done right, it’s an incredibly effective way to engage with people with relevant, highly targeted content. And even more than that, it’s a way for your customers to expand your reach even further.

Social media is a critical platform for a number of reasons: like a desert wildfire, word can spread (for good or for ill) about a company’s activities. Respond correctly, and you gain new loyal followers. Respond badly, and your reputation is spoiled — perhaps permanently.

So social media programs are critical to the success of most modern businesses.

In the B2B world, Account Based Marketing (ABM) is another. When you’re doing business with an enterprise organization, you are doing business with many people within that organization, and your marketing efforts must reflect that. Communication must be tailored to the specific audience: for example, your product’s champion inside a target organization may not actually be the decision-maker, but can certainly make or break the conversation. But you can’t leave that conversation solely to the champion, so you must find ways to shape the conversation, and those goals must be part of your sales effort.

And yet there’s still more

The market has evolved. Marketing and the tools we use must evolve with it. The technology available to us now enables the automation of complex repetitive tasks, freeing the sales and marketing teams to concentrate on the improvement of those programs, gaining insight from the success or failure of programs, and feeding that data back into future enhancements. Instead of a simple spray-and-pray approach to funnel stuffing, these platforms and techniques offer robust and exciting methods for highly targeted, timely, and relevant marketing.

This model, as complex as it is, is still incomplete. For each organization, there are unique considerations, different target audiences, and additional touch points. What they all have in common, though, is that the full customer lifecycle almost always needs to be addressed in more detailed fashion than anyone imagines at the outset.

It’s a tangled roadmap!

But it’s a start.

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Addendum: A friend of mine, on reviewing this, said the following:

If I like something and I have the money and can justify it, I buy it. If not, I don’t. Period. Now you’ll tell me that there is WAY more to it than that, and I know there probably is.

The answer is that she’s absolutely right.

But you have to KNOW about it first.

That’s what this is all about.