The Death of the Sales Funnel As We Know It

by · February 19, 2013115 comments

The sales funnel has been around for as long as any of us have been in business. It is a tool that has been used to visualize everything from the sales process to marketing impact on an organization. I’m a big fan of the sales funnel. It is one of the primary visuals I’ve used to help executives understand where social media and digital marketing fit into the context of business. But the truth is, the traditional sales funnel model has been dead for years; we just haven’t come to accept it yet. So why do I still use it? Because people understand it. I know it isn’t perfect, but I look for the opportunity to create progress while we work on optimizing for perfection.

Buying patterns have changed drastically in the last decade. They’ve changed so much that they have truly broken the sales funnel as we know it. Old habits die hard, so the big question is whether or not a sales funnel is still a viable model for sales concepts. Here are the biggest challenges I see with the sales funnel in today’s buying environment.

Buyers Don’t Follow a Linear Path

The sales funnel relies on the theory that someone comes into the top of the funnel and sales fall out the bottom. But is that true in today’s world? Do we start at the top and make our way through to the end? Or do we start at the top, leave, jump levels, come back, leave again, come back at the beginning and at some point come back and buy? Are we following a linear purchase pattern or an erratic path of engagement that sometimes results in a purchase?

I think the assumption that any large percentage of buyers follow a pre-determined path to a sale online is incorrect. One of my favorite exercises is to attempt to model the path to conversion. If you look at the path to conversion, this becomes abundantly clear.

We assume you come to our website from somewhere, for illustration purposes let’s assume you came to the website from a link to a blog post that was posted in a tweet. You come to the site and you read a blog post. Do you buy? No, probably not. Then perhaps, you do a Google search and find an article on our site. You come to our site through organic search, you read the article. Do you buy? No, probably not. Several months go by. You don’t visit our site at all. But then you see a link shared on Facebook to one of our products. Back on our site, you read about the product. You notice a new e-book we are promoting, your interest is peaked. You fill out the form to get our e-book. You leave. This process alone could go on for months. You could click on multiple links in tweets, you could visit from content shared on Facebook, you could find us through organic search, and not to forget you could find us through any other marketing channel. And you could never buy a thing.

Have you entered the sales funnel? Should we be tracking when you buy? If we argue that yes, any website visitor is a potential sale and we should be including you in the funnel, then at a minimum your experience in the funnel is like a 7 year old boy enticed into a pool surrounded by water slides. You’re just in the water long enough to get wet, but then you are on to the next adventure. It’s an experience of diving in, sliding in, jumping in but never staying long enough to enjoy the water. Does that make you a swimmer? It’s a question we need to seriously consider. At what point do you really enter the “sales funnel” and do you ever “enter” at all.

Distraction is the Number 1 Barrier to Sale

Distraction is destroying the sales funnel.

It’s clear that buyer behavior is erratic, but we are also finicky. Distraction may very well be the number one barrier to a sale. We get distracted and abandon our cart. We stop reading the article that brought us to you. Simply put, any little distraction means we move on to something else and we may never come back. We are also finicky buyers, what we think one day may be dramatically changed by another piece of content that contradicts our previous opinion.

We still make purchases and purchase inquiries on a whim. Something interests us and we say yes, we are interested in that. But if we can’t get the information we are looking for immediately, we are off to something else and may never come back, or it could take us weeks to come back. We are a culture of immediate gratification. How does that impact your sales funnel? If you provide all of the information needed to make a purchase, it could mean you can sell faster. If you haven’t provided enough information, it could mean you lose opportunities every day and chalk them up to casual website visitors.

We are also lazy consumers. If a purchase requires effort, we are likely to put it off until we have “time.” When we finally set aside the time, we will also take the time to do more research, look at reviews, look for other opinions and guess what. We may get distracted during that process and you may lose us.

Tracking is Flawed at Best

What’s worse? It is extremely difficult to track the true path to sale when there are only online components. Throw in offline components and you’re toast. If you rely on Google Analytics you are suffering from Last Touch Attribution Syndrome. There are a few other tools that will give you First Touch Attribution Syndrome and a couple that get into First and Last Touch Attribution Disease. Basically this means with most tools you are seeing the first campaign, the last campaign or the first and last campaign the buyer touched, but you aren’t seeing anything in between.

And here’s a real doozy. Most marketers aren’t using campaign tracking for the majority of the content marketing efforts they are using. Because it’s not a “spring” campaign, it’s a blog post. So poof. There goes any tracking.

Why are we not fighting to understand full campaign history? If we truly want to understand this erratic ride our buyers are taking us on we should be demanding that tools start to keep track of EVERY touch point, at least online. The best we can do at this point is to layer on a marketing automation tool. This is the best way to know everything someone touches on our website over time. It still isn’t perfect but it gets us closer. Progress before perfection should be your new motto. Start getting better data with what you have now, but we should always be working towards perfection.

Reporting is Abysmal

And it keeps getting worse, say you have added on a marketing automation tool and you can see every touch point. Can you aggregate data to see what the optimal path to conversion really is? Can you do predictive modeling so you know based upon historical data whether the combination of marketing channels you are using in your existing campaign will produce the results you want? Do you know if there is a combination of touch points that lead to the highest conversion rates and sales so you can start to optimize future results?

No. Reporting for online and offline is still in its infancy. We are still trying to separate marketing from sales and reporting has yet to be unified. We have disparate tools from web analytics to marketing automation to CRM. And very few companies have taken the time to connect them together. For those that have, many are suffering from Out of the Box Reporting Disorder. The problem is that there isn’t enough focus on understanding the real data so we can start to create a new model for understanding our buyer’s habits. And the companies who provide the out of the box reporting are focused on the “easy” data without taking the time to understand the data that would be transformational for a business. It’s funny honestly, because the company who does will have a huge differentiator, but it requires a lot of work and therefore it’s one of those things that never makes it into reality.

Should the Sales Funnel Be Transformed to a Neural Network?

(c) - dreamstime.comDoes the sales funnel method of visualization still apply? I would argue that the model for visualization is still a valid model for illustration purposes because it is one that is widely understood. At the end of the day there are “core” points in every sales process that most buyers go through. They may fall in and out of the funnel at various stages, but we still can focus our efforts on optimizing the path from one stage to the next, understanding we are simply modeling a process not the reality of the buyer’s progress.

But I think a new model is needed and it doesn’t look like a funnel. Rather it looks like an illustration of the interworking of a neural network. A neural network is a connection of neurons or nerve cells that work together to form the nervous system. Put very simply, neurons are what allow humans to process information, and react to the information through chemical, physical and emotional means. Admittedly, I have a very elementary understanding of the interworking of the human brain and neural networks. However, when I look at the visualization of these systems it seems like a more realistic model of purchase behaviors. Each lighted area in a neural network is an opportunity to educate a buyer and each cell body (large areas with multiple threads (axons) branching off) could illustrate where a conversion happens. This could illustrate where we are leading the buyer and the various paths a buyer could take to get there. It shows that the path to purchase is no longer linear; it is a network of touch points, decision points, and opportunities that are either taken or declined by the buyer. If we could track this it seems reasonable to assume that certain paths and certain conversions would glow brighter as they are working more effectively than others.  It could also show the black hole where potential buyers go and never return. Could we then optimize our efforts to put others down that path over less effective paths? Honestly, I don’t know. But I will tell you, if I can figure out how to model this with real data in a way that can be analyzed I’ll be the first to try. For now, I’ll continue to use a model that people recognize understanding the flaws it holds, while I try to build a new model for the future.  Until then…

What do you think? Is the sales funnel dead or alive and well? What should the model of the future look like? Is our focus on the sales funnel preventing innovation? Leave a comment and join the debate over the death of the sales funnel as we know it.

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About Nichole Kelly

Nichole Kelly

Nichole Kelly is the CEO of Social Media Explorer|SME Digital. She is also the author of How to Measure Social Media. Her team helps companies figure out where social media fits and then helps execute the recommended strategy across the “right” mix of social media channels. Do you want to rock the awesome with your digital marketing strategy? Contact Nichole

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