The sales funnel metaphor is somewhat misleading. In real life, the process never goes as smoothly as liquid down a funnel. In the last decade, digital marketing, artificial intelligence (AI), and customer relationship management (CRM) have changed the process of converting new leads into customers.
That’s why it’s important that business-to-business (B2B) sales and marketing teams align their lead generation activity and sales funnel strategies for this new landscape.
The top of the funnel signifies the goal of every business: to generate as many leads as possible. The narrow bottom reflects how many of those leads are converted to customers by the end of the sales process.
Stages of a sales funnel can vary, but a traditional model follows these phases:
Of course, consumer behaviour is rarely this simple.
The sales funnel has been used by companies to manage internal sales for more than 100 years and is still important to this day. At the top of the funnel, prospects may not be close to making a purchase. However, they might be “qualified” based on actions they’ve taken. For example, registering for a webinar, attending an event, or downloading an e-book.
Prospects progress down the funnel as they become aware of your products or services through interactions with sales representatives, as well as marketing and sales materials. Ideally, their interest grows along the way. Finally, some convert and become customers.
Having a well-defined sales funnel helps you understand your prospects’ knowledge of, and interest in, your products or services. That’s why tracking prospects through the funnel can determine how each should be approached. For example, what products or services they should be pitched or what content you should offer them.
Getting this timing right prevents losing prospects by bombarding them with information or giving them the hard sell too early. Moving prospects through the funnel in this way is called “nurturing.” Eighty-four percent of customers say the experience a company provides is as important as its products and services.
A prospect’s position in the funnel can determine the type and frequency of campaigns needed to gain or maintain their interest. It can also help the sales team prioritise leads or suggest the most suitable answers to a prospect’s questions or concerns.
Aligning sales and marketing throughout the funnel journey is also important. A common language needs to be set up to ensure marketing knows when a lead should be moved from marketing’s control, and placed in the sales funnel.
There are two terms, “marketing-qualified lead” (MQL) and “sales-qualified lead” (SQL) or “sales-accepted-lead (SAL), which marketing and sales must agree on. When marketing has a lead ready to talk to sales, the lead should be marked as an MQL, meaning marketing has gotten it to the point where they believe sales should take over. If sales agree the lead is sales-ready, they accept the lead and move it from MQL to SQL (or SAL), and the handoff is complete. If not, the lead goes back to marketing.
The ways in which prospects and customers interact with businesses are changing. Email, social media, and other digital channels are now preferred (if not necessary to use) by many. Arranging phone calls and in-person visits have become harder.
However, video conferencing and other apps offer an opportunity to engage prospects at a time and place that suits them. Eighty-four percent of sales operations professionals say digital transformation has accelerated since 2019, according to the fourth edition of Salesforce’s global State of Sales study. This means that sales tools like video conferencing, mobile sales apps, and CRM have become even more valuable in recent years. In fact, artificial intelligence (AI) used by sales organisations has increased 72%, with high performers (sales teams that have significantly increased year-over-year revenue) 2.8 times more likely to be among them.
Data insights are changing how sales and marketing teams make decisions. Sales reps now rely less on intuition for pursuing opportunities, with data providing more information than ever on who will convert.
The State of Sales report also compares the habits of sales teams considered high performers with those categorised as underperformers. It reveals that high performers are more likely to prioritise deeper customer insights. For example, industry news (48%), customer communication (36%), purchase history (34%), and competitor activity (32%).
Managing your sales funnel involves two tasks. First, your sales funnel strategy must be reassessed and updated regularly to reflect changes that have occurred in your business or the market as a whole.
Second, your sales funnel needs to be optimised to ensure prospects’ sales journeys are not rushed or convoluted. Organisations can also optimise their performances by improving their resources, sales tools, and the efficiency of their sales and marketing teams.
Another thing to consider is the importance of customer expectations. Seventy-eight percent of customers say they expect consistent interactions across departments. According to the State of Sales report, 89% of sales professionals say sales operations play a critical role in growing the business, by aligning marketing and sales strategies for the sales funnel.
The aim of your sales funnel is to convert prospects into customers. The sales funnel is about people. This is a nuance that’s important to remember as we increasingly focus on data.
As the State of Sales report finds, while building trust and long-term relationships with your customers are important, data-driven insights can help reps find relief in the form of automation. High-performing teams with the capacity for automated data-driven insights lead the way, enabling reps to spend more time learning about and connecting with customers.
For more insights on the sales funnel, download our State of Sales report today.
This article was adapted from the original post that appeared in the U.S. version of the Salesforce blog.