Funnel Failure

by Troy Burk 

IN THE LAST 20 YEARS, EVERY industry has experienced tremendous advances, but they all survive by generating revenue (sales). Interestingly, sales, the function responsible for driving revenue, is stuck in a time warp. The practices and strategies of sales and marketing managers haven’t evolved, despite accessibility to powerful software applications and major shifts in the way customers buy products and services.

At the crux of this problem is the concept of the marketing funnel. The funnel was meant to illustrate the path prospects take from awareness to evaluation, to decision. For the marketing funnel model to work, all brand advocates at the bottom must first be fed into the top of the funnel through marketing.

Today most sales that close are not sourced from marketing. Nearly half of all B2B marketers say they close fewer than 4 percent of all marketing-generated leads (most companies attribute less than 25 percent of revenue to marketing). The other 75 percent of revenue comes from many sources, including upsells and referrals, which have nothing to do with the marketing funnel.

Yet, companies allocate most of their marketing spend on filling the funnel with new leads. This creates a problem for marketers, who are evaluated based on sales resulting from marketing-generated leads. Think of a sales rep who is introduced to a prospect through a mutual friend, and the prospect becomes a customer. That lead never goes through the marketing funnel, yet results in a sale. 

Engagement Is Key

Marketers instinctively see the need to build prospect and customer engagement. But this can’t effectively be done using the old funnel model. The two strategies do not align. Instead, implement marketing plans to nurture prospects over their customer lifecycle. Such marketing goes beyond generating leads and passing them to a sales team. It recognizes that nurturing relationships continues past the qualification, and even the sale. 

Customer Lifecycle Marketing (CLM) recognizes that prospects and customers move through phases in their relationship with a brand, from initial contact to a fully engaged relationship. Marketers play a crucial role, communicating with prospects and customers across all channels to drive engagement and movement through the lifecycle. While every business has its own way of segmenting prospects and customers into stages of the relationship lifecycle, all include two categories: lead engagement and customer engagement. 

Companies should further define stages for each side of the buying cycle. By looking at the pre-sale portion of the buying cycle, we can identify the process any person/company goes through in getting to know your brand in the customer lifecycle.

Typically, the lead engagement phase consists of three distinct stages: Suspects, Prospects and Qualified Prospects.

• The first introduction you have to a lead places them in the Suspect stage. This contains all leads that have been touched by your brand and entered your database, but haven’t engaged with you.

• As a lead progresses throughAs a lead progresses through your marketing and nurturing tracks, you both collect more information on each other. Once you have enough info to identify them as an ideal fit, they become a viable lead and a Prospect.

• As people move forward in the relationship, and you track their interest in you by their engagement with you, they earn a spot in the Qualified Prospect.

Marketing and sales nurture leads as they move through the lead engagement stages. They do this using a series of communications, often automated, that may consist of case studies, white papers, webinars, regional events and online demos. Each time a prospect engages in one of these communications, a point value is assigned. The total points add up to an engagement score. The gate criteria, which determine when a person moves to the next stage of the relationship, typically includes a lead scoring measurement. Once a person or company meets the gate criteria, the lead is moved to the next stage (either Prospect or Qualified Prospect). Then the sales rep manages customer communication until the lead closes, the sale is lost, or the lead recycles to a previous stage (back to Prospect). 

The customer engagement phase also has several stages that signify move Customer communication is individualized and personalized based on the current stage of the relationship, with the goal being to move the customer to the next more engaged stage.

Three Dimensions

Visualize your scoring and measurements stages through a three-dimensional graphic. This customer lifecycle map shows engagement, target audience and lifecycle stage. Engagement levels accommodate the ebb and flow of a relationship, while profiles can be measured and identified based on data you have on the person or the organization, such as job title, target customer revenue, employee count and product need.

Many solutions have incorporated lead scoring features that score profile and activity attributes. But, evaluating prospects and customers on three dimensions, by considering what stage of the relationship they’re in, is the key.

CLM can be used for any business, and the stages and gate criteria should be customized to fit the company.

Implementing the New Framework

Marketers can embrace a CLM framework by taking four easy steps:

1. Define the CLM programs. How will you market to individuals in each stage of the customer lifecycle?

2. Define the CLM campaigns and tactics for each marketing program. Each lifecycle marketing program consists of one or more campaigns that are sequenced, triggered and scheduled according to the campaign design and automation.

3. Define target audiences and stages of the relationship lifecycle. Segment audiences based on attributes (behavior, demographics, action, time or lead score).

4. Define the treatments and call-to action (CTA) for each step in each campaign. Treatment refers to the communication method (electronic, physical, etc.). The CTA compels the individual to action.

Select a marketing automation solution that tells you how your prospects and customers are engaging with your brand and provides the flexibility to nurture all sources of revenue, including leads from marketing and sales, repeat customers, referrals, and upsells. 

Troy Burk is the CEO and founder of Right On Interactive, a lifecycle marketing automation software company. Email



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