Is the Sales Funnel Obsolete?
Steve Anderson
Keynote Speaker | International Best Selling Author of The Bezos Letters | InsurTech Advisor | Co-Founder at Catalyit?
Youtility is massively useful information, provided for free, that creates long-term trust and kinship between your company and your customers.
—Youtility: Why Smart Marketing is about Help Not Hype by Jay Baer
From my very first days in the insurance industry as I began to learn how to sell insurance products and services, I was taught the marketing and sales funnel.
The sales funnel was a visual representation of the steps that you needed to lead a prospect through in order to get them to the point where you could close the sale. Once they made a buying decision, you learned how to make them an advocate of your agency. Suspect, prospect, customer, client, advocate—that was the process.
And it worked.
I used the sales funnel—or marketing ladder—to visualize the marketing and sales process. I have been a big fan of this type of thinking. In 1990 when I began to sell commercial insurance as a new producer at an agency in Texas, it was a core part of the marketing process I used to build increase my sales. I believed in it so much that I used it when I taught other insurance agents about marketing campaign management and marketing automation. I even wrote a series of articles for Rough Notes magazine that is still available today.
Many insurance sales trainers continue to rely on the sales and marketing funnel as a key component of their sales process training. One email I recently received was promoting a webinar promising to provide "insider tricks to keep your pipeline overflowing."
But I wonder if sales funnel (or sales pipeline) thinking has been obsolete for a number of years and the insurance industry just hasn’t come to accept and embrace the change. It seem to me that the sales and marketing process has changed more dramatically in the last five years than in the previous 30.
Buying patterns have also changed drastically. The Internet allows consumers to begin their search for product information without a sales person knowing they are even a prospect. This change in information access may have broken the sales funnel as we know it.
So, is the sales funnel still a viable model for the sales and marketing process.
Sales funnel thinking relies on the theory that the sales person identifies a possible prospect and put them into the top of the funnel and sales fall out the bottom. But is that really true in today’s world? It seems to me that a large percentage of today’s consumers follow an erratic path of engagement with businesses that sometimes results in a purchase.
Jay Baer, in his book Youtility, states that “technology adoption has profoundly altered how consumers interact with information and with businesses.†He goes on to say: “In 2011 the Corporate Executive Board surveyed 1,900 B2B customers to uncover insights about purchasing behavior and found that customers will contact a sales rep only after independently completing 60% of the purchasing decision process.â€
As I mentioned above, the first time I was truly responsible for creating sales was in 1990. Back then, the whole sales process was controlled by the sales person. You’d cold call somebody and manage the sales process all the way through the funnel. As the sales person, I had all the information the prospect wanted, including pricing and discount options. I controlled the sales process.
If Baer and others are correct—marketing by providing “massively useful information†is now key to helping hidden prospects find you and learn more about you and the products and services you offer. Useful marketing builds trust, and trust fosters relationships.
Today, successful sales is more about self-service marketing than ever before. To find and attract the invisible prospect you need to be able to be very helpful. And your prospect may not start at the top of your sales funnel. By the time you find out they are a prospect for your services they may have already gone through multiple marketing steps. They did the research on their own.
So, if the sales and marketing funnel is obsolete, what analogy works for the sales process today? Is it:
- A neural network?
A connection of neurons that work together to form the nervous system. - The Web?
Massively hyperlinked pieces of information. (This is a reason your website is so important in today’s sales environment.) - The same funnel but a different progression?
Customers now dictate how fast they descend to the final purchase decision. They often do so without assistance from your agency, making inbound marketing key.
The sales game has changed a lot. What do you think? Has the sales process fundamentally changed?
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Steve Anderson is a leading authority on insurance agency technology. He is a prolific writer known for his knack for translating “geek speak†into easily understood concepts. Check out his free weekly newsletter “TechTips†and other resources for the insurance industry on his website.
Photo: Sergey Nivens / shutterstock
Photo Book Cover: Jay Baer
Retired Valuation Consultant
10 å¹´I've been working as an agent in a call center selling MetLife insurance products. Your article is right on target based on my experience with Tech savvy consumers who range from high net worth professionals to the single lower income parent.
Owner of GUIDE / IT Consultant / 8697857561 whatsapp no.
11 å¹´all products and services are not sold or can't be on departmental stores or global stores i.e through e-commerce...especially which requires customer engagement to know and get educated .... Sales funnel is the beginning of Sales life-cycle...
Retired
11 å¹´We used audio visual presentation materials such as films, videos and flip-charts 20 years ago. Now customers can shop online and watch slick advertising presentations on websites without a salesman. People previously invited salespeople into their homes and and board rooms more often and earlier. Now it is much harder to get into meetings to make a presentation. Buyers think they know more and need less information. The problem is that buyers only get the spin from advertising. Critical decision making requires expert advise.
Protecting, Preserving and Passing on Family Wealth ~ Investment, Estate & Business Planning Services.
11 å¹´Has the buying and selling process changed fundamentally? Or is it that we simply have more flexibility, choice on where and how we engage with the process, as both consumers and providers? Is that a fundamental process shift? I'm not sure. It feels more like methods, the manner in which we interact are evolving, and the fundamentals are well, fundamental. Products and services are generally not proprietary, relationships are. The changes have given rise to a more informed, educated consumer, as well as provider. So perhaps it's that the gap and levels of choice between DIY and full service are narrowing. And it's becoming easier for consumers and providers to decide where and how they'll engage along that continuum. Does that mean the funnel analogy is losing relevance? Most likely, as you can now enter the funnel from just about any point, not just from the top. So we may need a new analogy, but the fundamentals still feel fundamental.
Seasoned Marketing Professional
11 å¹´Why someone who got a world of information still needs to talk to a sales person? Only reason is to have a relation with the company rather than just be a customer. If one understands this, and walks with the customer all the way to touchdown, It yields better results for business plan. Remember customer is not just seeking help but he is looking for more insights into company's financial stand, post purchase services and benefits and most of all a better price.