Friday, May 18, 2007

The Buyer's Journey through the Leaky Funnel

The Leaky Funnel is a book by Hugh MacFarlane that should be added to the “must read” list of every sales and marketing executive. The premise of the book is “how to earn more customers by aligning sales & marketing to the way businesses buy.” I like the extension of marketing and sales alignment to the way customers buy. Rather than just advising sales and marketing to work better together, it gives both organizations a guiding post to align with – the customer.

The two concepts the book is focusing on – the leaky funnel and the buyer’s journey – are tightly related to each other. Many potential buyers start on a journey that could lead them to your solution, yet only a few finish there. Most will get distracted on the way; some will get lured by more promising value propositions; others might give up if the journey looks too challenging, or simply get bored with what you have to offer.

Here are some basic things you can do to keep buyers on track and reduce the funnel’s leakage:
  • Clarity: buyers are looking for guidance. If your offer is easy to understand, more buyers will follow your path. Keep your value proposition clear and simple.
  • Uniqueness: if your value proposition looks like many others, it is easy for buyers to get confused and hop on a different trail. Make sure your offer is differentiated enough so buyers can evaluate it against the rest of the field.
  • Ease: buyers today are busier than ever. In our multitasking world, they embark on many journeys simultaneously. If finding the information they need in order to take the next step is not easy enough, they may choose an easier path. Make it easy for them to find the information they need.
  • Frequency: there are many bumps on the road to your solution. If buyers get stuck on one of them for too long, it may be tough to get them back on track. Don’t wait until they ask for more information; offer it to them early and often.
Keeping the frequency of information flow to buyers is a challenge. Many companies spend a lot of money on marketing campaigns that generate buyer interest, but fail to keep buyers on track with timely and relevant follow-up. There are three common reasons for this failure:
  1. Ownership: passing all the leads to sales is a sure recipe for a huge funnel leakage. As much as 70-90% of the leads that are passed to sales are never followed up since sales believe they are not worth the time.
  2. Timeliness: being late is almost as bad as not following up at all. Some research shows that the likelihood of reaching a prospect on a follow-on call goes down by 90% within one week from the initial inquiry.
  3. Relevance: I don’t have statistics on this one, but this is what happens when a salesperson calls someone that downloaded a white paper and asks if they have an active project and approved budget. If the follow-up call is too aggressive, it fails to match the next logical step in the buyer’s journey. The results can be disastrous, as buyers will not only get lost on their journey but may also tune out any future communication.
How can you avoid such failures and ensure effective follow-up? Here are some things you can do:
  1. Plan the follow-up as part of each campaign
  2. Match your follow-up communication to the buyer’s journey
  3. Dedicate specific resources to do the initial follow-up and screening of leads before they are passed to sales
  4. Be clear on which leads should be passed to sales
  5. If you don’t have the bandwidth to follow-up in a timely manner, get outside help
Let me know what you think or if you need help with any of the above.

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