Why Sales Should Get Rid of Funnels and Pipelines

by on Mar 12, 2016
get-rid-of-sales-funnel-and-sales-pipeline

The folks who are likely to use your products or services are not water, oil or milk to be transported through a pipes or poured through funnels.  Nor are they particles clogging or choking your pipes. However,  sales funnel and sales pipeline are common methodologies used in sales, where potential buyers are mapped to different parts of the pipeline or funnel – such as awareness, interest, evaluation, suspect, prospect, top of funnel, bottom of funnel, etc.

The goal is to “close” a sale or a deal

We equip our sales force with these tools, terminology, thinking and expect them to go out and “close” things.

Notice the word “close”

As it is used in the sales context, it is a verb. The verb has negative sort of connotations.

  •  move so as to cover an opening.
  • block up (a hole or opening).
  • bring two parts of (something) together so as to block its opening or bring it into a folded state.
  • come into contact with (something) so as to encircle and hold it.
  • bring or come to an end.
  • (of a business, organization, or institution) cease to be in operation or accessible to the public, either permanently or at the end of a working day or other period of time.
  • remove all the funds from (a bank or building society account) and cease to use it.
  • the end of an event or of a period of time or activity.
  • the shutting of something, especially a door.
  • And of course, in sales, it means – bring (a business transaction) to a satisfactory conclusion.

How did sales funnel and sales pipeline creep into the sales process?

A Wikipedia article states that the Purchase Funnel also know as “customer funnel,” “marketing funnel,” or “sales funnel” or “conversion funnel”  grew out of the AIDA-model.

E. St. Elmo Lewis developed the AIDA model in 1898 (118 years back). The letters in the acronym AIDA stand for Awareness, Interest, Desire, and Action. They  map the mental journey of the customer along the path to purchase.

Awareness – the customer becomes aware of the product or service
Interest – gets interested in the product or service
Desire – aspires to get the product or service
Action – takes the next step towards purchase

This development was during the “Second Industrial Revolution” that started in the mid-19th century after the refinement of the steam engine, the harnessing of electricity and the construction of canals, railways and electric-power lines.

So, in the early stages or industrialization,  modernization and consumerism, it may have made sense to use sales funnel and pipeline models for sales.

Are sales funnel and sales pipeline still relevant?

Industrialization and modernization evolved stage by stage….. and here we’re today in the age of  information technology, social media, mobile apps and what not.

It is well known that industrial or technological developments have impacted social dynamics, human relationships and thinking.  The extended family died to give way to nuclear families as people relocated for job and opportunities created by industrialization.

Human relationships have been the biggest casualty of economic development.

For example, during the pre-liberalization times in India, we had closer bonds with extended family, friends and neighbors.  Relationships were a given in those times.  If you’re my age or older, you know what I mean.

Whereas, in the present times, relationships have to be consciously built.  Messaging apps and social media have become important tools for building relations.

Some aspects of human nature or business management basics still remain the same.  For instance, each and every of Fayol‘s famous 14 principles of management are 100% relevant even today.

But what about sales funnel and sales pipeline?

In new-found modernization times, people were amused by advertisements and eager to buy. So it was easier to sell. Additionally, competition was not as high for the seller as it is now.

Sales management processes were in the early stages of evolution, and sales funnel and pipeline helped streamline processes and provide direction and tracking.

But consumer psychology has evolved.  The modern consumer is intolerant to advertisements and cautious about being the next prospect for somebody trying to sell something.

A sales process invented in the 19th century may thus not be relevant to the evolved consumer thinking.

We may want to stop treating potential users of our product or service as elements to be pushed forward in the sales pipelines, or dropped through the sales funnel until they fall into that trap of a bottle, at which point you “close” the bottle with a lid and leave your buyers feeling suffocated and imprisoned.

An entrepreneurial approach to sales

How can sales processes, terminology and approaches evolve?

Like I said earlier in this article, relationships and desire for products were a given in earlier times.  In the present times, we need to make efforts to build relationships with our kith, kin or colleagues.

People are not eager to buy, but they may be looking for help with solving problems.

Instead of treating our sales team AS a sales team with targets and quotas,  we might want to treat them as entrepreneurs, help them think and execute like entrepreneurs.

Or treat them as partners, both your’s as well your customer’s.  Partners who will work with your customers and help them rise in whatever way that your product or service helps them to rise.  Partners who will work with you to map your solution to the customers who are facing the corresponding problem

Don’t close a sale, open a door

An entrepreneur is someone who stumbles upon or identifies a problem, takes the problem to their heart and gets passionate about solving it with a new technology, a product or a service.

Similarly, your team of “entrepreneurs” go out with the mindset that they need to identify people facing problems, feel strongly about solving their problem and then solve it with your product or service.

When they identify a problem, they don’t “close” a sale, but *open* a door to a new chapter in the life of the customer.  Open a door to new opportunities for both the customer and your organization to partner and work together in the long term for mutual success and growth.

The AIDA model, is of course still relevant.  In fact, it is all the more relevant  in the age of high population as well as high competition.  People with problems could be pro-actively researching online to look for solutions.  And this is where your digital, social, mobile, search presence matter more than ever.

My point really is that the sales funnel and pipeline approach is too pushy and likely less relevant to the present times when the whole world has evolved, all technologies have evolved and human thinking has evolved.

The stages in a “sales process” are usually labelled as lead, prospect, qualified prospect…….etc., and then the status is marked as “closed” in a sales management tool, once a sale is accomplished, We may want to label the stages in an “entrepreneurial effort” as

1. Identify – a problem
2. Solve – map it with the solution
3. Open – a door to a new chapter
4. Strengthen – the bond
5. Transcend – to higher levels of trust (and permanence)

That is to say, don’t try to find prospects, but try to identify problems to solve.  Don’t try to resell, but try to develop the relationship and take it to higher levels of permanence.  Stages #4 and #5  are where customer relationship management plays an important role (I’ll detail this in another post).

That’s because relationships are not a given even in personal life, let alone professional.  We need to work on them to build and maintain them, than take them for granted.  More so, we need to work on them rather sincerely.

So how does this paradigm shift help?

No. It’s not about relabeling the stages of a sales process. It’s really about a shift in the thinking pattern and an evolution of the mindset.

That’s the direction in which entrepreneurial thinking has been shifting at large.  Look around, there are so many billion or multi-billion dollar companies whose primary goal is to make their solution accessible to a larger set of users, even if that means undercutting prices with respect to their competition or sacrificing profits.

Once the problem is solved and new doors and new chapters are opened in the lives of users, profits would fall in place sooner than later.  To know what I mean, you don’t have to look beyond a Facebook, or an Uber, or an Airbnb or so many other modern enterprises.

These enterprises are super-successful, and they have been so without pushing customers through pipelines or funnels or tracking them through stages in a sales process – suspect, prospect, hot prospect, cold prospect and what not.  Their goal was to solve a problem.  Profit was a natural fallout of the solution and the commitment.