Forget Funnels, Go Pipelines
What is the first thing that comes to your mind when you hear the words “funnel” or “pipeline”? The two seemingly ordinary household concepts have increasingly become main concerns for sales professionals, keeping them up at night.
Often used interchangeably, both concepts describe the sales flow, a process of turning prospects into paying customers. Yet, the two differ fundamentally in terms of business approach. The ability to identify and adopt the appropriate sales strategy might have a major impact on your sales efficiency and long-time revenue.
So, let’s shed some light on the differences between sales funnel and pipeline approaches and how each of them can impact your efficiency and long-term revenue.
Disadvantages Of The Funnel Approach: Quantity Over Quality?
The sales process is traditionally thought of as a funnel: If you put the prospects at the top of it, they will eventually convert into customers in the end.The main flaw in this theory is that the laws of nature don’t always apply to the business environment. Namely, there is no gravity to force your prospects through the sales funnel stages. Therefore, there is no guarantee that your prospects will make their way down your funnel and change into customers.
Depending on your conversion rate, some amount of leads will change their minds throughout the process, so only a few of them will convert. If you have 1,000 prospects at the top of your funnel, only 10 of them might eventually turn into customers. This leads to another pitfall of this approach: Funnel-based sales teams tend to believe that more prospects will automatically result in more sales.
Research reveals that it takes an average of 8 calls and over 6 hours of prospecting to set up one appointment. Accordingly, in order to be able to process more leads, you will need to either grow your team or sacrifice the quality of your sales process. In both cases, this will lead to overall negative consequences for your business.
Thus, being a great strategy in theory, the funnel approach does not always work in real life. The truth is, to effectively convert your prospects into customers, you need to be actively involved throughout all stages of the sales process. This is where the pipeline approach comes into play.
The Pipeline Approach: A Proactive Sales Process
From the business perspective, the pipeline strategy represents a more hands-on approach. It prioritizes systematic and proactive sales efforts as the main driving force that turns your prospects into customers. Thus, instead of simply putting the leads at the top of the funnel and waiting for them to convert, the sales team is actively involved in the process at all stages of the buying cycle.
According to the DemandGen Report, 95% of buyers will choose a provider that offers relevant content and helps them navigate through each stage of the buying process. Thus, the pipeline approach proves to be more efficient in the long run. Instead of focusing on the number of incoming prospects, sales teams pay closer attention to qualifying the right leads early in the process.
With the required skills and proper tools at hand, even a small sales team can outperform a funnel-based process. In this regard, Docsify proves to be an invaluable addition to your sales toolset. By providing rich insights about prospect engagement, it allows you to qualify the best opportunities and allocate your resources accordingly.
All in all, the pipeline approach offers the following benefits:
- prioritizing internal sales processes over dry figures
- improved focus on salespeople’s skills at every stage (with the ability to eliminate the weaknesses immediately)
- systematic improvements to your sales process along the way
- ability to actively manage the customer’s journey and influence decision-making
- developing better relationships with your customers
How To Define Your B2B Sales Process
While the pipeline approach is typically more beneficial, funnel-based sales are still applicable in some cases. Namely, it finds its best application with businesses that usually have a large pool of potential customers and a relatively low sales cost. A common example for using the funnel approach is the retail business.
However, businesses that typically have high sales value (B2B sales) should choose the pipeline approach. The proactive, value-based sales process is the only proven way to increase your revenue and build future loyalty with your customers.
Armed with the right strategy, proper skills, and efficient toolset, you can increase your sales efficiency and, as a result, grow your revenue. Thus, you need to make sure you understand your sales process and can effectively manage it.