In the B2B world, accurately estimating sales is as easy as solving a Rubik’s cube blindfolded on a roller coaster. We’re not talking about e-commerce here but about large-dollar, complex service sales. You know the ones; they’re what you work on.
Yet what supplier doesn’t look at their sales pipeline and/or sales funnel to guess their future?
Leadership uses sales pipelines and funnels to help make important decisions, such as:
- Hiring or firing sales reps
- Placing ads or social media posts
- Buying anything expensive, like acquiring a firm
- Forecasting sales & revenue
What if Sales Pipelines & Funnels are Wrong?
Consider this: What if sales pipelines and funnels are misleading, or worse, downright wrong? What if they make estimating sales and revenue less accurate, not more?
This is inherently true because pipelines and funnels are built on different models with different purposes. They show an incomplete puzzle of what’s happening with B2B sales and customer buying. Specifically, these differences are:
Sales pipelines show estimates by stage of the SALES PROCESS. Their purpose is to guess at likely sales and downstream revenue — but they’re focused on the sales side only, not on customers’ behaviors.
Sales funnels show where customers are by stage in their BUYING PROCESS. Their purpose is to assess marketing results and direct go-forward efforts — but they’re harder to track and align with sales actions.
So, What’s the Problem?
Those important hiring, buying, and forecasting decisions benefit from a more accurate window to see what’s really happening.
The problem with today’s sales pipelines and sales funnels is that…
B2B Customers Don’t Buy in Straight Lines
When dinosaurs ruled the earth, the B2B sales path appeared linear. That is, if enough sales actions were done they would eventually produce X number of wins.
Back then it didn’t seem to matter how customers bought services or products. Suppliers just followed sales stages to get enough visibility to make “good enough” decisions.
Eventually the world turned, and customers today have overwhelming amounts of quality info online. This moved a large majority of their B2B buying processes online too.
For example, customers…”spend just 17% of their time meeting with suppliers — so if there are three potential suppliers, each gets only about 5% of a customer’s time.”
That makes it harder for suppliers to know where customers are during their buying journey.
And according to Gartner’s research into B2B sales, “…customers progress from the starting point to a purchase is unpredictable, inconsistent and sometimes repetitive. “Ninety percent of all buyers reported revisiting, or looping back, to at least one job as part of their overall purchasing process…”
This means customers’ B2B buying journey is jumpy. They often double back on a sales stage that suppliers considered complete only to find customers having a go at it again, such as more whitepapers, industry reports, benchmarks, in-person meetings with different stakeholders, etc.
The New Hybrid Reality
Understanding buying and selling has moved away from suppliers looking at sales stages and marketing milestones separately. That only provides a partial picture and may corrupt important decisions with inaccuracies.
The new reality is that customers don’t buy in straight lines, and B2B suppliers must see selling and customer buying as the singular animal it is — to bring the entirety of customers’ journeys in step with sales actions.
Easier said than done of course but it’s already in practice, just in separate ways.
Consider combining stages from a sales pipeline with parts of a sales funnel into a new perspective that better reflects reality.
This reporting hybrid integrates suppliers’ sales and marketing functions. It’s hugely dependent on suppliers’ CRM technology, web analytics, sales & marketing discipline, and expertise to create custom data visualizations, such as using QuickSight, Google Data Studio, Tableau, Salesforce Sales Cloud, etc.
This is an enormous initiative that spans technologies, processes, and the people to make it successful. But it wouldn’t be fun if it were easy and everyone could do it, now would it?
Hybrid View: 7 Key Parts
Here’s a simplified list of considerations with the difficulties in the details. But it’s a start.
1. Combine Buying & Selling Stages into Master List
A) Create a list of your customers’ buying stages (buying jobs). It may help to start with category buckets and then fill them in, pulling them from your sales funnel.
- Problem Identification
- Solution Exploration
- Requirements Building
- Supplier Selection
- NOTE: Gartner has two additional buckets that occur after Supplier Selection, Validation and Consensus Creation, which are extremely difficult to track and/or not as helpful with insight
B) Add your sales stages to that list. These stages are from your sales pipeline. If you don’t already have sales stages, be sure to customize them to your industry and firm’s needs — focus on the “vital few” instead of the “useful many.” Lots of stages are often ignored by sales reps when they have to fill them into your CRM.
2. Customize Web Analytics & CRM
Get your tech resources to customize your CRM and web analytics to match the stages in your master list above.
3. Create Custom Data Visualization (Dashboard/Report)
Again, heavy duty tech resource lifting here but with data visualization apps your tech gurus can integrate multiple data sources and formats into a single reporting platform. You have to design it first, of course. But that’s cool, huh?
4. Define Selling & Marketing Responses
While your tech team is doing their magic, define what your sales reps and marketers can/should do to help customers through each stage towards your sales win.
5. Train Sales & Marketing Folks
This is a critical part but you already knew that. And you’ve planned, funded, and scheduled it.
6. Test, Pilot, Scale & Incentivize
Follow best practices for standing up an integrated (tech/work-process/training) initiative. Consider incentivizing your sales reps and marketers’ full engagement with the initiative.
7. Nothing Left but to Monitor, Assess, Tweak
What could be simpler? Yeah, I’m kidding but this initiative will place you in the 21st century, leaving the 20th behind and in the history books where it belongs.
Sales pipelines and sales funnels can mislead suppliers because they don’t look at selling and buying as one entity. They separate sales actions from the customer’s buying journey.
This can lead to suppliers making less than optimal decisions in hiring, buying, and forecasting. Who wants less than optimal?
As difficult as it may be to create a hybrid view, combining stages from sales pipelines and funnels will provide a more accurate look into what’s really happening with a supplier’s B2B sales. And that can only help make better decisions.