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Is Your Sales Funnel Flawed?

Sales Management

The Sales Funnel

“Is your sales funnel flawed?” Marketing changed massively since the creation of the Internet. Some of the

Is Your Sales Funnel Flawed? image Sales Funnel1

The sales funnel, developed in 1898 was a linear process

most significant changes are evolving with the growth of social media. One of the things today’s marketers seem reluctant to relinquish is the sales funnel. After seeing a new model of a sales process in the age of digital marketing and social media, it might be time to re-think the sales funnel.

For those less intimately associated with the concept of the sales funnel, since 1898 businesses, marketers, sales people and many others have accepted the theory that people pass through four linear steps in making a purchase decision. (Some refer to the process as the “AIDA Sales Methodology.) The steps are awareness, interest, desire, and action. The role of marketing is to move prospects down (vertically linear) through the center of the funnel by providing the information they need to make the purchase decision.

The New Purchase Loop

Steve Hall recently published an article on the HubSpot blog (2/8/2013, “How Inbound Marketing Aligns with the New Purchase Loop) in which he focused on the role of Inbound Marketing in the purchase loop. For many small business owners, who are still reading about how to move prospects through the sales funnel in most of the marketing advice published today, the first step in moving away from a flawed sales funnel model is to understand another model more compatible with how people gather information and make purchasing decisions.

Recently, Latitude (latd.com) conducted a study of purchase behavior with About.com. The study revealed that 87% of consumers travel a more complex and less vertical or linear path to making a purchase. The study delineated six behavioral or mental states experienced by individuals when deciding to purchase. Further, logic supports the idea that high-dollar purchase decisions, complex sales, purchases requiring a long-time commitment of the buyer, or purchases of new product/service types likely follow a less direct path to purchase.

Six Behavioral or Mental States

According to the study, buyers experience six mental or behavioral states in the purchase decision. These are:

  1. Openness – conscious or unconscious interest or openness to a product or service that meets an emerging need
  2. Realized Want or Need – something happens that gives the individual a reason to start looking for a product/service to meet the need (the catalyst might be something heard or read or any other change in the individual’s situation
  3. Learning and Education – the individual transitions into research mode and gathers information about options and the fundamentals of those options that will provide a certain level of comfort about making a purchase
  4. Seeking ideas and inspiration – the individual gathers information and support for his or her emerging interest in the product/service
  5. Research and vetting – the person reads reviews, discusses the intent to purchase with friends or family, looks for deals, compares prices, etc. to support the purchase desire
  6. Post-purchase evaluation and expansion – The purchaser uses and experiences the product/service; and decides how s/he feels about the purchase. Positive or negative feelings and experiences may be shared with others in conversation, on social media, or by writing a review of the product/service

What Makes this Model Different

The first thing making this model different is the focus on the state of mind related to purchase behaviors and a recognition that the purchase decision is more than four simple steps. Perhaps the most important element of the new purchase loop process, however, is the recognition that a sales decision is not always direct and certainly is not linear. In fact, the study found that people actually move from one mental or behavioral state by “bouncing” from one to another.

Is Your Sales Funnel Flawed? image New Purchase Loop1

The new purchase loop shows the complexity of the decision to purchase today

This is not to say that the purchase process is random. Rather, it is actually reasonable and logical that individuals would move around the loop at a different pace or in different directions depending upon their prior knowledge of available products and services and various sources of the products and services needed. Similarly, the new purchase loop model allows different paths to purchase for those who are more, or less, deliberate in making purchase decisions.

It seems that all purchase decisions might be more about the needs and feelings of the individual buyer than previously recognized, even in simple sales. Other findings specified by the study are:

  • Shopping is more complex than identifying a need, considering options, and buying
  • Purchase paths are more complex than indicated by previous models, and less linear
  • The final purchase decision may happen more quickly, but may also require more “bouncing around” in the loop
  • The relationships between customers and brands are more personal than has often been understood
  • Shopping in 2013 is about the customer’s feelings and needs, with far less emphasis on the brands and the individual products or services

The purchase decision, then, seems far more complex than moving down through a funnel (or free falling through a funnel) and more about how brands and businesses provide information, answer questions, and build trusting relationships with customers and prospects. The new purchase loop seems a better reflection of the way people make purchase decisions today.

Is your sales funnel flawed? Does the new purchase loop better reflect the buying decisions of your customers? Perhaps the funnel is no longer relevant. Which purchase decision process makes the most sense to you?

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