This article pertains to the chapters 3, 8, and 11 in Gregory Olson's book, The Experience Design Blueprint, a book about designing better experiences and then making them come true.
- Chapter 3: Who is in the Sandbox?
- Chapter 8: The Promise Delivery System
- Chapter 11: Barriers to Innovation and Overcoming the Wall
The 3 Funnels
You see a model that is so simple that it can't possibly apply to your unique situation. That's what most people believe. It is also the reason why most humans (and business leaders in particular) struggle to learn from others. But, you're different. After all, you are reading this article.
The 3 Funnels are Key to an Organization's Longevity
No matter the size or type of your organization, you’re subject to the 3 funnels; there is no escape. Effectively navigate the 3 funnels and never run out of cash and your organization will be a going concern forever. The 3 funnels are (left to right in the image above):
- The exposure funnel where you turn suspects (A) into prospects (B);
- The adoption funnel where you turn prospects (C) into cash generating customers that are using your product or service (D);
- The retention funnel where you turn customers (E) into loyal advocates (F) that help you attract more prospects, in turn reducing your marketing expenses related to the exposure funnel.
Leaky Funnels and Blocking Covers
Limited flow through any of these funnels negatively impacts your organization. The funnel shape implies that there is a slowdown; people enter the top and then take a while to emerge from the bottom. No matter how perfect your organization is you won't have 100 percent throughput. Some customers never make it through the funnel; some never fully enter. It can be as though the funnel is leaky or has a cover that prevents people from entering.
Be Better Explorers as a Team
You don't want to be a board member, executive leader, or manager who makes decisions that in effect, limit the flow through the funnels. Rather than being your own competitor empower your team to explore performance (throughput) on each of the funnels. Imagine sales, marketing, and operations working cooperatively together to improve operations and smooth the experiences customers and prospects have with your organization. It is possible. Start by performing a 3-Funnel Diagnostic.
How to Perform a 3-Funnel Diagnostic
Spark authentic dialogue in your organization by pulling together a team and performing a 3-Funnel Diagnostic.
- First, build a report against the 3 funnels to show how many people are at each of the stages. Does your CRM and reporting repertoire enable this? You might have to evolve in this area; that is okay start with the systems, data, and knowledge you have.
- Secondly, discuss all of the activities that your organization is involved with in moving people from initial suspect all the way through advocacy. No doubt you'll discover issues with the organization's performance. Seek to understand the customer journey beginning from when a person first becomes aware of your organization all the way to them becoming a strong advocate. Map what you think is a typical customer journey and note any exceptions. Make sure sales, marketing, and customer service functions are represented in these meetings. You'll likely want to have more than one meeting. Eventually you'll find a rhythm that works for your organization and include a 3 Funnel Review as part of your normal business operating mechanisms.
- Thirdly, discuss what barriers are preventing people from entering each funnel or making it all the way through. By doing this, you'll surface where people get stuck and the reasons why. I guarantee you that the reasons will be more attributable to your organization's own performance gaps as opposed to your competitors doing a far superior job. This is especially true for organizations in industries where customer satisfaction is low industry-wide.
Sales and Marketing on the Same Page
Let's face it, in most organizations the discussion around the sales or marketing funnel is overly simplified. It's usually a single funnel and the discussion is dominated by whichever department is more influential at the time. But, that isn't the most productive way think about or run your business. When sales and marketing don't work cooperatively then customers and would-be customers suffer. Blindspots in other parts of the operation might be negatively impacting business, too.
Have a Better Conversation
A better conversation centers around your customer and each of the steps, touchpoints, they go through from initially learning of your product, service, or company to eventually becoming a loyal advocate (if you are lucky and skillful). Three distinct funnels best represent this metamorphosis from suspect to prospect to customer to advocate. Sure, it is easier to dumb things down and create a single simplified funnel. But, similarly, imagine your accounting department or bookkeeper only had a single account instead of a full chart of accounts. You'd have an accounting nightmare and subsequently a tax nightmare. Evolve your conversation around sales and marketing funnels and you'll explore issues and knock out problems before they become endemic to your organization. Your business will evolve for the better. Customers, employees, and partners will thank you for it as measured by increased revenue and engagement. Proposing such a 3-Funnel Diagnostic will take some courage. But, you do have the courage, don't you?