The Funnelholic

Today, The Funnelholic continues its series of interviews with the industry thought-leaders who contributed to the Focus Experts’ Guide: Sales and Marketing Pipeline and Funnel Models.

Meet Matt West, Director of Marketing at Genius.com and author of the Connected Marketer blog. Matt has more than a dozen years of experience managing B2B marketing and demand generation programs for technology companies. With experience in both the agency/consulting and client-side marketing departments, he is focused on strategy and committed to results.

The Funnelholic: Explain your approach to the funnel.

Matt: A few years back, we coined a term “Sales 2.0,” which at its core is about two things: acknowledging that the sales process has become a buying process; and in order to harness this new dynamic to benefit both the buyer and the organization, Sales and Marketing need to align to help the buyer navigate the buying process as quickly and seamlessly as possible. In order to truly align, organizations need to rethink and update three areas of their business: people, processes and systems.

So our funnel addresses four dimensions: 1) The all-important buyer, is the actual funnel. They interact with the company before they even enter the system; they eventually engage with the company and self-identify; the organization begins a dialogue with them; they develop a rapport; they eventually buy and ultimately buy more or advocate for the company. 2) The salespeople have a set of needs and contributions throughout the process. 3) The marketing people have unique needs and contributions throughout the process. 4) There are systems that align with each stage in the buying process. Sales is getting involved much earlier in the process, and Marketing is remaining involved much deeper in the process. This has a lot to do with the new tools and systems available, like social media, CRM and marketing automation.

The Funnelholic: Besides your own, were there any other funnels that resonated with you?

Matt: I really appreciate Ardath’s approach to the funnel. We share the common sentiment of being Buyer-focused, rather than Sales-focused. But she drives home an interesting point. As buyers work through the process toward a purchase decision, they invite additional people in their organization into the conversation. This is definitely the case with technology purchases. In the recent 2011 MarketingSherpa B2B Benchmark report, they found a trend of seeing multiple decision makers getting involved in the process. Interestingly, what Ardath doesn’t touch on in her overview of the funnel, is the implications that come of this model. Having worked with her, this is clearly what drives her marketing philosophy — it’s all about content. In order to connect with each of the parties involved, marketers must develop valuable, relevant content that speaks to each party at every stage in the buying process. I’m a huge believer in this, and companies that follow this process will be very successful.

The Funnelholic: What did you learn from the exercise?

Matt: When we were asked to create and submit our funnel, I really had to think about which direction to take. The funnel has three primary uses: an almanac, a map or a crystal ball. In other words, it’s used as an analytics tool to see where you’ve been, a snapshot of your current state or as a predictive modeling (planning) tool. I had to be careful to make sure it applied to all three of these uses sufficiently.

The Funnelholic: If everyone needs to create a funnel to model their business, what are best practices for creating it?

Matt: When creating a funnel, make sure it is usable for all three items mentioned above, a map, an almanac, and a crystal ball. The map should be relatively easy. The systems you have in place should be able to tell you how many people are currently in each phase of the funnel. An almanac may be a little more difficult if your system wasn’t set up to track these phases in the past. If it was, it should be pretty easy. The most important thing to focus on when looking historically is not necessarily the volume of people at each phase of the process, but the areas between. What were the conversion rates from one phase to the next? By combining the map and the almanac, you can make some hypotheses as to where each phase of your funnel can be optimized. In order to use it as a crystal ball, you will need to flip the funnel on its head. Start with the known variables. If you know your revenue goals and you know your average sales price, you can determine how many deals are needed to reach your revenue target. Then apply the conversion rates back up the funnel to determine how many leads are needed to reach your deal target and what each phase of the funnel should look like.

Join the conversation: ‘Is the funnel still a relevant metaphor for the b2b sales and marketing process?’

Ahh, marketing automation, thank you for coming along. Not just because marketers need you, but the technology market needs you. We don’t have as many dirty, bare-knuckled technology wars as we used to or at least any new ones. Especially for a guy like me who loves a good battle. Whenever I’m out with the marketing automation guys, I tell them: “I love standing on the sidelines watching you go at it.” I love it.

That being said, there’s been some recent amazingness in the blogosphere with marketing-automation-exec-on-marketing-automation-exec violence. We can derive some important lessons from it.

So, first, with joy, I present to you the last couple weeks in the war for marketing automation dominance:

1. Lead Sloth’s Genius.com article: This was a fairly innocuous article, with Jep getting the scoop from Scott Mersy at Genius and writing about the two freemium offerings in the marketing automation market. Innocent, right? Check out the war that broke out — particularly between David Thompson, CEO of Genius, and Phil Fernandez, CEO of Marketo — in the comments.
2. The Eloqua Blog “callout” of Marketo VP of Sales Bill Binch: Bill sent a LinkedIn message to some Eloqua sales reps. Alex Shootman, SVP of Sales at Eloqua, in a brilliant chess counter-move, then posted the message on his blog and, in his tone and message, took the high road. Many will debate whether posting the message on the blog in the first place really constitutes taking the “high road,” but who cares? This is war! How about Bill’s comment: “Old school or not, it got me 6 interviews.”  CLASSIC.

My perspective:

1. “A party isn’t a party without a good fight” — A really mean guy in high school who got in fights every weekend used this as his graduation quote. I’ll never forget being horrified by it, but now I get to use it. The key here, as I mentioned above, is that there is nothing better for a market than a good all-out fight. SAP v. ORCL, ORCL v. MSFT, MSFT v. GOOG. Bring on the trash-talk, lawsuits, gamesmanship, and — sorry Alex — recruiting, which is a big part of this.
2. “Its not a battle unless you are recruiting each others soldiers” —  Sorry, again, Alex, but it’s true. You should be excited that Marketo is going after your guys. Eloqua is the market leader, the king of the hill, so expect your competitors to pull out all the stops and try to beat you in deals, take your clients, and recruit your guys. Sending in recruiters to steal your people is fair game, and you need to fight back with a strong employee retention strategy. That’s war, guys. Embrace it, dig your heals in, and fight.
3. “Everyone needs an enemy” — Lightspeed Venture Partners’ John Luongo was an adviser on our board, and one of his first tips was to declare an enemy. This great tip gives your team focus, direction, motivation, and a common enemy.  The marketing automation war is a perfect example of how enemies only make you better. Lets face it, the current marketing automation market was built around everyone declaring Eloqua the enemy. Now, more and more, people are adding Marketo to this list. But the point is, the winner of the competition will be end users as (hopefully) companies work to make themselves better.
4. “The battlefield has changed, and it’s kinda fun” — Let’s go over what happened here again: EXECUTIVES from these companies went to war in the blog comment fields. I love the age of new media. Instigating your rival can be done in seconds in today’s world. Imagine what that would have taken 10 years ago.
5. “Predicting that a market with 36 companies in it will consolidate is not really a prediction” — With the Market2Lead-Oracle “deal” and IBM’s recent purchase of Unica, bloggers have been “predicting” that the marketing automation market will consolidate. Dude, come on. Even I know that. I can’t even think of an analogy, but of course there is no room for all these marketing automation companies. Thanks for that really insightful comment.

So, there and I didn’t even use “All’s fair in love and war.” Fight on marketing automation people, fight on.