GTM and sales funnels
20241216.1 - a new way to think about sales funnels
I was reading this article regarding go-to-market strategies and sales. In simple terms, the article talks about how go-to-market effectiveness should be measured differently. Historically, go-to-market has been measured with a sales funnel going from leads to marketing-qualified leads, and then to sales-qualified leads.
The article proposes a different way, which would be more similar to a marketing funnel going from identified, aware, interested, considering, selecting, to choosing.
However, I don’t think that these two things are mutually exclusive. I think that they are two sides to the same coin. The old method of using leads, marketing-qualified leads, sales-accepted leads, sales-qualified leads, and then deals is a strong measure of activity through the funnel. While this alternative go-to-market measurement approach is really a label on that traditional funnel, it helps us to determine the state of mind of the potential prospect as they journey through the funnel, rather than being a stage in the funnel itself.
I think an alternative approach would be a matrix where the original funnel is the vertical progress through the business through to conversion, and horizontally on this matrix would be, for want of a better term, state-of-mind labels on a prospect as it goes through the funnel. In this way, not only can we determine where in the funnel stages the prospect is, but also what the main task is in resolving and convincing the prospect to convert.
It’s worth considering that this kind of sales funnel optimization is not restricted to more mature companies, such as those in the scaling or product-market fit stage. I have previously talked about how product-led growth is a strategy that should be taken by more later-stage companies with clear product-market fit and revenues. This go-to-market funnel optimization, on the other hand, I think is something that can start much earlier in the journey of the business since it is not affected by technology or budget, but more by understanding the business process and how the business interacts with potential business opportunities.
We can consider that each stage of the go-to-market funnel can be optimized by considering what the best approach is to addressing the prospect’s progress through that stage. For example, we might find that many prospects stall at the interested stage, and we might consider that there are different approaches to addressing a potential prospect’s interest in our product or business. This interested stage would not necessarily be connected to the sales funnel stage, such as marketing-qualified or sales-accepted lead. Their stage in the funnel simply illustrates our progress interacting with them, whereas their stage in the go-to-market strategy, i.e., our identification of them as being interested, simply illustrates an information gap in their decision-making process.
In other words, the sales funnel is a measure of our progress in engaging with the prospect, whereas the go-to-market funnel is a measure of their interest in our business or service.
Turning back to looking at how to optimize the interested stage of the go-to-market funnel, we might consider a manual solution such as a customer consultation, we may consider a process solution such as a demo or a walk-through, or we might consider an automated solution such as a collection of videos, case studies, or other things that would help address someone who is still trying to decide if they are interested in our business.
One of the other issues that the article brings up is the concept of attribution fights and blame games between marketing and sales. I think that this is an mportant and valid concern, and I think that the go-to-market funnel certainly helps in addressing them. However, the go-to-market funnel is more challenging to measure, and therefore I don’t think we can easily give up the sales funnel. If you’ve read my previous articles on financial models, you’ll know that the sales funnel can be accurately assigned and attributed, which would avoid many of these debates between sales and marketing. However, upon reflecting on this go-to-market funnel, I think it adds a layer of detail that can help us to determine what exactly the solution to solving the sticking point at that stage of the sales funnel should be.
I think it is important to understand that the go-to-market funnel stages are not necessarily mutually exclusive. We might find that a sales-qualified lead might be interested in the business but not considering it, or we might find that a prospect is considering the business but not interested. In these cases, it is important to understand what the underlying reason is and what the best approach is to addressing it.
We may know that the sales-qualified lead falls within the responsibility of the sales team to convert through the sales funnel analysis. We can then layer on top of that the go-to-market funnel analysis to understand the underlying reason why that particular step seems to be a bottleneck. For example, we might see that the majority of sales-qualified leads are stuck at the considering stage. This would indicate we need to put effort into helping address the consideration concerns of sales qualified leads, so maybe pricing, competitors or features oir even procurement compliance are the reasons sales-qualified leads are stuck at the considering stage.
I think that this go-to-market funnel is an interesting concept, and I think it has the potential to be a valuable tool for businesses. However, I think it is important to understand that it is not a replacement for the sales funnel. The sales funnel is still a valuable tool for measuring progress and attribution. The go-to-market funnel is simply a layer of detail that can help us to understand the underlying reasons why prospects are stuck at certain stages of the funnel.
I think that the best approach is to use both the sales funnel and the go-to-market funnel together. The sales funnel can be used to measure progress and attribution, and the go-to-market funnel can be used to understand the underlying reasons why prospects are stuck at certain stages of the funnel. By using both funnels together, businesses can gain a more complete understanding of their sales process and how to optimize it.
Here is the original comparison between the two funnels, i don’t think its translates fully to what i was hoping to illustrate -
I’ve adjusted a version to better reflect how i think the original principles can work alongside the traditional sales funnel here, I’ll highlight its not perfect, just a working hypothesis
lastly here is the original article i’d highly encourage you to read
