The traditional funnel
The old sales funnel was pretty basic. It looked like this:
And was supposed to act like this:
It was usually broken up into three sections: Leads, prospects, and customers. Later, more stages were added.
These sales funnels tend to stop at the point of purchase, which works well if your company sells washing machines. But if you need your customers to continually return to you to use your product, that sales funnel model needs to change.
The Pirate Metrics-style sales funnel accounts for subscription-based business models, but it’s still a little short. It begins with acquisition or the first sign-up, which should really be toward the middle or end of the process. After all, a lot has to happen for a user to find the company, like the company, and engage with the company—all of which happens before that customer signs up. This funnel puts the emphasis on the activation and retention stages—that crucial first week after the first use of the product, during which most attrition happens.
We also should honor Dave McClure’s original presentation in its Crayola Glory:
The hourglass figure
Internally, we use “funnel cake,” and it is essentially Steve Blank’s model from his book, The Startup Owner’s Manual, that you might recognize. We added some specifics that helped us think about the who is responsible on our team for communication at each stage, but it’s essentially an hourglass shape. We’ve turned the sales funnel on its side, then constructed a mirror image that reflects what happens after we get and retain the customer and make them very, very happy.
What we like about the hourglass sales model is its emphasis on keeping customers and all the positive results that come from retaining and engaging active users. Happy customers are statistically more likely to purchase higher-end versions (upsells), other products and add-ons (cross-sells), and complementary products (next-sells). Most importantly, however, happy customers tell their friends. Here is Steve Blank’s original version for reference:
Referrals are the magic that make the hourglass into more of an unending Mobius strip, but referrals don’t always loop back to the beginning of the “Get Customers” sales funnel because, by the time they find you, they’re already interested and curious about what you have to offer.
Mapping your sales process into a funnel, hourglass, or Mobius strip is an invaluable step to ensuring your company takes a methodical, organized sales approach. But when you want to see beyond what you already have to find out how to improve upon it, you may want to consider ditching the funnel altogether.
The Sankey diagram
Sankey diagrams were originally created to show the flow of energy through power plants, but they might just be the best way to visualize the sales journey visitors make once they find your company website. Tom Tunguz used Google Analytics’ Sankey diagram to see the flow of visitors to his blog.
You can see the pages that visitors first landed on and what they did afterward, which gives you insights into how they navigate the site. But that only scratches the surface of how diagramming your company’s sales cycle Sankey-style can help you build a better process. As Tunguz says:
“Sankey diagrams can be applied in sales conversion funnels to understand how efficient teams are in closing customers and where in the process the most effective improvements can be made. They can be used to understand customer lifetimes, upgrade cycles. Properly applied, Sankey diagrams provide deep insight into longitudinal patterns. Give them a try the next time you’re tempted to employ a funnel.”
Without a sales funnel, your sales and marketing teams are flying blind. The right funnel can give them the all-important methodical, repeatable, and scalable process to help your business thrive. But don’t forget to look at how your sales process actually works, not just how it’s supposed to work, then iterate accordingly. Get it up on the wall as a visual reminder of your customer lifecycle.