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Technology is Driving Faster Evolution of the Funnel-Powered Sales Flywheel

By Eric Sugar

Anyone working in sales or marketing has probably encountered some version of this sales “funnel” or the more recent “flywheel” shown above.

The funnel/flywheel is meant to represent the journey that prospects go through on the way to becoming a customer. A traditional sales team spends the majority of their time focused on the middle of the funnel, which also has the most variability by company and sales cycle. It’s also where it feels like we’re in the middle of a huge, technology-driven transformation. Generally, the middle of the funnel inherits an interested prospect (from the top of funnel), and now the sales team need to spend energy “qualifying” the prospect (eg: making sure there is a defined need / pain point, that the right people are involved in the deal, that there’s available budget, etc). Working through a smart and efficient qualification process to get to a SQL (Sales Qualified Lead) is the key checkpoint in this segment of the funnel, although specific definitions and criteria vary.

Without breaking down the flywheel in detail (you can read this if you want more color), the whole concept is based on 1) generating speed by applying force to different areas (eg: paid advertising in the “attract” section, or incentivizing referrals in the “delight” section), and 2) reducing friction (eg: streamlining internal communications, removing HR red tape, etc). This combination builds momentum by leveraging existing customers to effectively drive new business and better maximize the sales process efforts by integrating them into the rest of the customer lifecycle.

This article isn’t about debating the pros and cons of each model (spoiler alert: I’m pretty sure the funnel is just a simpler visual representation of one element of the overall flywheel), but the process in the middle of the funnel and across the Attract / Engage segments of the flywheel must adapt to the new expectations of customers. This requires augmenting the sales toolkit with new technology, revising sales compensation/incentives, and upgrading the composition of the sales team itself.

1. Augmenting the Sales Toolkit with New Technology: Let’s first address the proliferation of sales-related technology flooding into the marketplace. According to Pitchbook, there was over $1.3B invested into the sales technology sector last year and Nancy Nardin (the self-proclaimed “world’s leading sales technology expert”) compiled a very thorough map of the 1000+ salestech vendors in this landscape. Basitaan Janmaat at Linse Capital also put together a few thoughtful categories in the middle of the funnel with some examples of associated technology (like tech for Pre-call research, Note Taking, Demo Software, CRM Updating, Content Management, Proposal Creation, etc).

More than just adding a bunch of new tools to the repertoire, there is a clear shift to more predictive and proactive, data-assisted selling. Machine learning and AI will drive much higher productivity from sales teams – providing deep insight on prospects (what to sell, when to sell), smarter forecasting and prospect prioritization, and most importantly, guiding the sales person on the most effective actions and behaviors that result in winning customers. This kind of “guided selling” is already mainstream (62% of the highest performing salespeople predict guided sales adoption to increase according to this State of Sales research from Salesforce) and results will only improve over time. Embrace your new sales machine overlords – they’re here to help.

New sales technology (both for the vendors and buyers) are adding a degree of complexity but also predictability to the purchasing process, and the best sales people will need to evolve to be more adaptive, data-driven, and consultative.

2. Re-aligning Sales Compensation & Incentives: In addition to the ultimate goal of evolving into data-driven sales cyborgs, it’s a good idea to revisit sales compensation and reorient around incentivizing sales goals that better align with the overall business strategy and value contribution (vs purely quantitative new business). This is something I’m seeing in our larger clients with bigger sales infrastructure but should really apply everywhere – selling is becoming more team-based but comp is still rewarding individual performers. Inside sales people earn roughly 1/3 of what their field rep counterparts earn, yet the inside team is often more valuable in terms of customer retention, upselling, and customer engagement (which was especially valuable during COVID with all the virtual sales support).

I’ve seen companies bundle compensation with overall sales (not just net-new sales but of all products and renewals) in order to properly reward the sales-supporting team and emphasize collaboration and customer service over pure growth. This puts more force on the “delight” segment of the flywheel, which is an indirect way to drive more “attraction” (vs disproportionally rewarding the sales team to “engage”). Some useful additional data points on the shifting team dynamics and changing comp structures here.

3. The New Sales Profile & Skillset: Lastly, the sales team itself is undergoing a bit of transformation. Sales has already shifted multi-channel (LinkedIn, Twitter, YouTube, Email, WhatsApp, etc) and buyers now have unprecedented access to vendor information, allowing them to easily compare and validate different solutions before even engaging the vendor. In the B2B software world, 57% of all purchasing decisions are already completed before the buyer even initiates contact. Ironically, this makes the customer journey even more complicated (and often overwhelming).

The next wave of sales reps will be experts at consultatively guiding the customer through their unique decision making process.
These reps will need to be to be more dynamic – not only experts on the technology but expert service providers, with a deeper knowledge base to really understand the specific stakeholders, hurdles, and budget constraints that the customer has to manage. This is already where the best consultative sales people shine – moving from an aggressive me-to-you sale, towards a collaborative “we” purchase – and this skill set is going to be in even higher demand in the future (check out this article from HBR outlining this prescriptive sales approach in more detail).

In conclusion, the sales flywheel is fully greased up – the different elements connect much more fluidly than ever before and applied force (good or bad) will have an outsized effect. New sales technology (both for the vendors and buyers) are adding a degree of complexity but also predictability to the purchasing process, and the best sales people will need to evolve to be more adaptive, data-driven, and consultative. The best sales teams will be much more collaborative and team-oriented (which will also be reflected in their compensation). This ultimately incentivizes both engaging and delighting customers, where the positive word-of-mouth will attract new business. Rinse, repeat. I’m not sure what the fancy acronym is for it, or where to find the graphic, but it’s commonly referred to as “growth” and it seems to be a good thing.

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