Jonathan Chan
Contributor
If you run a B2B business, then you know that you live or die by your sales funnel.
A well-structured B2B sales funnel not only helps you generate more sales, but it also helps you recognize how to better optimize and refine your sales process, in addition to gaining a deeper understanding of what your customer’s journey is like.
But yet, despite all the benefits, a whopping 68% of B2B businesses still don’t have a proper understanding of their own sales funnel.
In this post, we'll break down what a basic B2B sales funnel looks like, five crucial stages in the funnel, and how to improve your conversion rate at every stage:
Your basic B2B sales funnel
Ever since it hit the scene in the late 19th century, the humble sales funnel has been subjected to numerous revisions.
Depending on who you talk to, a sales funnel can have three or more stages depending on the business. However, while there is no true one-size-fits-all model, fundamentally, every sales funnel functions in the same way.
At its core, the sales funnel is a way to help businesses visualize and easily understand the key steps involved in turning a total stranger into a paying customer.
By understanding what your sales funnel looks like, your business can identify the key stages where you’re losing customers and figure out the best way to move a prospect into the next stage of the sales funnel. The end result: an optimized, efficient sales process.
While every business is different (and therefore requires its own version of the sales funnel), every B2B sales funnel should include these critical steps:
Lead generation
At the very top of your sales funnel, you have the complete stranger: someone who knows nothing about your brand or what you have to offer. They might not even understand that they’re experiencing a pain point yet, let alone that a service exists that is designed to help them.
The goal for this stage of the sales funnel is to find out the best way to attract the attention of as many potential customers as possible, while also establishing your authority.
While it may be tempting to believe that the sole goal of this stage of the sales funnel is to shovel in as many leads as possible, that kind of thinking is what gets you statistics like how over 50% of your leads are a bad fit for your business.
In the same way that gorging on junk food results in nothing but empty calories for your body, the key to building a good sales funnel is making sure that you’re not feeding it with healthy leads. Ideally, the only people who should ever enter your sales funnel are those who are genuinely interested in what you’re selling.
The key to filling your sales funnel with high-quality leads lies in understanding who your ideal customer is.
It’s only when you understand what your ideal customer looks like that you’ll be able to start developing tactics and strategies that specifically target them.
That could mean producing and promoting content that you know your ideal customer will find valuable, such as educational blog posts, downloadable lead magnets, or even online quizzes that showcase your level of expertise. It could also mean developing a strong sales prospecting strategy so you only reach out marketing qualified leads.
Lead nurturing and qualification
This is the step that most B2B businesses will skip, much to their detriment.
We often forget that the art of the B2B sale is as much a game of timing as it is knowing the right thing to say. Engage with a lead too early, and you run the risk of putting them off the sale. Engage with a lead too late, and they might have already lost interest, or chosen to work with one of your competitors.
That is why the challenge of this stage of the sales funnel is to further educate leads who aren’t ready to buy yet and to identify those who are.
Depending on how complex your sales process is, the time it takes to move a lead from this stage to the next can take anywhere from a couple of weeks to several months. According to Implicit, it takes an average of 84 days for a lead to progress through this stage of the B2B sales funnel.
But it’s important that you have a lead nurturing campaign in place, as businesses that excel at lead nurturing generate 50% more sales-ready leads, and on average achieve a 9.3% higher sales quota.
One of the most effective ways to go about lead nurturing is developing a drip marketing approach, where (usually through email) you consistently engage leads with content that they find valuable.
According to Forrester, the average B2B customer will look at five or more pieces of content before making a purchase.
But this then leads us to the question: how do you know when someone can be considered a fully qualified sales-ready lead?
While a lead might tick all the right boxes of what makes an ideal customer on paper, that doesn’t necessarily mean that they’re actually ready to talk to a salesperson yet.
Remove the guesswork by setting up lead-scoring through your CRM. With your CRM, you can automatically evaluate the quality of a lead based on their individual attributes and what actions they take, so that your salespeople are only spending their time engaging with high-quality prospects.
Spend less time on low-value stuff
More on CRM 👇
Learn about the tasks that a CRM can help you do more efficiently with this free handbook.
The first meeting
At this point in the funnel, your new prospect should ideally be someone who’s interested in what you have to offer, but still needs a bit more convincing before becoming a customer. This is when your salespeople spring into action.
Depending on how your own sales funnel is structured, the first meeting can be treated as a discovery call, a formal product demonstration, a direct sales pitch, or a combination of all of the above.
Regardless, the first meeting is your chance to establish that all-important relationship and trust necessary to convert a prospect into a customer.
This is probably the most critical stage of the B2B sales funnel, as the first sales conversation will be the deciding factor between moving onto the next stage of the funnel, or dropping out entirely.
After analyzing 2 million different sales calls, the research team at Gong found that the most successful sales calls were ones where the sales rep focused on 3-4 specific problems that their prospects were facing:
Attempting to focus on five or more problems led to diminishing returns, as it exposed the salesperson to the danger of making the prospect’s problems seem trivial, or having their attention spread too thin.
Furthermore, Gong also found that the top 5-10% of sales reps followed a clear and organized structure in all their sales calls. This allowed salespeople to cover more topics in a shorter amount of time, created natural breaks in conversation to listen, and enabled them to address each of the prospect’s challenges in an orderly fashion.
If all goes right, you should be able to end the conversation with a clear path to purchase, or, at the very least, be able to set up another meeting in the near future to speak again.
Closing the sale
This is the moment where it all pays off. The entire point of the sales funnel—leading someone into this final stage of the sales funnel. Be careful not to trip at the finish line.
As the narrowest point of your funnel, this is the stage where your customer is right on the brink of making a final decision about whether or not to do business with you—but something is still holding them back.
There could be a plethora of reasons for this: they could still be comparing you to your competitors, they might still have few questions that need to be answered, or they could still be examining the value of your proposition.
When it comes to dealing with indecisive buyers, David Jacoby, Managing Director at the Sales Readiness Group, recommends using the ASK process:
- Align priorities - Based on your prior customer research and the information you’ve gathered from your sales calls and meetings, start by demonstrating that you understand the buyer’s specific pain points, and how you can address them.
Once you’re sure that you’re both on the same page about the buyer’s specific needs and challenges, you can move onto the next step. - Secure commitment - Begin this next phase of the conversation by reinforcing to the buyer the key benefits of doing business with you and how you can help with their specific challenges.
Make sure to address any further concerns or questions they might have before asking them directly if they’re ready to close the deal. - Keep the relationship alive - Ideally, you’ll get a firm “yes” from the buyer, and can start moving them onto the final stage of your funnel. However, you won’t be able to successfully close everyone. But just because someone says “no” doesn’t mean that you should immediately go cold and terminate the relationship.
Not only is there a chance that they might become a customer in the future, but any feedback they might have about their experience in your sales funnel is also valuable in helping you further optimize and refine your B2B sales funnel.
This would be the final stage in the traditional sales funnel, but since we’re talking about building a powerful, modern B2B sales funnel, we still have one more significant step left.
Retention and referrals
The classic mistake that many business owners make is assuming that the relationship with the customer ends once the sale is over. But nothing could be further from the truth.
What these business owners often overlook is the fact that 84% of B2B buyers kick off their buying process with a referral from a friend or colleague. Moreover, leads generated from referrals are 3 to 5 times likelier to convert than leads gained from any other channel.
Just because your buyer has said “yes” doesn’t mean that you can stop putting work into this relationship.
As soon as a prospect turns into a customer, you need to start looking for ways to continue providing value to them. By ensuring that your new customer enjoys a positive experience with you even after the sale, it increases not only their average lifetime value (ALV) but also the likelihood of them referring you to someone else.
This simple step of making sure to ask for referrals as part of your sales process is one of the easiest ways to consistently fill your sales funnel with high-quality leads.
While gaining a referral can be as simple as asking existing customers if they know anyone who would be interested in your product or service, you can take things to the next level by creating a formalized referral program through your CRM.
Create an automated email drip campaign designed to continue delighting new customers, and offer incentives for referrals. You can even further automate your referral program by using your CRM to help you identify and reach out to your happiest customers.
Convert more at all five stages of your B2B sales funnel.
No two B2B sales funnels are exactly the same, but every successful one will almost certainly include the stages outlined above.
You can further optimize your sales funnel by constantly split-testing and experimenting with different ideas, and seeing what works. Depending on what your own sales process looks like, you might even end up adding in a few extra stages, or discovering new ways to increase conversions between each stage.
For over a hundred years, businesses of every stripe have successfully used sales funnels to help them grow and scale, and now you can too.
