In my last post I talked about a maturity model that outlines the major steps in utilizing Revenue Funnel Science, a methodology to measure, forecast and optimize your marketing and sales funnel. At its core, your “funnel” is really just a process for how leads are generated, nurtured and transitioned from marketing through sales on the journey to becoming a paying customer. You can improve this process with a series of incremental steps using Revenue Funnel Science.
I also referenced Josh Hill’s Martech Maturity Model™. If you don’t know Josh, he is a Marketo expert, and his website Marketing Rockstar Guides provides many great resources for Marketo and other marketing technology. He developed his Martech Maturity Model as a way to explain the stages that companies move through in evolving their marketing technology usage. In this post, I am going to describe in more detail how the Revenue Funnel Science maturity model aligns with Josh’s Martech Maturity Model.
The Starting Point: Desire & Need, Transformation
Revenue Funnel Science starts with having the desire and need to improve the measurement and performance of your marketing and sales processes. For marketers, this includes having the desire and need for marketing to contribute directly to revenue results. Typically, this includes marketing being responsible for demand generation that actively creates demand and hands leads off to sales.
This aligns well with the marketing transformation that is the prerequisite for martech maturity. Marketing transformation includes developing sales-marketing alignment, implementing an inbound vs. outbound strategy (usually a mix of both approaches, not just picking one or the other, although this depends on the business), and utilizing content marketing to drive engagement. Typically marketing transformation occurs as a result of the desire and need that is also the basis for Revenue Funnel Science.
Technology, Automation & Blueprints
As Josh says in his December 2016 update on how to use the Martech Maturity Model, the next stage focuses on “taking what you learned in Stage 0 and then finding the martech tools to automate it.” Many times this means implementing a marketing automation platform like Marketo, Hubspot, Pardot, Act-On or others. Use of these tools is rapidly growing as many businesses recognize the value of deploying a dedicated marketing automation platform.
The process of implementing a new platform like this can be complex and time consuming, but it also is the perfect time to establish a funnel blueprint. A funnel blueprint is the map of the steps in your marketing and sales process as leads are generated, nurtured, transitioned to sales and ultimately converted to paying customers. An effective blueprint includes both business definitions and technical criteria for each step in the entire process. It also considers the entry and exit points – where leads might jump into the process and where they might fall out of it.
The best time to develop your marketing and sales funnel blueprint is when you’re implementing core technology like your marketing automation platform. It is normal for blueprints to evolve over time, and many companies have different blueprints for different products or business units.
Middle Stages: Leads, Nurturing, Metrics & Goals
In the middle stages in both models, several things begin to happen:
- Leads are flowing through the funnel
- Nurturing is built out to manage leads that aren’t ready for sales
- Key data should be captured about your baseline metrics, even if they aren’t perfect yet
- You should be thinking about what goals need to be met for lead quantity and quality
Josh’s model describes Stage 2 as also where you begin scoring leads for the first time, decide when MQLs are ready to pass on to sales and route leads to the correct destinations in your sales or qualification teams. Stage 3 for martech maturity is then where nurturing programs are built out and sales is given information to help them see the context of what is happening with leads before they are handed off from marketing.
In my opinion, it is equally important during these critical stages to begin capturing data about how your funnel is performing. Your processes don’t yet need to be perfect, but beginning to capture data now provides the foundation for future analysis. The key metrics to capture for Revenue Funnel Science include movement (the records entering and exiting each funnel stage in a time period), conversion rates and velocity (the amount of time spent in each stage). You also want to capture enough information that you can slice your data in the future by different dimensions or “sub funnels.”
In addition, as you are thinking about lead flow and nurturing, you should be looking at your goals. How many leads do you need to provide overall, and when do you need to provide them? Using the funnel blueprint and the key metrics that you have begun to capture, you can reverse engineer your goals for lead generation and lead nurturing. This then allows you to assess if you’re doing the right things or where you need to focus your attention on doing more.
Higher Stages: Funnel Visibility, Early Warnings & Forecasting
The Martech Maturity Model talks about funnel visibility as Stage 4. I don’t disagree with this placement, but I feel that two points are important to consider:
- You can’t wait until Stage 4 to start thinking about funnel visibility. You have to put the foundational elements in place during earlier stages. You need to be thinking about your funnel blueprint as you implement your technology, and then you must start capturing the key metrics while you are building lead flow and nurturing. If you don’t put these elements in place earlier, you won’t be successful with funnel visibility later.
- It is helpful to better define what “funnel visibility” means. For me, “funnel visibility” is about taking your historical information and using it to see where you are headed in the future. It is the difference of looking out the windshield of your car at the road ahead vs. looking only at the rearview mirror.
True forward-looking funnel visibility is one of the core outcomes of implementing Revenue Funnel Science. This can be further broken down into two major elements, an early warning system and forecasting/projections.
An early warning system tells you if your funnel is on track, or if not, where the problem exists. In other words, it tells you if the boat is leaking, but you haven’t yet noticed the water coming in on the floor. It specifically looks for changes in performance that require adjustments in your goals or activities to make sure you hit future outcomes. Many companies never get to this level and instead are surprised when a major goal is missed. I struggled with this myself in my previous business and it taught me a valuable lesson that your data always tells a story about where you are headed in the future.
Forecasting and projections then build on top of the early warning system. An effective forecast ultimately uses the data you have captured in previous stages to calculate funnel momentum and project where you are headed in the future. It is different than the typical sales forecast that involves an imprecise probability placed on each open opportunity. Instead, forecasting with Revenue Funnel Science allows you to calculate a true probability of records in your funnel moving forward within a given time period based on how your data has performed in the past.
Effective funnel visibility is about more than just seeing what happened in the past. It is about getting full visibility into the future state of your funnel, including receiving early warnings of possible changes that are needed and using projections to understand if you’re likely to meet future revenue outcomes.
Topping It Off: Optimization, Attribution & Predictive Tools
The capstone of Revenue Funnel Science is utilizing all of the previous stages to ultimately benchmark and optimize your funnel results. This aligns well with Stages 5 and 6 of the Martech Maturity Model, attribution and predictive tools, because both of these items are assets that can be used in the process of benchmarking and optimizing your funnel.
Benchmarking means comparing your funnel performance both externally (against other similar companies) and internally (comparing between different campaigns or different sales teams). When done properly, it tends to shine a spotlight on opportunities for improvement. Optimization is the process of making adjustments to improve benchmarks and maximize results. For example, attribution can be used to better see which marketing campaigns or programs have the best correlation with revenue results. Then changes can be made to your marketing mix to focus more on the activities that are best demonstrating results. In a similar manner, predictive tools can help identify which pieces of data in your funnel should be accelerated because they have the greatest likelihood of success.
Depending on the size of your business, the benchmarking and optimization process can result in anywhere from hundreds of thousands to millions of dollars in additional revenue. As a result you can use Revenue Funnel Science to help you maximize your return on your martech investment.
Want to Learn More?
Read more about Revenue Funnel Science here and consider downloading a copy of my book, “Revenue Funnel Science: How to Optimize Your Marketing and Sales Funnel.”
Learn more about Josh Hill’s Martech Model and many other topics on his website at Marketing Rockstar Guides.