A Methodology to Optimize the Marketing & Sales Funnel
Revenue Funnel Science™ is a methodology to help businesses better measure, forecast and optimize their revenue funnels. It documents and teaches best practices, while combining the application of data and science to effectively manage the revenue funnel. Think of it as data science for the revenue funnel.
While the terminology is new, Revenue Funnel Science principles have been established and practiced over the years by many organizations and is the core discipline for revenue growth. Today’s best-in-class organizations make sure they have embedded Revenue Funnel Science as a key part of their planning and operations as they continue to grow their businesses.
Three Critical Actions
Using a holistic approach, Revenue Funnel Science ensures marketing and sales have a unified view of the entire revenue funnel. Often, marketing and sales only find answers at the top or bottom of the funnel, respectively. Revenue Funnel Science provides a toolkit to analyze the entire funnel and creates a single source of truth for both marketing and sales. This methodology provides value to the entire organization and allows leadership to take three critical actions:
Build a Foundation
By building and agreeing upon a common blueprint for how the funnel should function, organizations can accurately measure how their revenue funnel is performing with core funnel metrics.
Connect the Dots
Using those core funnel metrics, businesses can connect the dots by creating projections for where revenue is headed and form actionable insights on how to improve their future growth.
Operationalize the Funnel
With newfound insights, companies can operationalize the information through a cadence of meetings and gain visibility to make decisions and take actions to optimize the revenue funnel.
Growing Need for Revenue Funnel Science
Two significant changes in the business world have created an opportunity and need for Revenue Funnel Science. The first is the growing amount of data captured by sales and marketing due to customer relationship management (CRM) and marketing automation platforms. The issue with these systems is that they do not capture data in a way that tells the complete story of what is happening in the revenue funnel, instead they only focus on their specific portion of the funnel. The second change is the growth of technology has created more data silos for businesses. This causes a disconnect of data across the various areas of businesses, making it difficult to analyze yesterday’s efforts and make better decisions for the future.
Framework for Answering Forward-Looking Questions
Revenue Funnel Science provides a framework to tear down those data silos by pulling together metrics to answer forward-looking questions in four key areas:
- Are we generating the right number of leads?
- Which programs have the greatest impact on our funnel?
- Where should we make the next spend?
- Are we completing the right activities with leads?
- How are reps performing at each stage?
- What levers can we pull or dials can we turn to grow revenue?
Planning & Goals
- Do we have the right goals?
- Are we on track to hit future goals?
- If not, what changes and resources are needed?
Return on Investment
- What’s our overall ROI in marketing and sales?
- Which activities generate the greatest return?
- Where should we invest in the future?
Everyone is Accountable for Revenue
Revenue Funnel Science also makes revenue accountability part of everyone’s job. Company-wide, everyone monitors, analyzes and manages the revenue funnel – caring about its overall health. Revenue Funnel Science requires these skills: data analysis, understanding of marketing and sales and business communications. True leaders view this framework as a strategic way to bring the entire organization together.
It’s forward-looking versus backward-looking. Due to the enormous amount of data available, most businesses are constantly looking backwards. While looking at what happened yesterday is part of the discipline, organizations following Revenue Funnel Science focus on answering forward-looking questions regarding where the organization is headed and how they’ll drive future growth.
It’s not limited to just marketing or just sales. The funnel must be viewed as one holistic system. When it’s not, it limits a company’s success. When sales and marketing adjust their views to include both the top and the bottom of the funnel, they can better evaluate and improve funnel performance.
Fuzzy numbers still show trends. No organization has perfect data because marketing and sales work and live in a state of change. However, companies can quickly learn “fuzzy numbers” measured consistently still show trends. Implementing Revenue Funnel Science pinpoints issues with data and helps organizations create processes to maintain better data quality.
It’s not just business intelligence or data science. Revenue Funnel Science is a specific framework for applying the principles of “data science” to your marketing and sales efforts. It provides a methodology and set of tools to analyze the data, build projections based on how the funnel is functioning and then use this knowledge to make decisions that increase revenue.
It is a methodology. Regardless of the software companies use, they can practice the Revenue Funnel Science discipline. Proper execution only requires the approach, but organizations often find value in using a combination of different tools, such as a CRM software, a marketing automation platform and a funnel intelligence tool, to streamline tracking and capturing activities and funnel movement to measure and optimize performance.
Implementing Revenue Funnel Science
Revenue Funnel Science is for businesses that want to interpret the past, plan for the future and understand that by developing full visibility into their revenue funnels, their entire organization becomes a part of its success. Below is an overview of the three critical actions businesses can take to adopt this discipline:
1. Build the Foundation
The first critical action requires putting in place the key foundational measurements of the revenue funnel. To build the foundation, a funnel blueprint is needed to define the requirements for each stage of the buyer’s journey (from the top of the funnel to the paying customer at the bottom). Once the blueprint is documented and agreed upon, businesses can begin to accurately measure movement in the funnel to determine how and when records are entering and progressing through each stage and to calculate key metrics like conversion rates and velocity.
2. Connect the Dots
With a common funnel blueprint and foundational measurements established, the second critical action is monitoring funnel performance to gather insights and drive revenue. Using revenue funnel metrics and the Revenue Funnel Science tools to evaluate them allows companies to connect marketing and sales efforts to revenue. They discover where to make the most effective and immediate changes, how to set achievable, transparent goals and forecast where the business is headed. Once businesses have the tools in place to properly monitor the funnel and connect the dots, they can now take the next action to optimize the revenue funnel.
3. Operationalize the Funnel
The third and final critical action of Revenue Funnel Science allows companies to operationalize their funnels based on the results of their data. This is where effective communication skills play an integral role. With these newfound insights, business leaders can begin to make better decisions and create buy-in. Establishing a Revenue Leadership Team with a defined cadence of weekly, monthly and quarterly meetings is the starting point. By gathering the relevant information, leadership and key stakeholders – such as marketers, sales leaders, CFOs, CEOs, board members or investors – can strategically plan to grow their business.