Flipping the Funnel

Have you ever wondered why B2B marketers invest so much effort trying to interrupt people in the hope they will consider their products or services? Billions are spent by B2B brands trying to get attention from their target audiences, competing against thousands of other adverts and millions of pieces of content, often with very limited success.
We then rely on a multi-stage ‘conversion’ process resulting in a tiny percentage of these impressions turning into new customers, usually portrayed as a funnel, with unconverted leads leaking out the sides. For two decades now we marketers have optimised this approach, with platforms, data and processes to make it work, and justify it.
Funnel Vision
Funnel marketing relies on three things happening;
- People notice your organic or promoted content and ads, developing brand recognition over time until they raise their proverbial hand and contact you.
- You nurture their interest over time through content, retargeting and email, offering insight into how you can help them each time.
- You pick a time to interrupt them based on how strong their ‘intent’ behaviours are.
It’s a tried-and-tested technique that B2B marketers have relied on for almost two decades. To such an extent that everyone has a funnel these days and even a high-performing funnel really doesn’t differentiate your business. After working with dozens of SaaS businesses over two decades, I’m seeing more marketers getting increasingly frustrated with the traditional B2B funnel model of marketing.
Here’s why… Firstly, an abundance of venture capital this past decade has meant there are more vendors all creating similar funnels, with the same content, the same optimisation, and chasing the same prospects. It’s getting harder and harder to stand out from the crowd.
Second, the market for content is many times more saturated than when this started out, and with the advent of ChatGPT and its applications, will only grow more so. Every minute of every day 456,000 Tweets are shared, 156 million emails are sent (including 103,450,000 spam emails), and there are 600 new page edits to Wikipedia. With the funnel model, your messages become a needle in a haystack of other content.
Third, changes in privacy and cookie laws have hit digital advertising with a double whammy — making it less effective and way more expensive. Lastly, a shift in working practices away from email and phone towards collaboration on Teams or Slack is undermining the email-lead nurturing of prospects.
The economics of the funnel ‘numbers game’ approach is becoming less and less attractive to marketers, even when using the high intent platforms that are supposed to help with this.
Flipping the funnel
What I really don't like about funnel marketing is that it forces us to focus our efforts on people we don't know and most of whom don't want to know us. It’s a numbers game. This is the biggest issue I have with funnel marketing, how it makes us focus attention away from those with the greatest vested interest in our business, our customers, business partners, and colleagues. Surely this is the opposite of where we should be focusing?
That’s why I’m increasingly feeling that funnel thinking for SaaS and subscription businesses is upside down. Thankfully, the current economic climate is leading to a greater focus on budgets, especially for B2B marketers. This is putting the funnel approach under intense scrutiny. Isn’t it time we flipped the funnel and focused on those closest to us — our customers?
Communities for more than Customer Success?
We all know that for SaaS businesses in particular, retention is an essential prerequisite for growth. For their business model, just a 5% increase in customer retention can drive up to a 95% increase in profits.
Knowing this the teams primed to retain clients, usually, customer success, have typically led to the creation of customer communities around product/service support and knowledge. Communities can drive product adoption, by bringing to new and existing users of a product or service, and sharing best practices, insights and knowledge. This, in turn, drives retention. If customers are using your product more or getting better results, it’s a no-brainer that they’ll remain with you. And they will refer more prospects, especially if there is an incentive to do so. The Salesforce Trailblazer community is a good example of this, designed to engage end users and help build skills around using their solutions.
But the impact of these communities is about way more than retention. In many cases, up to two-thirds of some SaaS companies’ revenues come from returning customers. Plus it’s up to 25 times less expensive to retain customers versus acquiring new ones.
Community is the new Content
Over the past two years I’ve worked with Zapnito, a provider of community platforms to subscription publishers and SaaS businesses. What I’ve learnt in that time is how effective a community led marketing strategy can be, not just for retention, but for growth too.
If, like me, you listen to some of the B2B marketing podcasts out there, you’ve probably heard this concept championed by people like Sangram Vajre, Co-Founder and CMO at Terminus, who built their business with a community-led growth strategy, explained well here on this SaaSClub interview.
Communities are not only about engaging your audiences, they can be drivers of growth. By engaging customers, influencers and experts in a knowledge-led or practice-led community and influencing those closest to you. WBR suggests that as much as Eighty-four percent of B2B decision makers begin their buying process with a referral. So uniting existing, seasoned users of a product or service together with prospective ones is, in my opinion, the most effective way to win over new customers. Yet I’ve rarely seen B2B growth marketing strategies really focus on this approach.
B2C marketers, on the other hand, are well-versed in using their existing customers to attract and convert new ones. Just think of how many consumer apps today offer you incentives to refer a friend. Last week alone I had three banking apps, two credit cards, and a currency app all offer me a reward for referring a friend. Yet in B2B so many marketers still choose to work on interrupting people they don’t know before focusing on those they already know.
All this is why I’m so excited about this community I’m posting in, inspired by the team at Zapnito but created for all marketers who want to learn how to create communities that provide value to customers, partners, and influencers, whilst at the same time helping marketers to achieve their goals.
I’d love to hear from anyone about their stories of how community led growth has been successful for B2B SaaS and subscription businesses. Please share any experiences you have of flipping the funnel, and I’ll try and incorporate them into my next post.
Neil.
These thoughts reflect my experience working with SaaS B2B marketers in the past three years as part of my CMO Advisory practice with SaaS scale-ups.
Full disclosure - I’m an investor and strategic advisor to Zapnito, a provider of community platforms to the technology and publishing industries.
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Hi Neil, much of this piece resonated with my experience, particularly the similarity of funnels, content and optimisation across B2B SaaS - Mary Portas described this well recently (albeit B2C) as 'squeezing people down the funnel to a transaction'. If it's feeling formulaic to us as marketers, then no doubt the prospect is too! I'm a strong advocate of community and I see an increase in the number of organisations deploying it, whether that's informerly or formerly. In terms of using it for growth and flipping the funnel, does this change the metrics you gather/report and how do you get buy in from CRO/CFO?
Thanks Claire, great feedback. As for metrics, yes it does, introducing more focus on a set of community metrics (size, growth, engagement ) and business impact metrics (influenced product adoption, retention, up sell/crossell, and referrals). More broadly, it can also be correlated, if not directly linked to NPS and CSAT scores. HTH, Neil.
That makes lots of sense, thank you.