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Yes, the Marketing Funnel is Dead #PulseConf2014

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The marketing funnel, that venerable icon of converting prospects tocustomers, may not be a funnel at all. It may be more like an hourglass.

With some help from best-sellingauthor Malcolm Gladwell, Gainsight CEO Nick Mehta called for a reinventionof the customer success movement at the Pulse2014conference in San Francisco. The funnel, he said, "sucks" andrepresents an "old economy" business model.

His comments confirmed exactly what David Diamond told CMSWire readers yesterday: That it is time to do away with the antiquated notion of stuffing a sales funnel.

In Mehta's illustration of the funnel, the broad top of the funnel wasmarketing, the middle was sales and the narrow bottom was customer retention. Hesaid that makes it look easy to retain those customers at the bottom, "likeyou should just outsource it," but that's far from what smart companiesshould be doing.

Grow - Faster

"The best companies drive the most revenue from their existing customers," Mehta said. "If your company is just growing by adding customers and avoiding churn, you'll grow reasonably fast. If you're growing by adding customers and then those customers grow by spending more and buying more products, and telling other people to buy your products, that's how you become an awesome company.

"That's how you grow fast," he added. "That's how you gopublic."

Mehta said the symbol should be an hourglass, and that customer supportleaders need to make it clear to their CEOs that their department is arevenue-generation unit, not just a cost center that puts out fires.

Learning Opportunities

"If your job is to run into the fiery building to save the kids and comeout, you can never help build the building, build the product, build thecustomers. You can never be about creation," Mehta said. "If youdefine your job as a leaky bucket, and you're plugging the holes, you're neverthe person filling the bucket."

This isn't the first time the funnel has come under attack. In January 2013, Forrester Research urgedmarketers to "ditchthe funnel." More recently Svetla Yankova, product marketing managerfor Telerik Sitefinity CMS, wrote "we'vegot it all wrong."

Transforming Customer Success

Mehta's call for a reinvention of the customer success segment was backed upby a call from Gladwell. The "Tipping Point" author gave a keynotespeech on the nature of transforming industries, touching on major moments of"reframing" the business in media, shipping and medicine.

"What does it mean to reinvent a business, which is what all of your aredoing? You're basically starting over. You're re-imagining what it means to havea relationship with customers," he said. He noted how MalcolmMcLaren did that with containerized shipping in the 1950s, bringing the costof shipping down to 15 cents a ton from $5.58 a ton.

"When you look at almost any kind of transformation, any reinvention ofany industry, you will invariably find at the beginning of that process ofreinvention, this act of reframing, a moment when the issue or the problemfacing the customer is re-conceptualized, put into a form that allows them tore-imagine and re-understand their relationship to the person who is trying tosell them a product," said Gladwell.

Title image by Tito Wong / Shutterstock.