Sales funnels – it seems like everyone’s either got them or is talking about them, but what are they and why are they so important? I’ve put together a simple guide to help you navigate the ‘sales funnel’ minefield…
A sales funnel refers to the sales and marketing process that companies lead customers through when purchasing products, taking someone from simply an individual who falls into the organisation’s specific customer demographic, and leading them on a journey that hopefully results in as many new or repeat customers as possible!
The easiest way to think of a sales funnel is by visualising one of those plastic liquid funnels that you use to transfer liquid from one container into another with minimal spillage! It’s wider at the top and narrower at the bottom (to minimise spills), and this is the same with a sales funnel – we set the net wide, dropping as many ‘potential’ customers into the sales process as possible via targeted Google Ads, Facebook Advertising, Email Marketing, Social Media Marketing, etc. An organisation’s aim is simple – to gently encourage as many of those people who have been dropped into our sales funnel to ‘convert’ into paying customers.
A sales funnel isn’t simply: ‘potential customers in’ and ‘paying customers out’. There may be multiple steps in a sales funnel to help nurture the relationship between the customer and the business. Encouraging people to invest in a new product can take time; In their ‘Ultimate guide to prospecting’, Hubspot claim that, on average, 8 positive touch points with a customer are required to take an individual from first contact to purchase, and Keap cite a University College London study that claims “it takes 66 days on average for a person to get accustomed to a new habit”, like making a new purchasing decision. These statistics highlight the fact that the customer journey can be lengthy, and that organisations need to be persistent (but not in a spammy way!) to build trust and rapport with a customer.
Generally, a sales funnel builds awareness and interest at its widest point, providing useful information about the organisation and its products/services to the audience. Further on in the funnel, purchase intent and interest may be tested by offering a ‘tripwire’ product, a low-cost ‘special offer’ to encourage people to buy (for example, a low-cost eBook or webinar, or a low-price product from your range of products/services). This can help to demonstrate the quality of your primary products and build consumer trust in your brand. Towards the end of the funnel, offers for higher value products/services and memberships are offered to help people make the decision of whether or not to buy, and ‘hot leads’ who have engaged positively with your marketing content throughout the funnel can be contacted by your sales team (if you have one) or with a carefully designed and automated email marketing campaign if you can’t talk to all of them directly! The goal of the sales funnel is always to encourage ‘action’ – the purchase of your primary products and services – from as many potential customers as possible.
Just like the kitchen implement, it’s possible to have a ‘leaky’ funnel, reducing the effectiveness of the overall sales and marketing processes. Perhaps you’re not following up with potential leads once you’ve established contact with them, giving them time to ‘cool off’ after their initial excitement about your product or service? Perhaps there’s a technical error somewhere (a 404-error page on your website or an email sequence that isn’t triggering correctly) that is causing a blockage in your sales process, but you’ve got so many entry points into your funnel that you can’t keep track of them to update them? It’s important to be strategic and targeted with your sales funnel, and keep records of everything involved in the process so that you can more easily identify (and fix) potential errors if and when they occur.
If you need help developing (or fixing!) an effective sales funnel for your business, please get in touch! Sales and marketing activities need to be focused to save money and time, as well as generate as much revenue and as large a return on investment as possible. Without a clear customer journey and appropriate sales funnel for your business, you and your team aren’t working as efficiently or effectively as you could be, and in the current uncertain economic climate it’s more important than ever to be smart and tactical with your sales and marketing efforts.