Sales Funnel: More Than a Wishing Well
Introduction
Remember being a kid and using a spiral wishing well? You probably didn’t actually know what they were called but maybe you remember being at a restaurant, zoo or a shopping mall and launching a quarter off the ramp, stepping back, enthralled at the mesmerizing path the quarter would take, quickly curling down the sides until it eventually dropped away from sight. You could race your friend or sibling on the count of “ready, set, go”, releasing your quarters with glee to eventually end up in the belly of a well to be (hopefully) given to a children’s hospital or local charity. The premise was simple and a literal sales funnel. The spiral wishing well would raise funds by making it a game. A compelling offer to draw customers in while making it irresistible for them to not convert to a customer.
Your business doesn't need a spiral wishing well but it does need a sales funnel. A sales funnel can be a trendy word in business. However, the benefits of establishing your sales funnel, knowing where your customers are within the sales funnel, and reviewing the priorities of each stage within your business development are tremendous. This article goes into the details of each stage within a sales funnel, the benefits of establishing yours, and some practical applications within each stage.
Stages of the Sales Funnel
Awareness
Customers are aware of the company and might have an idea of their offerings.
Interest
Customers are making an effort to learn more about the company and its offerings. They are following them.
Evaluation
Customers are actively determining if the company’s offerings are right for them. They are engaging with the company.
Decision
The customer has determined the company’s offerings are right for them and are negotiating or determining the right time to make a purchase.
Sale
The customer has entered into a purchase agreement or paid for goods/services. The product is delivered or service starts.
Referral / Repeat
The customer advocates for the company or its offerings. The customer wants others to experience the value or continues to show loyalty to the brand. The customer is a fan of the company.
Implementation Note
It's worth pointing out there are multiple approaches to implementing a sales funnel within your organization. In the least, it should be defined, reviewed and referred to often by management. Going a step further, another popular implementation of the sales funnel is within a company’s CRM. Each sales funnel stage can be applied to a lead or customer which can greatly improve the metrics used in analyzing marketing spend and activity and company forecasting. The appropriate implementation will depend on the size and resources of your company but here where automation can play a role in collecting the customer data.
Benefits of a Sales Funnel
A sales funnel exists today at your company, even if unrefined. If you are already selling goods or services there is some kind of funnel. The benefit of a sales funnel comes from your intimate understanding of it. Formalize your sales funnel. Implement the vernacular and language. Get the marketing and sales team fully bought in. Segment your commercial activity by determining what aspect of the sales funnel the activity will service. By determining all the stages a customer goes through at your company you can:
> Determine and measure marketing priorities and budget:
You will begin to develop campaigns and efforts that best bring customers to the next stage in your sales funnel instead of random approaches. You will stop trying to close every customer and instead nurture the customer's journey to close. You will now be able to see the return on investment for the campaigns you develop. You will better invest into the campaigns that are best converting and attracting customers.
> Measure business health and develop your sales pipeline:
You will begin to track where customers are in the sales funnel and have a better understanding of exactly where your future business is coming from, or potentially lacking. It will become easier to predict future business which in turn will give you time to plan for gaps. You will better understand potential impacts to company KPIs and gain confidence in the future business outcomes.
> Develop stronger customer relationships and reduce purchase friction:
Your customers will be more easily guided to your company’s unique offering and services. They will be nurtured to a sale and arrive at the decision, faster due to the clarity your business has achieved. You will listen to customers more.
> Reduce spend and increase revenue:
By understanding how your marketing investments are impacting the customer journey you will reduce unnecessary marketing expenses and increase the company bottom line. Higher conversion means less money in trash cans.
> Increase team engagement and understanding:
An added benefit of implementing a sales funnel at your company is the increased shared responsibility and engagement it can bring about within your sales and marketing teams. By identifying what stage in the sales funnel a project is serving you will increase employees' understanding of the company’s vision and be more enthused about their work. We all want to be part of the bigger picture.
Application: Activities for Each Sales Funnel Stage
Need some help identifying what stage an activity supports? Here are some practical examples of activities within each sales funnel stage designed to bring the customer in.
Awareness
> Content Marketing: Blogs, Video, Social Content evangelizing your company, what you do and why you do it.
> Trade Shows: getting in front of audiences with a high concentration of your target customer.
> SEO: optimizing search engine results for inquiries of your offerings or solutions.
> Advertising: Social ads, billboards, paid placement to make customers aware of your company.
Interest
> Workshops, Webinars, Live Streams: Provide valuable content that also helps customers become more aware of your offerings.
> Newsletters: incentive customers to sign up by providing valuable content
> Giveaways / Lead Magnets: Giving away something of value to potential customers.
Evaluation
> Drip Campaigns: automated sequenced emails that reveal more about your offerings.
> Testimonials / Reviews: collecting success stories from real customers regarding your offerings.
> Case Studies: showing success from your work in broad topics that will relate to potential customers. 2
Decision
> Free Trials/Returns: instilling confidence by letting customers try before they buy.
> Comparison Guides: detailed guides comparing your products to similar products
> Product Demonstrations: showing practical application of your offerings
> Chat Support: Increase the ability for customers to get a hold of you and ask questions
Sale
> Promotions: discounts on your offerings intended to speed up the buying cycle.
> Satisfaction Guarantee: service and quality promises that help instill confidence.
> Outbound Sales: dedicated resources for outreach and personalized touch.
> Retargeted Ads: follow ads for customers who have previously shown interest.
> Payment Plans: financed or monthly payment options.
Referral / Repeat
> Customer Loyalty Programs: Rewards for repeat or referral business.
> Customer Survey: Gaining insights from existing customers, collecting referrals and testimonials.
> Cross Sell/Upsell: leveraging the existing happy relationship for more repeat business.
Summary
A sales funnel is much more than a buzzy marketing term. It is an aspect of your business worth formalizing to ensure your future business is healthy and your marketing efforts are going towards results. I love working with companies to better develop their sales funnel as it consistently reveals immediate marketing areas to focus on or better develop. This in turn leads to better conversion and results. If you want help digging deeper into the sales funnel at your company please get in touch with me. Otherwise, for insights like this, follow me on my x.com (twitter) page or by signing up for my newsletter.