Why Building a Sales Funnel is Important
98% of cold calls do not yield any results.
If you’re like most marketers, the need for a more effective and cost-efficient prospecting method is constantly on your mind.
Here is all you need to know about building a sales funnel and using the sales funnel as a marketing tool.
What Is a Sales Funnel?
A sales funnel (or a marketing funnel) is a method businesses use to guide prospective customers into making a purchase.
The funnel analogy is used to refer to the funnel-shaped customer journey from awareness to purchase.
It can be illustrated as follows:
- People who access a company’s site: 1000
- Customers that browsed through product specs: 800
- People who added products to their cart: 100
- People that authorized payment to make a purchase: 10
From the above, you can see the funnel; heavy at the top and then gradually thins out towards the bottom.
For marketers, the funnel takes several stages, with each designed to encourage the prospect to go to the next step.
Below are the steps in a typical funnel:
1. Awareness Phase
At this stage, a prospect learns about your solution. This is essentially the product or service you offer.
They are at this stage, aware of their problems and possible ways to handle them. At this point, they will look for you and land on your website.
They will be lead to you by an ad, a social media post, an organic search engine search or another traffic source. The whole idea of a sales funnel is problem-solving.
When you thoroughly understand the problem, you are then able to create content that addresses the needs of your customers. Once you do this, you must present a product or service to solve this specific problem.
Once a prospect enters the funnel, you have aroused their interest. However, getting a prospect’s attention and guiding it to the top of the funnel is no mean task.
How a prospect finds you determines how far they are likely to go. For example, a client that finds you organically through a search engine search has a different perspective of you, than one that finds you via a paid ad.
Regardless of how a prospect finds you, your goal as a marketer is to convert. This will be achievable by cultivating a positive image and positioning yourself as an honest, relatable authority in your niche.
2. Interest Phase
At this stage, a prospect is actively looking to find solutions to fix their problem.
The common route people take is to look for a solution through the internet. If they get hooked to your content, they might follow and even share your content.
Aside from great content, email sequences are also a great way to hold interest.
3. Evaluation Phase
Once a project learns about your solution, they will look into similar products and companies that have the same offerings.
This is done to compare the different offers, reputation and so on.
4. Decision-Making Phase
The decision making phase sees a prospect trying to make final purchase decisions. At this point, they have decided they want to take advantage of your solution.
Here, a prospect keenly evaluates the different offers you’re giving, options and packages.
These actions are geared towards making purchases, and it’s here that sales offers can be made.
Regardless of how great your product is, getting a client to make a purchase is not easy. Besides great content and showing your prospects who you are, you need to make a final attempt to nudge them in the right direction.
Here, customer reviews and testimonials come in handy. The more you can get, the better. The fact is, 86% of customers will look at online reviews to help them pick on which businesses to engage with.
Your reviews can provide a powerful push towards making a purchase.
If you’re using paid ads, you can use retargeting to keep that awareness and interest in your products high.
5. Action Phase
A prospect will take action and buy from you, therefore becoming a customer. They will click the purchase button and follow this up with their payment details.
This ends with a payment being made, and that marks a successful sale.
6. Retention Phase
This stage means you have one additional customer onboard.
The processes after this are geared towards customer retention. This requires you to keep your customers happy so as they go from one time customers to regular clients and brand ambassadors.
To have delighted customers who will speak positively of you, you need to help them with all aspects related to the service or product they purchased from you.
Essentially, you want them to remain engaged with your product or service.
You can do this by sharing content over:
- Customer satisfaction survey
- Product offers and discounts
- Product usage guide
- Technical assistance information like DIY’s and how to troubleshoot minor issues
Building a Sales Funnel: The How-To Guide
Marketing is pivotal to any business so much so that the lack of a marketing plan can kill the best of ideas. In today’s world If you’re not building a sales funnel for your product or service, you’re falling behind.
A successful funnel is one that is created specifically for your kind of business and with your client in mind. There is no one-size-fits-all.
The tips below can get you started. Nonetheless, your funnel will have many tweaks over time as you identify and fix leaks, as you shall see a little later on.
Know Your Client
Gather as much data as you can regarding what your customer’s needs and pain points are before building a sales funnel, and know how your product/service compares to the competitors.
The benefits of this are:
- You know what areas to emphasize and plump up in your content marketing and pitches
- You understand where your product falls short so that you can build on that
- You figure out where to find your prospects on social media
With a thorough understanding of this, you are able to create targeted content for each stage of the funnel to push prospects down the funnel.
Also, this will help you to create different personas for the different customer segments you will attract.
Develop a Traffic and Lead Generation Strategy
Building a sales funnel without a traffic or lead generation strategy is just going to waste your time. You’ll need to get your funnel in front of your target audience.
At this point, while you know your customer pretty well, they might not know you.
This step lets them know you are here and you have a solution for their problem.
You can use paid traffic, free traffic or cold outreach to get visitors on your site.
Paid traffic is the easiest and fastest way to get traffic. You pay for an ad, and once someone clicks on it, you automatically get a visitor.
The downside to this is, the moment you stop paying, your traffic and leads dry off. Affiliate marketing can be placed in this category, with the difference being that you pay after a sale has been made.
Cold outreach requires you to do cold emailing and calls to prospects that might need your product.
On the other hand, free traffic takes some time. Here you capitalize on SEO and great content to grow a loyal audience slowly.
Engagement with Your Client
You know what your customer’s problem is Vis a Vie what you offer.
Now you need to engage them. You can use several platforms for this, such as:
- Your website
- Social media platforms
Your website should exhibit your mastery of the problem and how your offer solves it. Because this will be your first impression of who you are, it needs to be impeccable.
Aside from sharing who you are, a great site also coaxes visitors into allowing you to start a conversation. Here, request them to sign up for emails or newsletters, subscribe to your website, like your social media pages and so on.
Strive to get contact information as well, as this opens up a more direct line of communication.
Social Media Platforms
Your research in step 1 will inform which social media platform (s) to choose.
The information and general feel of your social media platforms should mesh with your website. Consistency is key throughout all your platforms.
The same goes for your video and webinars.
Because these platforms speak to who you are, create great content that shows your in-depth understanding of your field.
The goal here is to engage and hold your customer’s interest so that they will want to move further down the funnel.
This is where all your prior actions come to a head. These are strategies aimed at converting prospects into customers by making a purchase and increasing your bottom-line.
Here, you create desire by drawing attention to your product page, stellar reviews, and testimonials or by using a compelling call to action.
As you look for the first purchase, explore avenues to upsell or upgrade on a product. In principle, you’re offering your client more value in the event that they choose to upgrade, and you’re making a larger sale as well.
Now, as you try to upsell, some situations call for a down sell. This is still a win. The budgetary constraints a customer will have today won’t necessarily be there tomorrow.
The final step in building a sales funnel is to keep the momentum going.
This means after sales service and support, checking on new customers to see if they are happy with the product and so on.
You can also think of scalable strategies to keep customers coming back, and referring your business over and over.
Some customer loyalty programs you can look into include:
- A membership point program
- The tiered program
- The paid VIP program
- A charity program based on shared values
- A subscription plan
What’s in it for you? Plenty. Studies by Bain and Company have revealed that even a 5% increase in client retention can yield a 25%-95% increment in profit.
What’s the Importance of Building a Sales Funnel
You actually have a lot to gain by building a sales funnel. If it wasn’t valuable, no one would take the time and energy to do it.
Here are the key gains you’ll get from building a sales funnel:
1. It Provides Valuable Metrics
Take a case where visitors are getting on your site and dropping off at some point. A funnel shows you the point where there is the most churn. From here, rigorous A/B testing can point out the leaks.
Granted, there will be some exits due to:
- Prospects feeling that your product is not ideal for them
- Budgetary constraints
- It is a wrong time to buy
By identifying the point of the drop-offs and the possible reasons, you will able to plug the leaks and improve your conversion rates.
2. Gives Direction
Without a clear direction on how you want to make conversions, your business is basically fumbling pitch darkness.
A funnel gives you more direction, control, and opportunities for improvement. As a business, this can give you an edge over your competitors.
3. You Can Predict Outcomes
A funnel gives you insights into your sales pipeline, allowing you to predict outcomes.
For example, it gives you the metrics on how many leads you need to create in order to create a given number of closures. This allows you to work with facts as opposed to assumptions and luck.
Similarly, this allows you to be proactive on your targets rather than reactive.
4. What Is Measurable Is Manageable
Without metrics, you are virtually shooting in the dark.
A funnel shows the strategies that lead to the most conversions. You can then invest your resources on these.
Again, it gives you your ROI at a glance. For example, you spend $5 on ten raw leads. Three clients make $5 purchases. That gives you your ROI, and the resources required if you were to scale up.
5. Gives You Leads for Future Clients
Everyone that does not buy does not necessarily dislike your offers as a whole. Sometimes it’s just the wrong time to buy, or their budgets don’t allow it for now.
Clients that venture close to a sale before dropping off are high potential future clients. A funnel can identify who these are and you can create custom made strategies for them.
It is not uncommon for these to become loyal clients down the line.
Building a Sales Funnel; Getting Started
With all the gains of building a sales funnel, Operating without a sales funnel is clearly a disservice to yourself and your business.
A key thing to get you started on this will be creating a budget for your marketing and other online business functions. Read our blog post here to get insights into the top budgeting tips.
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