Why Every Business NEEDS a Sales Funnel...
I’m sure that every businessman who has an online business would have heard the importance to create a sales funnel. A well-managed sales funnel will get all of your sales efforts well organized and put you in control of your sales results.
Basically, it would help them convert their website visitors into paying customers. And if you fail to do that, you will hardly make any money.
But the main question is “What is a Sales Funnel?”
Definition of a Sales Funnel –
Sales Funnel is also known as a revenue funnel or marketing funnel or sales process.
It’s defined as the ” ideal ” process you intend your customers to experience as they go from Prospect to Lead to Customer to Repeat Buyer. It’s basically an upside-down pyramid, divided into several steps, which differ depending on the particular sales model.
This strategy is so named due to the fact that in diagram form, this particular marketing strategy looks just like its name, i.e, a funnel. The top category is the biggest one and represents the largest number of people, i.e, potential customers. The bottom category represents the smallest number, i.e, committed customers, hence, it’s smaller.
Sales funnels have been around much longer than web marketing, but the online world is the best thing to ever happen to sales funnels because websites and email marketing make sales funnels easier to build.
- It reveals how many prospects you have at each stage of your sales cycle
- It details the conversion rates for each stage. This will tell you whether you have enough deals in your funnel to meet your goals and whether you need to appoint special attention to certain deals.
- It gives you a complete overview of where in the sales process your money is.
The Different Phases of a Sales Funnel
This stage includes the largest amount of customer prospects. It’s at this stage in which customers have determined a problem, begun searching for a solution and become aware of an organization via content marketing, an email campaign, social media marketing or other avenues. Basically, in this, prospects become aware of the existence of a solution.
At this stage, the number of customer prospects begins to decrease, but the possibility of a sales conversion increases. This is generally when the customer will engage with the organization, request more information and ask questions. This is basically in which prospects demonstrate an interest in a product by conducting product research.
Prospects got all information, now they need a nudge. So, this is a phase in which prospects or prospect companies examine competitors’ solutions as they inch toward a final buying decision. They could either choose you or choose your competitors depending on the pros and cons. So, it must be obvious for you to have more pros in order to have more customers.
In which a final decision is reached and negotiation begins. Once the customer has become aware of the organization, reached out and sought answers to questions, it’s time for the decision. This stage of the process may include sales offers and further research into the different options presented by the organization.
All of the previously mentioned stages funnel down into the final step: The Action or The Purchase. At this point, the customer has decided to purchase the product. The customers purchase the goods or services provided by you. Voila! You just got yourself a sale!
When a customer loves your product or service then he would repurchase your product or service. In B2B sales, it’s common for offerings to involve contracts that need to be renewed. As a customer becomes familiar with an offering, and especially as a contract draws to a close, a customer will enter a reevaluation phase before repurchase purpose, during which they’ll decide whether or not to renew their contract.
Importance of Understanding the Sales Funnel
Why do so many organization have problems with lead nurturing and conversion? The answer is that they have not taken the time or effort to lay out this detailed process and roadmap. In fact, many think that by automating the process, they can basically sit back and let the system do the work for them. Creating lots of content and automation is not the answer to developing a successful lead nurturing and management program whether you call it the sales funnel or waterfall.
Understanding the concept of sales funnels is important because it’s a useful model for visualizing the customer journey from initial awareness all the way through conversion. The sales funnel provides a useful framework through which you can analyze your business and identify areas for improvement.
For example, an e-commerce site might model their visitors in a funnel, and identify that there is a large drop-off in users between visiting the shopping cart and actually completing the transaction. Using this data, the company can then form a hypothesis as to why this is the case and test ideas for improving conversion rate, such as reducing form fields, establishing trust with seals, or offering limited time offers.
Advantages of a Sales Funnel:
- It will increase your sales revenue
- Using a Sales Funnel will increase your conversion rate
- It can also help to predict your sales volume
- It will show you products/services that don’t sell
- A sales funnel could basically make your sales structure consistent.
So, you might call it a “marketing funnel”, “conversion funnel”, “marketing pipeline”, “sales funnel”, “sales pipeline”, “sales process”, “sales cycle”… or any number of other terms that are all describing the exact same thing.
Bottom line, if you have a business it’s because you have processes in place to
- Acquire new prospects and leads
- Convert those leads into buyers
- Get those buyers to buy more or buy more often (or both)!
Thus, a circle of continuous engagement is born.
It might not be an optimized process yet but every business has some way of doing all the things listed above!
Hence, the next time you hear about sales funnel, make sure to remember these points and grow your business to the greatest of success.
After all, every business needs a “funnel” of sales.