A sales funnel is a system set up on your website that builds rapport and trust with new and returning visitors, qualifies leads and encourages them to make a purchase.
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At the heart of your sales funnel is the idea of conversion – turning casual visitors into buyers.
What is a Sales Funnel?
The sales funnel is an often-used metaphor that describes the process of attracting potential customers to, and moving them through, your sales process to sort out those who would be your ideal customer from those who would not.
Surely all customers are ideal customers? That is not true.
Your Ideal Customer
Your ideal customer is one who not only benefits from your product or service greatly but understands why they do so and are happy to act as brand ambassadors.
A less than ideal customer might be one who buys your product because they like the packaging, advertising, or heard about it by word of mouth – yet they might not fully understand how it works or its benefits to them.
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Such customers often ask for refunds or spread false information by word of mouth.
There are other reasons your potential customers or clients may not be a good match for you:
- Your product may not be within their budget
- They may already have someone who offers them a product they are happy with, and
- Some may be looking for a specific answer to their problem, which your product or service does not provide.
A sales funnel is the equivalent process of qualifying your leads.
Understanding this concept explains why you should vet your prospective customers to find a perfect match between your product or service and your customer.
That’s why sales funnels exist – and why it’s vital you take the time to build and understand your funnel.
Like many systems and processes in digital marketing…
Your sales funnel will require consistent monitoring and tweaking to make it as effective as possible.
Sales funnels may also change seasonally which demonstrates how important it is to understand your funnel and how it converts.
The sales funnel isn’t just a system that moves your potential customers through a qualifying process. It’s also a tool that allows you to predict how many customers you can expect to convert.
Without understanding how many customers you convert it’s impossible to properly budget for your advertising.
For example, if you understand that as part of your sales funnel, 12% of those potential customers who are exposed to your PPC advertising campaign become customers with a dollar value, then you can gauge appropriately how much money to spend on advertising and still realize a profit.
Sales funnels also show problems in your sales process, such as:
- Not having enough salespeople to follow up on leads
- A lack of knowledge about the product on the part of your salespeople
- A financial leak in advertising expenses,
- And more
Monitoring Your Sales Funnel
All sales funnels should involve a flowchart where the sequence can easily be visualized. It might be cliché, but what gets monitored gets managed.
The sales funnel will include several steps and each can be evaluated separately.
Analyzing how changes affect the conversion rates of each part of your workflow helps you fix what’s losing you revenue.
It takes several months to build up a picture of your sales funnel, so be patient. You can’t expect to learn anything by skipping the process and it’s a huge mistake to do so. That means changing one thing at a time and giving it enough time to make a difference or not.
Making more than one alteration to the process doesn’t allow you see which one is making the difference to your funnel, or what that difference is. You’ll only end up confused about what’s working.
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Mirror Your Prospects…
Your funnel should mirror your prospects buying journey and should bring them from awareness of their problems to taking action to solve them.
Sales funnels seem like a lot of work and effort when viewed from the outside, but while the initial setup is awkward (no metrics for comparison, lack of traffic, uncertain goals), the ongoing optimization and analysis takes a lot less time and effort.
Finally, the less moving parts the better. Every sales funnel is different, and what works for someone else may not work for you – remember that the more barriers you place between your lead and your product, the less likely the sale.
This post is part of a series to help you understand what a sales funnel is, why it’s so important, and how to set one up. View the other posts here:
- Why You Need To Build A Sales Funnel
- How To Build A Sales Funnel
- 4 Stages of a Sales Funnel
- How to Provide a Good User Experience For a Successful Sales Funnel
- Why You Need To Track Your Sales Funnels Conversion Rates
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