6 min read
Creating a more successful and efficient sales funnel can increase your business's ROI on marketing dollars by cutting customer acquisition costs and increasing customer lifetime value. But what is a sales funnel and how can you improve yours?
What Is a Sales Funnel?
You're likely familiar with a sales pipeline. The pipeline refers to leads who are undergoing a journey, the end of which will result in either a win or a loss. The sales funnel differs from the sales pipeline in that it is a more customer-centric view of the journey that takes into account the customer's perspective throughout and even before they become a true lead.
- Sales Funnel Definition: A sales funnel (also called a marketing funnel) is a customer-centric marketing model that looks at various customer personas and attempts to outline corresponding, theoretical customer journeys toward purchasing a service or product from the theoretical customer's perspective.
Sales funnels do not necessarily focus on closing sales. Rather, the goal of a sales funnel is to develop brand relationships with consumers before they even become potential leads. As a result, strong sales funnels can help attract potential leads that will convert into loyal, long-term customers – customers of higher value – rather than short-term, high-cost customers that don't generate a significant ROI.
AIDA: The 4 Sales Funnel Stages
The customer journey maps outlined in sales funnels are divided into four distinct stages:
The first stage is known as awareness or attention. During this stage, the consumer becomes aware of your business, service, or product and asks, "What is it?"
During this stage, it's your responsibility to get your company's content and brand in front of potential customers and to engage them, educate them, and provide them with valuable information. This is your chance to make a good first impression, capturing the consumer's attention, and it's the customer's chance to move on to the next stage of the sales funnel.
The second stage of the sales funnel occurs after you've managed to grab your potential customer's attention and have made them aware of your brand. During this stage, they're aware and interested. In other words, they like what you're offering, but they do not yet want what you're offering.
It's your job now to keep them hooked. The consumer wants to learn more, and it's your responsibility to provide them with engaging information that continues to hold their attention while providing them with information about your product or service, the problems you solve, and how you can help them solve their own problems. The goal is to be engaging and persuasive enough for the consumer to begin to want your product or service.
In order to move a consumer from simply liking your product or service to wanting your product or service, you'll need them to trust you. You can build trust with a not-yet customer by continuing to provide them with high-value content and information. Encourage them to follow your brand on social media, download free tools or content, and subscribe to your newsletter.
The more you can offer consumers up-front, the more the consumer will feel they can trust your business, the more they will begin to value what you offer, and the more they will begin to desire your product or service.
Once a consumer is in the action stage of the customer journey, they want what you're offering so all you need to do is make easy for the customer to take action. At this point, your best move is to provide the customer with a simple, barrier-free, high-value call to action. This might come in the form of an email offering a limited-time discount or simply a clearly stated offer with easy-to-understand terms and actions. With this offer, the goal is to convert a potential lead into a customer.
Further along the customer's journey, you can focus on upselling and increasing customer loyalty with new incentives, exceptional service, and smartly targeted relationship-building tools.
Sales Funnel Statistics: How to Propel Consumers Through the Customer Journey
- Most consumers rely on readily available content when making purchasing decisions, rather than reaching out to sales representatives for information.
- 87% choose to do business with companies that provide valuable content at every stage of the sales funnel .
- Visual content (videos, visually striking, ebooks, pictures, and infographics) is preferred by 91% of audiences .
- Design quality affects 94% of consumers' first impressions .
- For at least a portion of the sales funnel, 100% of B2B buyers prefer a self-serve experience .
Monitoring Your Sales and Marketing KPIs: What To Track
Most importantly: you can’t manage what you don’t measure.
Closely monitoring your Sales and Marketing KPIs will help you evaluate past data to drive future- hopefully profitable- results.
If you’re asking yourself… ‘what metrics should I start to monitor?’ Here is where we start with our client’s Sales and Marketing Scorecards:
- Number of Leads and Number of Leads Trailing Twelve Month (TTM)
- $ Value of Proposals and $ Value of Proposals TTM
- Closed Sales and Closed Sales TTM
It starts with your accounting system. A robust back office will provide you with the financial data you need for pulling management reports that can give you invaluable insights into your business's sales funnel.
How GrowthForce’s Outsourced Controller Services and Smart Back Office™ framework filled the gap in Liberty’s back office.
Collaborating Across Departments – The Key to a Successful Business Sales Funnel
Outlined in simple terms, the customer journey that takes place in a sales funnel seems easy enough to navigate. However, it's not quite as simple as it appears. Sales funnel strategy requires the knowledge and expertise of several business departments – marketing, customer experience specialists, and sales teams – to get it right. So, the key to developing successful sales funnels for your business is to collaborate across departments and remove the barriers between siloed information.
Each of these departments has information that is essential to the process of outlining the sales funnels of your primary customer personas. For example, marketing has the market research that defines your ideal customer persona. It understands the audience, their pain points, and how they prefer to engage with the company. Customer experience teams understand the intricacies of messaging and the importance of getting it right. They can help you segment experiences throughout the sales funnel to ensure the right messages and information are hitting consumers at the best possible time in the right order. Your sales team understands how to convert leads to customers. They know how to close deals, and they understand the ins and outs of the action step of the sales funnel.
So, although a sales or marketing funnel looks like a job for the marketing department, it's impossible to create a successful sales funnel without collaborating across each of these departments in your company. Working together, your teams can develop accurate customer personas and journey maps in order to create high-value marketing materials that help move real-world consumers all the way from attention to action.