Obtaining customers is the central goal for the majority of marketers, making a well-defined and carefully monitored sales funnel one of the most powerful tools an organisation has at its disposal. A sales funnel is an absolute necessity for ensuring your company is taking a regimented, methodical, highly organised approach to building relationships with potential customers and increasing conversions - without one, the individual success rates for each stage in your customer’s journey can be difficult to interpret.
But what happens when holes start to form? Sadly, the concept of creating customers instead of finding them is often considered an unusual process, resulting in a leaky funnel and therefore increased revenue costs and difficulty in generating customers out of leads. With this in mind, here are some quick sales funnel fixes for achieving more conversions:
Firstly, What Is A Sales Funnel?
A sales funnel is a marketing strategy that represents the journey a potential customer follows before becoming an official customer. It also details the conversion rates for each stage in the process; allowing you to identify whether you have enough leads in your funnel to meet your marketing goals and if you need to implement certain strategies to improve the stages where your sales funnel fails - this is divided accordingly:
During a sales process, there are three types of people you will interact with - leads, prospects and customers. Leads are placed within the widest section at the top of the funnel; this is often referred to as the awareness stage which involves trying to accumulate as many potential leads as possible.
The quality of the leads is essential here, as a significantly smaller percentage of these leads will become prospects - people who are actually interested in your product or are qualified to purchase. The more valuable leads you accumulate, the more prospects you’ll have. The last and narrowest stage of the sales funnel is the customer, those who have actively purchased your product or service.
The Sales Process:
Understanding your sales process is advantageous for tracking every step within your customer’s journey. Naturally, this process will differ depending on your customers, but here are the most common sales steps for a funnel:
The first step in any sales funnel is to ensure potential customers are aware of your existence. This can be achieved using a variety of methods, such as SEO, email marketing, paid advertising, blog posts and social media. At this stage any potential customer interaction with your marketing efforts is usually the only form of contact between you.
Before making a purchase, leads need to be taught why they need your product or service. Attract them further by introducing promotional sales/discounts, but avoid becoming too assertive, as this could discourage them completely. Inspiring further action from your leads - requesting more information or asking questions is a great way to share additional knowledge and thereby make the lead feel well-informed.
Evaluate And Engage:
This is when a lead turns into a prospect. At this point, the prospect will understandably need some time to determine whether making a purchase is the best option. For example - if you were a car salesman, a test drive is an important part of the evaluation process.
Some industries might offer demos or free samples as a subtle added incentive. It is common for prospects to communicate with others regarding their potential purchase or to shop around; this is where building a positive reputation and customer loyalty is beneficial.
Depending on the company’s sales strategy, this final section is sometimes labelled the ‘commitment’ stage.
If possible, encourage the prospect to make their purchase there and then instead of instantly believing they’ll ’be back next week’. Once a purchase has been made, congratulations! You have successfully reached the final part of the sales funnel.
Repeat Customers And Loyalty:
Although the sales journey appears to end once a purchase is made, there are two more extensions to the sales funnel which work in tandem - repeat customers and customer loyalty. A previous customer might not repurchase, but they can encourage new leads for the awareness stage of your funnel, in fact - 74% of consumers identify word-of-mouth as a key influencer in their purchasing decision (stat from Ambassador).
Obtaining repeat customers is even better, for they might repurchase without further encouragement. This doesn’t mean they can be completely ignored, usually additional information on a different product might be required, meaning they will need to be integrated back into the sales process.
What Causes People To Fall Out Of A Sales Funnel?
A surprising amount of marketers are failing with their sales funnel, in fact 68% of B2B organisations have not even identified their funnel. Here are some common problems often faced with sales funnels that decrease conversions:
Lack Of Consistent Follow Up:
According to JMJ Direct, 48% of sales representatives never follow-up with a prospect. Furthermore, only 10% of sales involve more than three contacts and an incredible 80% of sales are made on the fifth to twelfth contact. Knowing the most appropriate time to contact a lead is difficult - do you start calling new leads or follow up on an old lead for the fifth time?
Leads are nine times more likely to convert if you follow up within the first five minutes of the prospect expressing interest. Also, if you wait more than 30 minutes, your lead is 21 times less likely to turn into a sale. It is important to remember leads are seeking information about your product or service before even considering a purchase; meaning they are more likely to lose interest at this early stage.
Prioritising Lead Generation Over Nurturing:
It is a misconception that increased sales conversions can be achieved by constantly generating leads into the sales funnel for this results in high expenditure, inefficient time-management and a low lead-to-customer conversion rate. Remember - you might have a substantial number of new leads entering the top of your funnel, but only a very small proportion of them will ever make it all the way through and become customers.
Not Tracking Enough Data:
Merely focusing on your closing ratios and neglecting any conversions during the rest of the sales process won’t be enough to determine how successful each stage of your funnel is. For example, out of 100 sales leads, how many will agree to an initial appointment? How many of those appointments lead to a more extensive sales presentation? Where in your sales process are the biggest successes and the biggest opportunities to improve?
Fortunately there are several solutions to repairing your sales funnel, such as:
Follow Up On Leads:
Implement a sales automation system for emails to prevent your representatives from providing inadequate, delayed information; this eliminates the problem of having to choose between following up existing leads or finding new ones. The time management of your representative will also improve for nobody will have to monitor your server database for 24 hours a day in order to respond within the recommended five minutes.
Campaigns can be set up to immediately respond to an interested prospect. Start small by building one with a very specific focus - perhaps your representatives need assistance in scheduling demos, or maybe you’ve identified common objections and decide to create a campaign to address one of these objections. This also links with customer relationship management (CRM): an effective CRM in your sales funnel will allow you to utilise existing database information for higher personalisation.
Create The Right Opt-in Offer For Each Prospect:
An opt-in offer is a free product or service implemented at the start of the sales funnel with the intention of attracting a lead; this can be offered in the form of free software, E-books, free trials or training courses.
Although free is usually perceived to guarantee success, this sadly isn’t always the case. In order for a free offer to be successful, it needs to be irresistible and to potentially solve an urgent problem - something a competitor cannot provide. Setting a limited-time offer is beneficial for opt-in offers as it adds urgency to the deal - a customer will be concerned with missing out on the offer. The lower you drop the price, the higher your conversion rates will be.
Introduce ’Tripwire Offers’:
A tripwire product is a low-barrier product that solves a specific problem which a segment of your audience is facing. The main objective of this product is to convert your prospects into paying customers; meaning it is commonly offered at the initial stage of a sales funnel process. The product on offer should be a low-risk, low-price product that will convert prospects into customers.
For example, if a gym normally charged £30 a month for membership they could offer a complete subscription for 30 days for just £1 in order to entice the prospect with their full package, making it more likely to generate a customer from this initial tripwire offer.
The undoubted popularity of social media makes it ideal for maximising your sales funnel at every stage. Prospects and customers are familiar with your brand - they are fans who like your posts, favourite your tweets and read your blog. Although familiarity doesn’t guarantee sales alone, knowledge and popularity of your brand is something a prospect will consider before making a decision.
Engagement is essential - asking questions, posting surveys and sharing blog posts on social media will increase the chance of your audience reacting to and sharing your updates and therefore improving word-of-mouth brand awareness.
Track Touch-points From Initial Enquiry Through To Full Conversion:
A touch-point relates to any contact a potential customer or a current customer makes with your brand before, during or after they purchase something from your business. Identifying your touch-points is the first step towards creating a customer journey map and therefore ensuring whether customers are satisfied every step of the way.
We use call tracking to log the contact data for every session and each user; this enables us to determine if a lead has visited via a referral, organic search, a remarketing pay-per-click (PPC) ad and then finally called our business through their assigned unique phone number generated by the call tracking software. All data produced is logged specifically for that user, providing a complete view of their journey.
If you’re finding that your leads and sales are slowly decreasing month on month, try implementing some of the above tips to help plug the hole in your leaky funnel.
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* Adapted lead image: Public Domain, pixabay.com via getstencil.com