What is it?
A sales funnel describes what happens after a customer becomes aware of your company or product, and the process that moves them to purchase. I have simplified this one into just three sections, but they can be far more complicated if you want them to be.
Your sales funnel starts with your New Customers. They enter at the top at the point they first become aware of your company, brand or product. If they like what they see they will move down the funnel and into the main section of the funnel.
In the Research Phase your new customers have become interested in your product. But, they will have questions and fears that will need to be resolved in order that they form a strong enough desire to consider buying. Every time you solve a problem for them, they’ll move further down the funnel. The closer your customers are to the bottom of the funnel, the closer they are to making a purchasing decision.
If you guide them all the way to the bottom, they will make their purchase and complete this part of the sales journey.
There is another section that comes after purchase, but I will talk more about that later. For now, let’s talk about how you can use this to help your customers purchase from you.
They won’t all make it!
You’ll notice that the sales funnel gets smaller the closer you get to purchase. This is normal as many of these new potential customers will fall out of the funnel as they learn more about your product or service. Your product isn’t for everyone, so on average you should expect only about 6% of new prospects to make it to the bottom.
If you are very focused in your marketing, and are only reaching your golden customer, the percentage will be higher. And likewise, if you don’t target your marketing at all, then you’ll lose new customers at a much higher rate.
So, how does this work?
Lets look at a real life example.
Our potential customer “Donna” is looking for someone to deliver her friend an afternoon tea gift box. She asks members of a local interest group on Facebook for ideas and they come through will a long list of suggestions.
At this stage, Donna has now become aware of a long list of possible solutions and enters separate sales funnels for each one. The viable options include 3 afternoon tea delivery companies, one person suggested she made her own, and another person suggested a prosecco and chocolate hamper company they had used. There were a few other suggestions of brownie boxes, an afternoon tea company that didn’t deliver, and flower baskets. She immediately dismisses those suggestions and so bounces straight out of those funnels.
Donna is now in 5 sales funnels, and is following 4 companies on Facebook, including yours. She also signed up for two newsletters on the websites that offered them, and follows one other on Instagram. You all offer what she wants.
From your point of view, the other options that are in consideration, including “do it yourself”, are now your direct competition in the race to the bottom of the funnel, and ultimately the sale. She WILL buy from someone, that decision has been made. So she might as well buy from you, you are not trying to trick her into buying, your job is to nurture her in the right way so that she chooses you?
Solve her problems
At this point she is fully in the consideration phase of the buying process. She is in no rush to decide as the birthday is not until next weekend, so can take her time to research the options. The do it yourself option requires active research from Donna so she puts this off until she is next in the supermarket. In the meantime, she has pain points which must be resolved in order that she can progress towards the sale. As she is not in a rush, she is relying on your to get the information to her.
Her problems are:
- Must be fancy, its for a special occasion.
- Ideally would be delivered.
- Must be made fresh that day.
- Reliable service.
So, your job is to solve all her problems for her, so that she chooses you before the others. If she was in a hurry she might go to your website and discover most of the answers she needs, but she’s not doing that.
Over the next few days, it will be over to your marketing strategy to do its magic. Your marketing will have to reassure her that you are the right company to solve her problems, deliver the service she wants, exactly how she wants it. Don’t forget that she is in other funnels too, so consistent and varied marketing is your best chance to reach her when there is so much competition.
Hopefully, she will buy from you this time. If she likes what you are doing, but chooses not to buy from you this time, she could stay in your funnel until a new need arises. When that happens, your marketing strategy will continue to interest her, and your call to actions will move her to buy as soon as she is ready again. If you don’t offer a service she wants at all, then she will fall out of your funnel and go elsewhere. This is perfectly ok and to be expected. Concentrate on the benefits you offer and attracting the right customers.
Refer to your Marketing Strategy
If you haven’t got one yet, then there is more information about how to create a marketing strategy here.
In short though, the more you speak to her objections, across all your marketing, the quicker she’ll move to the bottom of the funnel. If you do a better job than everyone else, then you’ll get her there first and she’ll buy from you. Customers in this stage of the funnel are mostly interested in how, why and what you do. Resist the urge to actively sell, and instead focus on education.
Also, don’t worry too much about how much interaction your social media is getting, a potential customer in research stage will scroll down you page to see your most recent posts anyway, so keep posting, even if it feels like no one is listening!
If you are struggling to make the sale, even after all this work, then the next place to look is your customer journey to see if there is a problem with the actual sales process. A high abandoned cart rate could confirm this if you use an online shop.
The Advocate Stage
I mentioned earlier that there was an additional stage in the sales funnel. This is a very special stage and only your very, very best customers will make it here.
Customers that make it to the advocate stage are your golden customers. They make up only around 20% of your customers but they are responsible for as much as 80% of your sales. Your advocates believe in what you do and share your core values. They love your products, buy them regularly, and will readily recommend you. Look after this special group of people carefully and they will look after you.
Customers that come to you via one of your advocates fast track their way down your funnel without much effort from you. Many, if not all, objections they might have had, have already been dealt with by your advocate. These new customers are much closer to making a buying decision, and they may even head straight for the checkout.