A sales funnel is an ideal sequence of events that you take someone through to go from a cold traffic visitor into a repeat customer.
It’s the ultimate way you can automate hyper personalized, behavior driven messages and events at scale.
Send thousands of emails as if they were written from scratch personally to drive your leads and prospects towards the path of becoming a customer.
Typically that path to becoming a customer looks like this:
Cold Traffic To Warm Traffic
First you’ll warm them up, taking them from cold traffic to warm traffic. Usually this is through an article, video or some other content that introduces them to concepts related to your product.
Warm Traffic To Lead
Once they’ve been warmed up, you’ll want to turn them into a lead. This is done through having them take the action of giving up information. It can be an opt-in for a lead magnet, a signup to a newsletter, filling out a contact form or any other number of mechanisms.
Lead To Prospect
Once someone has become a lead, it’s time to qualify them for your offer and turn them into a prospect. This is almost always done through obtaining further information about a lead to turn them into a prospect. It could be behavioral data, if they opened and interacted with certain emails that point towards a fit, or it could be obtaining more information about that lead’s situation that would point towards a fit. The mechanisms here being anything from emails or calls you may have with the prospect to get information that points towards them having a need for your offering.
Prospect To Customer
The main qualifier at this stage is that a prospect has spent money with you. Once they’ve spent money with you, they’ve been qualified as a customer. It could be $1 to kick off a trial or it could be $1 million to implement a full scale cyber security system. Regardless of the amount, once they’ve spent money with you it’s time to treat them like a customer and move them to the last stage.
Customer To Repeat Customer
This stage could be purely focused on retention of customers to have them repeat purchase down the road or it could involve converting $1 trial customers into fully fledged customers with monthly recurring purchases.
A sales funnel is the system that adds and removes barriers for someone as they move through these processes in order to become a customer and a repeat customer down the road.
One Size Doesn’t Fit All
As you build your sales funnel, it’s important to know one size doesn’t fit all. Depending on your particular needs, your sales funnel can be any shape or size. It may be simple, only consisting of a handful of landing pages and a dozen emails.
It could, however, be more complex and behavior driven like Scott Oldford’s SSF methodology. In that case you’re funnel would consist of:
- 10+ landing pages
- 40+ emails
- multiple advertising campaigns
- 3+ content pieces
- and more elements
The more automation and behavior driven actions you add to a funnel to improve relevance and your conversion rate, the more complex it can become.
Why Use A Sales Funnel?
All of the above just talks about what a sales funnel can do for you, but the real question is why use a sales funnel at all?
A sales funnel is going to increase the likelihood that people are going to do exactly what you want on their path to becoming a customer. Here’s the reason why you want them to do exactly what you want; if they do exactly what you want, chances are they are going to become a much better qualified prospect. That qualification makes them easier to turn into a customer and keeps them around that much longer when the fit between your offering and their need is in line.
A sales funnel is essentially the focused approach to pushing people through the chain of understanding. All while letting fewer drop off along the way.
You want them to fully understand your service, understand your offer, understand why you are the best fit for them. Paint that picture for them and get them to the point of making a purchase. That’s what a sales funnel helps you do in a one to many way.
If they’re already a customer, get them to the point of making a repeat purchase.
The typical stages of the sales funnel from HubSpot.
In this diagram, there are more qualification stages to ensure there’s a fit before taking the prospects too far. Your traffic turns into leads, leads become qualified at the marketing level (usually one or two questions on a lead opt-in), lead become qualified at the sales level (often though a demo) and then they become opportunities. Opportunities being someone who has shown interest to the point of becoming a possible sale within a defined amount of time. The final stage, as always, is turning that qualified and ready to buy lead (opportunity in this case), into a customer.
Sales Funnel Stages
Let’s dive deeper into each stage of a typical sales funnel.
Traffic or visits are just the people coming to your landing pages or your website. It could be warm traffic or cold traffic. Cold traffic would be people who have never heard of your company. They don’t necessarily understand the concepts that you are talking to them about. They are really coming in blind.
Warm traffic has some understanding. That understanding could be knowing your company, knowing your offering or anything in between.
Leads are those you’ve converted from cold or warm traffic. They’ve oped into something that you’ve offered them. It could be a lead magnet (ebook, guide, checklist, etc) or they could have offered up some information through a contact form or newsletter signup.
Prospects are leads who have been qualified through some means that you’ve defined. It could be a reply to an email saying they’re interested in talking further, it could be that they submitted further information through a demo booking form, they may have had a demo call already or any number of mechanisms.
A customer is someone who has spent any amount of money with you. There are classifications of customers as you dive deeper, the loyal ones, high spenders and so on. But as long as they have spent money with you they should be the ones you’re investing time and money in nurturing heavily.
Common Sales Funnel Leaks
The lead and prospect stage are the biggest leak in most sales funnels. This is the common money pit for companies and it only gets worse as they scale.
Often companies never make the shift into behavior driven funnels or even segmentation. Not everyone who comes into your funnel as a lead can be converted into your particular offering, treating them all like they can will cause waste and skew your metrics heavily.
Since you’ve already paid money to acquire any leads you have, it’s worth nurturing them but making offers regularly. Even if those offers are from other companies through joint ventures and partnerships.
To make the most of your leads and prospects, one of the first things to look at is implementing nurturing campaigns. Plan for a six month nurturing sequence on the lowest end. This will retain the value of the leads you’ve acquired, limit lead decay and keep them active for when you can convert them down the road to generate an ROI.
Sales Funnel Hacks
Physically Map Out Your Funnel
Map out your sales funnel physically on something. It could be a white board, use sticky notes on a wall, a pin board or whatever works best. Also keep track of the key metric like conversion rate, traffic and lead flow at each stage using this physical overview. It will become one of the most powerful tools to really see the big picture and key points of optimization across your entire funnel.
Digital overviews are great, but if everyone on your team can see what’s going on, one of them might see opportunities the others don’t. People are generally visual learners and if you can see that mapped out, you are going to see exactly where you have issues.
Improve Conversions First – Increase Traffic Second
If you are not converting leads into prospects and customers, focus on improving your conversion rate on pages instead of just throwing more against the wall.
Just because you aren’t getting a 100 leads a day from your sales funnel, doesn’t mean you couldn’t be. Don’t start using YouTube videos, content marketing and other marketing strategies to boost your traffic and hit that lead number. They’re all great strategies, but if you are only achieving a 2 – 10% conversion rate on your landing page, that’s where you need to be improving. Doing more videos and putting out more content won’t fix the underlying problem. It will just cause more money and traffic to be wasted.
Focus on your conversion rates, once they’re solid – then focus on your traffic flow and top of the funnel.
Nurture leads for the long-term. Build a nurturing sequence that lasts at least six months with ample opportunity for those leads to become prospects and customers.
Deliver value to them, tell them stories and then directly make them an offer. Offer to bring them further down the line of your funnel than they were and offer to push them further backwards. They may have been at a stage that wasn’t the right fit for their buying process, which caused drop off.
80/20 Your Emails
Follow the 80/20 rule even with your email sequences. Deliver heavy value and tell stories in 80% of your emails, and keep the 20% to promotion focused emails. It will keep leads more engaged as they receive emails from you over the next 6 months.