Growing a business without a defined sales funnel is kind of like trying to catch a particular colour of confetti pieces with a large fishing net.
Imagine confetti making up multiple shades of a rainbow, all falling from the sky. You’re standing there, moving your net this way and that, but inevitably pieces of the wrong colour get caught, while others of the right colour never make it in at all.
It wouldn’t take long before you wished there was a way to isolate only the confetti pieces of the colour you wanted, and a net that would somehow magically let the rest fall on the floor.
Customers are obviously represented by the confetti in this analogy, but the fishing net could stand in for several channels at once. It could be your website, where prospects first come browsing around to see if you offer the kinds of products and services they need. Or it might be your social media channels, where many people might follow you but only a percentage make up the kind of people who will actually drive sales. The fishing net could even be your email newsletter, which might get lots of clicks but only a smattering of conversions to a sales lead or an e-commerce purchase.
The power of a defined sales funnel
A defined sales funnel addresses all of these challenges, and more. Larger organizations will have entire teams within their marketing and sales groups focused specifically on various stages of their sales funnel, because they know any misstep will lead to missed quotas and potentially more business for their competitors. They’ve often been in business long enough that, even if customer behaviour changes over time, their sales funnel can be adjusted so that the journey of learning about products and making a purchase never reaches a dead end.
Notice we’re using the word “defined” when we talk about a sales funnel here. The truth is, all businesses have a sales funnel — it’s just that not all businesses recognize the path their customers take.
A small or medium-sized business might be successfully selling its products, for instance, but it always seems like a bit of a mystery how someone hears about them, or when and why they’ll finally sign off on a deal. There might often be a bit of a panic in responding to sudden customer inquiries or pulling off a sale as other prospects suddenly emerge.
Companies need to define their sales funnel because otherwise, day-to-day progress starts to feel like luck, or a series of flukes. That’s often very difficult to sustain, much less scale into something bigger.
Fortunately, defining your sales funnel doesn’t have to be a Herculean task. It just means paying closer attention to what customers are doing and building your processes around it:
1. Set the stage by identifying your key buying stages
Even if you’ve never used one in real life, you’re probably aware that a funnel looks like a cone or round pyramid. Sales professionals would label the widest end as the “awareness” stage, when customers first find out about your brand thanks to online ads you’ve run, a social media campaign and so on.
If whatever story you’re telling through those marketing tactics compels them, customers will then move to the “interest” stage, where they might visit your website and browse through the items that interest them. Hopefully this will lead them to the “decision” phase, where they decide to make a purchase, followed by the “action” phase of calling a sales rep or putting something into an online shopping cart.
As you consider these four stages, start to ask yourself the following questions:
- What are we doing to attract the most likely customers to the funnel? How can we recognize them early on?
- How do these stages map to the things we do as a company (for example, how we organize our website and product information)? How are we encouraging customers to move to the next stage?
- What might get in the way of a good experience at any stage in this funnel? What can we do to improve it?
Answering these questions will not only help you define your sales funnel but begin to actively shape it in a way that leads to more wins.
2. Harness historical customer data (and determine how you’ll get even more data)
An undefined sales funnel treats every person who approaches your company the same. A defined sales funnel learns to pay attention to the customers with whom you will have a long-term — and profitable — relationship.
This only happens by doing a deep dive on what’s happened in the past. Take a look at your website activity, for instance, and you’ll probably start to see patterns of where people tend to navigate, and which page visits lead to sales. Or look into the notes your reps have taken from customers over the phone, and pinpoint the kind of questions asked, budget size or other characteristics of a typical buyer.
A well-defined sales funnel doesn’t stop there, though. The most successful companies not only pore over their existing data but fine-tune all the channels they have — from contact centres to landing page forms to customer surveys — to solicit as much input and feedback from customers as possible. This is often data customers are very interested in sharing, because it reduces the time and effort they need to spend finding the companies, products and services they want.
3. Pick the sales funnel metrics that offer ongoing education
The whole point of a defined sales funnel is to bring greater consistency to the process of acquiring customers and maximizing the volume of business they’ll give you. Those aren’t necessarily the only ways to evaluate its success, however.
Some other approaches to measuring sales funnel effectiveness include:
Marketing costs — If you develop your funnel into a well-oiled machine, you’ll be spending more of your budget toward talking to the right people at the time they want to hear from you.
Customer satisfaction — People love to talk about companies they love. It’s that simple. And the companies they love tend to be those who make it easy to do business with them. In other words, your funnel should represent an outstanding customer experience.
Time to decisions: When customers seem to come out of nowhere (or don’t come at all), business owners can be up all night figuring out their next move. A defined sales funnel will provide them the basis for figuring out the next steps more quickly and with greater confidence.
The work you put into defining your sales funnel will be one of the smartest moves you make. So smart, in fact, that you might wind up celebrating your business’s next growth spurt before you know it. Somebody break out the confetti!
