Having a steady flow of clients is the deciding factor whether a business idea sinks or swims. There are millions of new shops, products, and merchandise established every day – many of which fail within a 12-month period. The biggest reason for their failure isn’t the economy or competition but a lack of customer awareness. Many business owners launch an enterprise without doing research beforehand and find themselves in a situation where profit margins are flatlining instead of soaring. What’s worse is that a large percent of these businesses not only don’t do their research, but when they do, they focus on the wrong market. There is nothing worse than having a good idea and ruining it because you decided to focus on an outdated strategy.
Sales funneling is a sales and marketing strategy that has been around for a long time. Some might argue that ancient Greek vendors unknowingly invented this strategy by focusing their merchandise pushing towards a select crowd rather than towards the general public. Regardless of when it was invented, it’s a strategy widely used by larger companies to create a sustainable customer flow. This article covers some of the basics of sales funneling, offers several practical sales funnel examples, and provides information about tools and strategies that can boost your sales numbers. Let’s have a look.
What is a sales funnel?
Before we dive deep into the how’s and why’s, we should first discuss what a sales funnel actually is. The concept is rather simple: imagine a large kitchen funnel placed over a glass bottle. The bottle is your business, and the funnels are different strategies and tools that attract your customers. As you begin to pour liquid into the funnel, it lands directly into the glass bottle. From now on, every time you pour something into the funnel, it will go directly into the glass bottle. This is what a sales funnel is – a combination of steps and hooks that draw customers to a certain location and then entice them to spend money on your products and services.
Metaphors aside, the best sales funnels provide a steady flow of customers already pre-informed about the product or service they will be buying. Aside from generating new leads, the goal is to automate the process where the least amount of time and money is spent on marketing and more time is spent on strengthening core features. This frees additional resources to perform staff maintenance, improve infrastructure, and increase brand recognition without sacrificing product quality.
The core of a sales funnel consists of four steps that have been designed to remove uninterested clients and usher in prospects that are more likely to make a purchase. The essential steps include:
- Awareness
Awareness is the first stage/step of a sales funnel, and it has to do with brand recognition. A customer can be either aware of your business or not. If the customer is aware of the business, then they will naturally progress towards the next step. If, however, they are unaware, it is the funnels’ goal to educate and try to persuade the client that your business or product is worth a second look at. You can think of the awareness stage as an advertisement: the client looks at a billboard that contains your product and makes an unconscious decision whether that product is of interest to them.
- Interest
Now that the client has become aware of what your business is, it’s time for them to show interest. This stage is out of the business’s control since it’s up to the customer to do research, ask for people’s opinions or come into direct contact with you. The business side can increase the chance that a client will proceed towards the next stage if it has a sufficiently large marketing portfolio. The goal is to provide a client with information organically without them having to seek it out too hard.
- Decision
The third step of the funnel process is the result of the first two steps — awareness and interest. If the business has a good marketing and brand recognition network, then the customer will have an easy time deciding if they want to buy something from you. This stage is completely out of your control, and all power belongs to the customer. Certain tips can be applied to help tip the balance of the decision in your favor, such as giving a discount or offering a 2 for 1 deal. However, these kinds of offers are generally frowned upon since they not only show a lack of faith in your brand but also give away valuable merchandise for a low price.
- Action
The final stage of the funnel: the customer either decides to make a purchase or walks away. 90% of customers who reach this stage are likely to make a purchase based on the first two steps. 10% of customers are likely to change their opinion at the last moment or come back for a refund. A 90% turnover is good only when your sales funnel functions properly and doesn’t bleed money. If, however, your funnel has cracks in it (marketing costs, wrong audience targeting, improper sales pitch), you will end up earning less money than what you normally would.
As you can see, there are a lot of different aspects to a high converting sales funnel. There are only four core stages that need to be accounted for, but the elements that reside within these stages can make or break a sales funnel.
How to build a sustainable sales funnel?
Some of the best sales funnels were built on the existing client base. While there is no rule as to when you should establish a funnel, it helps if you have some analytical data to draw upon. Having somewhere between 50 and 100 regular clients should be the golden standard. Existing prospects can move through the funnel and start trickling down the four core stages. Once you observe client behavior inside the funnel, you can conclude if the funnel functions as intended or needs changes.
There aren’t any concrete steps to establishing a sales funnel. It depends on the business whether it will focus on expansion, retention, or data analysis.
• Have a recognizable brand page
In 2021, almost all business transactions happen online. With the state of the world economy as it is right now, we have seen a rapid increase in online traffic around the globe. This is a positive and a negative development at the same time. More traffic increases sales and revenue, yes, but it also increases competition. It’s important to stand out from the crowd if you want to be successful.
An attractive website is essential when establishing a young sales funnel. Some of the best sales funnels were created on top of simple, elegant, and informative websites. There are many elements to building a good website.
- Have a positive personality;
- Be informative and clean;
- Be able to relay a sales message without putting clients off;
- Contain links towards associated business pages to cover a wider network of clientele (when applicable);
- Avoid over-the-top messages and images.
Prospects will visit your webpage to gather information regarding your product or service. You want them to access this information quickly and without distractions. It’s tempting to oversaturate a webpage and make it look like a high schooler’s first HTML project. Do not do this.
There are a lot of tools online that offer help creating a beautiful website. Wix and WordPress allow users to preview over a hundred different templates before settling on a design. Even then, you are free to make changes and tweaks so that your website has exactly the personality you want it to have. And, of course, there are professional developers who can create a fully customized website from scratch. The solution is pricier but could be well worth it in the long run.
• Offer prospects something to look at
Once you’ve attracted prospects to your website, you need to offer them something of value. This could be information about your products, pictures, or even videos. The content on the website needs to be engaging and informative enough to push people further down the sales funnel.
An interesting tip that can be applied to make a website more attractive is to include a promotional code. Hiding a discount code somewhere on the webpage adds a gaming element to a business’s interaction with new clients. It doesn’t need to be hidden very well – it can be placed somewhere on the contact information page. The goal behind this game is to leave an impression of relaxed confidence in the customer. If they are having a good time simply browsing your website, they would be more likely to continue towards the next stage.
• Establish a line of communication
Now that you’ve attracted people to your website, it’s time to gather their contact information. The next step in building any types of funnels is to harvest client data in order to expand your networking.
There are many tools online that offer help in gathering client data. Email finders like SignalHire are a popular marketing strategy that almost any big company uses. The goal is to either ask clients for their information with the promise of delivering promotional content or to use publicly available data on the Internet. SignalHire offers an excellent email finder software that allows you to not only locate email addresses but phone numbers as well.
A sales funnel will not function properly without some form of an outreach program in place. Clients need to be kept informed regarding upcoming changes to services or products that will be available for purchase. Email marketing remains one of the best ways of cold outreach. You can find more info on the latest email marketing trends here.
• Nurture your existing connections
A big mistake that many business owners make is ignoring their existing clients. Many people focus on finding new prospects and forget about their loyal clients. As a result, sales go down, along with brand reputation.
To prevent this from happening, you need to establish certain principles in your company that protects existing customers. Loyalty programs are a way to encourage clients to come back. Offering 10 to 30% off for loyal customers will not only make them more inclined to do business with you but could also generate good feelings in the community. If you’ve played your cards right in establishing your core sales funnel strategies, you can become a community business that caters to a small but loyal clientele.
• Upsell your services
As your sales funnel starts to grow it’s important to upkeep the momentum. Don’t just sit down and watch as customers come and go; nurture the client/business relationship. Communication is the key. Whether you do it through email marketing in the form of promotional emails or through social networks, it’s important to keep clients in the loop.
A fantastic idea for making sure that the sales funnel doesn’t dry out is to expand your network to other places. Many websites offer advertising space. It is usually cheap to have your product appear on a popular blog or website. This sort of passive marketing will make sure that new prospects come into the sales funnel.
Another thing that will keep the momentum going is hiring a data analyst. A professional analyst will be able to look at a set of data (new/returning customers) and pinpoint you in the direction best suited for your product promotion. There is an old saying: ‘Strike the iron while it is hot.’
• Rinse and repeat
Congratulations, at this point, you should have a functional sales funnel that is self-sustaining — or, at least, a theoretical understanding of one. Your averages can be low in the beginning, but they will pick up in time as word of your business circulates.
Don’t think that this is the end. For a sales funnel to function properly you will need to nurture it. Putting yourself in your customers’ shoes will allow you to gain a different perspective on your business. Ask yourself:
- Would I buy this?
- Is all the information necessary easily available to me?
- Am I valued as a customer?
Examples of Successful Sales Funnels
1. Netflix
Netflix is the Internet’s largest paid video subscription streaming service. As of 2020, Netflix has over 90 million active monthly subscribers. With several different subscription plans to choose from, the company has done very well for itself.
Netflix is focusing on a high converting sales funnel. They offer every new member a month-long trial period with no purchase commitment. This allows their customers to sample a few popular TV shows and decide if they want to commit later down the line. This is a genius move as Netflix’s streaming library is huge – no person will be able to watch everything in one month. The goal is to attract people with a simple to use website, quality television, and cheap prices, and convert trial memberships into paying customers. More than 80% of trial memberships convert into premium members.
What makes Netflix unique is its brand and excellent website design. Everyone knows the phrase ‘Netflix and chill’. The website is easy to use and sleek so that users do not get lost. Their purchase section is transparent and open; you know exactly how much you pay and what you pay for. Besides, the service makes a point of collecting their prospects’ emails before they can proceed with a subscription, which simplifies future outreach.
2. Tricentis
Tricentis is a software testing online tool that helps small and mid-sized app developers iron out bugs in their software. Tricentis is one of those tools that not only provide initial support for clients but also allow them to re-educate themselves.
The way that the Tricentis sales funnel operates is through its successful SEO. If you type ‘software testing tool’ in Google, there is a 90% chance that one of the three top results will feature the Tricentis website. This leaves the software testing tool in a great marketing position since it is visible to more potential customers without adding extra costs for marketing their product. On average, 9 out of 10 people will use a search engine to research a business before they make a purchase. The Tricentis sales funnel allows these prospects to find their product without any hassle or wasted time.
When a client lands on the Tricentis website, they are immediately shown useful information regarding the online tool. The website is filled with tutorials, About Us section, and 24-hour customer support representatives that have been trained to answer technical questions on top of providing regular service. This type of sales funnel strategy not only boosts sales across the board but also attracts new customers by showing a certain amount of care for the brand image.
Possibly the best part of the sales funnel is concentrated toward sales turnover. The online software tool is filled with resources that match their clients’ needs. By having all the necessary information on the main website, Tricentis eliminates the customers’ need to look elsewhere. If all information is focused in one place, the client is more likely to stay with the service rather than turn to a 3rd party.
Finally, the service offers demos and trials, easily accessible on the company main page. Similar to most other successful businesses, it makes a point of collecting their leads’ contact info by offering free reports or a chance to join a webinar.
3. Mailshake
Mailsahke is an online outreach tool that allows customers (usually businesses) to reach out to existing customers and establish a marketing email campaign. The service specializes in cold emailing, which is clearly seen through its main page and catchy slogan — “Put your email outreach on autopilot.”
When discussing sales funnels that work, Mailshake ranks in the top three. The service allows clients to book a free demo without an initial investment. Unlike a free trial, a demo allows a company to try out every feature in a tool and see if it’s a comfortable fit.
Mailshake focuses on client conversion by offering a full tutorial on their demo. A member of the Mailshake company will walk you and any other demo users through using the tool and answer any questions you may have. This sales funnel technique has proven to be a success in attracting small and medium businesses since it adds a touch of friendliness to an otherwise cold product.
4. Hulu
Another paid streaming service, Hulu, does a lot of the things that Netflix does. Unlike Netflix, however, Hulu needs to rely on good branding and marketing to get the word out. They advertise on social media, paid ads, and blog posts, which add a large number of prospects into their sales funnel.
Hulu has a free trial similar to Netflix, but with a twist. Depending on the type of package you choose (standard, premium, or custom), the length of the trial period shortens. This is a great idea since it allows customers to try out every service without spending a lot of resources. It’s sort of like giving free samples at an Ice Cream shop.
This sales funnel strategy works great for businesses that focus on subscription-based models. The added idea of expanding or shortening a trial period based on features included also helps reduce resource bleeding. Not every customer will be interested in a premium package, after all. The benefit of a subscription per month sales model is the large source of regular passive income. As long as the product doesn’t get worse, clients that are already subscribed are 90% likely to remain loyal.
All in all, most successful sales funnels follow similar logic — despite all differences in the products and services these businesses may advertise. Before creating your sales funnel, the final word of advice is to carefully consider your unique value proposition — what are you marketing, and who are your target buyers? The answers to these questions will make funneling the right customers easier.
Image source: pixabay.com
