How To Build An Effective Sales Funnel

One of the most common questions that new business owners and entrepreneurs ask is: What’s the most effective marketing technique that will get me leads?

However, this question is almost impossible to answer. It assumes that there is a technique or an approach that will immediately turn a complete stranger who has never heard of your business into a paying customer.

Even if you invest heavily in your marketing efforts to drive qualified traffic to your website, it’s unlikely that these visitors will buy your product or service right away. Instead of hopelessly looking for a technique that will instantly bring you customers, it’s better to consider how your business presents itself and guides your prospects to the sale.

You will quickly find that this leads to the creation of a sales funnel.

What is a sales funnel?

It’s hard to come up with a definition that covers all the intricacies of a sales funnel. We can represent it as the journey that your prospects pass through to become paying customers.

For example, your business markets its products or services to thousands of people, but only a fraction of them will interact with the ad and provide you with their contact information, becoming leads.

Further, only a small percentage of the leads will actually convert to paying customers. This is why the strategy is called a sales funnel. You need to funnel prospects down to acquire new clients and grow your revenue.

Why is a sales funnel important?

A sales funnel is important because it adds structure to your business processes. Without it, attracting new customers usually comes down to shooting in the dark and hoping for the best.

To succeed, a business needs a highly structured process that will eventually turn strangers to customers. Otherwise, the sales will depend on sheer luck and word of mouth marketing. Needless to say, that’s far from the optimal growth strategy for any type of business.

Similarly, a sales funnel is important because it lets you track and analyze the behaviour of your prospects and leads. This helps you identify potential weak points and improve your organization to capture more leads and close more sales.

In conclusion, a sales funnel is important because it:

• Allows you to choose the marketing strategies and optimize them for the specifics of your business
• Helps you relate to your customers and track their behaviour
• Generates more revenue by allowing you to capture more leads
• Provides you with a competitive advantage over other businesses in your niche.

However, it’s important that you understand that a sales funnel isn’t a fixed solution that will help your business grow. It’s actually a highly flexible inbound marketing technique that will require a lot of testing and optimization before it returns notable results.

The four stages of a sales funnel

A sales funnel can comprise of a number of different phases, but each funnel relies on the same basic stages that cover brand awareness, business consideration, product or service interest, and consumer action.

Now, let’s cover each stage separately and explain how they play into the funnel and direct the sales process of a business.

Stage 1 – Building awareness

In the first and the largest stage, your business is dealing with unknown people who are interacting with your product or service for the first time. They may or may not be interested in your business and this is why you will not be spending much money per person in this stage.

Instead, you should focus on casting a wide net and reaching the highest possible number of people to build awareness. The precise size of your audience depends on the size of your market and the marketing channels that you’re using.

Stage 2 – Business consideration

In this stage, your funnel is narrower and you should invest more per person. If the first stage contained the entire market, the second stage contains only people who are prospects, which means that they’re undoubtedly interested in the product or service that your company is offering.

They may have even interacted with your website or representatives, or left their contact information. This is why it’s essential that you invest more heavily in them – they’re almost halfway down the funnel and it’s up to you to direct them towards the final sale.

Anyone that doesn’t need your product or service, anyone that doesn’t have the budget for it or isn’t the decision maker should fall off in this stage.

Stage 3 – Specific product or service interest

As you may have assumed by now, stage three is even narrower than the previous stages and it’s the first stage in which the prospects are definitely interested in your specific offer.

Here, you’re dealing with people who are ready to buy, but they’re just not yet sold on your product or service. They represent qualified leads and you should invest handsomely to capture them.

If the first stage had thousands of people, the third stage will only have a handful of people. These people have already engaged with your business, either through email, social media or brick-and-mortar shops. They may even be following your website and waiting for the next big sale to hit before they buy your product or service.

The majority of people in stage three should pass through stage four as well. If that is not the case, your funnel may not be functioning properly and you may have a problem.

In case you’re missing out on a relatively high percentage of qualified leads, you will need to reconsider how your business presents itself to potential customers. Assess your competition and try to identify weak points.

For example, you may be asking for too much information or the process of sale closure may be too complicated for your target audience. This means you need to perform A/B testing and ask for customer feedback to better gauge how you can improve their experience with your business.

Stage 4 – Consumer action

This is the key part of the funnel. In stage four, all customer objections have already been cleared and the customer is ready to take action and purchase your product or service.

More importantly, they have everything they need to make a purchase decision and act on it. This stage is usually a formality, in which you sign the deal, get the payment information, etc.

If you’re losing customers in stage four, you have a major problem with your checkout process and you need to address it as soon as possible.

10 tips to build an effective sales funnel

Now that you know what a sales funnel is, why it is important and how you can structure it, it’s time for you to learn how to optimize your funnel and create a more effective solution for your business.

If your sales funnel isn’t performing as well as you had hoped or if you would just like to learn what marketing companies do to create better sales funnels, we advise you to go through the 10 tips listed below.

Each of them should help improve a sales funnel, if only marginally. Combined, they will develop a highly functioning funnel with incredible conversion rates.

• Create a blog and publish regularly. A blog is a great way to organize all the important information that your potential customers should have. It will also help improve your SEO and drive more traffic to your landing pages.
• Use a variety of marketing channels. The most successful companies utilize all types of marketing campaigns to drive awareness of their services. This includes on-page and off-page SEO, mailing campaigns, cold calling and pay-per-click marketing.
• Analyze your marketing campaigns. To improve the use of your marketing budget, you will need to constantly analyze your marketing campaigns. Identify the best performing campaigns and allocate more funds to them.
• Ask for feedback. You want your sales funnel to be customer-centric and the best way to ensure that you’re focusing on your clients is to ask them for feedback. Carefully evaluate their responses and adjust your funnel accordingly.
• Include multiple call to actions within your funnel. Many of your visitors won’t be ready to make a purchase. To keep their attention and capture their email addresses, create multiple call to actions with free offers.
• Use re-targeting to capture more leads. Re-target the website visitors that didn’t convert during their first visit. Most people will visit a website more than once before they make a purchase.
• Develop a referral or affiliate program. This is arguably the easiest way to acquire new customers. Make sure to develop and advertise your referral or affiliate programs to your existing clients and motivate them to recommend your services.
• Work on your brand authority. Most people prefer to stick with the largest brands. To ensure you’re constantly acquiring new customers, you need to build your brand by investing and sponsoring industry events and conferences.
• Nurture your leads. Never give up on a lead, unless they unsubscribe or request that you stop contacting them. If they left their contact information to you, it means they’re interested in your product or service. Nurture the leads by sending them monthly or weekly newsletters and promotions.
• Take immediate action. If you’re developing a sales funnels, you cannot allow yourself to waste precious time. Take immediate action and create a plan to slowly and carefully address all issues and optimize your funnel.

Now, you have everything that you need to start working on your sales funnel and improving its conversion rates. However, if you need any additional help with expanding your business, feel free to contact us.

Our team will be more than happy to help get your project off the ground with a unique offer for a versatile CRM system that can help you build sales funnels, landing pages, marketing automation and much more.

Ready to try Simply CRM? Schedule a free trial and start exploring a new way to manage and run your business.