Detailed research, multiple follow-ups, and extensive nurturing – losing a potential sale after all these efforts is a nightmare.
A simple solution to this widespread problem faced by sales professionals across industries is sales funnel management.
Managing a large volume of leads is impossible without an effective sales funnel in place. The lack of this well-defined structure can result in missed opportunities. Therefore, you must implement the best funnel management system and practices to improve your sales numbers.
But what does a sales funnel look like, and how does it work?
This blog explains what is a sales funnel system and its significance in great detail. It also describes how to create a sales funnel for your business. Moreover, the best practices listed here can help you get your funnel up and running in no time. So, let’s get right into it!
What is a Sales Funnel?
A sales funnel represents all the stages a prospect must pass through before converting into a customer. Essentially, it is a funnel-shaped structure that helps businesses capture, qualify and convert leads.
A sales funnel is wide at the initial stages, where leads are captured. It narrows as the sales cycle progresses and more leads drop. Usually, the funnel can be divided into three stages – top, middle, and bottom.
Difference Between Sales Funnel & Sales Pipeline
Before we go into more detail about sales funnels, let’s establish how they differ from sales pipelines.
Although used interchangeably, sales funnel and sales pipeline are far from being the same thing.
Sales funnel refers to the defined stages of your sales cycle, while a sales pipeline is a dynamic representation of available opportunities. Both pipelines and funnels represent different data types and should be treated as separate entities.
The sales funnel lists the stages that a lead has to go through before the final purchase. On the other hand, the sales pipeline carries more utility for your team since it helps track leads and provides an overview of the upcoming sales activities needed for conversion.
Sales funnel management involves tracking and optimizing the journey of prospective customers. Pipeline Management, on the other hand, is more concerned with getting qualified leads and maintaining the effectiveness of the sales process to convert these leads.
Importance of Sales Funnel Management
The sales funnel process helps businesses identify which stage of the buyer’s journey the prospect is in and what actions can move them along.
96% of people visiting your website are not willing to make a purchase right away.
However, this doesn’t mean that they will never convert.
You need effective nurturing for this conversion. A well-defined sales process can make this possible by helping you deliver the right message to your audience at the right time.
A sales funnel helps visualize how prospects move through your sales process. With tangible data of how many leads progress from one stage to the next, you can utilize your time and resources effectively.
Here are some important benefits of funnel management:
- The visibility provided by a sales funnel can be leveraged to improve your marketing efforts.
- One of the most significant advantages of sales funnels is that they prevent leads from getting lost in the process.
- You can reduce your churn rate with the help of a sales funnel by optimizing buyer journeys.
- With a consistent process in place, your sales representatives know how to approach the prospects at every stage. This improves team productivity.
- Sales funnels help improve your forecasts, discover roadblocks in the sales process, and make better business decisions.
- It helps identify actions that drive the most conversions.
- The best sales funnel helps find out which marketing channels generate the best leads, allowing you to allocate your marketing budget judiciously.
Stages of Sales Funnels
A sales funnel includes all the stages a prospect has to go through before conversion. The fundamental structure remains intact, while the names or number of stages of sales funnel may vary from one organization to another.
Simply put, the sales funnel system somewhat looks like this-
The prospect finds your business, evaluates your offer, and then makes the final decision.
Based on this, sales funnel stages can be divided into the following broad segments:
Regardless of your industry, the first step in the sales cycle is Awareness. Making your business discoverable can help you get access to promising prospects. You can accomplish this through various marketing channels, including advertising, cold emailing, surveys, social media, etc.
Prospective customers are on the lookout for products that can address their needs and challenges. It is crucial to grasp their attention at this stage and direct it towards your business.
Since the prospects are not ready to buy yet, the awareness stage should focus on educating them about what you do. You can offer how-to videos, whitepapers, blogs, etc., at this stage.
This stage is where prospects demonstrate an interest in your product or service.
Once the prospects have a better understanding of their own problem and how you can help them, it’s time to initiate contact. In the interest stage, the prospect is researching your product or service, along with considering other alternatives. Therefore, you must approach them with detailed content to help them make an informed decision.
The next stage is Consideration. At this stage, the prospect is evaluating the information to reach a decision. The consideration stage provides you with the opportunity to offer a unique proposition to your prospects.
You need to let them know about the value you can offer and what sets you apart from the competition. Sales calls and other methods of interactions such as seminars should be a part of the consideration stage.
After the consideration stage, comes the Decision stage. The result of all the funnel steps comes down to the action stage. At this point, the prospect decides whether they are going to make the purchase or not.
After the action stage, sales representatives can mark the deal as won or lost.
Even though the prospect has converted into a customer, your work is far from over. You must keep the customers engaged to ensure that you do not lose them to competitors.
Maintaining a post-purchase relationship can provide you with multiple upselling and cross-selling opportunities. You are likely to get better profits from retaining existing customers than acquiring new ones.
Common Sales Funnel Mistakes
Before getting into the process of creating a sales funnel, let’s take a look at things that usually go wrong with it. Being aware of these common mistakes and challenges can help you create a high converting sales funnel.
1. Not Investing in the Right Technology
Your tech stack is highly consequential for your sales funnel’s effectiveness. Choose the most suitable sales funnel management tool for your business.
2. Not Tracking Performance
Regular monitoring can empower you to optimize the funnel’s performance. Track relevant metrics using reports to ensure that the funnel is functioning properly. Eliminate any guesswork and fine-tune it to the best of your ability using this data.
3. Ineffective Lead Nurturing & Management
Lead tracking, routing, and management can improve the performance of your sales prospecting funnel. Furthermore, you must implement effective nurturing strategies to convert the leads in your funnel.
4. Not Aligning Sales & Marketing
Seamless alignment between your sales and marketing team can be a huge advantage for your funnel. Establish a clear definition of leads for both teams to boost your conversion rate.
5. Inadequate Sales Funnel Training
Sales representatives must be properly informed and trained about the various aspects of the sales funnel. Train your sales team in a way that helps them close deals more quickly by guiding leads through the funnel.
6. Not Beginning with Clear Goals
Finally, the most serious mistake to avoid regarding sales funnels is not setting expectations and goals. Keep crystal clear end goals in mind when creating and implementing your funnel.
How to Build the Perfect Sales Funnel
A clearly defined sales funnel can help deliver appropriate content to nudge prospects in the right direction. For instance, a lead at the top of the sales funnel can benefit from educational resources about the product and the industry. On the other hand, leads in the later stages would be more interested in how your business caters to their unique needs.
To build an effective sales funnel, you must:
1. Know Your Customers
Buyer personas are critical for building sales funnels. Be aware of your audience’s pain points, buying behavior, and preferences. This can help you include the most relevant stages in your funnel.
2. Create Landing Pages
A functional funnel requires a steady flow of leads. To acquire these leads, you must build effective landing pages. These pages should offer value to the visitors and seek their information to transform them into leads.
3. Understand Your Sales Cycle
Take some time to analyze your existing sales process.
Which stages result in the most lost opportunities?
What hampers the effectiveness of your sales process?
These are some of the questions that you should find the answers to. This analysis will help you determine the stages for your funnel.
4. Establish a Consistent Message
Come up with a consistent message to be relayed across to the audience through multiple channels. Make sure that every stage of your funnel aligns with your business goals and remains aligned with your value proposition.
5. Include Supportive Content
Your prospects seek solutions as they move through the sales funnel. Every stage of the buyer’s journey should meet customer expectations. Create engaging content for every stage of your sales funnel and craft drip campaigns to get in touch with the prospect at the most favorable time.
Pro-tip: Ensure that the prospects do not encounter any difficulties or delays during the sales cycle. Stay in touch with the prospects even after the conversion. This can help you retain more customers, enhancing your brand’s position as well as credibility.
Best Practices for Sales Funnel Management
A formally defined sales process can help your sales team achieve better productivity, leading to an increase in your ROI. However, the sales funnel has to be smooth and efficient to see actual profits from it.
Any leaks or any inconsistencies in your sales funnel can end up in lost opportunities and profits.
Here are some ways to optimize your sales funnel:
1. Score & Qualify Leads
More isn’t necessarily better when it comes to the sales funnel.
You must focus your efforts on leads that have a high likelihood of conversion. This requires you to score and qualify leads. Make sure that your organization has a clear understanding of what makes a good lead. Have a well-defined lead scoring system in place. By qualifying the leads that enter your sales cycle properly, you enhance the chances of having an improved bottom line.
This can also keep your sales funnel from clogging with unimportant leads, allowing you to focus your attention on important prospects. A clean sales funnel can be highly effective. Therefore, know which prospects carry more value for your business and prioritize them accordingly.
2. Find Bottlenecks
Indicators of issues with your sales funnel include the sales cycle being longer than average, most of your leads going cold, or a considerable drop in the conversion rate. If you notice such problems, you need to revisit your sales funnel and make the required changes.
Make a note of actions that drive the most conversions and try to identify what your sales cycle is currently missing out on. Track your sales efficiently and address any hurdle in the sales process immediately.
Review your sales funnel routinely to monitor its performance.
Track how the audience responds to your emails, landing pages, and other marketing campaigns. Pay attention to what fares well with your target audience and use this information to tweak your sales funnel strategy.
3. Improve Productivity With Automation
A study revealed that sending emails to prospects at the right time can improve conversion rates by 53%.
But how do you ensure that you reach out to the leads at the right time?
This can be simply done with automation.
With an automated sales funnel, you eliminate the risk of missing out on important opportunities. Relevant and personalized content can be shared with prospects automatically based on their respective actions. You can also automate tasks and reminders for your team members to boost their efficiency.
4. Use a CRM Tool
An effective CRM tool can considerably enhance the outcomes of your sales funnel. It can provide you with a central repository of sales data, helping improve customer relationships and grow sales. You can use it to track leads, manage emails, monitor team performance, and analyze business trends.
Furthermore, an intelligent CRM tool can help you make accurate forecasts and predictions. This can help you allocate your time and resources more efficiently. Additionally, it can help you enhance your team’s productivity with activity tracking and automated reminders.
Make sure to keep your business requirements in mind when choosing a sales funnel management CRM.
5. Deliver the Right Message
Let’s approach this from the customer’s perspective.
Imagine you have encountered a challenge and are looking for solutions. At this stage, you require more information about the problem. However, during the initial call with the sales representative, you find them trying to sell you the product right away, without any information on how it falls in line with your requirements.
You are most likely to never return to that business.
This scenario is a perfect example of the damage that not delivering the right message at the right time can do. A sales funnel can help your team offer valuable and relevant information to the audience based on their current stage.
6. Nurture Leads Effectively
Nurture your leads effectively by providing appropriate assistance and personalized content at every stage. Actively engaging with the leads can help you ensure that they do not slip through the cracks. You also need to provide a clear CTA for every stage.
To get the proper traction, you need to offer content based on the current position of the sales leads. This can help avoid any frustration from the customer’s end and help you drive more conversions.
Track Prospects Effortlessly With Your Funnel
Over 79% of marketing leads don’t make it to the conversion stage.
Only with a well-laid-out sales strategy can you ensure that most of your leads convert into customers. This systematic and strategic approach to sales can prove to be instrumental in keeping things organized and aligned with your objectives. It can help achieve better sales productivity, and consequently, lead to a significant increase in your revenue.
An optimized sales funnel management strategy can play a substantial role in boosting your business growth.
With a sales funnel, you can easily gauge and meet customer expectations. An effective CRM such as BIGContacts can enable you to take much better control of this funnel. It can provide you with improved visibility into your sales opportunities, so you can work towards closing these accounts easily. Investing in a powerful sales funnel system like BIGContacts can keep your sales numbers soaring high!