One of the most common mistakes we see small business owners make is that of trying to go from a first contact directly to a sale. A straight line may be the shortest path, but that doesn’t matter if the path is rarely (if ever) taken. With the number of businesses out there and the access buyers have to online research and DIY tools, a direct sale is hard to come by these days. The way to increase your sales and get more customers is actually to create more steps between the first contact and eventual sale, as counterintuitive as that may seem. Read on to learn how to do just that, by creating a basic sales funnel.
What is a Sales Funnel?
Whether you’re meeting someone in person for the first time, or you have a potential buyer who has arrived at your website for the first time, it’s critical to give that person some space between becoming aware of your business and actually becoming a customer. This is one of the basic marketing concepts for businesses. A sales funnel represents that space between awareness and sales.
Sales funnels apply to just about any business that has some form of a sales process. However, there is no one-size-fits-all sales funnel. Each industry has different sales cycles depending on the product or service offered, the target audience, and many other factors. In some cases, a sales funnel doesn’t apply, for example with a lemonade stand or street vendor that goes straight from awareness to sale.
What’s the Difference Between a Marketing Funnel and a Sales Funnel?
What’s the difference between a sales funnel and a marketing funnel? Well, the two aren’t entirely the same, but they’re also not completely separate. As you know, sales and marketing go hand in hand, and they both strive to connect with your target audience at various stages of their engagement with your business. For some companies, the sales and marketing funnel are one and the same. For others, marketing is at the top of the funnel with sales at the bottom. Yet for others, the sales funnel begins where the marketing funnel ends. Marketing influences sales at every stage of the buyer journey, including stages after the purchase. Sales impacts marketing in the same way.
In sum, sales and marketing may form one or two funnels depending upon your sales process.
The Basics of a Sales Funnel
The core concept behind a sales funnel is giving your potential customers space to make their own decisions. A business without a sales funnel mindset often pounces on potential customers immediately upon contact and ask them what they want to buy. This creates undue pressure on the person and is likely to send them away. People need time to browse, try out a few things, and gather information in order to make a decision. You can provide the means of making the decisions to engage with your business, but you cannot make the decision for them.
Your potential customer should be moving from one stage in your funnel to the next, on their own accord, because they have made the decision themselves based on their understanding of the risks and benefits at each stage.
Stages of a Sales Funnel
There are countless ways to define a sales funnel, and every business will be different, so in this section we’ll just go over three basic stages: Awareness, Nurture, and Sale.
Sales Funnel Stage One: Awareness
The first step in getting more sales for your business is generating awareness.
How to Generate Awareness
Potential customers can gain awareness about your business in a number of ways, such as by finding your website online, meeting you in person at a local or marketing event, or seeing your ad in a newspaper. A mix of online and offline marketing activities is the best way to get more eyes on your brand.
What to Do with Awareness
The first time someone becomes aware of a business they are usually not ready to buy (that is why it is called “awareness” and not “purchase”). They need time to understand what you do, whether they need what you offer, the quality of your offering, and other information that will influence their decisions.
Therefore, asking them right off the bat if they want to buy your product is your way of trying to go from the first contact directly to sale. Instead, look to encourage them further down the funnel. Offer them something free or valuable in exchange for their contact information, or provide them with an invite or coupon that will encourage them to return to you in the near future.
By doing this, you have not only created a middle step that is of less risk to your potential customers (which encourages them to continue engaging with you), but also they have willingly entered into that step.
Sales Funnel Stage Two: Nurture
The point of getting a potential customer’s contact information is to be able to proceed with the second stage of your sales funnel: nurturing.
The Purpose of Nurturing
Nurturing is the period of time during which a potential customer gets the information they need about your business in order to decide to make a purchase. However, you cannot rely on your leads to seek out this information, let alone remember your business from that first encounter. It’s your job to provide that information through nurturing.
Nurturing your leads is not reminding them that you exist and that they should choose you. It’s staying top of mind through the provision of valuable information (and quality products and promotions). Remember, you’re not trying to trick someone into buying. You’re building a relationship with them so they can learn to trust you and come to understand your value to them.
How to Nurture Leads
For every business, the tactics of nurturing will be different. You could send monthly newsletters, share helpful blog posts, make sales calls, or provide tips and tricks via your social media accounts. Nurturing could take weeks, months, days, or hours. Regardless of the tactic or the duration, the concept of nurturing remains the same: provide information or assistance that moves them closer to a sale.
Nurturing is not obnoxious or pushy. It’s a gentle push or piece of guidance that can be the difference between someone who forgot about your business and someone who completes a transaction.
Sales Funnel Stage Three: Sale
After a courting period during which a potential buyer has been non-aggressively given information about your business and has willingly consumed it at their own pace, they will be ready to make a purchase decision. Yet just as with the above stages, your potential customer still has the freedom to decide whether their decision is to purchase, to not purchase, or to purchase later.
To increase actual sales in the sales stages of your funnel, you must pay strong attention to detail. These are the stages when the potential customer will be looking for specific information and may have specific thoughts, doubts, concerns, or needs. Using conversion tools like landing pages and tracking behavior in your sales funnel will help you to increase the number of people who convert into customers from your sales funnel.
While a straight line is the shortest path, the reality for business is that you will lose customers by trying to skip the important steps in between. Using the concepts, examples, and tactics above, you should be able to create a funnel that will help you convert more casual shoppers into happy customers.