Will Building a Sales Funnel Double Your Profits in 2018?
Reading Time: 6 minutes According to a Demand Gen Report, 95% of buyers choose to go with a vendor who provided them with the content to move through each phase of the buying process. A vendor will only be able to produce the right content at the right time when she is using a sales funnel to push the prospects through the buying stages.
What are the sales funnel? Sales funnels are based on the classic marketing hierarchy of – Awareness, Interest, Decision, and Action, popularly called the AIDA.
HubSpot has been a heavy influencer in bringing the sales funnel definition to masses. According to HubSpot, a sales funnel is a process of pushing a lead through the stages of Attraction, Conversion, Closing, and Delight.
On every stage, the lead gets promoted into the role of Strangers, Visitors, Leads, Customers, and Promoters after the brand carries out certain activities successfully.
Now that you know what a sales funnel is in the simplest words, here is why you need one in 2018:
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Table of Contents
#1. It helps you differentiate between marketing and sales activities.
Many businesses have a combined sales and marketing team. This might work for a small scale business but as the operations grow, the roles of marketing and sales completely change.
In the simplest terms – marketing brings leads and sales are supposed to convert them. All lead generation activities come under marketing and all conversion activities come under sales. When you use a sales funnel the objectives of marketing and sales teams get clearly bifurcated.
This helps in multiple ways – primarily it helps you ascertain the individual performances of the sales and marketing teams, which will help you identify the inefficiencies in the process. Marketing may bring quality leads and sales might not be efficient enough to convert them and vice versa. In anyways, you will know where to hit to make the process work.
In addition to this, the sales and marketing bifurcation will help you in providing performance-based remuneration, better collection of data on each level of the customer journey and help your team focus on their expertise under their scope of work.
#2. You make your sales a more efficient process.
In addition to this, if a live chat solution is integrated with the sales funnel it can help in on the spot conversion, better customer experience, decreased bounce rates and increased engagement.
28% respondents to this research said that closing more deals was their top priority as sales executives and leaders. More than anything else, a sales funnel helps you close more deals because:
- It makes you qualify leads to ensure that you only pursue what you can convert. Sales executives spend a lot of time and resources in conversion; if the lead is not converted all the resources go in vain. Thus it becomes imperative to pursue only the leads which have a high probability of converting.
- Since you can bifurcate the quality of leads, you get to decide which leads you to want to pursue and which are a bit too resource consuming for your process.
- You have an organized way to differentiate leads along with an action plan to approach each category. You will know which leads require more nurturing and which leads are hot enough to be pitched with the product. Each sales executive, with the help of the funnel, gets a clear action plan to be leveraged to push the lead into the next level of the customer journey.
- You are able to quantify the efficiency of your sales process. At the initial stages of the sales funnel are the leads or strangers entering the customer journey. At this very stage, the sales team and the marketing team can determine the quality of each lead depending on the fulfillment of certain parameters. Hence, in the very beginning, there is a benchmark set up for the sales team depending on the quality of leads it has received. This way, the efficiency of the sales process can be easily quantified.
You become a customer-centric organization. Jeff Bezos once said, “We’re not competitor obsessed; we’re customer obsessed.” This radical customer centricity made Amazon the giant it is today. Many sales teams do not focus on customer centricity.
Sales teams are working where the tarmac hits the rubber – the market. Hence, they become a bit too carried into market dynamics and forget that the customer is looking for the best value and not necessarily the best prices. Sales teams often find themselves trying to beat the offers or the prices of the competitors with the help of deep discounts, extended warranties and what not. Although such tactics may help in the short run, they are not a healthy strategy for winning customers and retaining them. There can always be a better offer in the market.
When sales funnels come into the picture, sales personnel get to interact on a deeper level with the customer and the entire focus shifts to solving the customer’s queries and providing solutions to their problems in order to help them navigate through their sales process. Not only does this help the sales executives understand the customer needs closely but it also helps them pitch the brand as a problem solver instead of just another shop for the usual goods.
#3. It becomes easier to track the performance of your sales team.
Sales performance tracking becomes easier. Not only sales but one also gets to see the performance of the brand’s marketing efforts. This can be done because every single lead goes through the marketing channel and then is passed on to the sales channel. Hence, depending on the conversion rates on each stage in respect to the quality of the leads, it can help in understanding the employee performance in the right context.
This helps in two ways- one, it helps in identifying the best performers who can further set the best practices standards within the organization and who can be used as benchmarks; two, it helps in showing which sales rep might need more training.
According to a SiriusDecisions report, 73% of organizations use classroom training for new sales reps, with the average of 13.3 days for the top performers. Once their results are out, the business can help nourish its sales talent within the organization by providing apt training.
#4. Your end focus becomes creating promoters, not just customers.
The sales teams are usually paid on the basis of the business they bring in. Most of the sales executives take this as the opportunity to bring in new business because there is no extra initiative to retain older clients. As it is known to everyone in business, retained customers are more valuable than new ones. A customer who has bought from a business once has 27% chances to buy from the same business again. When the same customer has bought from the business thrice, the same percentage goes up to a likelihood of 54%.
Most sales processes end the moment a deal is closed. It is imperative to keep the customers turning into brand evangelists and promoters. With a sales funnel in place, the brand gets to interact with the customer on a deeper level. This engagement helps because by the time the customer has bought something from the brand she already has the brand positioned as a positive solution in her head. This is exactly what is required for a customer to turn into an evangelist.
Retaining customers has obvious benefits in the form of repeat purchases but the benefits are not limited to that. Brand evangelists make the brand more reliable, increase its brand equity and provide with free word of mouth.
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