F is for Funnel – of the Sales Variety
Okay, I’m cheating a bit with the alphabet. But the Sales Funnel is so important that I didn’t want to wait till I got to ‘S’ before dealing with it.
Especially as S also includes important words like ‘split testing’ and ‘social proof’ that need to be dealt with. So, for today, F is for Sales Funnel.
The sales funnel applies established process engineering principles to sales leading, inevitably, to better results.
Breaking down the sales process into a number of steps enables the merchant to easily manage each step in the conversion process and progressively improve the performance of each step and of the overall process thereby leading to increased profits. This is called a ‘sales funnel’
The process starts with a low cost, easy entry product or service (often referred to as the front end) and then moves the customer progressively to higher value products (the back end – of which there may be several layers).
To be successful the merchant must provide offers that match the customers needs and willingness to pay. i.e. they must provide a perceived value for money.
The advantage for the merchant is the ability to progressively test each step to improve the conversion rate of that step, i.e. it’s effectiveness in moving the customer on to the next stage, with the intention that the accumulation of small gains at each step (optimisation) will amount to a substantial improvement in the total result.
While ‘sales’ has traditionally been surrounded by a good deal of mystique the reality is that human psychology including the reaction of prospects to offers is increasingly well understood. This has been particularly aided by the increasing amounts of data arising from online transactions where data on customer reactions is particularly easy to gather.
Although the sales funnel is applicable using any sales method, it is the speed and automation of online marketing that makes the application of the sales funnel process so effective online leading to quicker progress and bigger profits.
The initial offer and each progressive ‘upsell’ to a higher value offer can be designed in advance. In addition, ‘downsell’ offers can be built in to the process to be presented when the prospects backs away from the next higher offer but may still be tempted by a package at a lower price.
Split testing of each step in the process can be built in to the development and continued throughout the life of the product offer.
Once established and working effectively the sales process becomes a fixed, robust and well proven element of the business.
The owner can then focus the majority of their effort to the marketing process by generating more leads to enter the sales funnel (maximisation) in the certain knowledge that every lead entering the sales funnel process will produce a known value of revenue and profit.
Applying the Sales Funnel to your local business
Even though many local businesses deal in physical products and services and have ‘traditional’ marketing methods built in to their DNA, nonetheless, an understanding of the principle of the sales funnel can transform their results.
If you would like some no obligation help in understanding how the Sales Funnel can be applied to your business then give us a call on 01924 459244.