Why Do I Need A Sales Funnel In My Business?
The sales funnel is a marketing process where you take prospects through a number of steps to get them familiar with you and your products so they feel comfortable enough to purchase from you. The funnel is a metaphor that's used to convey the various stages of the selling process.
If you’ve ever taken the time to study psychology and consumer behavior, then you know the people who’ve shown an interest in your product, they are the ones who are most likely to purchase from you again. If you spend the majority of your time and energy marketing to this group of people, then you will get higher conversion rates, because you are making the most of your time and resources, to get the highest possible return on investment.
A SALES FUNNEL WILL INCREASE YOUR SALES REVENUE
When you think about it, it's absolutely crazy not to offer people multiple products to buy.
Let's say you've got a report you're selling for $20.
If you leave it at that and get 500 sales, then you'll make $10,000.
A nice result – but don't you think that some of those people would be interested in another related product priced at $47?
and in turn, don't you think some of those people would be interested in buying another product at $497?
Of course many of those people WON'T be interested – but a proportion WILL.
So, if you don't have a sales funnel then you're going to miss out on a LOT of sales.
It's really that simple 🙂
USING A SALES FUNNEL WILL INCREASE YOUR CONVERSION RATE
While you move down the sales funnel, you’ll notice the number of people in each phase decreasing, but, more importantly, the likelihood that the people who are there will buy your product or service increases.
The nature of the sales funnels filters out the non-perspective buyers while building up the number of targeted prospects. As the funnel narrows, the end result becomes more targeted. As such, you can create a fertile environment with highly targeted customers, where you can focus your marketing efforts. By focusing your efforts on these people, you can appeal to their wants and needs, because they already have a higher chance of converting.
A SALES FUNNEL CAN HELP PREDICT YOUR SALES VOLUME
With a sales funnel, you can use each marketing phase to quantify the number of perspective customers, and then take the data to predict the percentage who will become actual customers.
For example, if Jane monitors her website traffic for six months and finds that she gets 5,000 visitors to her website every month, and out of those visitors, 40% of them sign up for her free product/email newsletter, that’s roughly 2,000 new subscribers per month. Of those 2,000 new subscribers per week, 5% of them end up becoming paid subscribers or purchasing one or more of her products.
With this information, Jane can then determine based on the number of people in each stage of the funnel, how many sales she can expect to make.
A SALES FUNNEL CAN HELP IDENTIFY MARKETING OBSTACLES AND DEFICIENCIES
Keeping a close eye on your traffic and statistics from your analytics program will help you keep track of what’s going on each stage of the marketing process. You can watch for trends in each stage over time, and as you notice these trends, you can pinpoint issues where you have room for improvement.
Using this knowledge, you can either make adjustments to your plan to improve it, or you can learn where you need to focus more of your efforts to improve your results. If necessary, you can change your strategy, or concentrate on a particular strategy to see what it does.
If Jane notices a change in response to calls to action during certain months, she can adjust the number of emails she sends to her list, either up or down accordingly.