A sales funnel is a metaphorical description of the steps or the approach taken by the sales team of a company to sell their product or service. It starts with the preliminary contact and ends, hopefully, with a sale. The sales funnel acts as a visual representation of the lead status which helps the salespeople make forecasts and take steps to move the leads further down the funnel. It also gives the organization insights into the conversion rate and the sales team’s performance.
At the topmost and the widest part of the fennel come the leads while the next level belongs to the prospects or qualified leads, those who are interested and have the wherewithal to purchase the product. The narrowest and lowest part belongs to the customers, those who have actually made a purchase.
So, what does this all mean? How does the sales funnel help anyone? And how does one go about creating a sales funnel?
As mentioned earlier, a sales funnel is the graphical representation of a company’s sales process. It helps organizations design a collaborative, scientific, and systematic approach to converting their leads into customers instead of a chaotic sales process where one hand does not know what the other is doing. This is especially important for large, sales-driven organizations which have an army of sales people among whom collaboration is required.
Building a successful sales funnel is no easy task, though. The first step is to clearly define the following:
Lead generation channels: The lead generation channels, be they trade shows, direct selling, social media, or inbound marketing techniques, have to be clearly defined. The topmost part has to be as wide as possible so as to create enough volume as we move down the funnel.
Lead nurturing techniques: Unqualified leads do not do much for the business. Organizations have to actively engage with their customers to qualify and nurture their leads to convert them into customers.
Measurement and analysis: Measure the performance of each activity in the sales process. Assign metrics like number of clicks, number of enquiries, conversion rate, and time taken to move from one process to another to exactly understand how each activity is performing. Set benchmarks for future performance.
Execute and Iterate: Once you execute your generation or nurturing activities, keep iterating till you plug the leaks in the funnel. Leaks arise due to lack of interest from the buyer, lack of follow up, or inability of the buyer and seller to come to a consensus on the terms. Leaks are inevitable but they must be contained as much as possible.
In conclusion, it has to be remembered that sales funnels are only as good as the people and tools you use to create them. Improper processes help no one. If you want help creating or optimizing your sales funnel, deploy customer relationship management software to implement best practices and gain best results.