Imagine putting months of hard work into curating a product only for it not to be sold. All the elevator pitches, worked-up charms, and demo conversations down the drain right at the end.
We’ve been there. We get it.
But here’s the thing: over 40% of salespeople say that the most challenging aspect of any sales process is prospecting. Spending time with a potential customer only to have not made a sale, in the end, is just part of the game. Whether you're a part of a small business or a well-established company, it is a reality that leads drop off along the path that goes from the first contact to the sale going through. It probably has nothing to do with your sales acumen.
Potential customers dropping out of a sales process without making a purchase is something that cannot be avoided entirely. However, what if you could narrow the gap?
The good news is that you can. It's probably unlikely that you will ever move all leads through the sales process without any drop-offs, but you can certainly optimize the process so that you reduce the number of drop-offs. For that, however, you’ll need to understand when and why prospects are dropping off.
A sales funnel helps you get this vital insight by dividing the sales process into various steps.
What is Sales Funnel?
A sales funnel represents a prospect’s journey towards making a purchase. Like actual funnels, a sales funnel works as an inverted pyramid shape. The structure reflects the size of the audience in every section of a sales funnel. When someone responds to an advertisement or clicks on a post and arrives at your website landing page, they stand at the topmost part of the funnel. Selling occurs at the bottom of the funnel.
Sales Funnel Stages
Prospects begin their journey through the various stages of a sales funnel from the moment they first discover your product or service to the time they purchase it (or do not). There are four different stages of a sales funnel.
In the awareness stage, customers first learn about your services or products. Did you know that 4 out of 10 sale reps have closed 2 to 5 deals directly owing to social media? It is possible that your potential customers learned about you from referrals or social media, read your blog, advert, webinars, or typed the landing page of your website into the Google search engine. Marketing efforts on a target audience to provide personalized adverts according to the assimilated information can not only effectively increase sales but also eliminate a customer's perspective of an "unnecessary advertisement."
You’ve got their attention, and that’s already a leap. Now it is about holding on to that attention and making sure it culminates in a sale.
In the interest stage of the sales funnel, prospects will consider the issue they are attempting to resolve and carry out a market study to confirm that your service is the ideal remedy. A good sales rep will capitalize on the new lead’s interest and find out about the issues that the lead is trying to resolve to build a convincing argument in favor of the product or service that they are trying to sell.
In the decision stage, qualified leads will investigate pricing, and they might also scour the market for better deals. Throwing in value additions and allowing for flexible payment schedules might help to persuade prospects to make a purchase. Sometimes - when it makes business sense - you might also have to offer a discount or additional freebie to match or better a rate being offered by your competitor.
- Take Action
At the next stage, you can celebrate because your prospect is ready to turn into a customer and sign up for your product or service. It's not, however, time to relax. You need to make sure the product or service delivery goes through without a hitch (or that your company meets whatever commitments you have made to the customer).
Avoid disappearing on the customer at this point, especially if they have complaints or questions. If you intend to sell to this prospect once again, you need to uphold the relationship of trust that you built through all the stages of the sales funnel. Stay in the loop even if they must be passed to a different department for onboarding or product/ service deployment.
That’s the end of the funnel, but it's not the end of the road.
A related concept - sales flywheel
It might also be helpful at this point to juxtapose the concept of a sales funnel with the related concept of a sales flywheel. A sales flywheel is very much like a sales funnel, except that there is no start or end to the customer’s journey. You might have turned your lead, John Smith, into a customer today, but he’s still a prospect for other parts of your product or service offering. John Smith is also still in the mix and still needs to be impressed because you want him to stay loyal and also advocate your product or service to other people.
9 out of 10 companies utilize more than two lead enrichment tools to know more about their prospects. A flywheel also helps sales teams to not view drop-offs as drop-offs. You don’t give up on them because they are still on the wheel.
Sales Funnel Benefits
When you study and improve upon your sales funnel, you can increase lead generation and client conversion rates. Each level of the funnel allows you the opportunity to check up on the effectiveness of your game plan and also acts as the yardstick to business productivity. This is possible as you're able to analyze how many leads or prospects have completed their sales journey and whether your tactics are working.
These are a few of the primary sales funnel benefits:
- Facilitates Upselling
Businesses use the strategy of upselling as a lead magnet to sell a variety of things directly to customers and push them into another marketing funnel. When done properly, upselling can significantly improve your ROI (Return on Investment). Furthermore, if the upsell is beneficial and relevant to your customer, you will further foster brand loyalty.
- Determines and Fixes Problematic Stages
A sales funnel gives you visibility into where your highest drop-off rates are so that you can find the problematic stage in the sales process and figure out how to retain prospects better. Every stage is a micro-conversion that can be improved to enhance the conversion rate at the end. If one of these phases has a larger drop-off rate than anticipated, it can be examined to determine what is wrong and tested out for potential fixes. By showing how many people leave the funnel at each stage, you can see the flow of customers across your website and identify pages with high drop-off rates.
- Focuses on Customer Loyalty and After-Sales Service
A sales cycle is segmented and standardized so that insights can be gathered on the practicality of each funnel stage. The optimized management of every customer's journey improves your relationship with consumers. A sales funnel can also help gather your consumer's contact information, provide them incentives like discounts and bonuses, and ultimately raise your business' worth.
What Else Can You Do?
You can first try to not confuse a sales pipeline with a sales funnel. Both marketing concepts are closely woven together as they include the sales process of customers; however, they are fairly different things. So to make your comprehension of a sales funnel clear, you need to know exactly how different the sales pipeline vs sales funnel is.
A sales pipeline is the sales process that involves you, the sales reps, holding your prospects' hands and guiding them through their journey to become your consumer. Therefore, the stages of a sales pipeline are outlined in such a way that all leads convert into a consumer. Only when customer retention has been carried out successfully the sales process of a pipeline is complete. Say, for example, if the journey is a blueprint, then a sales funnel acts as the device to calculate the design of the blueprint, which represents the leads at each stage of a sales pipeline.
Your paying customers can tell you everything. From complaints about poor customer service to unhappiness with a product or service, hear them out. For a lot of companies, the struggle to alleviate customer pain points has sometimes led to uncovering new ideas for innovation. The greatest way to determine and address customer pain points is to listen to what they have to say.
The Bottom Line:
Marketing and sales automation software can plug most sales funnel holes and turn your near-misses into successful sales. They might turn your cold leads and give you a tonne of opportunities to boost your ROI. If you're searching for your next big business break, you must understand that traditional sales training programs aren’t enough.
Wingman’s real-time sales coaching and AI-powered insights can provide you and your business the boost you've been looking for. It helps you personalize your customer relations by integrating your CRM, dialer, and business communication channels like Slack. You get everything in one place - that toom in an insight-based manner. Wingman’s sales intelligence enables you to conduct better, more data-driven marketing campaigns. Book a demo today to kick off your AI-powered sales journey.