Why Does My Business Need a Sales Funnel?
Sales funnels are one of the most important things your can build for your business.
If you aren’t sure whether or not your business needs a funnel, you’ve come to the right place. Let me first start off by answering the question of whether or not you need one. YES. If you are a business, you need a funnel.
Who needs a sales funnel? Everyone.
Why does your business need a sales funnel? That’s easy: to make sales. If you are not collecting leads online, you need to be doing so. If you are collecting leads online but don’t know what to do with them, you need a funnel in place to engage with those leads, and essentially, make sales.
Here are the top reasons you need a sales funnel for your business:
1. Sales funnels exist to help people move through the customer awareness timeline.
The customer awareness journey goes like this:
This customer awareness timeline is applied to the sales funnel with a corresponding stage for each step.
So let’s start with the basics. If you don’t know what a sales funnel is, it’s a lot like the traditional kitchen gadget you’re familiar with. It starts off with a wide mouth at the top of the cylinder that collects whatever substance you are pouring into it. From there, it continually gets more and more narrow until the substance drips through a skinny point at the bottom.
If you apply that visual to the sales process, it goes like this:
At the top of the funnel, numerous visitors can enter in. This part of the sales funnel is referred to as the Awareness Stage. Potential customers will start to become aware of your product, whether they came from an enticing promotional offer, free download, or something else that caught their attention and brought them into your funnel. However, they are still unaware that they have a problem and that you could potentially solve that problem.
In the upper-middle section of the funnel is the Interest Stage. The people who progressed on from the Awareness Stage that become interested in your product or service are now here. The potential customer is now problem aware, meaning that they now understand they have a problem and that your product or service offers a viable solution.
In the lower-middle section of the funnel is the Decision Stage. The people who’ve moved on from the Interest Stage have now dropped into this section after becoming solution aware. These people are the ones who found your product and realized that they have a problem that you can solve and are now making a decision of whether or not they will purchase it.
If those prospects have moved into the bottom of the funnel, they’ve made it to the Action Stage. This is where they have become product aware and they actually purchase your product in order to solve their problem. If you have successfully brought people all the way through to the bottom of your funnel, you have achieved the goal of the sales process.
If you’re really, you’ll have customers who are considered most aware. These are the ones who know about your product or service, have purchased before, and are likely to keep coming back for more. They are your brand advocates.
A sales funnel incubates people through this entire customer awareness journey. It also gives you the ability to create multiple touch points that are relevant to the place people in.
For example: if a prospect is in the Interest Stage and they are problem aware, that means they have realized they have a problem and that your product could be a solution. So, your messaging should include things that twist the knife on their pain points.
2. Having a sales funnel means building an asset that your business owns.
In this case, the asset is the attention of the people on your list. Whether it is through email, chatbots, social media, SMS, or something else. All of these people on your lists have given you permission to market to them, and there is a lot of power in that. You audience is your company’s most valuable asset, and owning that asset is priceless.
By having an audience of people who have opted into learning more about your business, you’ve been given permission to communicate and engage with them as they navigate through the customer awareness timeline. Throughout this process, you will be able to convince them that your product is the best solution to their problem.
Let’s say that you have someone that downloads a lead magnet from your website. Ideally, you want that person to eventually lead into your coaching program. So, they go through the lead magnet, and then later on you make an offering and they don’t purchase. With an online funnel, you can continue to communicate with them. So, the fact that they didn’t buy your product means they’re not at that stage of the customer journey yet. On the bright side, you can now continue to nurture them for as long as you need to, until they either decide, “Hey, this offering is not for me and I don’t want to engage with this brand anymore.” Or, eventually they will purchase your product.
Having the ability to engage and communicate with your subscribers at all stages of the customer awareness timeline had several advantages.
According to a Salesforce and LinkedIn study, the average B2B company has a database of 50,000 individuals and spends an average of $150 to acquire a single email address. This means the email database (the owned audience) alone is worth $7.5 million, likely making it the largest asset under a marketer’s control, and possibly the company’s largest asset.
The cost of building this audience shouldn’t be looked at as an expense, but rather an investment. Nurturing that audience is important for building brand your credibility and authority. By having an online sales funnel, you will build an asset that will continue to help your business grow.
3. Sales funnels make it easier to stop chasing bad leads, and to go after quality leads.
Having a sales funnel setup means that you’ll be able to score your leads in terms of quality. Lead scoring is the method of assigning value to leads based on their engagement behavior and demographics. You can score your leads based on various attributes like the information they’ve submitted in a survey, if they are a recent website viewer, or if they’ve made a purchase in the past.
By having a sales funnel set up, you are giving yourself the ability to focus on higher quality leads that are more likely to purchase from you. You will have the opportunity to ask the customer to commit to a higher level of interaction if you include steps that offer things like phone consultations or product demos.
If you’re a software company and a prospect is willing to set up a 30-minute demo walkthrough with your business, they are more likely to buy from you than someone who downloaded a PDF about the features and benefits of your software.
There are numerous reasons why your business should have an online sales funnel. Having one in place is important for success in both the B2B and B2C spaces.