Sales funnel, still a young fire or an old flame?
What is a sales funnel?
According to infusionSoft, it is an upside down pyramid used to represent the journey of potential customers in becoming actual customers
The 3 main parts are
1. Marketing
2. Sales process
3. Customers
The phrase as a funnel is used to the fact that people dip in and out at various stages so have the potential of 100 customers slowly trickles down to 10 filtering them down
Reason for using this tool
According to mind tools there are various reasons for using this tool
1. To predict the number of prospects that will later become customers
2. To identify problems in the sales pipeline and take necessary actions
3. To identify roadblocks and time of standstill
4. To show if the sales have insufficient leads at any stage
5. Identify areas of improvements needed to be made in sales
To properly analyse a sales funnel it is recommended using a sales contact management system with prospect status and workflow built in. this allows effective analysing and avoid time wasting (mind tools, 2016)
Stages in using a sales funnel
1. Fully understand your unique sales process this could be done by using flowcharting and brainstorming with the team
2. Identify the key sequential steps in the sales process
3. Create status codes for each step
4. Classify your prospects by the status codes
5. Count the number of prospects for each status code
6. Compare the figures monthly to create a proper work out of the strengths and weakness of your sales
(mind tools, 2016)
Leakages
The aim is retaining as many customers from the top to make them reach the bottom to be customers. But mostly some potential drops out and one has to find the leakages and repair them
To identify those leakages one most obtain crystal clear on their sales milestone or the individual steps in the sales process
When doing so try not to be vague in the stages, separate whenever possible. The more steps and separate they are, the easier to notice leakages. Notice each company varies in their sales process so each is unique in their own way.
When done you will be able to find the bottle necks in your funnel you will also be able to find the specific actions that triggers the sales
Common causes of leakages
1. Disregarding those that say ‘no’ very quickly. Try resolving the reason no was said to close the deal
2. Lack of consistent follow ups
3. Not following up quick enough
Plugging the leakages
Mostly its time not following up or lack of consistent communications that is the fault or root of most faults
Try using sales and marketing automation systems. These act as buckets that can collect the leakages to avoid totally losing potential customers. (infusionsoft, 2016)
Is sales funnel an old flame
It has been said the model is old fashion and does not hold the candle to the modern times
Reasons by BuyFactors is that the purchasing power has shifted. That the use of a linear sales process is outdated. The market is now controlled by the buyer
It is being said that customers are not entering from the top funnel destroying the funnel concept. and the reason for this is that the customers are in control by absorbing information about product and services before purchasing by themselves even when they are not in the process of purchasing decision.
Regardless customers are still buying on emotion. It is just the fact they conduct their own research so the pitching stage is mostly erased and they engage company and products without a blank slate
The way around it?
The trend is aligning oneself with the buyer and tracking their buying factors to learn and analyse and position your product tuned and specified for the individuals to gain their interest
According to Jason john in advertising age, shoppers are jumping in and out of channels on their own accord in the search of better deals and this can be seen when online shopping when looking for the best prices and even using comparison sites and again it is emphasized that the way around it is thinking in terms of the people (advertising age, 2016)
But is the sales funnel really dead or gone under a major makeover
Well Mark Ritson of marketing week thinks so. That the core of funnel sales; defining advertising goals for measuring advertising results, hasn’t changed and that people are mistaken tactics for strategy
Though that the tactics of using the internet or comparison sites to gain knowledge n isn’t the core of the sales funnel. Again the core is working out what stages to focus on to increase sales. A note mentioning that the sales funnel created in 1898 by E St Elmo Lewis preceded the invention of the TV, direct mail, telemarketing, cinema ads, internet and smartphone and with each invention the tactics changed but the strategy of tracking the customer journey and measuring it has not changed.
references:
: https://www.mindtools.com/pages/article/newLDR_94.htm.
https://www.infusionsoft.com/sales-funnel.
http://www.buyfactors.com/the-sales-funnel-is-dead/.
http://adage.com/article/digitalnext/today-s-digital-world-sales-funnel-dead/303301/.