A sales funnel describes the path a potential customer takes to become a customer. Although the path is industry-agnostic, the numbers and examples in this guide are pretty specific to ecommerce sales. This is because there aren’t a lot of data in other industries and it is heavily documented in ecommerce, so frankly it’s just easier this way.
Despite that, every industry has a sales funnel that can last from as little as a few minutes (i.e. B2C ecommerce) to longer than several months (i.e. B2B commercial jets). You see, the cool thing about sales funnels is that — once you have defined it — it’s a useful model to visualize the customer journey from initial awareness all the way through to conversion. You can see where customers fall off and analyze the data to identify areas for improvement.
For example, with Patriot Chimney we noticed that we had a ton of inspections scheduled and a lot of proposals out. We’d get them to the Commitment stage — enough to receive a quote — but we couldn’t get them to schedule the work. We thought maybe since we were a new(ish) company they couldn’t really trust us, so we started pushing for more reviews with current customers to build social proof. We also thought that if we’d offer financing it would lessen the burden on making such a high cost. Then we thought we’d take a look at our prices, which were pretty close to our competition in the area. Because of the similarity in prices, we formed a hypothesis that the close rates of other chimney companies were probably the same and the prices didn’t match the demand of the customers. So instead, we are working on building a more thoughtful approach to pricing, disregarding the local competition. The new approach to pricing is still in the works (at the time of writing), but the point is that we are testing different hypotheses to see the reason our customers fall out of the funnel.
By the way, these tests are called A/B tests (or split tests or bucket tests), which is a method of comparing different hypothesis (more reviews v. thoughtful pricing) to see which one performs better. For websites, you can do A/B testing on different colors or sections to see which ones perform better. For sales, I use A/B testing to see which talk-tracks work better or which email template gets the most responses. I can go into more details, but this guide is supposed to be a quick overview, so let’s get to it!
There are four stages of the funnel that I call the Four Cs: Consciousness, Curiosity, Commitment, and Customer. Everyone starts in the consciousness phase. This is where your customer become aware of your brand. If it looks interesting enough to them, then they will start to look at your solutions to their challenges. If the potential customer believes that your solution is the one for them, they will become commited to buying your product. However, they are not yet customers. Once they think that your solution is the only solution to their challenge, then they buy and they slip through the bottom of the funnel to graduate as customers!
Consciousness – 100%
This is the beginning, the first step in selling your products and brand. Basically, this is the stage that gets customers aware of your company. Consciousness is where potential customers first see and become aware of your brand. Maybe they stumbled on a video or blog post that you published on YouTube or your website. Or their friend shared an Instagram post. The goal for this stage is to get as many people conscious of our company; to get your brand at least in their head. At this phase, they haven’t taken any action or clicked on your links to the section of the site where they will actually buy something or give you something like an email. They haven’t expressed any interest.
In the book Influence, Robert Cialdini says that people are more prone to be influenced by things they are familiar with. In order to build familiarity, you have to get in front of your audience and show them that you exist. There are a TON of different ways to do this (not to turn you away from this) but there are three methods that you can focus on to get pretty good results: Search Engine Optimization (SEO), Pay-per-Click Ads (PPC), and Social Media.
SEO will include keeping everything in your site optimized for search engines. There are two different categories, on page and off page, that you will need to focus on.
On page SEO is sort of the behind the scenes, making sure that your site is working properly; that your site is organized in a way that makes sense; that you minimize the number of broken links on your site; and literally a ton of other steps.
Off page SEO involves building content and spreading the word that will lead potential customers back to your website. This includes posting blogs, creating relevant content on your site to keep content constantly updated, or even creating videos that are relevant to your customer base.
There are a lot of resources out there on the interwebs for free that can help you get an idea of what to look for and how to build what you can. Learning a little bit will allow you to see if you can do it yourself or hire someone to do it for you.
PPC is a pay-to-play game that can suck money out of your business if you’re not careful. Ads on Google or Facebook are PPC. Companies pay to be able to target a specific target market with advertisements. If you’re just starting out, PPC is a great way to get the awareness because there’s not a lot that you can do with regards to SEO to get to the top of the search engine at that time.
The best way to build PPC ads is to create very hyper-specific customer profiles and create ads based on those customer profiles. Remember the old 80/20 rule, where 80% of your sales come from 20% of your customers. So the hyper-specific customer profiles should look like your 20% group.
Social Media marketing is more hands on and requires some attention several times per day. Oftentimes, it is significantly easier to build a ton of content at one time and schedule them to be published.
Curiosity – 43.8%
Once your potential customers have seen value in your brand, hopefully they click on the link or do a quick search for your website (or stop by your store, or give you a call – whatever your funnel is) or stop by your Facebook page. This is where they start to see what you offer and begin to evaluate how they could implement your products or services into their own life. In this phase, it’s important to keep them interested so that they start to move to the next phase to decide to purchase. It’s important to note that at this stage your potential customers are actually considering buying, so your goal should be to move them down the funnel by removing any doubts they may have and make things easier for them.
Organization is extremely important as it helps the consumers know what to buy and how to find it. You can do this in an ecommerce site with easy navigation and categories that actually make sense. For your website, you it’s a good idea to keep a visible search bar so that customers can search for what they are looking for. Consider using faceted search (side bar) on category pages so that customers could easily search what they are looking for from the sidebar. And include filtering options to make it very easy to filter out the options your potential customers don’t want. Finally, be sure to include breadcrumbs so customers understand how they got to where they are.
Promote Social Media on the website so that customers know additional ways to reach you. Consider putting social media icons on the footer so that it’s on all of the pages and easy to see. Consider including personal social media accounts so that customers can easily reach you. Posting additional communication avenues could lead to increased trust from your customers.
Promote Offers with a clear Call to Action (CTA). For example, use a pop up to ask for emails. Consider a pop up that offers a free gift or something like a 30 day challenge if they give you their email. This pop up will take the user to a landing page where you can get their information. Or consider using Groovejar for a discount sign up.
When you promote offers, you need to ensure that the offer doesn’t lower the perceived value of the product or service. You also need to make sure that customers understand that the discount was an exception rather than the norm. Additionally, you should always put an expiration date on the discount. This takes advantage of another one of Robert Cialdini’s weapons of influence, where urgency comes into play – your consumers are more likely to speed up the process if they know they will get a discount.
Commitment – 14.5%
This is the stage where the customer has began the purchasing process. During this phase, we must convince the customer that your brand is fulfilling a need of theirs and they should give you money.
Commitment might be a bit misleading for a term that does not imply the customer bought. To help me explain, I turn to my favorite pastime and my favorite team: Florida Gators and College Football! In college football (and all college sports for that matter), just because a recruit commits to your team doesn’t mean they will sign with your team. The day before writing this, my Gators received news that OLB Derek Wingo flipped from Penn State (Go Gators!).
My point is that just because a consumer has committed to buying your product or service, doesn’t mean they will sign with your brand. So you need to do what you can to make sure they see that your brand is the right one to solve their problem. You do this by making your buying process way easier.
Checkout should be one of the easiest options for the customers. You should offer more payment options to give our customers as many opportunities to buy as possible. Also include a 2 page checkout to instill more secure payment options. Also, customers are impatient, so including a progress bar during the checkout will help keep more customers going through as they see the progress.
Product Descriptions should be clear and compelling, and should also, ideally, be between 350-400 words, unless you are selling smaller products that don’t have that many benefits or features. Photos should be clear and show exactly what they are looking for. Description should always include an overview of the product, specifications on the sizing, measurements, washing info, material info, etc., and present the descriptions in an easy to read, bulleted format.
Reviews should be easily accessible, ideally on each product page. The benefit to reviews on the product page is twofold. First, this allows customers to see which items other customers have loved and gives an idea of what to actually look for. Providing this information provides more trust features for the customer. Second, it allows us to see exactly what the customers do not like and what they love.
Offer Perks such as free shipping, relevant discounts (birthday, daily (like today only, get 5% off), seasonal), easy and sometimes free returns. This basically limits the risks for customers to purchase.
Customer – 3.3%
This is the stage where customers have given you their card information allowing you to begin your fulfillment process. At this stage, your potential customers have moved up the ladder to full blown customer. Only 3.3% of customers that go through your funnel will make it to this stage so they are rare and it’s extremely important that you treat them like it.
In fact, 40% of revenuecomes from returning customers. Not only does a large chunk of your revenue come from repeat customers, but it’s easier and cheaper. The probability of selling to an existing customer is 60-70%, while it costs about five timesas much to get a new customer than to keep an existing one.
Having top knotch customer service, answering phones, and offering an overall better experience can help keep them coming back. I can’t teach you customer service today and answering your phones when a customer calls is pretty self explanatory. What I’ll share instead are ways that you can easily boost your customer’s experience and lead them to think of your brand next time a solution comes up.
Customer Accounts are actually pretty common now and are almost expected. These accounts should allow the customer to go back and see their order history and easily allow them to reorder straight from there. One caveat to this is that while you should allow your customers to have an account, it should be optional. You should also have the option for your customers to continue as guests.
Customer Loyalty Programs are not just for sandwich shops. You can create customer loyalty programs for any type of business. For ecommerce, you can set something up to reward customers with a gift or discount for something like their birthday. For Patriot Chimney, if we can get a commitment for an inspection to the next burn season (i.e. colder months), we’re sure to offer discounts for their commitment to our service and brand.
Relevant Emails can really help with your email marketing game. This definition of relevant expands past relevancy of your brand. The emails need to be relevant to the product your customer bought, maybe include some of the content you wrote in a blog trying to gain some consciousness or if you’ve added a new product or service that would compliment their previous purchase. You can send updates about your company or the occasional promotion, but I think the real value is when you try to be a resource for your customer.
Thank You Notes are a lost touch to a lot. Especially in business. Of course you want to make sure the ROI is there, so you don’t want to spend too much on cards if your product is priced less than $100. But if you’re selling a luxury product or service, you can add that extra touch to increase your chance of brand loyalty by simply sending a hand-written thank you. This doesn’t actually have to be done by you (shhhh – don’t tell anyone…). You can hire someone to do it like Postable. This adds a personable touch that a lot of customers like.
I hope you found this useful and you can take some of this away to create or further design your sales funnel. Using some of these tips are sure to help plug some potential holes and help earn a lot more revenue for your business. Leave a comment telling me how you plan to build your next sales funnel and I’ll be happy to help plan it with you.