Turning Sales Funnel Upside Down
The Traditional Sales Funnel
As a professional sales person, my brother has always argued that all business starts with the sales funnel. Until recently, I would have agreed with him. In his model, every sale starts at the top of the funnel with a large group of unqualified prospects who you will typically find with mass marketing efforts. In the middle are people who are mildly interested. This is where marketing and sales come together to convert a prospect to a customer. On the bottom are customers, that small, but precious group of people who have trusted you to deliver on whatever promises you make in your sales process.
In the past, the bulk of marketing investments were spent on the top of the funnel, as businesses tried to drive as many people as possible into the sales funnel. But rising costs and diminishing returns make mass marketing less and less attractive for small business owners. Fortunately, there is an alternative today.
The Modern Sales Funnel
With the advent of social media and email marketing, businesses can target their messages. Instead of talking to everyone hoping someone will hear you, there is a shift to reaching smaller groups who are already familiar with your brand. Directing marketing to these groups is much more likely to generate positive responses. As you think about your sales funnel, the smart plan involves spending a relatively small percent of funds at the top of the funnel (strangers). Instead marketing efforts should be split between the middle (prospects) and the bottom (customers) of the sales funnel.
Talking to prospects
This group doesn’t need slick advertising and generic messages. They have already been introduced. Maybe they have downloaded some information or requested a proposal. What they need now are specific answers to questions and informative updates. This is where automated response campaigns can be extremely effective, answering common questions and addressing typical concerns. If this relevant information is delivered in a timely manner you will see prospects nudged further down the sales funnel.
Talking to customers
While existing customers represent the smallest audience, they are likely to be the most receptive audience. Assuming you have done a good job delivering your product or service, this is where you should spend most of your marketing energy. Reach out to your existing customers through email with offers of additional services or products. Track their purchases and send them reminders before they run out. Encourage repeat business with simple renewals or frequent shopper discounts and loyalty rewards.
Make these customers feel special by inviting them to join a private Facebook page or Linkedin group where you share information on different ways to use your product, changes in your industry and new product trends. Check in and see how happy they are with a short customer satisfaction survey, solve their problems and ask for review or testimonial on social media, your website or industry review sites like Yelp, TripAdvisor or Angie’s List. Prospective customers are likely to be impressed by what they read.
Don’t stop there. The final part of the new sales funnel are the recommendations and referrals of existing clients which lead to your next customer. When you stop spending resources trying to reach everyone, you have resources left to create referral programs. Customers who enjoy doing business with you will be happy to refer you if you make it easy. Consider creating an email they can pass on to a friend or have your employees hand out ‘refer a friend cards’ with every purchase. The endorsements of your happy and loyal customers will be much more influential than any advertisement.
My brother was right, the sales funnel is still important. It just looks a little different today.
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