Understanding the Sales Funnel Model
The sales funnel model concept has been made far too complex for successful implementation within small businesses. When I started my coaching firm, I named it Business Simplified LLC because my focus was to help business owners comprehend overly complicated ideas and help them develop tactical implementable solutions. While there are hundreds of sales experts that weave their ideas into an unmanageable bowl of pasta, I prefer simple, straightforward, and doable concepts.
As a business owner, you have probably heard of the “sales funnel.” Here’s the gist: start with your prospects at the top of the funnel and turn them into customers at the bottom. Think of it as an upside-down pyramid.
Though many people understand how important a carefully orchestrated sales funnel is to the well-being of their business, they tend to struggle when it comes to execution. In this article, we’ll go over the sales funnel model – starting at the top – and how you can successfully create one that works for your business.
1. Suspects (or Prospects)
These are the targets you want to interest or chase after. They are potential future customers that intrigue you.
The key is to assume your suspects probably don’t know about your business or may not even need your product or service right away. In other words, before you can brief them about your offer, you need to create an awareness about the existence of your product or service. Let them know that when they’re ready, you’ll be ready.
Leads are targets that have raised their hands, moved toward you, or confirmed their interest in what you’re offering. You can record them as a lead if they call you, contact you through your website, walk into your office, send you an email, ask for more information, and so on.
3. Quotes, Bids, and/or Demonstrations
At this stage, you have the opportunity to showcase your product or service to a qualified lead, whom you have invested a considerable amount of time. This is also the phase where your leads are actively seeking solutions that can address their “pain” (whatever it is they’re lacking) – and your business’s solution is one of their options.
If you experience a sudden drop in interest, it’s crucial to ask for feedback so that you can understand what went wrong and how you can improve when moving forward with your other leads.
Congratulations! This might mean you received a purchase order or the sale has been initiated. At this point, your lead has now become your customer and you will soon receive payment.
The Aftermath: Measurements
The customer life cycle does not end with a purchase. Keep in mind that it costs a lot more to attract new customers than it does to retain existing ones. Your goal is to turn your new or current customers into long-term, loyal ones.
Always evaluate your sales funnel model. I recommend you measure your sales funnel conversion rates weekly or monthly. Likewise, you should measure how many leads you turn into quotes and how many leads you have between quotes and sales. Work the number backward to help you understand how many prospects you need in order to meet your sales target.
Understanding the sales funnel model and its inner workings gives you a unique opportunity to assess the effectiveness of your funnel, highlight what works, see where you can improve, and identify your superstar sales people as well as employees who need additional help.
Becoming great at sales takes time and effort, but it’s not impossible. If you’re interested in learning more about how you can better build and execute your sales funnel, sign up for a one-hour complimentary, no-strings-attached online coaching session with me. Just fill out my contact form!
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