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How Does A Sales Funnel Work?

The whole idea of a sales funnel is to bring people through the buying process, in order to make them lifelong customers to your business.

The Online World

The idea of the "sales funnel" or "purchase funnel" has existed loooong before the Internet (1898 [Wiki]) - it's essentially how businesses are run.

However, in "Internet speak", we tend to refer to sales funnels as a process, or system, that's streamlined with the help of automation and other tools.

By utilizing the tools and resources available, individuals and small businesses are able to multiply their revenue with much greater ease than in the pre-Internet days.

Ultimately, the concept remains the same while the "how" has changed (for the better!)

Sales Funnel Concept

There are a few phases customers go through within the sales funnel, but before we get into the phases, let me set the stage:

  • Your business has a target market.
  • Whether it’s local, national, or worldwide – you have an ideal customer.
  • The problem is, this person may not even know your company exists –

1. Make ideal customer aware of your existence

Once your ideal customer is aware of your existence and is getting to know your business, you will have the opportunity to approach them and transform them into a lead –

2. Capture ideal customer’s contact information

You’re now able to have a conversation with your ideal customer. You will be able to determine what makes them “tick.” You will be able to inform and entertain this person –

3. Build a trusting relationship with your ideal customer

Once you’ve taken the time to learn about this person – their wants, their needs, their problems, their desires – you’ll be able to -

4. Ask for the sale

If you've done a good job targeting your ideal customer, building a trusting relationship, and identifying their problems - asking for the sale should be as simple as recommending a product that will solve a particular problem.

After the sale is made, they become your customer and it's up to you to -

5. Keep customers happy and coming back for more

You've done the hard part. You've taken a person from the top of the funnel all the way through to the bottom. It's now time to maintain that relationship and maximize customer lifetime value by recommending more solutions (products & services) for years to come!

Let’s dive into each of these phases.

Sales Funnel

Make ideal customer aware of your existence

I’m going to make a very obvious statement – the Internet is extremely large.

Large does not mean complicated. So, don't over think this.

Advertise where your ideal customer hangs out

It’s really that simple.

Many people get wrapped up in and overwhelmed by shiny SEO (search engine optimization) techniques, PPC (pay per click) techniques, social media techniques, content marketing techniques, and they forget the big picture.

Yes, techniques are fantastic; however, if you’re not where your customers are – all the techniques in the world will not help you.

If your ideal customers hang out on a set of forums – you need to be on those forums.

If your ideal customers are huge Pinterest users – you need to be on Pinterest.

If your ideal customers search for certain keywords – you need to be the answer.

If your ideal customer doesn’t use the Internet, you still need to be where they are. Are they listening to the radio? Watching certain channels on TV? Residents of a certain community?

Capture ideal customer’s contact information

Once your ideal customer knows you exist, you will want to capture their contact information.

This is going to allow you to converse with your ideal customer, thus keeping your business in the front of their mind.

If you fail to capture their information, they’re just as likely to bounce over to one of your competitors who will capture it, build the relationship, and have a lifelong customer.

The good thing is, capturing contact information has become fairly commonplace and you will not be “invading” anyone’s privacy by asking for a little bit of information (like a name and email address).

To help entice people to give your business their contact information you will want to –

Offer a lead magnet to increase leads

A lead magnet is a fancy way of saying the word – incentive.

What would make your customer want to give your business their email address?

  • Coupon
  • Contest
  • Sample product
  • Video/eBook/Course that solves a problem

You’ll want to capture their contact information and place it in a mailing list like ActiveCampaign or MailChimp.

The two services listed above are great for businesses just getting started and offer tools to create the forms required to collect the contact information.

Build a trusting relationship with your ideal customer

Take a moment to think about yourself.

When you’re making a purchase, you may spend hours conducting research, reading reviews, and watching videos before finally making a decision.

Then, your trusted friend tells you they like this other widget and that’s what they would recommend.

Instantly, you throw your hours of research down the drain and go with your friend’s recommendation.

Why?

Trust.

Build trust by delivering value

With your ideal customer’s contact information, you will be able to reach out to them and provide valuable information.

Share helpful articles, insightful stories, product reviews, reminders, and answer their questions.

Even if they’re not your articles and stories – if they’re helpful, share them.

Ultimately, be ever present and helpful.

Ask for the sale

Customers can trust businesses like they trust their friends.

Once this happens, you can ask for the sale.

Ideally the customer will make a purchase and enter into the "Retention Phase" where you'll be able to maximize their lifetime value; however, if no purchase is made -

Continue to build trust

According to this Business Insider article, the total number of times you need to contact or "touch" a prospect tends to range from 3-12. While other studies show you need to touch your prospect a minimum of 7 times in an 18 month period.

So, the reason a sale might not have been made is that the appropriate number of "touches" has not yet been reached.

Don't give up, continue sending helpful, educational, entertaining, and informative content. Continue to respond to inquiries.

You can do it!

Keep customers happy and coming back for more

If you make it to this point, you've managed to bring someone in through advertising and convince them to open their wallet and give you money - congrats!

The absolute last thing you should do now is ignore that customer.

Why? Because they already trust you enough to buy from you and they have money and are willing to spend it.

Unfortunately, many businesses ignore those that are already paying and try to "impress" new potential customers.

Fortunately, you're smarter than that and you'll continue to help your customers solve their problems for years to come 😉

Are you ready to start building sales funnels? Checkout The Sales Funnel Training Vault!

2017-04-20T10:03:28+00:00

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