Most people think that if they make a good product and put it out into the world, customers will automatically roll in. It generally doesn't work like this, even with a great product. Because getting someone to buy something new requires a change of behaviour and people are resistant to change, especially for a new product that they have never heard of before.
On top of that, if you haven't had much practice selling before getting started can be an awkward and uncomfortable process. It certainly requires a step outside of the comfort zone.
The good news is, like most things, learning to sell your product becomes much easier when you know the process, and with practice, you can make progress in leaps in bounds.
Sales is an essential skill that not only will have a positive impact on your bank account, it will also help you to be better at influencing people in general.
In this blog, we give a simple introduction to the sales funnel and the overall process behind a successful sales strategy.
The Sales Funnel
For most businesses, a sale requires a series of touchpoints with a potential customer, until they are ready to buy. This series of steps is referred to as a 'sales funnel'.
The number and type of touchpoints required will vary from business to business, as it depends on a number of factors relating to the perceived value and risks associated with your product. These touchpoints should satisfy your target customers' information needs and help to build trust so they become more and more likely to buy your product or service.
If your product is more expensive, new and unfamiliar, or it requires a change of behaviour, you will likely need more touchpoints with your customer before they feel comfortable enough to buy and use your product.
The effort required to convince someone to buy your product also influences the type of touchpoints you need to have, whether they can be achieved digitally (through your website) or whether you need steps in the sales process that require in-person contact.
When building your sales funnel you must consider the information needs of your target customer at each step of their decision-making process. Below is a very simple example of the states of the potential customer as they progress through the funnel.
A Simple Sales Funnel:
In the Awareness stage of the funnel, you are letting the right people know that your product or service exists, in a meaningful & memorable way.
If you succeed at this, your target customer moves to the Interest stage. They may sign up for your newsletter, follow you on social media, or request a callback.
Once you have captured your target customers' interest, your goal is to provide them with the information they need to make a decision about whether they want to buy your product or service. This is the Decision stage. In the short term, when a business is just getting started, it is often best to do this work in person as much as possible, to get a good understanding of how your target customers make decisions.
Over time, however, you will need to move towards a sales process that makes financial sense for your business. For example, if you are selling a $20 widget, you can not afford the cost of having to speak on the phone to every person who wants to buy a widget. You have to make the information available for your customers so they can make their own decision (eg on your website).
However, if your sale price is $1,000, you can afford to have a number of calls in your sales process as you will get enough of a return to cover this cost if you get a sale.
The Action state of the funnel is the final step when your target customer becomes a customer, for example by paying for the product/service.
There are a number of different ways to consider the stages in the sales funnel. We have chosen this one for this blog because it is simple and generic.
Leads, Prospects & Customers
It is common to categorize deals in the sales funnel into Leads, Prospects, or Customers depending on where they are in the sales process.
A Lead is anyone who you have identified as being a potential customer. There are many ways to find new leads, through marketing, networking, referrals, cold calls, walk-ins, etc.
A Prospect is a 'qualified leads', which means you've identified that they are your target market and have the problem you're product or service can solve.
Once you have leads, the next step is to convert these leads into prospects. This could be done by having a conversation with the person, either over the phone or in person, to ask questions to understand their needs and whether they're a good fit for your product or service.
The end result is that you will know whether they are interested in your product or service (and if you want them a customer). This way you'll be able to decide if it's worth you investing time to try to convert them to become a new customer. If it is, they become a prospect and go into the next stage of your funnel.
Converting a prospect into a sale can require a number of steps, depending on what's needed to convince the potential customer of the value of your product and overcome any objections.
Your goal is to have your customer commit to the next step in your funnel. Not necessarily to close the sale yet. You risk losing the sale if you try to close too early before you have demonstrated sufficient value and overcome your customer's objections.
Once the sale is made, a prospect becomes a Customer. At this point, your job is to make sure they have a great experience with your product so they remain a customer and refer your product or service others.
Taking Action to Build our your Funnel
Below are some ideas that you could consider testing out to help with acquiring and converting leads into prospects then sales.
- Email sign-ups from a website
- Posting into Facebook groups with a survey that collects emails
- Running an event relevant to your target market
- Attending networking events
- Paid advertising (e.g. social media or Google ads)
- Finding leads via the web or social media
- Attending expos, conferences or industry events
Converting leads to prospects:
- Send an introductory email
- Phone call to discuss needs
- In person meeting (e.g. coffee)
- Free Discovery Call
- Targetted facebook marketing
- Useful tools that help to qualify them as a prospect
Converting prospects to sales:
- Providing value-add content or services
- Follow up phone calls or face-to-face meetings
- Onboarding process
- Present solution and pricing in a proposal
- Selling the product at markets and promoting to all 'prospects'
- Special offers
CRM and Sales Systems:
Having a system for capturing leads and managing their progress through your sales funnel is important. You need to make sure that you are nurturing any new leads that you get and not losing track of them. It can be hard to do this without a good system.
Our favorite software for this is Hubspot's free CRM. You can store contacts, set up the steps in the funnel and set tasks with reminders so you don't forget to follow up. But, a good old fashion spreadsheet can also do the trick too when you're just starting out.
It is important for a business to know the repeatable process that will generate sales. However, building this repeatable process takes conscious effort. By understanding the different stages that exist in a sales funnel, based on the needs of your potential customers, and ways that you can add value at each of these stages, you can work through the process of refining your sales funnel until you get to that repeatable process that works.
Be patient and give this process the attention in needs to yield a return in the long run.
All the best!