A sales funnel is often seen as the backbone of a successful business. It helps to lead the customer through your buying process, encouraging them to make a purchase at the end.
So, what exactly is a sales funnel and why do you need one? Below, you will discover everything you need to know about the benefits of using a sales funnel as a small business owner.
What is a sales funnel?
A sales funnel is something every business has; they just may not be aware of it. When a customer arrives at your business, they have to go through several stages before making a purchase. These stages are referred to as a sales funnel.
It is called a funnel because with each step, you reach a smaller number of customers. With an online business, your sales funnel happens entirely on your website.
There are four main stages in a sales funnel including:
The awareness stage is where customers first learn about you and your business. The interest stage is where the customer wants to learn more, while the decision stage is where they are debating making a purchase. Finally, the action stage represents when a sale is made.
Now that you know more about what a sales funnel is, let’s look at the benefits they can provide…
Helping to simplify your marketing
Having an effective sales funnel in place can really simplify your marketing. You will be able to see how many leads entered your funnel, and how many ultimately made a purchase.
This gives you an opportunity to better tweak your marketing efforts to generate more conversions. With minimal effort, you will be able to invest more in platforms or sources which generate the biggest returns.
Monitoring your progress in marketing is crucial for getting results. However, some sales channels don’t make it easy to see what is and isn’t working. So, if you are looking to simplify your marketing, utilizing a sales funnel can help.
Providing accurate sales forecasts
A sales funnel also lets you produce more accurate sales forecasts. You will get to see exactly how much money you are making from your marketing efforts. You will also be able to put together a forecast for the next year, based upon the results of your funnel.
This can prove invaluable if you are looking at getting financial help from investors, or a loan from the bank.
It improves conversion rates
A key part of a sales funnel is email. Compared to every other marketing channel, email tends to provide the largest return on investment.
Email subscribers are known to convert at unbelievable rates. In fact, it can be up to 40% more effective at attracting new customers than social media.
If you utilize email into your sales funnel, it is going to prove highly effective at generating and converting leads.
Helping you to build trust with customers
Consumers today typically do business with brands they can trust. The more your customers trust you, the more frequently they will make a purchase.
An online sales funnel lets you build up trust with your audience. You can use email autoresponders for example, to reassure customers after they make a purchase. You can also follow up with questions about the customer journey. This shows you care about their experience with you.
The more trust you can build up with your customers, the more successful you will become.
Retaining more clients
With a sales funnel, the initial purchase is just the beginning of the buyer’s story. Unlike other sales models, a sales funnel doesn’t just stop when the customer makes a purchase.
An effective funnel will keep customers coming back for more. Evidence shows that returning customers spend more than first-time customers. They also tend to make up a third of the income of a business.
Anything you can do to retain more clients is going to benefit your bottom line.
These are just some of the reasons why your small business needs a sales funnel. They aren’t overly complicated to set up and when done correctly, they can have significant benefits for your company.