Is your sales funnel out of shape?
It is traditional at this time of year to commit to losing a bit of weight, cutting back on alcohol or simply toning up those muscles. However, since this is a business blog I think it is best if we focus on the health of your business and in particular your sales funnel. The shape of your sales funnel tells a lot about where you might be losing sales and more importantly what you can do to get those lost sales back.
Step 1 – establish the shape of your sales funnel
The world is full of data, but the most valuable data is your own. However, it is quite normal for businesses not to actively collate their data, let alone analyse it. Fortunately in this age of big data most of the data you need, to visualise your sales funnel, is recorded automatically. Taking a typical calendar month for your business, follow the list below to gather your data. (you may need to choose a month before COVID if your business has been severely disrupted by COVID.)
- How many people saw your digital advert or the estimated number to have seen a printed advert? Label that figure as ‘a’
- How many people visited your website or business premises? Take the figure most relevant for your business and label that ‘b’
- How many people spent at least one minute looking at the product or service pages on your website or spent more than two minutes browsing your products or services on your business premises? Take the most relevant figure and label that ‘c’
- How many people contact or asked you for further information about your products or services? Label that figure ‘d’
- How many people went ahead and made a purchase? Label that figure ‘e’
A quick reminder of the good, bad and ugly
Figure (i) illustrates a very good sales funnel. i.e. everyone who has seen your advert has immediately purchased your product.
Figure (ii) illustrates a very under developed sales funnel where no one knows about your product, no money is been spent to promote it and as a consequence no one has purchased it.
Figure (iii) illustrates a very bad sales funnel. i.e. despite a huge amount or advertising and exposure, no one has purchased your product.
Step 2 – draw out your own sales funnel
First you need to establish your own scale. For example if your Google Ads have been seen 10,000 times (10,000 impressions) then perhaps use a 1cm to a 1,000 impressions scale and draw a horizontal 10cm line on a piece of paper. Using the same scale repeat the exercise on your b, c, d and e values and draw a centred line under the previous line until you get four more horizontal lines under the first one. Then connect all the left line ends up and separately all the right line ends up to create your funnel shape.
Step 3 – compare your sales funnel to the examples below
- If your sales funnel is similar to figure (iv) then issues causing purchasing friction could include:
- technical problems with your online banking portal, including transfer to it
- unexpected product or delivery cost, if not displayed prior to this step.
- poor product returns policy
- unacceptable payment methods
- If your sales funnel is similar to figure (v) then issues causing purchase decision friction could include:
- in-bound calls, emails or chats are not being answered
- staff not properly trained to answer questions or to ‘sell’
- something is lacking in the overall value proposition of your product or the communication of it
- If your sales funnel is similar to figure (vi) then issues causing browsing friction could include:
- website hard to navigate
- physical premises not welcoming or poorly laid out
- lack of clarity of what the product or service offers, particularly in the form of benefits
Step 4 – consider setting up a focus group
It is quite possible that you will not be able to see the problem that your potential customers are seeing when it comes to sales funnel friction. Consider setting up a focus group of people who fit the profile of your typical customer. Ask them to individually make a fully refundable purchase from your business and then ask them what friction points they found. The results may surprise you. For example, many customers fail to recognise drop down boxes and therefore don’t realise that they can change the parameter.
Step 5 – or if you just want to have the problem solved asap
Then contact us as we can certainly help get your sales funnel back into shape.