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The sales funnel is here to stay

16.02.2018 | Usability, Marketing Strategy

Dmytro Romanovskyi, Director and Founder of the internet marketing agency Destra

Back in 2018, finding material on sales funnels without lies, pomp, self-admiration, or attempts to sell you services was quite a challenge. Every third article described the same scheme with a similar picture — where obedient sheep-like clients, like robots, follow a marketer’s 1938 plan and bring endless profits to anyone who wants it. Sound familiar?

This article is meant to remind entrepreneurs of an old truth and to break down sales funnels “as they are” — without advertising, confusing terminology, or the fairy-tale idea of controlling consumers’ minds.

What is a sales funnel

In its original form and meaning, a sales funnel is neither a principle of distributing and influencing clients, nor an independent selling tool, nor even a strict blueprint for building a business.

In other words, simply creating a sales funnel increases profits about as much as writing an annual plan guarantees its execution. Without active and consistent actions, the result remains a fantasy. Moreover, if the product itself isn’t needed by anyone, not even a team of the world’s most famous marketers can save it.

A sales funnel is a tool for evaluating the results of the marketing team’s work, not the work itself. It helps identify and analyze at which stage weaknesses appear in the sales strategy and which stages are missing from that strategy.

Automated Sales Funnel

An automated sales funnel implies that the marketing framework and sales system are set up so effectively that human involvement is almost unnecessary. In its ideal form, it’s a script, program, or code that automatically guides a customer from point A (first contact with the company) to point B (a loyal brand advocate). In reality, where marketers are still very much employed, things are a bit more down-to-earth.

For example, a customer decides to take up running and wants to buy sneakers. He comes into the store. The prices don’t suit him and… we activate the script:

If he refuses the sneakers, right next to them are sports pants with an incredible discount.
If he buys the sneakers and the pants, he’ll also need a windbreaker from the same line and color — but this time without a discount, so he ends up spending more than he planned.
If he refuses both the sneakers and the pants, then at the checkout there’s a sale on smart wristbands with an 80% discount, and he ends up buying them for himself, his wife, and even the dog.

An automated sales funnel is a set of scenarios or scripts that generates leads and loyal customers with little to no involvement from human staff.

Sales Funnel Analysis

To learn how to effectively collect statistics and work with data in a sales funnel, you need to:

Know your customer as well as a close friend and fully understand their problem/need.
Identify the stages of customer behavior that align with solving their problem through your product or service.
Define the target action expected from the customer at each stage.
Collect conversion data for each target action.
Determine at which stage potential customers are dropping out of the funnel and why.
Use common sense — don’t try to force your business into a generic funnel example found online. Build your funnel from scratch, tailored to your specific goals and business.

An automated funnel means the marketing framework and sales system are set up so effectively that human involvement is almost unnecessary. In its ideal form, it’s a script, program, or code that guides a client from point A (first contact with the company) to point B (a loyal customer). In reality, where marketers are still far from unemployed, things are a bit more pragmatic.

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Create a powerful USP — show and prove to the client that buying this specific product anywhere else would be physically impossible to do more profitably.

Organize a source of potential customers. Give clients the opportunity to discover your products and get to know them.

Help website visitors want your product. Show and explain how great, prestigious, and beneficial it is to own it.

Sell — bring the process to completion and receive the payment. Create limitations that make an immediate purchase as beneficial as possible.

Convince the client who already wants the product to make the purchase. Remove anything that might cause distrust, doubts, or fear.

Don’t pressure or try to control the client’s actions. Forget about the idea of being able to guarantee influence over their decision — see them as a real person.

Building a Sales Funnel

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Monitor your reputation. Eliminate mistakes and negligence in production and delivery. Turn negative feedback into respect for the brand (by apologizing, correcting issues, or holding those responsible accountable).

Believe in your product and be honest with the client from start to finish — this will earn their genuine gratitude and their willingness to recommend your brand to others.

An effective sales funnel requires deep immersion into the client’s problem, significant effort, testing, and — most importantly — time. Those who believe in unicorns, magic wands, and quick, stable results are better off not dealing with it.

To build a funnel and generate profit from it, you need to:

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Constantly analyze and test the overall effectiveness of the funnel as well as each individual stage in terms of conversion. Conduct usability audits of the entire website and react quickly to any “leaks.”

Increase momentum — boost conversion using all available means. Expand your audience, discover new sales channels, improve usability, maintain the interest of loyal customers, provide expert content, and encourage repeat purchases.

Let’s imagine an online computer hardware store owned by Alyosha. The store sells assembled computer systems, individual components and accessories, and server equipment. Thanks to direct contacts with manufacturers, the shop can offer server and desktop processors at very competitive prices.

Company Goal
Earn the maximum possible profit in one quarter. The target: 1000 “magic coins.”

How can this be achieved? There are two options:

Increase the average check
Increase the overall sales volume

Steps Alyosha Needs to Take:

Collect statistics on the current state of the business
Analyze the sales funnel to identify weak and strong areas
Optimize the sales funnel

Analysis
Currently, the company earns 800 coins per quarter. Over three months, 10,000 people in the country search for queries that Alyosha’s site can satisfy. Out of these, 5,000 visit the site, 1,500 add products to the cart, and 1,000 complete a purchase.

Breakdown:

50 purchase server solutions
150 buy ready-made home systems
300 purchase monitors
500 purchase components, mice, and keyboards

The resulting average check per quarter is 0.8 coins per customer.

Alyosha’s analysis revealed that the company is failing to fully leverage its main advantage — server processors at attractive prices (each priced at 10 coins). Though sold in small numbers, these account for 63% of total profit.

Example of a Sales Funnel in an Online Store

Solution:
Alyosha adjusts the target audience profile toward IT companies;
Orders more server processors from the manufacturer;
Invests money in search engine promotion for relevant queries and optimizes the site for those queries;
Adds sales copy to the section with the needed product and makes an exclusive offer to IT companies;
Promotes the best salesperson in the sales department and assigns him to make cold calls to IT companies;
Conducts usability testing;
Encourages repeat purchases from existing customers.

As a result, in the next quarter the company sells 100 processors instead of 50 — that’s a +125% increase in profit. Alyosha’s head spins from such success, and he vomits a rainbow right onto the gingerbread floor.

Unfortunately, in reality, no one manages to perform a couple of operations and forever multiply their profit by two. And if you take into account crises, dumping, defective goods, seasonal sales, factory fires, and other cataclysms, you can fall straight into depression. Results, as in all areas of life, come from relentless work, regular investments, and constant testing.

Conclusion

An entrepreneur with an analytical mindset can quite successfully build a basic sales funnel without mystical rituals or hiring Phil Schiller (Apple’s marketer). However, to conduct productive analysis and increase profits, they will either need to make significant investments in their own education or hire professionals to continuously improve and develop sales channels.