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Do you ever wonder how businesses make consistent sales? If you’ve ever tried to sell anything, then you know how hard it can be. You might make a sale, but getting to the point where you can generate regular revenue is tough. Successful businesses don’t just make sales here and there. They and with high enough volume that they can comfortably hire full time employees. They know that despite having regular expenses, they are going to be profitable. So how do they do it? The key to making consistent sales is a high converting sales funnel. In this article, I’ll talk about what sales funnels are, the stages of a sales funnel and examples of how businesses use sales funnels to achieve consistent growth and predictable revenue.
What is a Sales Funnel?
Sales funnels are virtual salespeople that work 24/7, 365 days a year without complaining or asking for more money. Sales funnels are everywhere, even if you don’t realize it. Let’s take a look at Starbucks, for example… The sales funnel for Starbucks might start when you see a piece of their marketing somewhere. You may be driving home one day and you see a Starbucks billboard. Seeing a company’s branding lets potential customers start getting familiar with the brand. At home, when you are watching television in the evening, you might see a Starbucks commercial on TV. The commercial might show you how the coffee is made. It could also show people enjoying the coffee and being more productive at work. The next morning, as you are going to work, you walk by a Starbucks and someone hands you a flyer advertising a “buy one, get one free coffee” special. You decide to go inside and order Starbucks coffee for the first time. The person at the checkout counter asks you if you want a cookie with your order. Their cookies look tasty so you say “yes”. They give you your cookie and two coffees. They put a sticker on the second coffee saying “for your favorite co-worker”. While most ordinary folks might not realize it, they are purchasing products or services because of sales funnels. Sales funnels are used to sell everything including information products, services and physical products that you see every day.
Why Use a Sales Funnel?
When deciding to grow a business, many people struggle with how to market their business. Most aspiring business owners have two options…
- Continue to rely on “hope marketing”. Hope marketing means waiting around for referrals and word of mouth. Or going to networking events and talking to random people in the hopes that you will meet a potential customer. Basically, businesses that take this approach sit around and “hope” that business comes their way.
- Take the time to actually build a sales funnel that attracts the right leads and systematically converts them into paying customers.
Winning companies have figured out how to acquire customer at profit and scale. The best way to do that is through a high converting sales funnel. Businesses that take this approach identify their target customer. They figure out where and how to reach them (we use for this). These businesses also have a plan for cultivating these leads and turning them into paying customers. They might also have a plan to get them to buy more products or services and to systematically refer even more leads. Do you want to continue relying on external factors that are outside of your control and waiting around for business to come to you? Or would you rather take control of your business growth by building a step-by-step system that attracts the right leads and converts them into paying customers. If creating a step-by-step system sounds good to you, then let’s take a closer look at the makeup of a high converting sales funnel.
The Stages of a Sales Funnel
To create a successful sales funnel, we need to start by understanding the four phases of a sales funnel. These four phases include the awareness stage, the relationship stage, the sales stage and the upsell stage.
In the Awareness Stage, your goal is to let people know that you exist. Ask yourself, “What can I do to make people aware of my business?” There are many ways to reach your target customers and build brand awareness. Content marketing is one way to build an audience and create brand awareness. Writing articles can drive traffic to your website through SEO and social media while also allowing other people to see you as an expert in your field. Video is another tool that can help build awareness. Videos can allow people to see who you are as a person and form a deeper connection with you. Videos can also be used to demonstrate a product (or service) or share other ideas. Advertising can be a great way to reach your target audience quickly. Paid ads often allow you to target people by preferences or demographics. Word of mouth and referrals will start to generate awareness for your business if your products or services and content are good. While getting customers through referrals is nice, don’t rely on it. Instead, build a real marketing system that provides predictable revenue and results.
Once people become aware of your brand, you want to continue to build a relationship with them in the Relationship Stage. In this stage, ask yourself how you can build trust and authority so that people will feel comfortable buying from you. If you do a good job of building relationships, then you might start getting emails like this: Think about what communication channels will allow you to communicate with your audience most effectively. Email marketing is a popular choice for online marketers because it is relatively inexpensive. Once someone joins your email list, you can keep communicating with them by sending emails. You can even use re-targeting to show ads to people who visited your site before so that you can continue to build brand familiarity with those prospects. Some other channels might include social media, webinars or even sponsored videos. During the Relationship Stage, you also need to decide on what buying beliefs your customer needs to have before they will buy. For example, a vegan bodybuilder might need to believe that a vegan protein powder comes from 100% plant ingredients and is an effective source of protein before buying it. A buying belief consists of the beliefs and biases a person might have regarding your product or service. Here is an example of a belief system target towards a vegan consumer: Decide what buying beliefs are necessary. Then incorporate them into your sales funnel during the Relationship Stage. Educate your prospects so that they will be ready to buy once they reach the Sales Stage.
After your prospects have been through the Relationship Stage, send them to the Sales Stage so that you can close the sale. In this stage, ask yourself what is the best way to get people to pay. If your Relationship Stage is well designed, then selling should be easy. Your customer will already want to buy your products or services. However, you can still improve your results by having a strong Sales Stage. For a high end conference, the Sales Stage might consist of a landing page with a video and a list of featured speakers. It could also list other benefits of attending, like being able to network with other successful individuals. Another way to improve sales results is to use urgency or scarcity to get people to buy. Scarcity is optional if you did a good job of building trust and authority in the Relationship Stage or use a relationship funnel instead of a sales funnel for your business. It’s important to note that you should never create false scarcity. Customers can sense it and it prevents them from trusting you.
Finally, the Upsell Stage is where businesses can make more money by selling additional related products or services to their customers. McDonald’s grew into a multi-billion dollar company by simply asking their customers “Would you like fries with that?” after they purchased a burger. Aside from generating more revenue for your business, upselling can also improve the customer experience. Some people purchasing a ticket to your live conference might be willing and even wanting to pay more to consult with you directly. When designing your upsells, think about what other products or services that your customers might want. Can you upsell a more expensive product or service that can help them even more? Or can you cross sell them a similar product or service that they might be interested in? Ultimately, a well-designed sales funnel focuses on building relationships. Relationship selling is the key to success. Having a relationship-building mindset will allow you to provide more value for your customers and therefore drive more growth to your business over the long term.
The Benefits of Using a Sales Funnel
Sales funnels solve one of the biggest problems that companies have, which is creating a system to consistently generate revenue. Here are the benefits of using a high converting sales funnel:
Consistent Lead Generation: Having processes in place to systematically generate new leads allows you to acquire customers at profit and scale. You can do as little or as much lead generation as you want. Once you have your system established, you can scale your business by focusing on improving your products or services.
Predictable Revenue: Your profits and revenue will be consistent and predictable once you’ve tested your funnel and have it working. Like Mubaid, who increased his sales conversion rate to 9-10% using Relationship Funnels. Or Landon who made over $6,400 in just six weeks.
Performance Tracking: You will be able to measure how your business is performing on a daily, weekly and monthly basis by analyzing your performance dashboard and analytics. This allows you to make data-driven decisions and make improvements to your funnel.
Improved Communication and Decision Making: You will also be able to more effectively communicate with your team and make better decisions based on data. This allows you to streamline your business operations and focus on growth.
Would you like to see a visual representation of the Relationship Funnel stages? Check out our free Relationship Funnel graphic.
Real-Life Examples of Sales Funnels
Y Combinator is a small business accelerator that invests in early-stage startups. They’ve invested into successful companies like Airbnb, Dropbox, and Reddit. Y Combinator’s portfolio of successful companies has a market valuation of over $30 billion. Y Combinator builds brand awareness by getting featured in top-tier media outlets and investing in successful companies that help spread the YC name. They also provide educational content and programs to attract startup entrepreneurs. Y Combinator focuses on building a relationship with their target audience by providing valuable content through their website, social media, and events. They have a sales stage where startups can apply for funding and a program called YC Growth that helps companies scale their businesses. Y Combinator maximizes profits by offering additional products and services, such as one-on-one mentoring and online courses.
Tony Robbins is a world-renowned motivational speaker and entrepreneur. He has built multiple successful companies that earn around $6 billion annually. Tony uses content marketing, including podcasts, articles, and videos, to create awareness of his brand and attract his target audience. He also utilizes social media and syndication platforms to expand his reach. In the Relationship Stage, Tony builds relationships with his audience by sending out valuable content through email marketing and automation. He offers his front-end program, the Tony Robbins Starter Kit, to audience members who are ready to buy. In the Sales Stage, Tony sells his core product, the Unleash the Power Within live event, through sales calls and a landing page. He maximizes profits by offering additional products and services, such as virtual events and one-on-one coaching.
Sales funnels are a crucial tool for businesses to generate consistent sales and predictable revenue. By understanding the stages of a sales funnel and implementing a well-designed funnel, businesses can attract leads, build relationships, close sales, and upsell additional products or services. The benefits of using a sales funnel include consistent lead generation, predictable revenue, performance tracking, and improved communication and decision making. Real-life examples of successful sales funnels include Y Combinator and Tony Robbins. So, if you want to take control of your business growth and achieve consistent sales, it’s time to implement a high converting sales funnel.