Sales Funnel 101: Increasing Your Bottom Line By Knowing How Your Funnel Works
The concept of sales funnels has always been a part of every Internet Marketer’s lingo. It has been explained and interpreted in various versions across the web. This simple selling concept oftentimes, becomes a confusing topic to many. I have dissected the funnel into 3 simple stages. It is presented it in a way that is easy to grasp even by those who are new to this concept.
What is a Sales Funnel?
Sales Funnel defined:
The Sales funnel concept was derived from the metaphor of a funnel (wide opening at the top and a narrow tube at the bottom) to clearly illustrate the sales process.
The opening of the funnel is a catch basin of all prospects which we will call the “Unqualified Leads (UL)”. These are leads come from various sources like SEO, Social Media, Email marketing, Pay per Click (PPC), clickfunnels $19 Traditional marketing, and the likes. These are usually prospects that may have a potential to be converted into a customer overtime. You will then need to filter these prospects to identify who are ready to buy, which we call the “Qualified Leads (QL)”.
Sales Leads defined:
A “lead” or “sales lead” according to Wikipedia is “the identification of a person or entity that has the interest and authority to purchase a product or service”.
The metaphor of the funnel was used because when the leads go through the opening/mouth of the funnel, it goes through a process called the “Leads Qualification Process (LQP)”. As it moves down the funnel, it is then filtered leaving those leads that has a potential to be converted into a sale. Thus the narrow tube of the funnel shows that only a very few are shortlisted and the unfit are set aside for the next cycle of leads qualification. The leads qualification process will be explained in great detail below.
Why is a Sales Funnel important?
- It saves you time and money when you qualify the leads early on.
- It helps you focus on the leads that can easily be converted into a sale.
- Shorter sales process ergo increases your bottom line.
How does a Sales Funnel work?
We will work on a premise that the prospect has a need for your product/service and that you have the product/service to serve that need. A qualified lead must comply/address all the questions below:
- Is he the decision maker/influencer?
- Does he have the budget?
- What’s his buying timeframe?
Note: Any time more than 3 months, the lead goes back to the pool of Unqualified Leads and will be filtered again on the next cycle. This is where the use of CRM tools like Highrise(37 Signals), Pipeline Deals, and Salesforce(Enterprise) come in handy.