The Sales Funnel
Alright, we discussed the elements that sit at the top of the funnel—the customer avatar, the different traffic sources, and the return paths.
Now let’s move on to the actual funnel:
The Top of the Funnel
The top of the funnel is typically going to feature great content such as:
- Blog posts;
It’s all about the mass market stuff—for example, in an old school company with old school marketing channels, this is your billboard on the highway, your Super Bowl commercial.
These pieces of content are designed to hit a very, very broad audience. What you are reading right now might as well be created for the top of the funnel.
The goals here are going to be things like:
- Acquiring new traffic;
- Segmenting your visitors based on their interests;
The metrics you might use to monitor these goals include:
- Total number of new visitors;
- Percentage of new visitors of your overall traffic;
- New direct visitors;
- The size of your retargeting list;
The Middle of the Funnel
The middle of the funnel will consist of tactics that are a little bit more targeted.
It may be something that’s colloquially called a lead magnet—giving users something in exchange for their contact details.
It may also be some type of opt-in, or maybe a low-priced offer (often called a tripwire, some type of $0-$19 product, a product that’s designed to give the user a ton of value in exchange for their trust, and commitment.)
The goals here are going to be something like:
- The total number of returning visitors;
- Leads generated;
And the metrics to use when measuring these goals include the following:
- Total returning visitors;
- Total number of new leads;
- The growth of your retargeting list;
- Total number of sales of your tripwire, and so on.
The basic idea here is that you have the user at the top of the funnel, you are warming them up to your product and who you are, you push them down in the middle of the funnel, and you want them to keep coming and engaging with you again, and again.
The Bottom of the Funnel
At the bottom of the funnel, there’s typically one thing going on—your core offer.
It doesn’t mean it’s just one product, it’s not your best selling product. It’s just the thing you do on your site, or the primary thing you want to achieve in your business.
The goals here are pretty obvious:
- Maximizing conversions;
- Increasing the conversion value.
The metrics that are a good proxy for this are:
- Average order value;
- Total number of revenue per visit;
- Total number of SKUs that you’ve sold;
- Total quantity of items that you’ve sold;
This is something a lot of people get wrong.
Converting users is very difficult—but it is very important to make sure that you make converted users more likely to buy from you again.
They have already made a purchase and loved the experience the first time—so it’s very common that a lot of people forget about retention and trying to give more value and monetize their users after the purchase.
Some examples of what you could do in the retention phase include:
- A high-ticket event to an annual conference;
- An ongoing consulting product if you are providing consultation services;
- A monthly subscription;
- A community you have built around the product;
- Any other type of ongoing product customers get value from again, and again.
The goals here are to:
- Get as many repeat buyers as possible;
- Grow your total lifetime value for each customer;
- Reducing refunds and churn.
The metrics that will help you map these goals are:
- Percentage of users that you’ve retained with your product or application;
- Total user lifetime value;
- Net promoter score;
What Is Intertwined With the Funnel
We talked about the elements sitting on top of the funnel: customer avatar, traffic sources, and return path.
Then, we talked about the four stages of the funnel: top of the funnel, middle funnel, bottom funnel, and retention.
There are also two elements that are intertwined with every stage of the funnel: Measurement, tracking, and optimization.
You need to apply these to every stage of the funnel—and it never ends.
The best way to do this is through Google Analytics. Although it can feel very overwhelming at times, Analytics is all about focusing on what really matters.
I like picking a much smaller number of metrics to monitor throughout this whole process—it makes everything easier. Most businesses are able to focus on five metrics or less in order to see a real improvement. You really don’t need to monitor more than that.
You should be constantly experimenting and optimizing. You define your customer avatar, you have your traffic sources and your return paths. You have every step of the funnel. You have your Analytics and tracking.
From here on, you experiment and optimize—and you do this forever. This part doesn’t end.
Good funnel design and conversion rate optimization are the things you do to increase the percentage of users that move from one stage of the funnel to the next.
Keep in mind: this is not just for sales. It’s about increasing the overall efficiency of your entire funnel.
CRO (Conversion Rate Optimization) is not just about increasing the total number of people buying from you. It’s about increasing the total number of people that move through every stage of the funnel.
That’s it – this is the sales funnel, marketing funnel, or conversion funnel. This can be applied to the sales pipeline by all business owners, regardless of the business type they are running (be it a small business, a large eCommerce, or any other business, really).
Once you have done the following:
- Created a great experience at the top of the funnel, in the middle funnel, at the bottom of the funnel, and in the retention phase;
- Made sure your analytics and your optimizations are rolling;
- Make sure you are constantly iterating and reiterating on the aforementioned,
… ladies and gentlemen, you have a loyal customer.