The Importance of Tracking Your Sales Funnel and Creating KPIs and Action Plans around It
When running a business, it’s easy to get caught up in the process of manufacturing your product or providing your service. You’re absolutely great at what you do, but marketing can be difficult and challenging. Let’s say that you manufacture high-quality custom pens in Australia. Aside from manufacturing these products, you also need to find the time and make the effort to market your customised pen products in order to make a sale and sustain your business.
Does the idea of marketing your product or service frighten or paralyse you into inaction? It doesn’t have to be this way. Having a sales funnel in place can help improve the way you market your customised pen products. By using a sales funnel, you can easily identify the bottlenecks and leaks in all of your marketing activities, allowing you to streamline your marketing processes.
Why Your Business Needs a Sales Funnel
But first, what is a sales funnel, and why is it important that you have one? A sales funnel is a series of steps that your marketing team has to go through in order to turn leads into paying customers. By building a funnel system, you have a process in place that will find leads and nurture them until they convert into customers. You can track your leads and prospects through their buyer’s journey from first contact to the final purchase, and plan your marketing activities for each step along the way.
A sales funnel is essential for your business because people usually don’t buy a product or a service based on first impressions alone. A common mistake that many businesses make is trying to make the sale during the first point of contact with a potential customer. However, this technique is rarely successful because the selling process is like that of a courtship.
Just like a budding romance, a lead needs to warm up to you over time. It usually takes a lot of interactions between you and your leads before wallets get opened. You need to establish their trust first and build long-lasting customer relationships before a deal can be closed. This can only happen with the help of a sales funnel.
Stages of a Funnel: The Basics
There are many stages to a sales funnel. The first one is the lead. This person is a part of your target audience that you haven’t had the chance to get in touch with, yet. This person has the potential to purchase the product or service you are offering.
A prospect is someone who you’ve had some form of advertising contact with, and has shown interest on the product or service you are offering.
The third and the most important one is the customer. This is the person you have won over and actually bought the product or service you are offering.
Preventing a Leaky Funnel
Having a marketing campaign will not be worth it if it does not translate into a sale. The ultimate goal of every marketing activity is sales conversion—which is why it is important for you to track and analyse your sales funnel to see how effective it is. More often than not, a sales funnel can get leaky if one employs the wrong tactic or strategy, with the end result being spending more for marketing but getting less in return.
One effective way of using your sales funnel is by not treating all of the customers the same way. Track only the leads and prospects who are ready to become paying customers. You need to study the leads you have right now, distinguish the real prospects from the duds, and separate the "just looking" to the "really interested." Check your current KPIs and see the ratio of leads to qualified leads. Once you have segmented your leads, you can decrease the marketing legwork on those people who are "just looking" and focus all of your efforts instead on those people who are ready to buy.
Tracking your sales funnel allows you to qualify your leads and ensures that nobody falls through the cracks or gets left behind. This will result to a great improvement in your marketing performance and will make a big difference to your company’s bottom line.