Developing and managing sales funnels is one of the most powerful marketing engagement tools in your small business. Email marketing is your follow-up system in your business. Each type of sales funnel is a tactic of email marketing and can impact buyer behavior. Marketing happens in stages. It is the customer-buyer journey and the execution of the sales funnels that drive action. Once your drive a prospect to your landing page or website and opt-in to your offer or lead magnet, your sales funnel takes over to build the relationship. By knowing each step of the buyer journey, you can use tactics to improve the number of people who go from one step to another. For example, let’s say you double the number of people at the second step of your funnel. When you double your leads, you potentially double the percentage of closed sales. That gives you four times the number of new leads every month, which should significantly impact your monthly revenues. This is Part 1 of a two-part series on sales funnels.
Marketers like to make sales funnels sound complicated, but they don’t have to be. The secret to a great email sequence is being as helpful online as you are in person. The best emails read like you are talking to a friend.
Before I go deep into sales funnels, I need to take a moment to define the customer buyer journey or the sales path that you want to drive the customer down to get exposed to your offers. There are five stages in any customer buyer journey: Brand Awareness, Consideration, Purchase, Retention, and Advocacy.
The Brand awareness stage is all the ways you engage people about your business brand, content, and offers (website, social media, content marketing, paid ads, speaking, media interviews, etc.)
The Consideration stage is when your lead is considering your brand alongside other offers. (Content marketing, value comparison charts, product demos, sales calls, etc.)
The Purchase stage is when a sale is made.
The Retention stage is when the relationship starts. What is your new customer process? Do you check in with them days later to make sure they are happy? (Unboxing experience, onboarding, exclusive content/access, customer support services, training opportunities, special discounts, etc.) Just add more value for your customers, so you keep them as a customer.
The Advocacy stage is when you turn a customer into a raving fan. (When they really love you, they’ll tell people.) Referral business is the best kind of business to get, and it closes faster.
The primary difference between the customer journey and sales funnels is that sales funnels work to turn visitors into leads and leads into customers, while the customer journey is the overall sales path.
Historically, people have been taught that the sales funnel is a downward process that thins out leads on the way down and ends with a purchase, but I push back on that notion. The modern sales funnel is more like a bow-tie shape. The reason for this is because the relationship deepens when a purchase is made. The retention stage is as important as the purchase stage. The goal of any business should be repeat business. Small business owners must focus on existing customers as much or more than new leads because a new lead is only 5%-20% likely to buy, but an existing customer is 60%-70% likely to buy again, making them critical to the long-term success of any business.
Why are sales funnels important?
The first time a visitor sees your offer, they are not likely to buy. It typically takes 5 to 30 reaches to get a target customer’s attention. Sales funnels are often referred to as email nurture sequences or drip campaigns that are automated to deliver ongoing communications to your leads, prospects, and customers. Your goal is to build a solid foundation with them and earn their trust, so they can be receptive to your offer. Email sequences can be timed so that your emails arrive when they are most likely to have an impact. The key to success with email marketing is to segment your list. You’ll find that 6th graders do not want to be spoken to like they are 1st graders, and adults are the same way. Get as much information as you can about your leads so that you can send them the appropriate content and marketing messages. The sooner you start using sales funnels and email automation to engage with your email list, the sooner you’ll take advantage of one of your most powerful assets.
You can’t develop an effective sales funnel without a value ladder or all your sales offers.
Whether you operate in a B2B or B2C industry, few businesses wouldn’t benefit from having a value ladder. The implementation of a value ladder increases sales potential and income. Value ladders tend to start with something small and easy to sell — like a free offer or lead magnet to build some initial trust and get the lead interested in your brand, then you start building your steps with paid offers. See the diagram.
What are the elements of a value ladder?
First, clarify your target customer, Lead magnet, Tripwire, Core offer, and Premium offer. A value ladder consists of a range of products that range in price from your lowest to your highest priced premium solution. The lowest offer can increase the size of your email list. Plus, it can prove your customer to your leads and raise awareness about your brand. Your goal will be to direct customers to ascend every stage of your value ladder to maximize their spending potential. The best value ladders don’t have endpoints. Rather, they conclude with high-value repeat spending options like recurring subscriptions, VIP retreats, high-end coaching packages. When a value ladder is designed and executed well, a business can maximize its customer’s lifetime value.
How to create your value ladder:
1.) Start by digging deep into your target customer. Who are they? What inspires them? What are their biggest fears? How do they spend their leisure time? Learn as much as you can about your target audience beyond basic demographic information. Then define your user customer personas. A customer persona is a semi-fictional archetype that represents the key traits of the target segment of your audience, based on the data you’ve collected from customer research and your web analytics. You need to be able to see the face of your customer.
2.) Develop a lead magnet. Your lead magnet or irresistible free offer is how you build your email list.
3.) Then you need a tripwire. This is a no-brainer dirt-cheap offer that typically costs $7-$47) Typically, your offer should be worth at least double the price you are charging. You want to use this offer to demonstrate how well you serve your customers.
4.) Next, you need to define your core offer. ($97-$497)
5.) The final step is determining your premium offer. ($1997+)
By the way, sevens roll off the tongue better than round numbers. You want to appeal to the customer psychologically that your offer is under $500 at $497.
Now that you understand the customer buyer journey and how to build a value ladder, you’re ready to dive into the exact sales funnels you’ll need to drive sales. In Part two, we’ll talk about the 9 sales funnels every small business owner needs.
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