Succeed As Your Own Boss

ENDING SMALL BUSINESS FAILURE

  • Home
  • About
  • Book Melinda
  • Consulting
  • SBL Store
  • SmallBizLady University
  • Free Tools
  • Podcast
  • #Smallbizchat
    • Be a #SmallBizChat Guest
  • Blog
  • Contact
    • We’re Hiring!
You are here: Home / Grow Your Business / How to Create a Profitable Sales Funnel

How to Create a Profitable Sales Funnel

January 20, 2011 By Melinda Emerson 1 Comment

Feel free to share...Share on facebook
Facebook
Share on twitter
Twitter
Share on google
Google
Share on linkedin
Linkedin
Share on pinterest
Pinterest
Share on reddit
Reddit
Share on email
Email
Share on print
Print

small biz chat with melinda emersonEvery week as SmallBizLady, I conduct interviews with experts on my Twitter talk show #SmallBizChat. The show takes place every Wednesday on Twitter from 8-9pm ET. This is excerpted from my recent interview with Hugh MacFarlane @funnelguy Hugh has 20 years+ experience in working with Business owners, Boards, CEOs, Directors of Sales and Marketing with products or services that are complex to sell. Hugh is also the author of The Leaky Funnel, a book which teaches how to develop a sales funnel, and improve sales and marketing effectiveness. For more information visit www.mathmarketing.com.

Smallbizlady: Your book, The Leaky Funnel, is based on what you call — Funnel Logic. Can you briefly describe it?

Hugh MacFarlane: Funnel Logic is a sales and marketing management and planning system used to increase prospect progression through the sales funnel, and improve sales and marketing effectiveness. It is a “belief system” built upon four key principles relating to how sales and marketing are conducted in the best-run businesses. Firstly, the combined sales and marketing function should build its activities around the buyer’s journey; not the sales cycle. Secondly, how many prospects will progress through each of these stages of this journey over time? Thirdly, what tactics will be used to cause this progression? And finally, the actual progression should be measured, so that tactics that work can be bolstered, and those which do not can be shelved.

Smallbizlady: What is the ‘buyer’s journey.’ What do you mean by that?

Hugh MacFarlane:: Business buyers go through a process as they buy. They start off untroubled and unaware — even complacent — and then at some point, they become troubled. Once they’ve acknowledged their problem, they decide what they need to solve that problem. They then make their preferences, receive proposals and, ultimately, select a vendor, sign a contract and engage. We call this the buyer’s journey.

Smallbizlady: What are the stages of the buyer’s journey?

Hugh MacFarlane: It is important to remember that businesses don’t just wake up in the morning and decide to purchase something. They take a journey:

  • It starts with being Positioned in Category which means the buyer knows you are one of the businesses who sells a particular product or service.
  • Then Interest Established: The buyer has done something (called, clicked etc.) to show they are interested.
  • Gap Acknowledged: The buyer will acknowledge that a problem exists.
  • Need Agreed: The buyer agrees what they need, even if they are not sure who to choose.
  • Offer Understood: The buyer knows what we are proposing to do to meet that need.
  • Preference Formed: The buyer prefers our solution.
  • Decision Made: The buyer moves to contract.

By structuring your sales and marketing around the buyer’s journey, your focus is on helping them move through each stage.

Smallbizlady: So, the problem you solve for buyers is key. How do you choose which problems to focus on?

Hugh MacFarlane: The challenge is to identify a buyer problem that you are strong at solving, and one that you can solve better than your competitors. This ‘feeling out’ process is all about finding a problem that is worth focusing on and that you solve well. If you are good at solving buyer problems that are not rewarding, you will major in the minors. On the other hand, if you are focusing on the right problem but from a position of weakness, you will not be able to rival your competition.

Smallbizlady: Once you’ve picked a single problem, should that influence your sales and marketing strategy?

Hugh MacFarlane: Simply, yes. In identifying your buyer’s problem, you are able to clearly define three key aspects of your sales and marketing function. Firstly, what your business is selling is now a clear solution to a problem. Secondly, who you are selling to, becomes who has the problem. And thirdly, how you will reach your buyers, translates to, what is the channel that uncovers the problem? This basically turns our thinking inside out:

What began as:

What do you want to sell?

To whom do you intend selling?

Through whom will you reach them?

Becomes:

What best solves the problem?

Who is most affected by the problem?

Who best can help buyers accept the problem?

Smallbizlady: Once you’ve formulated your strategy, how do you develop an action plan?

Hugh MacFarlane: Once you have turned your strategy inside-out, it is time to translate this strategy into action. In order to do this effectively you must select tactics to help these potential buyers recognize that they have this problem. However, your strategy does not translate into action…yet; because our tactics are often arbitrary. I say this because businesses will often select tactics on the strength of; they worked last year, or it seems to work for our competitors, or we’ve always done it this way. I present an alternative. Remembering the buyer’s journey, you must select tactics that will progress buyers through that journey; through each stage.

Smallbizlady: What about volume? How do you work out the number of buyers you actually need to progress?

Hugh MacFarlane: Trying to calculate the number of buyers you actually need is a valid pursuit, however it can be a trap. When doing this, you must keep two things in mind: buyers need time to progress (take their journey) and your tactics need to be repeated several times to have an effect (“one-hit-wonders” rarely do the job). Marketing teams are always geared for success, but it is often how they capitalise on failure that makes them rich. If you start with a simple numerical model mapping your prospective buyers progressing along their journey — importantly remembering to allow for leakage at each stage — you quickly realise two scary realities:

A vast majority of initial leads will leak at some stage along the journey, so doesn’t it make sense to have a proper recycling program?; and Shouldn’t we have some idea of the effect of recycling before we plan a demand generation campaign?

Given this, in order to work out exactly how many buyers you will need, you need to recycle all the “leaked” buyers back into your funnel and re-run the model. Decide how much of the total revenue Marketing is to contribute and then adjust your top-of-funnel number until the “customer” (converted buyers) number will contribute the desired revenue outcome.

Smallbizlady: And once you know how many buyers you need to progress, how do you actually get them moving?

Hugh MacFarlane: Ultimately, what you are trying to achieve is to nurture your buyers along their journey. In order to do this, you need tactics that move your buyers through your funnel from stage to stage. In a practical sense, you must initially identify buyers who meet your target profile, position your brand on their list and get their attention, convince these businesses to accept they have the problem you solve best, gain acceptance and backing of your own solution and then move to contract.

Smallbizlady: What are some examples of progression tactics that are suitable for small businesses?

Hugh MacFarlane: There are many tactics that will work just as well for big business as they will for small operators. As your goal for progression is to keep doing the small rhythmic tasks that keep the prospect aware of how you can solve their problem; something as simple as a monthly email or blog article will have the same effect no matter what size the business. It is likely that your financial position or operational capability will dictate what is actually possible. Investigate options for each stage of your buyer’s journey; here are some common tactics:

  • Get known by making sure all the key bloggers mention you and the problem you solve.
  • Trouble buyers by asking tough questions on your website and in meetings.
  • Agree the need by providing a template showing typical buyer needs.
  • Confirm your buyer’s situation, problem and need by email after meeting.
  • Build this whole journey (situation, problem, need and solution) into your proposal in case there are others involved in the buying process.
  • For all buyers who leak (at any stage) recycle and nurture using regular email and thought leadership.

Smallbizlady: How do you see social media? What new tactics work for B2B?

Hugh MacFarlane: The marketing benefits of social media are just now beginning to become apparent. While there has been endless conjecture surrounding the ways in which social media is going to revolutionise the way we market products and services, the initial hype is beginning to turn into some sort of reality. As this is a small business forum, let’s consider some relevant B2B uses for various forms of social media. Blogging, micro-blogging (Twitter) and video blogging (YouTube) are great ways to position and even trouble business buyers on a shoestring.

Smallbizlady: What about buyers who fail to progress?

Hugh MacFarlane: It is often the small percentage of successful lead conversions that get all our attention — while the other, much higher, percentage that leaked gets forgotten. Adopting tactics that recycle those who have already leaked, in order to assist nurturing tactics that stem the leakage, can turn neglected prospects into future customers. Recycling tactics handle those buyers who fail to progress — the leakage; these tactics ready a buyer for re-entry into the funnel. While these leads are in the funnel, specific nurturing tactics keep the buyer from leaking. Having captured the buyer’s details, relevant and rhythmic eDM, Tele-nurturing and RSS updates will keep your name and your solution at the front of the buyer’s mind.

Smallbizlady: What would you say is key to successfully executing tactics?

Hugh MacFarlane: To help your buyers move along their journey, down the funnel, you have to execute the correct tactics at the correct time; however, as we have already agreed there is always going to be leakage. When executing tactics, the key to success is rhythm — if you can manage tactics in a way that will take advantage of ’leakage’ whilst nurturing leads still in your funnel, success will come. If you can reach a point where you have a sound grasp of your buyer’s journey, Sales and Marketing are on the same page tactically and your tactics for progression are working — it is now time to focus on obtaining good momentum that  allows for recycled leads to be rhythmically nurtured, even if a little at a time. In B2B marketing, I like to use the term ‘corkscrew’ to refer to a tactic (or series of tactics) that you can execute over and again, knowing that while the buyer will only drop into your funnel occasionally, every time you twist the corkscrew, you are moving them along — a little.

If you found this interview helpful, join us on Wednesdays 8-9pm ET follow @SmallBizChat on Twitter.

For more tips on how start or grow your small business subscribe to Melinda Emerson’s blog http://www.succeedasyourownboss.com.

Feel free to share...Share on facebook
Facebook
Share on twitter
Twitter
Share on google
Google
Share on linkedin
Linkedin
Share on pinterest
Pinterest
Share on reddit
Reddit
Share on email
Email
Share on print
Print

Filed Under: Grow Your Business, Q & A Interview, SmallBizChat Tagged With: Hugh MacFarlane, marketing, sales, sales funnel, SmallBizChat, tweetchat

Fix Your Business Now!

Order SmallBizLady's new book Fix Your Business, 90-Day plan to Get Back Your Life and Reduce Chaos in Your Business. It includes the 12 Ps of Running a Successful Business and readers will finish the book with a new strategic plan to take their business to the next level.

About Melinda Emerson

Melinda F. Emerson, “SmallBizLady” is America’s #1 Small Business Expert. She is an internationally renowned keynote speaker on small business development, social selling, and online marketing strategy. As CEO of Quintessence Group, her Philadelphia-based marketing consulting firm serves Fortune 500 brands that target the small business market. Clients include Amazon, Adobe, Verizon, VISA, Google, FedEx, Chase, American Express, The Hartford, and Pitney Bowes. She also has an online school, www.smallbizladyuniversity.com, that teaches people online marketing and how to start and grow a successful small business and publishes a blog SucceedAsYourOwnBoss.com. Her advice is widely read, reaching more than 3 million entrepreneurs each week online. She hosts The Smallbizchat Podcast and is the bestselling author of Become Your Own Boss in 12 Months, Revised and Expanded, and Fix Your Business, a 90 Day Plan to Get Back Your Life and Reduce Chaos in Your Business.

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Let’s Connect

  • facebook
  • instagram
  • tiktok
  • pinterest
  • linkedin
  • twitter
  • youtube
  • feedburner

Sign up for the SmallBizLady BUZZ Newsletter and be the first to receive updates and details about upcoming events:

We’re proud to be part of the Mediaplanet Empowering Small Business campaign! The COVID-19 pandemic brought hardship and ruin on the nation’s small businesses, but there’s now reason for hope. Learn about the resources, support, and tools available to help your small business bounce back and grow stronger than ever by picking up a copy of the campaign in USA Today and reading it online here.

Get a FREE Chapter of SmallBizLady’s Book,
"Become Your Own Boss in 12 Months, Revised and Expanded"!

Become Your Own Boss

Most Popular Posts

>Seven Ways to be More Profitable in Your Small Business
> 7 Ways to Attract Customers to Your Small Business
> 6 Tips for Managing Small Business Finances
> How to Run a Successful Multilevel Marketing Business
> 10 Ways to Grow Your Small Business With Instagram
> How to Sell on Facebook
> How to Get Over the Fear of Starting a New Business

Featured Videos

Bloomberg News Interview
How to Support Small Businesses During the Holidays

National Speakers Association
Winter Conference

Fox 29 Philadelphia
'Small Biz Lady' gives best advice for starting a new business in the New Year

Fox Business
Starting a Business

MSNBC
The importance of job mentoring for women

#SmallBizChat Live
National Small Business Week: Q&A

Good Day Philadelphia
Expert Shares Tips on How to Become Your Own Boss

Testimonials

Become Your Own Boss is a must read if you’re thinking of launching a business of your own.
Jean Chatzky, Bestselling Author of Money 911 and Financial Editor of NBC’s Today Show
Great step-by-step advice for anyone looking to start their own business.
Andrew C. Taylor, Chairman, Enterprise Rent-A-Car
Melinda Emerson has written a remarkable book. It is essential reading for anyone seeking to make the transition from working girl to successfully working it, as an entrepreneur.
Cynthia McClain-Hill, Past President, National Association of Women Business Owners
The perfect companion for those planning to go out on their own. Melinda delivers firsthand practical advice on how to be the successful entrepreneur. Read it if you want to get it right the first time.
Kenneth L. Shropshire, Professor at the Wharton School of Business, University of Pennsylvania
If you are looking for a versatile speaker who can talk about how to grow small businesses or get started with social media, look no further.
Heather Van Sickle Executive Director, National Association for Community College Entrepreneurship (NACCE)
Her wit and depth of subject knowledge were entertaining and empowering. Melinda is definitely on our short list of seasoned entrepreneurs and business leaders we look to invite back in the near future.
Tennille M. Robinson Senior content & Event producer for Inc. magazine
Melinda Emerson, “SmallBizLady,” is an engaging and witty speaker and a great addition to any conference. Her terrific presentation and compelling delivery give people the information they need and want to become their own bosses and grow success… Read more
Laurie Dalton White Conference Director, Pennsylvania Conference for Women
Melinda Emerson has been a fantastic small business and social media resource for the Pitney Bowes team. Not only is she personable and easy to work with, but she also has an innate understanding of the small business audience. My marketing programs … Read more
Justin Amendola, Former VP, Global SMB Digital Strategy, Pitney Bowes

Latest #SmallBizChat

The SmallBizChat Podcast: How to Reinvent a Legacy Business with Rich Trotter

In this episode, Melinda Emerson welcomes Rich Trotter, a fourth-generation entrepreneur, to discuss his journey in the food industry. Rich shares insights into the challenges and innovations he faced, particularly the transition to natural ingredients. The conversation delves into how small businesses can overcome the impact of the pandemic and adapt to new market demands. […]

Fix Your Business Q&A Video

Recent Posts

  • The SmallBizChat Podcast: How to Reinvent a Legacy Business with Rich Trotter
  • May 2025 #SmallBizChat: How to Position Your Brand with Multicultural Markets
  • How to Tighten Your Sales Infrastructure (Before Your Bank Account Screams for Help)
  • The SmallBizChat Podcast: How Giving a TEDx Talk Can Benefit Your Business with Dr. Dan Young
  • 10 Critical AI Automated Workflows to Elevate Your Small Business

#SmallBizChat

  • SmallBizChat Archive
  • @SmallBizLady

Business Advice

  • How to Start

SmallBizLady Store

Products

Free Chapter

Get In Touch

  • FAQ
  • Be a #SmallBizChat Guest
  • Contact Us
Copyright © 2025
Quintessence Entertainment, Inc
PO Box 280
Drexel Hill, PA 19026
(610) 352-0680
Privacy Policy · Refund Policy

Let’s Connect

  • facebook
  • instagram
  • tiktok
  • pinterest
  • linkedin
  • twitter
  • youtube
  • feedburner