Stages of the sales funnel. In the companies that are in our consulting, we are constantly counting the numbers. Or rather not so. We are constantly forcing the owners to count and analyze the numbers. And they in turn force their employees.
Practice shows that quite often people’s behavior is at odds with expectations, so only the numbers will help to see the true picture of “all is well”, “all is bad” or “you can Live”. And for the calculation of numbers among the many tools helps us to build a sales funnel.
In this article we will discuss the issues:
1. What stages of the sales funnel should be?
2. What are the criteria to determine them?
3. That in the end it will give you.
SALES FUNNEL WHAT IS IT?
The term sales funnel has been around for at least 100 years. It was invented and coined by Elias St. Elmo Lewis. He led the way in which each customer comes to purchase:
That is the classical principle of trade and decision-making by the buyer about purchase. Such a thought funnel or, in a marketing term, “consumer funnel”.
And as you can see, in these stages there is a very big similarity with the formula AIDA for the correct preparation of advertising. Therefore, it is often called “marketing funnel”.
But we are interested in how the sales funnel works in reality. And why does everyone talk about her so much?
Stages of the sales funnel, what they are?
The sales funnel is a derivative of the consumer funnel, but it is the way that the customer goes from the first contact with the product/service to the conclusion of the transaction, that is, the purchase. And all this is divided into stages.
In different literature, and on the Internet, I met different schemes of the sales funnel. And the classic 4 stages, and very long, consisting of more than 12 stages.
In this article I will tell you the General guidelines how to make a sales funnel, with examples. After studying you will understand what should be the correct structure of the sales funnel in your company, what steps to include and in what sequence.
We constantly encounter a mutiny among sellers, when announcing that it is now necessary to work with a funnel. That’s OK. After all, the hidden becomes apparent. Do any of you just want to show the skeletons in your closet?
Now I’m talking more about the cases when the sales funnel is introduced in wholesale or retail trade. When implementing a funnel in the Internet revolt this is almost there.
There and so everything is easily tracked, and most often without their participation. Not offline.
Employees count everything manually (come, bought, passed, etc.). For this, they will hate us and you, although part of the process can now be easily automated.
But it’s all from a misunderstanding of why we need a sales funnel. From a misunderstanding that businesses must not only count the sales, profit, margins, but also indicators of stages of the sales funnel.
After all, thus you can see the weaknesses in your company and understand what you need to focus on at this time. And, as a rule, sales managers do not need the analysis of the sales funnel, they are “not up to it”.
Important! Next will go a small part of the theory, while reading which, you will feel that it is not for you. But, don’t go. Read the rest. This is no accident. First-the basics, then concrete examples in reality.
Classics of the genre
If you ask me about the universal stages of sales in marketing (bypassing the hunt Ladder), you can portray them as levels. 8 classic sequential levels:
1. Familiarity with the proposal. Your first contact with the client;
2. Definition with choice. The belief of the client to choose your product;
3. Intent to acquire. Task formation buy;
4. Bargaining. Formulation of transactions;
5. Intention to make payment. Everything is clear;
6. Getting the product. Including evaluation of the success of your purchase;
7. Making a repeat purchase. Provided that all liked it;
8. Making purchases on a regular basis. Provided that all VERY much.
Looks complicated, right? Agreed. Itself in the study of this methodology (5 years ago) puzzled myself how all this “nonsense” can be implemented in ordinary business.
Therefore, in simple language, on the example of b2b business:
1. Making cold calls (getting acquainted with the offer);
2. Product presentation (definition with selection);
3. Sending a commercial offer (intention to purchase);
4. Signing of the contract and invoicing (conclusion of the transaction);
5. Payment (intention to make payment);
6. Shipment of goods (receipt of the product);
8. Making purchases on a regular basis.
Or here’s an example of a retail store:
1. The client saw the advertisement (acquaintance with the offer);
2. Went to the store (definition with a choice);
3. Tried on a thing (intention about acquisition);
4. Decided to buy it (the deal);
5. Paid for it (intention to make payment);
6. They have started to use (getting product);
7. Returned for another purchase (re-purchase);
8. Became a regular customer (making purchases on a regular basis).
Evaluation of each stage.
There is a simple and logical question, how to calculate the sales funnel? How to calculate each stage? In percentages, the units or as to the advertising: “How to hang in grams?”.
Let’s analyze the evaluation of each stage on the example of b2b sector, where the primary contact begins with the Internet funnel, and then goes to the sales Department.
Will count on three parameters.
- Introduction to the offer
- Google contextual advertising
- Number of transitions in pieces
- Definition with choice
- Left a request on the website
- Number of applications in pieces
- Intention to acquire
- Sending a quotation
- Number of CP sent in pieces
- Agreement and signing of the contract
- Number of invoices issued or contracts sent in pieces
- Intention to make payment
- Payment for goods
- Number of invoices sent
- Getting the product
- Shipment of goods
- Number of shipments in pieces
- Making a repeat purchase
- Repeated purchases
- Number of re-shipments in pieces
- Making purchases on a regular basis
- Constant purchases (from three purchases and more)
- Number of shipments in pieces
The period of time for which you define these indicators is most often measured either “in days” or “Months” or “per quarter”. For example, we measure” Orders “every day, but” Repeat purchases ” we already measure once a month.
MORE TO THE POINT
You survived the most boring but important part of this article. Now let’s summarize, consider what you do with this miracle and how to create a sales funnel for yourself.
And now, you probably have a question: what does the sales funnel look like in the end? So, if you fill everything out, calculate, and draw, the visualization of the sales funnel will be as follows:
Sales funnel stages visualization
It turns out that at each stage the number of actions is less and less, the principle of the funnel is applied, hence the concept.
People get lost, leave, change their mind at each stage when moving to buy (top-down). And already here it is clear what are the weakest points in your company.
We turn to the most important thing — how to make a sales funnel.
1. Define your stages
The funnel should be built on the example of those stages that we considered earlier. In your case, the structure of the sales funnel may be different, the stages may be different or there may be more.
After all, it all depends on the number of touches with a potential client, and how loyal he is to your product/service.
To identify them is not difficult. Just think about which points of contact are most important to you. Usually these are the ones on which customers make their decisions — to buy or not.
Or if you need a maximum program, then write out all the possible stages at which customers are lost and for this you need to know the main marketing indicators.
2. Measure performance
The hardest part of the job. Not building, and system filling of all stages of a funnel. The key word-system that is constant.
After all, in practice it is at this point that failures occur most often, since the owner is not up to this, and managers and marketers do not want to process, believing that they already see everything perfectly.
In this case, if you are lazy and you and colleagues can implement the most primitive funnel of 2-4 stages. Make and fill this will not be difficult.
3. Improve and increase
This of course all is well. You have numbers on your hands. But, they need not just look, and they need to work. Namely, to improve and increase. This is the whole point of the sales funnel — to show weaknesses.
Consider an example for each of these actions.
And now magic. Imagine a situation that you have 360 750 impressions of your contextual advertising for a month. At the exit, having passed all the stages, customers bring $ 5,000.
And now imagine that we just took and increased the cost of advertising by 60%, and thus increased the number of impressions, which as a result gave us 6300 dollars. Which is 26% more than the previous figure.
Sales funnel stages increase
Note that by increasing each stage of the funnel by an arbitrary number of percent, you can not just increase sales figures, but simply blow them up.
And it does not always need such a large increase in the form of 60%. Somewhere it will be enough from 1%, to make 1.2% and your sales will grow one and a half or two times.
For example, your employee makes daily cold calls to the sales script, in the amount of 30 pieces. Where only 10 are successful and it comes to the decision maker.
All the rest stuck at the stage of “the Passage of the Secretary”. This means that the conversion from call to communication with LPR is 33% (1 out of 30).
In this case, the correct strategy is not to increase the number of calls, but rather to improve the conversion rate.
To from 30 dials, we passed secretaries 66% (20 from 30). This kind of improvement will give us double sales.
Another example from this process. Managers issue 100 invoices per month for a total amount of $ 15,000 (with an average check of $ 150), of which only 50% is paid.
So we take and do everything possible to increase the number of payments to 60%. And most likely there is not much to do. As a result, we will get $ 1,500 more, just increasing one stage by 10%.
The main advice of this article is not even that you need to know what are stages of the sales funnel. And not even that you need to paint it individually for your business.
And the fact that many companies in vain neglect this tool when it can give much more than it seems at first glance.
Otherwise it turns out there is no difference:
1. you invest the money into a new ad or not,
2. invest time in training managers or not.
Since if you do not analyze the indicators, and do not know how much profit has increased after that, or how increased the conversion from stage to stage, all this was done in vain.
Business is numbers, and not just profit with marginality.