“Know, like, and trust.”
This is how John Jantsch describes marketing.
So it’s always about your potential customers getting to know and like you first. Only then will they build trust.
That’s why inbound marketing is about your customers finding you.
It’s a good start, but it’s only the first step. But what happens afterward?
This is where the sales funnel comes into play. This is based on the right, old AIDA formula. So let’s start with that.
What is the AIDA formula?
In 1898, a marketer by the name of Elias St. Elmo Lewis came up with a tried and tested method of turning prospective customers into customers:
- Attention (attention) – Win the attention of your potential customers for your solution.
- Interest (interest) – Keep your potential customers interested so that they can deal more closely with your answer.
- Desire (wish) – Awaken the wishes of your potential customers by communicating the benefits.
- Action (action) – Make a clear call to work so that your potential customer will buy your solution.
It is the classic buying process that everyone goes through. Everything in marketing is based on this simple formula. For example, your homepage, your email campaigns, landing pages, and your sales funnel are inbound marketing process.
But what exactly is the latter?
What are a sales funnel?
As a rule, every company uses a sales funnel. Consciously or unconsciously. Complete or incomplete.
You can think of a sales funnel as a funnel. Put a lot of water in at the top, and a fine jet comes out at the bottom. Accordingly, you pack visitors in at the top, and perfect customers come out at the bottom.
But with a household funnel, the same amount of water comes out at the bottom. However, this is not the case with a sales funnel. So the metaphor of a holey sales funnel is much better.
So you lose visitors, leads, and customers along the way.
The sales funnel is often also called “conversion funnel”, “marketing funnel”, ” email funnel “, “content funnel” or simply “funnel”. In principle, everyone thinks the same thing, always has a slightly different perspective. Sometimes with subtle differences.
According to the inbound style, the sales funnel lacks an important part, namely, what comes after the deal.
Therefore, the new customer journey is much better as a starting point.
What role does the customer journey play in the sales funnel?
The customer journey is the journey that your potential customer goes through until he becomes a customer:
Let’s go through the individual phases briefly:
- Awareness – Your potential customer recognizes their problem or need, has become aware of, and is interested in your solution.
- Consideration – Your potential customer is considering buying your solution. He is thinking about how well she can solve the problem or satisfy the need.
- Conversion – your potential customer buys your solution and uses it.
- Retention – Your customer is satisfied or even enthusiastic about your answer. If possible, he will repurchase your answer.
- Advocacy – Your customer is so excited that he tells his friends, family, and colleagues about your answer.
If you e.g., B. wants to buy a new car, don’t go straight to the first best dealer, do you? Most people first think about buying a new car. Go peddling a bit with the thought. They then search and research online. You get several offers and compare them. Finally, they do one or more test drives. If everything is correct, only then will they buy the new vehicle.
This process is anything but linear. That’s why it’s a trip. A wild trip. It can take a long time. In between, there can be short or long breaks. There are many points of contact with the company. Usually, there are about seven until it is bought.
If we now take the customer journey and compare the AIDA formula, it looks like this:
It’s two sides of the same coin. Nearly. Because, as already mentioned, an important part is missing, namely what comes after the sale.
Therefore there is a lot of criticism. The question that arises: Is this sales process still up to date today?
How important are the sales funnel today?
There are many posts ( here, here and here ) that describe that the sales funnel no longer so important. That it’s too linear. Today the customer journey has gotten a lot of wilder with lots of different touchpoints.
In response, McKinsey has created an exciting model that is circular:
They call it the “Customer Decision Journey”. But here, too, some voices say that the model is out of round. Because it’s not just about the decision, it’s about the relationship.
Brian Clark from Copyblogger has developed another exciting model that does not look at the funnel from the side, but from above and focuses on inbound marketing:
Of course, I agree with all of this. For me, the models often mean the same thing. Sometimes a little something is missing, but I would like to add it! 🙂
The thing is, everything is based on the right old AIDA formula. Because that’s the buying process that we all go through, that was the case 100 years ago and will remain so for the next 100 years.
However, as a company, we still have the responsibility to not stop after the sale and to keep delighting our customers.
What are the advantages of a sales funnel?
If you keep in mind the metaphor of a funnel, there are several advantages:
- Clarity – it becomes clear to you that it is quite reasonable for not all of your prospects to become customers. You also have a solid overview of your sales process.
- Measurability – You know the individual phases and can measure your success precisely. You know which screws you should turn to increase your sales.
- Forecasts – You know your key figures and make better and easier predictions for future sales growth. This gives you a better basis for planning.
The focus on your sales funnel brings you more efficiency and a higher customer lifetime value. Simply put, you sell more.
How do you create a sales funnel?
A simple sales funnel can be divided into three levels and looks like this:
If you like, you can still pack “opportunities” (qualified lead) between leads and customers. Or split your points into MQLs (Marketing Qualified Leads) or SQLs (Sales Qualified Leads). There is no right or wrong here. It always depends on your company and your sales funnel.
- Visitor – The visitor is attracted by high-quality content and lands on our website.
- Lead – The visitor becomes a lead by downloading our free e-book or signing up for our free updates.
- Signup – The point sees the calls-to-action on our website and receives emails to test Chimpify.
- Customer – The user checks our platform, possibly gives us feedback, and buys our solution. Mission accomplished.
Since I am a big fan of keeping things as simple as possible, I recommend that you start with the three simple steps and add some if necessary.
What else should you be aware of in your sales funnel?
Another vital part that is somewhat invisible is the value ladder.
But because you are now looking at your offer in stages, you notice gaps to be able to accompany your customer even better.
It also increases your customer lifetime value because a customer who has already bought something from you is more willing to buy something from you again.
Let me give you an example. Let’s say you’re a coach. Accordingly, a simple value ladder would look like this: e-book (lead magnet)> book (frontend offer)> conference (middle offer)> seminar (backend offer). At first glance, this doesn’t seem particularly exciting, but it is powerful.
Mainly because of backend sales. So you can afford not to be profitable in the frontend or only to cover costs (e.g., if you publish your book for free or very cheaply) because you know that you can expect a long-term customer relationship later. Provided, of course, that you know your key figures.
If you are a software company, you usually automatically have a value ladder in it. Because here, the packages are limited by defined factors. With us, these are e.g., B. Email contacts. And when your customers grow, you grow with them.
With your funnel, think about which products that build on one another and could offer (preferably with costs, but also free of charge), so that you can accompany your customers perfectly and get the most out of your company.
What do a sales funnel looks like in inbound marketing?
After taking a simple sales funnel, let’s take a quick look at what it looks like in inbound marketing.
Since inbound marketing is very content-heavy, it is about which content you should deliver at which phase of the customer journey or sales funnel. Here you should make sure that you always use the entire content.
Which key figures should you consider in the sales funnel?
Fortunately, with a simple sales funnel, there are not many indicators that you should look at. In essence, it’s always about the number of conversions and the associated conversion rate.
Above all, you should always keep an eye on the conversion rate. It is the lever for more efficiency.
Here are a few benchmarks that you can use for a fixed rate:
- CVR visitors to lead: 1-3%
- CVR leads to customers: 0.5-5%
As always, with benchmarks, that’s one thing. They should only give you a rough direction. The main thing is that you focus on regularly increasing your key figures.
We track our funnel daily to keep our finger on the pulse. We also look at it together every week and think about where we can still optimize.
Inbound marketing is always about being found by your potential customers. But just being seen is not enough.
Therefore, you should focus on your sales funnel.
Your goal should be to set up your funnel as quickly as possible, track it regularly, and optimize it. In this way, you gently guide your prospects from one phase to the next and accompany them on their customer journey.
Even if some voices think that the sales funnel no longer relevant, it is nevertheless. It’s just the classic buying process that we humans go through. You can’t shake it.
You mustn’t forget your customer after the sale.
A sales funnel often ends up with sales. But that is also automatic (as the Atlassian story shows, for example ).