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Inbound Marketing: What is a Funnel?

 FunnelInbound marketing is a way of attracting more customers to your business. We’ve discussed several aspects of inbound marketing this month. Next, we should talk about your sales funnel.

 

Finding Your Customers

 

Every business owners should understand his/her target customer or audience. Business owners also need to know or learn:

 

  • The lifetime value of every new client. How much money is a new client worth to you over their relationship “lifetime” with your business? Knowing this will help gauge how much you can/should spend on marketing and advertising. For example, if one new client is worth $5,000, that investment of $500 is fine.

  • The age, rough income, education level, and other demographic information. We talk about this more in our post on personas.

  • Cost of Customer Acquisition - Calculate your CAC by dividing all the costs spent on acquiring new customers (marketing/advertising) by the number of new clients obtained in a period, such as a month.

  • What do you consider a conversion? We’ve talked before about landing pages and tracking people. One metric you track is how many conversions you have on your website or landing page. But is a conversion the action of the consumer clicking “Contact” or is it filling out the contact form?

  • The length of your sales funnel - How long does it take your business to court and secure a new customer?

What is a Sales Funnel?

That last one is sometimes tricky to figure out. So let’s dive into the sales funnel. The funnel is an image that looks — you guessed it — like a funnel, with a wide open top that narrows downward. The idea is that the open top is where you’re bringing and gathering clients, and then they move downward through stages of the buying process.

These stages are:

  • Awareness - This is when a customer is searching for information about a product or service. He or she is aware of a need and may be aware that there are companies who can help.

  • Interest - The consumer is learning about the different products or services, comparing specific options, reading reviews.

  • Consideration - He or she is thinking about those options, possibly sharing the information with other buyers (such as a spouse or partner if he/she is involved).

  • Intent - The consumer intends to buy, adding the item to a shopping cart, or getting a demonstration from your sales team. In some B2Bs, this is a verbal confirmation with you.

  • Evaluation - At this stage, the buyer is obtaining the contract and proposal from you and asking any final questions. In the case of B2C with products, he/she is reviewing his/her shopping cart and going to check out.

  • Purchase - The transaction is complete!

Some companies have a very long sales funnel, meaning it takes many months or even years to court new customers. One example of this might be a service that works with the government. They fill out RFPs (Requests for Proposals) and go through a lengthy vetting process. The customer is only searching for a new company every few years.

As you speak with potential customers, get a feel for their stage of the buying process. You should create marketing and sales materials different for each step. For example, if someone just wants to know more, have a one sheet ready for them with information that doesn’t sound salesy. You want to come across as helpful so that when he/she is prepared to buy, he/she thinks of you as useful, not as that pushy person who won’t stop calling. Much of your inbound marketing content is focused on this stage of the buying process, but that doesn’t mean you should ignore the others. You should have:

  • Informational one sheets about the product or service, not your company

  • Visuals, documentation, or explanation of how your product or service works

  • Brochures that talk about your company and how it stands out

  • Online reviews from customers and testimonials on your website

  • A demonstration/presentation if applicable

  • An FAQ sheet if needed

  • Information about what happens after a customer chooses to buy -- the next steps

If you’re not sure about your sales funnel, contact us for a free consultation. We can help you figure it out and create materials to guide your buyers.

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