How Understanding the Marketing Funnel Will Boost Your Sales
A brief introduction to marketing and sales
It’s safe to say that some of you will take to sales and marketing like ducks to water and others may find it a little uncomfortable. However, if you want to get your product, service or cause out there, then you’re going to need to understand how it’s done.
If you don’t really enjoy putting yourself out there, selling or engaging with people directly, this article will help you find ways to complete these tasks and feel good about them.
Even if you intend to outsource your sales and marketing or hire in for the roles, it is still essential that you understand how these parts of your business work. You don’t want any part of your business to be a black box – especially not the part that brings in your revenue!
Understanding this concept will give you a better idea around how you’ll achieve the volume of sales required to make a profitable business and prove your choice of business model is the right one.
While working through the market research articles, we looked at your competitors and their marketing channels. This article will build on this research to help you market your product, your service, or create awareness for your cause. Therefore if you haven’t done any market research yet, I’d advise checking those articles out.
Before we start the central part of this article it is vital for you to understand that you need to keep it simple! Don’t try to copy the marketing efforts of enterprise-level businesses like Disney, Virgin, Amazon and so on, as they have a completely different agenda to your new business. Start from your research, not from giants of industry.
To approach this vast topic we’ll begin by understanding and creating a marketing funnel.
What is a marketing funnel?
What’s the most basic form of marketing you can imagine?
For me, it’s as simple as walking up and down the street trying to persuade everyone you meet to become your customer.
There’s no discrimination between who might be likely to be your customer and who might not be. You just pitch your proposition to everyone you meet. Simple. You don’t need to arrange anything. You don’t need any marketing materials. It’s entirely manual.
It’s also completely untargeted and very inefficient, leading to a lot of wasted effort on your part. You could walk up and down the street all week, and nobody could buy your product or service.
We need to look at more sophisticated methods of marketing and selling than this. Methods that market to specific groups of people who are likely to become your customer, and that offer potential customers several opportunities to understand what the business has to offer.
Effective marketing usually has several stages. People seldom buy something from just one interaction with a company. It takes different kinds of information and building a degree of trust and acceptance on the part of the customer that what they are being sold is valuable to them.
This multi-stage process is called a marketing funnel. It’s your job as a startup to nurture people through this funnel so that they become leads.
Whoa. Hold on. That was quite a lot of jargon! That is going to be a bit of a theme in this article, however, it’s going to be helpful to know some marketing shorthand 😉
A marketing funnel is a way of describing how customers move from knowing nothing about your company to become leads, or even sales from exposure to your marketing activities.
A lead is someone who is interested in what you are selling. Whenever you see marketing agencies advertising “lead generation” this is what they’re talking about. A “hot lead” is someone who’s really keen to buy, while a “warm lead” is someone who has expressed interest and perhaps taken a step to engage with your business – joining a newsletter for example.
Nurturing is what it sounds like – “helping”. As a business, you want to help people become your customers. Some may not expect to become your customer – but by keeping in touch with potential customers, through brand awareness, adverts, or emails, you may be able to make your products, services or cause more interesting to them.
“Top of the funnel” marketing is often about exposure, and may not be directly related to what you are selling.
It’s about getting people who are interested in things related to your product or service and then finding ways to market to them. The goal of marketing to people you attract to the top of your funnel is to draw them further down into your marketing funnel.
Engaging with different forms of marketing and communication from your business that will eventually result in them buying from you.
The three phases of your marketing funnel
There are three broad phases to marketing and these are based on where your audience is in their journey to discovering and purchasing a product or service.
During the awareness phase, the person or business becomes aware of the fact that they have a problem or a need that requires a solution.
This is also known as the top of the funnel. You’ll want to make sure that people become aware of you at this stage by providing them with useful information. This is your first opportunity to generate leads for your business.
Once people are aware that there is an issue that requires a solution they’ll start to look around for the solution and at their various options.
This moves them on to the next phase which is where the evaluation of solutions takes place.
Again, you need to ensure that your product or service is in the mix of options they are considering.
Make sure you provide materials they can use to evaluate you as a provider. This is where you nurture the leads that you captured in the top of the funnel or ones that have only just become aware of you.
This phase is also known as the middle of the funnel.
The final phase is the conversion phase, which is right at the bottom of the funnel when the person is ready to decide and commit to the purchase. This is usually where your formal sales process kicks in. This stage itself is often charted in it’s own ‘sales funnel’ where leads are moved from being mildly interested towards putting their credit cards down.
These three phases are known as a funnel because a larger audience enters at the top of the funnel and the audience size decreases as they are filtered out during the evaluation and conversion phases.
The journey through the funnel can be very fast (minutes or hours) for spur of the moment purchases and simple products or services right the way through to days, months or years as the product becomes more expensive, complex, luxurious or aspirational.
Marketing Funnel Example
At Brixx, we have our own marketing funnel.
One of the ways we begin raising awareness is through our blog: www.brixx.com/blog
On our blog, we write a lot of educational articles that are full of useful help and information. More importantly, they tackle topics relevant to our product. Visitors stumble upon us when they are trying to learn and find out about a topic by searching for answers on Google.
Some of these visitors have problems around forecasting and cash flow that our product can help with. After a few visits, these people naturally start exploring the more core pages of our website and begin moving from awareness to the evaluation stage.
Our past experiences have told us the Brixx demos very well in person, but in an online environment, we don’t have the luxury of face-to-face sales demonstration.
So, we developed a self-guided demo of our software that can be accessed directly from the website, with no need to register or hand-over any details.
The next step is to start a 14 day free trial of the software. We don’t ask for any card details at this stage, as we see this is an impediment to someone starting our trial.
Once on a free trial, we provide in-application guides and a series of onboarding emails and videos to help people get the most out of Brixx. By the end of this process, we have (hopefully!) demonstrated the usefulness of Brixx, given our new free user a good experience and proved the value of our software. If they decide that the software meets their needs, only then do they purchase.
Whilst providing help, onboarding and guidance might sound like it’s just simple customer support. It’s actually a key part of the marketing funnel. The quicker a user can understand and find value in a product, the more likely they will eventually turn into a sale!
The specific tactics involved in nurturing a sales funnel may be different to a marketing funnel – they might involve demonstrations, or tutorials, or free trials, or other more personal experiences like consultations.
At this stage though, we don’t need to get bogged down in the distinctions between marketing funnels and sales funnels. They’re both trying to accomplish the same action in the end – getting you customers.
As we move onto to assessing the different types of marketing you can approach, you need to think about where they are best placed in your marketing funnel to have the greatest impact.
Begin exploring your marketing budget in your financial projections
We’re going to be talking a lot about the financial side of marketing in the third article this week, measuring the success of your marketing campaigns. So in this section here we’ll just be giving you a heads up as to what to expect.
Start to think about your marketing budget.
Yes, as a startup, you may not have a budget set out. However, by now, with the plan you’ve developed over the previous weeks, should be able to derive an idea of a budget for your marketing efforts.
You can start to put some numbers into your financial plan to see how much you can afford to spend on marketing. You can also look at what return on investment you’d need from your campaigns in order to be profitable.
A marketing funnel is a way of describing how customers move from knowing nothing about your company to becoming leads, or even sales from exposure to your marketing activities.
There are three phases to the marketing funnel, awareness, evaluation & conversion.
Awareness: Top of the funnel. The person becomes aware of the problem and is considering the product or service.
Evaluation: Middle of the funnel. The person becomes aware of your product or service and is considering it in their mix of options.
Conversion: Bottom of the funnel. The person is ready to commit and purchase your product or service.
The concept of the funnel is relatively simple but mastering the steps to reach conversion is quite difficult and takes some finesse. You’ll likely get better at it over time, so don’t get disheartened if you’re not converting as much as you’d like.
So you understand the funnel and how it’ll boost your sales.
How do you reach those customers to get them to enter your funnel?
This blog post forms part of our series on how to start a business in 90 days. For an overview of the series and all the blog posts so far click here.