The selling is something that gives a life to your business because with the enough sales you constantly bring a fresh cash flow in your company. With cash, you can continue developing your business to the next level. Your sales numbers will depend on the efficiency of your sales funnel.
In the sales funnel the sale is the final step when your customers decide to buy something from your business. All of the activities that you take before the customer’s decision to pay you, is simply called your sales funnel.
In most of the cases, the sales funnel start with your marketing campaigns that will initiate awareness about your company, your offer, your products and your services. On the other side, only the small part of that potential customers that will be aware about your business will show interest about your offer and your products or services. But, small part of those persons with interest will have a real desire to buy something from your company. And at the end of the funnel, small part part of potential customers with desire will buy something spending money in your company.
What You Can Improve in Your Sales Funnel?
You can see that your sales funnel has entry point where leads come into the funnel. The purpose of the sales funnel is to transform as much as possible from these leads into buyers at the exit of the funnel. Because of that, when we are talking about improvements of the funnel, we have two possibilities:
- Improvements at the entry points in the sales funnels.
- Improvement of the conversion rate of the whole sales funnels process.
I will explain these two possibilities later in this post. Here, as a first, I want to explain something about the improvements. You can read more about possible improvement in 77 Business Improvements in 77 Days. When we talk about the improvements of the sales funnel, I think about a better entry point and better conversion rates of the sales funnel. This will lead to improvements of the sales numbers for your business and an overall business improvements.
How You Can Improve Entry Points of Your Sales Funnel
The total number of customers you will have will depend on the entry points of potential customers into your sales funnel. If you have more potential customers that will enter into your sales funnel, you will have more customers for your company. For example, let’s say you have at some specific period of time entrance of the 1.000 potential customers, and your conversion rate is 5%. With this parameter, we will have 50 customers who will spend the average of 100$. So, in such a way you will have $5.000 income.
If you make some changes to improve your entry points, so you bring 3.000 potential customers that will enter. If the conversion rate is the same 5%, in this case you will have 150 customers. With an average spending of $100, it is $15000 income.
How you can improve the entry points in this process? The one and only way to make improvements at the entry points is marketing. If you improve your marketing activities to increase visibility of your business, then the number of potential customers who will enter the sales funnel will be larger.
How You Can Improve the Conversion Rates in Your Sales Funnel
This is the second area where you can make improvements. Besides marketing in the process of conversion will come other features as location, interior and exterior, products or services quality. For example, if you have 1.000 individuals that enter your sales funnel, and currently you have a conversion rate of 5%, you will have 50 customers at the end of the process.
If you improve the conversion rate from 5% to 8%, you will have 80 customers at the end of the process. With an average spending of $100 that means $8.000 income with a 8% conversion rate. As you can see, this is a 60% increase in sales numbers.
How you can increase this conversion rate? Some of the possible activities in this process of improvement can be:
- Convert more individuals with awareness into individuals with interest. Here the biggest role will play your marketing materials, choosing the right market niche, location, the design of the interior and exterior of your sales store and so on. For example, you have 1000 potential customers with awareness about your businesses. Currently, your conversion rate from awareness into the interest is 50%, or 500 potential customers. However, you want to improve that percent and because of that you perform market research and choose the right market niche for your business. You make improvements in the image of your business and because of that you succeed to increase this conversion to 60%. Now, you have 600 individuals that have an interest about your business.
- Convert more potential customers with interest in potential customers with desire. When some potential customers have an interest, your sales team must convert them into potential customers with desire. For example, if your conversion rate of interest to desire is 50%, that will bring you 300 individuals with desire of buying. Now your sales team makes a direct call to them, send them e-mails, educate them about your products and services… In such a way you increase a conversion rate from 50% to 60%. This improvement will bring you 360 individuals with desire for buying.
- Convert more potential customers with a desire into potential customers that are buying. Now, the potential customers are in your sales store and look and feel your products. For example, the quality of your products and services enables you conversion of 50% of individuals with a desire into individuals that are buying. This is 180 customers that buy from you. If you improve the design and quality of your products and services, your conversion rate will increase at 60%. So, you will have 216 customers at the end of the sales funnel.
In the table are conversion rates before and after improvements as an illustration.
|Number of entrances||1000||2000||1000||2000|
|Conversion – Awareness to Interest||50%||50%||60%||60%|
|Conversion – Interest to Desire||50%||50%||60%||60%|
|Conversion Rate – Desire to Buying||50%||50%||60%||60%|
|Total Number of Customers||125||250||216||432|
You can see from the examples in the table that with 10% improvement of a conversion rates between different conversions into the sales funnels, you get overall conversion rate improvements of 73%. This is called the butterfly effect.