What is Sales Funnel? And Why is it Important?
Do you remember your middle school science experiments? In this context, one particular experiment comes to my mind. It was called distillation of water. There was this little glass funnel with a long pipe at the end. We carefully folded a filter paper and poured murky brown water into it. And, then we collected the much clearer water in a beaker. This experiment, to me, is the perfect example of how a sales funnel works.
- The dirty water -> all the leads that contact your business
- The filter paper -> the CRM/ Sales Execution platform that you choose
- The clean water -> the qualified prospects ready to purchase from you.
Let me introduce to a popular face from LeadSquared. If you have been our regular follower, then chances are that you have received an email from Shibani Roy.
Now Shibani is a perfect example of how our own sales funnel works. For those who do not know her, she heads our webinar program. So, every time a webinar is scheduled, she sends the invite to an average of 40,000 leads (Yes, she does send out so many emails 😊)
Now take a look at how this works out.
What is sales funnel?
A sales funnel is, in essence, the series of steps that your lead will have to circumvent before they become your customer. It is usually a pictorial representation of these various sales stages, commonly represented by an inverted pyramid. The top rung is the widest with all the leads that reach out to you and the lower rung are the ones who have actually made a purchase.
Is a sales funnel necessary?
The answer is a resounding yes. Imagine if Shibani decided to go about promoting her webinars blindly without a funnel. She would have no idea how many people have become customers because of her webinars. Not just accountability, there are chances that some of the leads might just get lost in transit. Our sales team might miss out on very good leads that Shibani painstakingly generated. Follow-ups may get forgotten, and nurturing emails may never get sent.
But this does not happen to us, anymore. Because Shibani has built a solid and lead-proof sales funnel that ensures all leads that come from her webinar are properly followed-up and nurtured until they convert.
Not convinced yet? Here are some of the tangible benefits that you get from creating a sales funnel for your business.
Benefits of having a sales funnel:
Marketing becomes simpler:
When you have a sales funnel in place, you would have an accurate view of how many leads entered your funnel as opposed to the ones that finally converts. This way you can reverse calculate how much more leads need to enter your funnel for you to achieve your targets. You can then wisely invest your money on the sources or platforms that offer more returns.
Sales forecasts are more accurate:
In reverse, you will also be able to accurately predict how much you will sell in the future. Not only does this help you with your sales plan for the next quarter, but you can also start putting in efforts to meet your projected target for the next quarter or fiscal year.
Conversion rates are improved:
A more clear funnel means more targeted marketing which in turn brings in more leads. More the leads, more interests, and ultimately more customers. Another reason for increased conversions could be because your sales team has a 360-degree view of how every lead passes through the funnel, the time it takes to become a customer and the conversations that are happening with your business. This helps them to personalize and refine their own sales pitch.
More accountability for your sales:
No more blindly reaching out to your leads and confusions during incentive time! Every single activity is tracked when you have a proper sales funnel in place. You will know your best sources, your best selling products, the geography that has most of your paying customers, the social media platform that has the most responses, and even the salesperson who has exceeded expectation.
Rake in more revenue:
Every benefit mentioned above, in the end, directly translates into the one benefit that every business cares about the most. More moolah! Even more importantly, since you know what helped you rake in the extra revenue, you will be able to replicate your success and in time, even double it.
So there you go! I am sure this article must have convinced you of how important a sales funnel is. You can even hear from our star sales expert, Vineet Tiwari, on how having sales funnel management is the reason why he wins ‘Best Employee’ awards every quarter.
To be like Vineet, take a 15-day trial with LeadSquared, and watch as the money keeps flowing!