To stay alive, humans need water, sleep, and food. Similarly, to stay viable in the market and thrive amidst its competitors, a business needs to grow. It has generally been observed that businesses are either growing or declining; there appears to be no middle ground. Growth is crucial to the company's long-term survival. It helps businesses to acquire assets, hire new employees, and fund investments. Of course, growth also ideally leads to boosting business performance and profit. With more profits comes more growth opportunities. Hence, business growth can be directly proportional to business profits. Remember, profit is recorded only after subtracting all expenses and liabilities from revenues. Since, revenue is generated by selling goods and services, or through the returns realized by other company investments...
...the formula of success can be derived as:
Potential Leads → Revenues → Profits → Business Extensions → Business Growth
...and, when executed correctly, the cycle should continue.
Converting every lead into profit is not a foregone conclusion. When it comes to Small and Medium-sized Enterprises (SMEs), the task becomes quite challenging; owing to the requirement of many oft absent components.
Note: Generating leads is a complete science in itself, which we will discuss later.
It is important to mention that, to explain the strategies, we are taking Canadian SMEs into account by evaluating the opportunities and dynamics available within the Canadian market.
It is a universal fact that starting a business is easier than running and maintaining it for a long period. Every year, a lot of new SMEs appear and disappear. The net result of the increase and decrease of businesses in a year referred to as ‘Creative Destruction.’
In Canada, on average, 96,400 businesses disappeared (per annum) from 2001 to 2015, and 95,400 appeared; according to a survey, only half (around 51%) of new firms survive their fifth year of operation.
Canada is thriving when it comes to small and medium-size businesses. As per the records of the Government of Canada, there are 1.18 million SMEs operating within the country. However, 60% of them are struggling to secure their existence in the market due to a lack of vital direction.
In this article, we will understand how a sales funnel works, and learn some useful tips to convert leads into customers.
Let us begin with some basics!
Knowing the stages of a sales funnel and laying out the right foundation is imperative for every business.
The funnel starts with many potential customers (i.e. leads) who appear interested in buying the product of the company but only a few of them actually order (aka "convert to sales"). Why? Often, this is due to the product's marketing messages reaching the target audience but fail to convince the target market of the value of your offerings over the competition. Your unique value proposition or unique selling proposition (UVP or USP) is a critical part of your message. Further, it often boils down to YOU standing in between your customer and a successful sales transaction.
Suppose I am interested in buying your services. Are you willing to sell? More specifically, are you willing to patiently build value in your service until I am ready to proceed? It may sound ridiculous, but many businesses fail to show the willingness to invest the time necessary to build consumer trust to warrant sales. Even worse, some companies appear to display ignorance or apathy toward leads that exist early in the sales funnel - those that require much more information, time, and nurturing to convert.
On average, only 10% of the potential customers convert and move ahead in the next stages of the sales funnel. Moreover, 10% of that 10% (i.e. 1% of the leads at the top of the funnel) might end up buying your product or services. It stands to reason, then, if a business wants to end up with more sales, they need to extend the first layer of the funnel and increase the number of leads.
There are many layers in a sales funnel that differ from business to business. If a business knows their exact stages, then mapping-out the sales funnel gets easier.
Exploring the Sales Funnel in Greater Detail
The first stage of the sales funnel is called the ‘Awareness’ level. It is the stage during which the target audience becomes aware of the business product or services. The next or the middle stage is known as ‘Sales Process,’ and is where a business should pay close attention. Leads engaged in the Sales Process have undergone the first conversion and are expressing a genuine interest in what you have to offer. With the ball in your court, you need to ensure you do not drop it. Analyse your sales process from the customer's perspective. Measure outcomes and track satisfaction to glean insights into what may be improved. For example, it may be that customers find completing a transaction on your website cumbersome and frustrating. So, despite their intention to give you business, one part of your sales process can inhibit conversions and block sales.
Bleeding leads at every level is expected and not necessarily indicative of a major problem. However, not identifying the bottlenecks and low conversion points is a huge mistake. If your funnel is not predictably and consistently progressive it can by symptomatic of some shortcomings in competencies critical to the sale process. Take the time to uncover these and root them out.
Unfortunately, even perfect prospects leak out of the sales funnel in the middle or last level if not nurtured carefully. Again, be aware of consumer behavior, common objections, and human nature. Plan for it and create strategies to counteract those things that cause lead attrition. The best possible way to avoid lead attrition is to apply a very consumer-empathic and critical eye to every step of your business' sales process. Solicit feedback from both those that were converted into sales, as well as those that did not. Then, work with your team to devise strategies to make these processes more efficient and, most importantly, customer-oriented.
The last level is ‘Decision Making,’ where the prospect decides either to buy the service or not. Here, it is essential for a business to bridge trust with the customer.
Throughout the sales funnel management process, a business should find the answers to these questions:
What are the bottlenecks and conversion obstacles in the entire journey?
Where is business losing track of prospects in the funnel?
What are the trigger points which can positively impact sales?
A Sales Funnel helps a business to lay down a sales process between Awareness and Purchase ends. Not only can a business boost sales with a well-designed and executed sales funnel, but also make the customer experience more pleasant.
4 Tips for SMEs to Boost Sales
Here are some tips to help businesses convert potential leads into sales, gathered from experts. These insights will assuredly assist with your business growth efforts. As is the case with all such tips, it is the concerted and consistent application of the wisdom inherent in the tips that matters; there is no such thing a one big secret panacea.
# 1: Identify Your Target Audience
Information is the key to success. Knowing the target audience, what they want, and how they like to be engaged by the business, are powerful tools for lead conversion.
Pedro Campos, the Founder of PedroConverts, said:
"Often, when I see entrepreneurs having a hard time converting strangers into leads or leads into customers, it all comes down to the quality of their offers.
If you have a bad offer, what that tells me is that you don't know your ideal client well enough."
Knowing the target audience also helps to extend and optimize the first level of the sales funnel; attracting the right prospects also saves time and money. Aside from being wasteful, filling the funnel with unqualified leads is a sign that you need to do more market research.
Once a business identifies the target audience, then the task of designing the right offers becomes easier. This is a key reason that successful enterprises not only attract potential customers, but also entice them to make the purchase.
# 2: Offer Discounts and Freebies
One thing that small and medium-sized businesses lack compared to major corporations is outstanding brand value. Having a recognizable and trusted name in the market is invaluable for businesses. Still, there are many small enterprises who have worked hard to earn a quality reputation, build trust, and create a name with brand value among their consumers and throughout their market. While working toward the same, new entrants and small scale businesses can attract more customers by offering discounts and freebies. Giveaways are one of the best ways to get people on the board, due to the risk that is removed from the customer.
Dan Ariely, a behavioral economist at Duke University, said in one of his interviews to The Atlantic that:
“Discount and giveaway offer a particular desire for something. If I gave you a bit of chocolate, suddenly, it would remind you about the exact taste of chocolate and would increase your craving."
Giveaways also help businesses in creating brand engagement with customers. Once a business gets the information of the customer, it can be used in a more personalized way in future communications. Hence, it helps the business to convert more prospects into paying customers.
Ronald D'Souza, a content marketer at angeljackets.com, advises:
"Personalize your email and make it appear as if the discount is only available for them. You can do this by generating a unique coupon code only for your email subscribers."
# 3: Follow-Up with the Leads
Timely follow-up with the prospective customers is crucial; a simple email or a call to the customer asking if they have any questions or concerns related to the product or service can renew the relationship with the customer.
Follow-up does not mean sending just one automated email after the customer click on the Call-to-Action button. A business should have a clear strategy for follow-up. If a customer shows interest by landing on the company’s website, contacting live chat or support, but never purchase anything, a plan needs to exist to keep him engaged.
First, a follow-up email should contain information about the product and a call-to-action, to know more. If the customer does not respond to that email in 3 to 4 days, another email should be sent with an ‘Exclusive Discount’ or ‘Giveaway’ to entice the customer. Still no response after another week? Now, is a good time to humanize your Sales Funnel; give a warm call to the customer, understand and address any concerns, and build trust. If a customer wants to hear more about the product, it means the customer is interested in making a purchase.
Most SMEs lack the follow-up department. According to a study by Propeller:
48% of sales representatives never make any follow up
44% of salespeople give up after one follow-up
Only 10% of the sales representative makes three follow-ups
80% of sales require five follow-ups after the initial contact
Hima Pujara, of Signity Solutions, said:
"Follow-up is the best way to make your prospects feel important. Regular emails related to your service will leave a brand impression in their mind, and later, when they need a related product, they will surely consider your business."
Anthony Martin, the owner of Choice Mutual, also referred to the same thing and stated that:
"Lots of people won't answer phone numbers they don’t know. However, when they see you call back again, they'll suspect that you're calling for something important. You would be amazed at how regularly people answer when you call back 15 minutes later."
A monthly or weekly newsletter is another form of follow-ups where a business keeps its customers and prospects aware of the updates, changes, and recent happenings of the company and the market.
# 4: Optimize User Journey with Clean CTAs
If a company has a website, it is imperative that businesses should employ the most relevant keywords and SEO practices in the searches. It will not only help in attracting more leads but also build trust among the readers and influencers.
Knowing the right keywords for your business is essential to help manage Pay-Per-Click campaigns on Google.
David Reischer, the CEO of LegalAdvice.com, explained:
"The keywords selected for each ad group should be based on a narrow category to be targeted so that the campaign can more easily be monitored.
We carefully monitor all campaigns and either tweak or discontinue those keywords that do not convert."
The website should convey a clear image and vision of the company. The navigation should be simple and informative to make the user experience more pleasant.
Having a definitive Call-to-Action (CTA) encourages potential customers to make a decision. It is a slight nudge in the right direction that attracts the lead in the first place. Regardless of the end result, catchy and interesting CTAs can lead a business to conversions and their associated profit.
John Breese, the founder, and CEO of HappySleepyHead, said:
"We don't just place verbs like 'download now,' "act now' or 'get free' – you must admit that sounds like an order.
We use a combination of idioms and call-to-action verbs – for example, 'first come, first served,' 'contact us today' or 'buy it off the shelf' – and we use this combination on every page of our site."
Without a call to action, visitors on the website do not know the next step to take. It leads the potential client to leave the website once and for all.
The Bottom Line
Incorporating these expert-recommended tips in the business strategy does not only ensure a good number of leads converting into paying customers, but also helps the business to survive in the long-run.
The good news for SMEs is that there is little risk in renewing or revamping their Sales Funnel. You have the advantage of nimbleness and the ability to react quickly to new information, market changes, and performance metrics, unlike large corporations that require an overwhelming amount of logistics to correct course and risk losing a huge database of customers. Whether you are starting from scratch, experiencing an unacceptably high attrition of leads, or simply wish to improve your already impressive conversion rates, now is the right time to double down on your commitment to improving your sales funnel.
Do you lack the resources, expertise, tools, or knowledge to implement the ideas herein on your own? Do you need any help related to your sales process or sales funnel? If you’re unable to find the bottleneck in your lead conversions, then don’t hesitate to share with Bickert Management; our experts will not only identify the obstacles, but also implement effective solutions to manage your leads.