FUNNEL, SALES CONVERSION FUNNEL

Accelerate your business with these expert tips on "The Marketing Funnel" - take a look and discover this TIP!

The conversion funnel, or sales funnel, is a model that helps to understand the customer journey from the first contact with your business to making a purchase. This model is especially useful for entrepreneurs looking to grow their business, as it allows them to identify and improve key areas of the sales process.

The following is a breakdown of important concepts and phases

• Why is the conversion funnel important?

In the digital environment, you don't have a salesperson physically interacting with the customer. Therefore, you must be effective in generating content that captures and maintains the interest of potential customers. This is where the conversion funnel is invaluable. It lets you know what kind of information you need to offer to motivate the customer to make a purchase.

• Complementary Models

  • Customer Journey: understands the customer's decision-making process, from the moment he/she notices a need until he/she makes a purchase.
  • Conversion funnel: is used to identify the most effective strategies to convert the customer, depending on the stage of the funnel they are in.

• Phases of the Conversion Funnel

  • TOFU (TOP OF THE FUNNEL) - TRAFFIC ACQUISITION PHASE:

    • Strategies: SEO, Social Media, Advertising, Blogging.
    • Measures of Success: site visits, cost per click, bounce rate.

• • MOFU (MIDDLE OF THE FUNNEL) - LEAD NURTURING PHASE:

    • Strategies: offer valuable content in exchange for information, such as a newsletter.
    • Measures of Success: mail opening rate, number of completed forms.

• • BOFU (BOTTOM OF THE FUNNEL) - CONVERSION PHASE: 

• • • Strategies: optimisation of the sales page, payment facilities.
    • Measures of Success: number of sales made, average ticket value.

• • LOYALTY PHASE:

    • Strategies: loyalty programmes, personalised offers.
    • Measures of Success: customer retention rate, frequency of purchase.

Crucial Aspects

• Motivations: know what the customer needs and is looking for in order to offer the right solution.
• Objections: understand and counteract the barriers that may make the customer hesitate to buy.
• Lead: contacts who have been interested enough in your offer to provide their details.

FINAL ADVICE

Don't invest in attracting more traffic if you haven't yet optimised your funnel to convert that traffic into sales. By understanding and applying the concept of the conversion funnel, you not only improve your conversion rates but also optimise the return on investment (ROI) of your marketing campaigns.

With all this in mind, you will be better equipped to accelerate the growth of your business!!!

UNDERSTANDING THE CONVERSION FUNNEL WITH PRACTICAL EXAMPLES

The conversion funnel, also known as the sales funnel or marketing funnel, is an essential tool for any entrepreneur looking to grow their business.

HERE ARE THREE PRACTICAL EXAMPLES TO ILLUSTRATE DIFFERENT TYPES OF FUNNELS:

• EXAMPLE 1: ONLINE CLOTHING SHOP

  • Traffic Acquisition Phase: You use Facebook Ads and Google Ads to attract people interested in fashion. You also blog about the latest trends.
  • Lead nurturing phase: You offer a 10% discount in exchange for the visitor's email address. You send weekly emails with news and special offers.
  • Conversion Phase: you use automated email marketing strategies to remind customers of the items they left in their cart.
  • Loyalty Phase: send personalised offers based on past purchases and ask for feedback to improve.

• EXAMPLE 2: LANGUAGE SCHOOL

  • Traffic Acquisition Phase: you use SEO to rank for searches such as "how to learn English fast". You publish free blogs and videos about language learning.
  • Lead nurturing phase: you offer a free trial lesson in exchange for contact details.
  • Conversion Phase: after the trial class, you send an email with a time-limited discount to sign up for a full course.
  • Loyalty Phase: you offer discounts for new student referrals and course renewals.

• EXAMPLE 3: SMALL BUSINESS MANAGEMENT SOFTWARE

  • Traffic Acquisition Phase: advertising on platforms such as LinkedIn to attract entrepreneurs and executives. You also use technical content and webinars to attract traffic.
  • Lead nurturing phase: you offer a free download of an e-book on "Best Business Management Practices" in exchange for contact information.
  • Conversion Phase: you send a series of educational emails and then a free demonstration of the software, followed by a special offer.
  • Loyalty Phase: provide premium support and free upgrades to recurring customers. You send monthly newsletters with tips on how to use the software more efficiently.

These examples demonstrate how the conversion funnel can be applied to different types of businesses. As an entrepreneur, it is crucial to understand each phase of the funnel and how it applies to your specific business model to maximise conversions and ultimately growth.

OPTIMISING THE SALES FUNNEL IS ESSENTIAL TO MAKE A PART OF THE BUSINESS MODEL SCALABLE FOR A NUMBER OF REASONS:

• LEAD GENERATION EFFICIENCY

When you optimise the top of funnel (TOFU), you ensure that only the most qualified leads enter the later stages of the funnel. This means your sales team can focus on closing deals with leads that have a high probability of conversion, thus improving efficiency and reducing costs.

• PROCESS AUTOMATION

Optimisation often includes automating repetitive tasks such as email follow-up, lead qualification and customer data management. This frees up time and human resources that can be used to focus on growth strategies and tasks that require a more personal touch.

• IMPROVED CONVERSION RATE

A better understanding of your funnel will allow you to identify and correct bottlenecks (+) where leads tend to drop out of the process. By doing so, you improve the conversion rate and therefore increase revenue without the need to invest in bringing more traffic into the funnel.

• PROMOTING CUSTOMER LOYALTY:

Funnel optimisation does not stop once a sale is made. Existing customers are easier to convert for future sales and tend to spend more. Optimise post-sales stages to include retention and retention strategies. up selling (+) can have a significant impact on profitability.

• DATA-DRIVEN DECISION MAKING

With a well-defined and optimised funnel, you can collect valuable data at every stage. This allows you to make decisions based on data analysis rather than intuition, which is more scalable and reproducible.

• SHORTENING OF THE SALES CYCLE:

An optimised funnel can accelerate the sales cycle, allowing the business to grow faster. A customer who moves smoothly through a well-designed funnel is more likely to convert more quickly than one who encounters friction or barriers along the way.

• ADAPTABILITY AND SCALABILITY (+)

Finally, an optimised funnel is easier to adapt or scale. If you decide to introduce a new product or enter a new market, an effective funnel will serve as a solid operational base that requires only minor adjustments to accommodate the new offering.

In short, sales funnel optimisation makes every aspect of customer acquisition and retention more efficient, which is key to scaling any business model.

LA ARTIFICIAL INTELLIGENCE (+) CAN BE A VALUABLE TOOL FOR ENTREPRENEURS LOOKING TO DEFINE AND OPTIMISE THEIR COMPANY'S SALES FUNNEL IN A NUMBER OF WAYS:

• RESEARCH AND PLANNING

  • Competition and Benchmarking: can provide competitor analysis and successful strategies in similar sales funnels, which could inspire you for your own funnel.
  • Identification of Target Audience: can help identify and segment your target audience, which is crucial for funnel planning.

• FUNNEL DESIGN

  • Structuring the funnel: can provide a basic structure of a sales funnel and explain each stage in detail.
  • Marketing strategies: can suggest effective marketing tactics for each stage of the funnel.
  • Key Performance Indicators (KPIs): can help to identify the KPIs (+) you should follow to measure performance at each stage.

• OPTIMISATION

  • Data Analysis (+): can explain how to interpret and use data and metrics to identify areas for improvement.
  • Automation (+): can offer ideas on how to automate certain aspects of the funnel to improve efficiency.
  • Personalisation Tips: can provide techniques to personalise the user experience at each stage to improve conversion.

• VALIDATION

  • A/B tests (+): can instruct on how to conduct A/B testing at different stages of the funnel to determine which strategies work best.
  • Customer Feedback: can suggest methods to collect and analyse customer feedback for future optimisation.

• SCALABILITY

  • Climbing Tips: Once the funnel is optimised and its effectiveness has been validated, artificial intelligence can offer advice on how to scale your marketing efforts.

• ADDITIONAL RESOURCES

  • Tool Lists: can provide a list of tools that could help you implement and manage your sales funnel.

In short, artificial intelligence can serve as an information and guidance resource for entrepreneurs seeking not only to define their sales funnel, but also to optimise it to maximise efficiency and profitability.

On the internet there is no such thing as a salesman interacting with his customer. However, the internet is a great source of inspiration in arousing need states and considering various purchasing options to satisfy them. A customer's/consumer's purchasing decisions on the Internet are dependent on the attractive and convincing we are when it comes to generate content.

It is therefore necessary to identify their motivations and, also, their objections to find out what kind of information can make the customer feel comfortable with their decision.

We have two complementary models or tools for this purpose

The "Customer Journey" is a model that helps us to understanding the purchasing decision process from customer as an individual. We analyse the customer journey from the moment they experience a need until they make the final decision.

The second model we refer to is the "Conversion Funnel", which helps us to identify the most appropriate strategies according to the buyer persona or target segment entering at the top of the funnel. It is so called because the funnel illustrates vertically the process that the buyer follows.

Not everyone who comes into contact with our content (enters the funnel at the top), ends up buying (exits the funnel at the bottom). The percentage of those who exit the funnel having purchased in relation to those who enter is called the conversion rate.

• In the first phase of the graph, the customer is either aware of a need or is in contact with a marketing stimulus, website, blog, social network, etc., which triggers that need. What triggers that need. This is a kind of inspiration that occurs in the Top of the Funnel, TOFU. From the company's point of view, we are in the traffic acquisition phase.
• The customer then enters a process of searching for information and analysing the different options. We are in the middle of the funnel, MOFU. We are in the lead nurturing phase.
• At the end, the customer is ready to act in what we call the bottom of the funnel BOFU.

LET US LOOK IN DETAIL AT WHAT EACH OF THESE PHASES CONSISTS OF:

TRAFFIC ACQUISITION PHASE:

The entrepreneur designs a series of strategies to attract traffic: Search engine optimisation, banner campaigns, social networks, a website, a blog, offline advertising, etc.

In any case, all content must be appropriate according to the buyer persona and the need to be satisfied and, in short, our value proposition. If we are talking about a website, we will pay special attention to the fact that the landing page is well oriented to the conversion of the captured traffic.

THE ASPECTS TO BE ANALYSED IN THIS PHASE ARE

1. Analyse the origin of each of the visits in order to determine which are more effective and more efficient. More visits at the lowest cost.
2. Qualify the traffic obtained by each strategy with quality-related metrics: bounce rate, page views per session, dwell time.
3. Compare the costs of traffic generation by paid methods and organic traffic.

LEAD NURTURING PHASE

It is considered at this stage that the user may not be mature enough to buy and is in an exploratory phase or has simply diverted their attention to something else. In this phase, it is important to qualify the traffic in order to better identify their interests and where their motivation to buy lies. How can we solidify a first relationship?

THE ALTERNATIVES CAN BE:

1. Registration: Obtain the visitor's data by registering for a newsletter or an advertising newsletter containing an offer or discount.
2. Incentives: In exchange for the data, we offer the customer something that does not involve an additional cost, an e-book, a video with training content, the results of a study, downloading the first chapter of a book, etc. If we are able to extend the relationship we can find out more about their needs and we will be more accurate in our value offer.
3. Cookies: To mark the visitor's browser in order to carry out remarketing actions or personalise the value offer. This is done by installing a cookie in the user's browser. The cookie makes it possible to identify the origin of the visit, the specific stimulus or advertisement that triggered it or the products or services in which the user showed most interest.

The most important key figures in this lead nurturing phase are:

• % registered visitors to the newsletter or bulletin.
• % Recurring visits due to re-marketing.
• % Completed forms.
• % Openings of e-mails.
• %CTR (Clicks) on the links in the email.
• % direct traffic increase.
• Quality indicators seen in the traffic acquisition phase.

CONVERSION PHASE

The focus is now on the transaction. For this, lead conversion (3) will be the goal. In this aspect, the business model is of great importance. It is not the same to close the purchase of a flat or a vehicle, which is done in person, than others in which the final conversion can be done on the website itself: Tourist bookings, downloads, use of software, etc.

In this phase you have to analyse the reasons why users do not reach the final conversion. Why do they leave the funnel, when and where they do so. This is the only way to design a good recovery strategy.

THE STRATEGIES FOR THIS PHASE ARE:

• Website usability.
• Conversion rate optimisation.
• Automated marketing actions.

If we are able to attract significant traffic and the quality indicators of the visits are good, the conversion rate should be in line with the industry average. If, on the other hand, the conversion rate is unsatisfactory, we will have to look for the causes in prices, strict return conditions, high shipping costs, etc.

In any case, make sure that the usability aspects are working properly: download speed, security of the environment, mobile compatibility, etc.

Abandoned carts are one of the most important indicators to analyse in this phase. These are users who entered a product in the shopping cart but did not complete the purchase. Cart abandonment may be caused by registered users, in which case we can target them with an incentive to complete the transaction (discount, limited benefit for a certain period of time, etc.).

When the abandonment is made by an anonymous user, we can use the cookie, which will allow us to direct a personalised offer to the user through re-marketing campaigns.  

Finally, at this stage it is important to evaluate the results of each of the traffic attraction strategies that have led to conversion. 

The conversion rates are:

• No. of transactions.
• Total invoiced.
• Average amount per act of purchase.
• Returns.
• Conversion rate: attraction strategies on total conversion.
• Average ticket: final amount of transactions per strategy.
• Average cost per sale: divide the investment in each strategy by the total number of transactions made.
• Total income: divide the contributions of each strategy over the total amount invoiced.
• ROI: ratio of the benefits provided by strategy to the amount invested in the strategy.

In any case, it is not advisable to invest in attracting more traffic if we have not solved all the problems related to conversion!!!

Loyalty Phase:

The focus in this phase is on how to build customer loyalty by extending the customer lifecycle, increase purchase frequency and increase average ticket. The most commonly used strategies in this phase include e-mail marketing, remarketing, automated actions and dynamic social networks (+)

At this stage we know much more about the customer, we know their needs and motivations, which allows us to personalise offers. All this should contribute to an improvement in conversion rates and of course that the ROI (+). Investing in loyalty support has the advantage that the cost is lower than the cost of bringing in a new customer.

1. Motivations: Every purchase decision is born out of a state of need or deprivation. The satisfaction of this lack is the first motivation. This is followed by the motivations that the buyer is able to generate with his or her arguments.
2. Objections: son brakes, obstacles that act on the customer, arousing fears and a sense of risk: will it be a scam, will I be able to return it if I don't like it, is this payment method secure?

Lead: ehe term lead is used in Inbound Marketing to refer to those contacts who have left us their details through one of our landing pages in exchange for content of interest to them. Therefore, they are contacts who voluntarily become part of our database.