A sales funnel is an illustration for how sales and marketing should be setup. At the top of your funnel you have all of your marketing campaigns and strategies. Potential customers then work their way through your funnel and end up at the final goal of making a sale.
A lot more people enter into your funnel than you have sales. It would be impossible the other way around.
The featured image on this post is a good illustration of a sales funnel. At the top, I listed SEO, PPC, networking, and advertising campaigns. Really, this chunk is any way a person becomes aware of your business.
Then, the potential customers work their way through landing pages, contact us forms, and meetings. Finally, they find their way at the sale. At each stage, there are potential customers you lose. This is normal. You can’t sell to 100% of the people who end up on your website. For example, Google’s bots end up on my website, and they have no interest in buying my books.
Sales Funnel Metrics
Conceptualizing the sales funnel is the first step. The second is finding and analyzing the metrics for each step. Some are easy. How many visitors were there on your website or on particular landing pages? That’s easy to find if you’re using something like Google Analytics. However, some things are harder to track than others. How do you know if someone went to your website because of a referral versus receiving your card at a networking event? It’s hard.
Keeping track of all these metrics will help you improve your efforts and get more sales for less time and money. Let’s look at the following hypothetical.
Dane, owner of ABC Corp is beginning to measure his sales funnel. In October, 2021, he spent 5 hours working on content marketing, 15 hours networking, and $500 on PPC ads. Because of his efforts, he got 1,025 users on his website and 40 follow up emails from networking.
Of the website visitors, 1,000 went to the specially created landing for his PPC ads, so he knows the PPC campaign brought 1,000 visitors to his website for $500. His landing page had a contact us form which 3 people filled out. Of those 3 people, 1 scheduled a meeting and also ended up buying Dane’s $800 service. The ROI for Dane’s PPC campaign is easy to calculate because everything is separated. He ended up profiting $300 on the whole campaign with an ROI of 60%. Yay Dane!
Content Marketing Tracking
The other areas are harder. Content marketing is hard to measure because (1) there’s a lag between the work and the reward and (2) it’s not 100% measurable. First and foremost, you can track who arrives on your blog articles from search engine results. These are going to be mostly content marketing leads. However, some of the direct traffic is actually mislabeled. I’ve found that certain search engines come through as direct traffic instead of organic search.
Additionally, there’s bleed over. As your blog traffic grows and becomes more recognized by search engines, your home page and subsites get more recognized as well. For example, I run multiple sites that are somewhat related. As this site starts to get more and more recognized, the other sites will gain traction as well because of all the cross linking I do. Those links will show up as referral traffic, not direct or organic search.
Finally, how do you know if the person filling out the contact us form is a referral, content marketing, or networking lead? You can ask, and I still appreciate this strategy. Most people will respond to that question. However, if you’re willing to do the work, you can setup segments and events in Google Analytics that will tell you where the people come from who fill out your contact us form.
Networking and Referrals
The hardest group to track are the IRL crowd. That stands for “in real life”. They’re harder to track because you simply cannot measure when other people are making referrals. Some people will tell you they’ve made a referral. Most won’t. All you can do is track what you know which is website traffic, phone calls, and emails. Once they enter the funnel those ways, you can track them. It’s still worthwhile asking how they found you during intake as well!
Seriously, the Goal
Okay, back to why we’re doing this! I said it is so you can improve your sales efforts, but what does that mean? Once you have all this data, you can start looking at where you have issues. Using the ABC Corp example above, even though there is a positive ROI on the PPC campaign, I think it needs to be adjusted. Either the PPC targeting is wrong or the landing page is not enticing. A lot of people are ending up on the website for how few are actually filling out the form. If you’re in this situation, you need to take a close look at what keywords are giving you the best results and optimize around those. You should also look at your landing page to make sure there’s a clear call to action and a compelling reason why these people should buy from you.
If you’re spending too long or too much money with little to no return, it’s time to reevaluate that strategy. Without analyzing your sales funnel, you won’t know which portion needs work. If you’re looking at PPC spending versus website sales, you’d be getting bad information. You need to know which step is the problem so you can address that portion.
The sales funnel is a very important part of any business. I keep all my statistics in yearly spreadsheets, but there’s plenty of different ways to look at it.
- Some campaigns are lagging while some are instant. If you’re measuring one of the lagging types, like content marketing, you have to give it a longer period of time to see if it pays off. For these, set a number of hours or dollars for each month and then start measuring 6-12 months after you’ve begun.
- Before cutting a campaign, also look at externalities. Does that campaign give you something other than sales? If it does, add a value to that extra benefit.
- Start with only a couple campaigns, and make them distinct enough you’ll know which is working and which isn’t.
- Create a separate landing page for each PPC, social media, or referral advertising campaign. That makes it much easier to measure.
It may seem like a lot of work, but measuring your sales funnel quickly pays off. In my law practice, I like to look at my clients’ business as a whole, including their marketing strategies. Those who have metrics always do better than those who don’t. I’ve encounter clients who were running ads for years before measuring and finding out they weren’t getting any sales from them.
What is something you think you can do a better job measuring now that you’ve read this article?