How to find the best customers in your sales funnel (and earn more profit from them)

Not all Customers are created equal. Some are good, some are bad. Just because they hand over their money to you doesn’t necessarily make them them the customer you want.

Less-than-ideal Customers can take a lot of time and effort to market and sell to; they can be reluctant to buy; they complain about the price and make you feel guilty for charging what you do; they are slow to pay; they complain about the product or service; you don’t like dealing with them. You have Customers like this in your sales funnel. So do I. Every business does.

Ideal Customers, on the other hand, love your business; they move through your sales funnel very quickly; they buy from you happily (preferably more than once); and they tell their friends about you. You have customers like this in your sales funnel. So do I. Every business does.

There’s a tendency among businesses to lump all Customers in together, simply because they’re Customers and each one has handed over their money. But that’s not an ideal business practice. Less-than-ideal Customers cost a lot of money to sell to and they are often barely profitable because it takes so much time to get them to buy and they require a lot of hand-holding afterward. Ideal customers are more profitable: They enter your sales funnel quickly, they move through your sales funnel quickly, they don’t try to grind down your prices, they don’t require very much hand-holding.

Your business can be more profitable without increasing how much marketing and sales you do. All you need to do is profile your Customers and then tweak your marketing to target the ideal Customers.

Here’s how to do that:

GROUP YOUR POTENTIAL CUSTOMERS

In order to best serve the sales funnel contacts who will turn into preferred Customers, look at your existing Customers and group them together.

Keep the groups broad and simple at first; just to do an initial sweep. Rank each Customer quickly and subjectively in each of the following categories:

  • Speed through your sales funnel: Were they fast or slow through your sales funnel?
  • Ease of sales effort: Did they require little effort or a lot of effort as they moved through your sales funnel?
  • Amount of money they spent: Did they spend a lot or a little once they became Customers?
  • Number of times they’ve bought from you: Have they bought from you several times or only once?
  • Whether they’ve told others about you: Are you aware of anyone else they’ve told about your services?

From this, you should have 3 groups — one group of superstar customers (mostly “good” results in the above list), one group of less-than-ideal customers (mostly “poor” results in the above list), and a large group of average customers (a mix of “good” and “poor”).

PROFILE YOUR CUSTOMER-GROUPS

Now look at each of these three groups and figure out what is common among them, and more importantly, what traits one group shares that is not shared by another group.

It could include any number of factors, although here are the types of traits I find to be a useful stating point:

  • Industry
  • Size of business
  • Length of time in business
  • Level of success in business
  • Clarity of purpose, products, and benefits

OPTIMIZE YOUR SALES FUNNEL

Now it’s time to optimize your sales funnel to maximize your opportunities with your ideal customers and to minimize the work you do with your less-than-ideal customers. (As for the middle-of-the-road Customers, you want to try not to alienate them but you do want to work toward replacing them with ideal Customers).

Review all of your marketing efforts and sales efforts in each stage of your sales funnel and ask yourself the following questions:

  • Does it resonate with that group of ideal Customers?
  • Are you clearly writing for them (and are you clearly NOT writing for the less-than-ideal group?)
  • Does the content appear in the places where your newly refined target market is looking?
  • Do you address the objections that your newly refined target market is facing?

You may not want to completely get rid of the Customers who you are defining as “less-than-ideal”. After all, they are paying customers and it’s possible that by grouping your Customers together, you might accidentally throw the proverbial baby out with the bathwater. However, by reviewing your sales funnel carefully and making changes to focus on a newly refined target group, you might be so busy counting new-found profit that you won’t even notice those less-than-ideal Customers are missing.

Sales Funnels 101: How does a sales funnel work?

A sales funnel is a graphical depiction of the interaction you have with your prospective buyers over time. (For more information about this, see my previous Sales Funnel 101 blog post entitled Why is a sales funnel funnel-shaped?)

A sales funnel is made up of several stages, each one representing a stage in the relationship between a buyer and a seller.

Many people have theorized about the number of stages in a sales funnel — some theorizing 2, 3, 4, 5, 6, 7, or more. I think each of these theories has something valuable to add to our consideration of sales funnels. However, in my work on sales funnels, I have tried to consistently use 5 stages, just so my readers have a reference point.

AARON HOOS’ 5-STAGE SALES FUNNEL

The 5 stages I’ve identified as being typical stages in sales funnels are:

  1. Audience
  2. Leads
  3. Prospects
  4. Customers
  5. Evangelists

Each stage represents a distinct mindset change for your sales funnel contact.

Contacts at the Audience stage think very different things than contacts at the Customer stage. (Audience-stage contacts barely know who you are. Customer-stage contacts have trusted you enough to give you some of their money in exchange for a product or service).

At the top of your funnel are the Audience-stage contacts who barely know who you are and are just looking for basic information about a problem or need that they might or might not be aware of. The Audience is the widest part of the sales funnel.

Your job as a business owner/entrepreneur/salesperson is to take in lots of contacts in the Audience stage and move them through each stage of the sales funnel until they become Customers. Then, to continue to move them through the sales funnel to make them into Evangelists (so they’ll happily talk about your products or services with their peers).

You move them through your sales funnel with marketing activities and sales activities — and ultimately a relationship.

Not everyone will move through at the same speed, and some contacts will fall out of your sales funnel at each stage. That’s okay; it’s expected. But the ones that stay in your sales funnel, that you build a trusting relationship with, will become Customers (and ideally Evangelists). Customers and Evangelists are at the narrowest part of the sales funnel.

For more information and a picture of the sales funnel, Download my Sales Funnel Quick Reference sheet.

The evangelist equation: How to get your customers to fill your sales funnel for you

My hammock gave out in the spring of 2010. Squirrels had ravaged it while preparing nests for the previous winter. I’ve been meaning to replace that hammock but last summer was busy and wet (not conducive to “hammocking”). So yesterday I went outside and realized that the weather was perfect but I remained hammockless.

I posted on Facebook: “It’s beer-and-hammock weather. Sadly, I’m out of beer and my hammock was eaten by squirrels.

Seconds later, a friend messaged me and told me that she had just bought a hammock for her husband. She briefly described it and sent me a link to the seller’s website. Within minutes of posting my sad status, the sale was closed. I’ll be picking up a hammock from this importer this weekend!

SALES FUNNEL EVANGELIST IN ACTION

My friend was first a hammock Customer. She had purchased the hammock, was happy with the quality and price and service. Then, she became an Evangelist by sharing her success story with me. I will (shortly) become a Customer by purchasing a hammock.

This hammock importer’s hammocks have now become more profitable because she didn’t have to spend time and effort and money marketing and selling to me. I’m already in her sales funnel and I’m basically sold; it’s just a transactional issue at this point. My friend’s advice was enough to compel me toward a buying action.

Turning your Customers into Evangelists is critical for your business. Rather than expend the costly effort of marketing and selling to every single Customer, you can turn your Customers into an army of marketers and sellers who are working on your behalf.

Here’s how to do that:

THE EVANGELIST EQUATION

The right combination of elements need to be present in order for a Customer to become an Evangelist… and not just an Evangelist but an effective one that actually closes the deal for you. Those elements come together in the following equation:

Effective Evangelism = Trust + Satisfaction + Shareability

Where Satisfaction = Problem Solved + Perceived Value + Satisfaction with Service
And Shareability = Ease of Sharing + Context

Here’s what those equation components mean:

  • Trust: Trust needs to be established between the Evangelist and the prospective Customer. In order for the prospective Customer to act on the advice of the Evangelist, there needs to be a foundation of agreement between the two. In my situation, I know my friend is a very careful shopper who thoroughly researches everything before she buys.
  • Satisfaction: Satisfaction is actually made up of three components: (1) the problem was solved; (2) a sense of value was perceived between the price of the product and the degree to which it solved the problem; (3) a sense of satisfaction with the service received during the process.
  • Shareability: Shareability is made up of two components: (1) how easy it is to talk about your product or service in relation to the problem; (2) the context in which an Evangelist has an opportunity to share.

When all of those components are present, an Evangelist can effectively talk about your product or service with their friends and their friends will act on the Evangelist’s advice.

If any components are missing, your Evangelists might still share but the likelihood of success diminishes with each missing component. For example, a recommendation on Twitter about a great soup restaurant is still Evangelism but might not result in any new Customers if there is no trust between the tweeter and their followers or if there was no context for the recommendation.

TAKE CONTROL OF EVANGELISTS IN YOUR SALES FUNNEL

The truth is, you can’t control every part of the equation. You have little influence over the trust established between an Evangelist and their network. And, you have little influence over the context in which your Evangelist shares.

But, you do have a lot of influence over the other parts of the equation — the components that make up Satisfaction (Problem Solved, Perceived Value, and Satisfaction with Service), as well as one of the components that make up Shareability (Ease of Sharing).

Creating an army of Evangelists to help you market and sell your business is done by looking at each of the following components and improving/increasing each component:

  • Solving problems: Your product or service solves a problem or fulfills a need, even if you don’t think it does. Figure out what the problem or need is and make it clearer in your marketing.
  • Providing value: Customers who feel that they got ripped off will never return. Customers who feel that they got exactly what they paid for might return or they might not return. But Customers who feel that they got more than they paid for will be far more likely to buy again and turn into Evangelists.
  • Satisfying with service: Like the above component, Customers who feel that they received poor service will never return. Customers who feel like they received “normal” service may or may not return. But Customers who were surprised at how good the service was will buy again and turn into Evangelists.
  • Making your product or service easy to explain: Use clear, compelling, picture-words in your marketing, and use the same messages over and over. Make your business name and your web domain easy to talk about and share. Spread your presence around the web (Facebook, Twitter, etc.) so that people can share you far more easily.

The equation to turn your Customers into Evangelists is pretty simple. And it is made up of several components, many of which you have a considerable amount of influence over. The time and energy you invest into these components will be an investment into creating Evangelists who will fill your sales funnel for you.

Aaron Hoos: Writer

I’m writing a very brief series of blogs on who I am and what I do (see the blog post entitled Aaron Hoos: More than you need to know about me for the one that kicked it off). One of the roles I use to describe what I do is “writer“.

WHAT I WRITE

I write about opportunities and strategies in business, finance, and real estate. I spend a lot of time thinking and writing about sales funnels, business strategy, profitability, start-ups, investing (both in equities and real estate), business finance, innovation, marketing, and sales.

I write content (books, ebooks, training content, seminars, etc.) to help business owners learn more about their sales funnels and optimize those sales funnels for greater profitability. And, I write to help investors discover and exploit new opportunities to make money.

I’m also hired by businesses to write marketing and sales content. This includes marketing content (like articles, blogs, and ezines), sales content (like sales letter copy), digital content (like ebooks and ecourses), customer service content (like support scripts and autoresponders), and more.

MY WRITING BACKGROUND

In my first gig as a professional writer, I was a reporter for a daily newspaper. That showed me how to dig deep to find the story and write quickly to meet demanding deadlines.

During my undergraduate degree, I helped to pay my way through college by editing, freelance writing, and through writing-related awards. I was exposed to a couple of different industries, and this is where I first started working in finance.

After college, I started my first writing company (which later folded). Then I worked in a couple of financial and real estate firms, primarily doing some specific types of business writing. For a short time, while getting my writing business off the ground, I worked for a leasing company and sold insurance (and wrote reports and proposals for the company as well as some magazine writing.

Then, I started up my current business several years ago. I started by freelance writing a wide audience (but primarily B2B, financial, and real estate clients). Over time, a lot of my work started to bridge the gap between writing and marketing advisory/marketing management. Today, my writing is part of a larger work of sales funnel advisory.

In total, I have been writing professionally for over 18 years. I’ve worked with hundreds of businesses across numerous industries and produced thousands of pages of content.

WHAT MY WRITING IS LIKE

My goal in anything I write is to use approachable language to break down complex ideas into practical, relevant information with no filler.

WHAT I’VE WRITTEN

I’ve written the following content types:

  • Advertising copy
  • Advertorials
  • Articles
  • Blog posts
  • Books
  • Brochures
  • Business plans
  • Ebooks
  • Ecourse curriculum and content
  • Enewsletters
  • Forum posts
  • Guidebooks
  • Handouts
  • Knowledge Center content
  • Manuals
  • Newsletters
  • Press releases
  • Reports
  • Sales copy
  • Scripts (i.e., for call centres)
  • Speeches
  • Social media content
  • Website content
  • Whitepapers

HOW CAN WE WORK TOGETHER?

If you are a business looking to grow your sales funnel, (it doesn’t matter whether you already know what you want or if you’re not entirely sure what you need yet), I’d like to hear from you. Together, we’ll figure out how your business can grow.

I can be contacted at aaron@aaronhoos.com.

What’s the “pickaxe factor” in your sales funnel?

I’m renovating my kitchen. I have a company come in and do the cabinets, the countertops, and the floors, but I do the plumbing myself.

The reason? I’m a half-decent plumber (usually — there was one time when that wasn’t the case, but that’s another story) and I don’t mind the work of plumbing. Since I can solve most plumbing problems in less time than it would take for a plumber to even get to my house, I just do it myself. But cabinets and countertops and floors? That’s another issue. I don’t have the skills and tools or time. Therefore, I pay someone else to do it.

THE PICKAXE FACTOR

I call this the “pickaxe factor”. To me, a pickaxe represents work. Hard work. Nearly impossible work that builds up a sweat, breaks your back, and makes you wish that you could just sit on the couch and pay someone else to do the job while you drink something cold and watch American Idol. For me, plumbing has a very low pickaxe factor. I’m happy to knock out a plumbing job in a short time. On the other hand, kitchen cabinets have a high pickaxe factor (for me) so I pay someone else to do it.

There are lots of problems/challenges/needs that have a high “pickaxe factor” because they are difficult to solve/overcome/fulfill. For example, some people may find it hard to…

  • Start a business when they’ve worked for someone else all their life
  • Meet a potential romantic partner
  • Get to work in nasty weather
  • Look good
  • Do your taxes

These are just a few examples of problems, challenges, and needs that people find hard… they have a high “pickaxe factor”.

Now here’s the exciting part for any business owner: The higher the pickaxe factor, the more value people place on a product or service that solves the problem, overcomes the challenge or fulfills the need. That’s why people pay for the following products or services to help them with the high pickaxe factor the challenges I listed earlier…

  • Business consulting services to get help starting a business
  • Online match-making services to meet a potential romantic partner
  • A vehicle to get from home to work in comfort and style
  • Personal trainers, dieticians, and plastic surgery
  • An accountant

THE PICKAXE FACTOR AND YOUR SALES FUNNEL

Your products or services help people to solve a problem, overcome a challenge, or fulfill a need. If you want to sell even more products or services, or if you want to charge more money for your products or services, you have to do one thing: Identify and exploit a higher pickaxe factor in your sales funnel. In other words, you need to demonstrate to your sales funnel contacts how the hard task they’re facing can be made easier by you. And, the harder the task seems to them, the easier and faster you’ll sell your products and the more money you can charge for them.

WHAT YOU CAN DO RIGHT NOW

If you are just starting a business and looking for a great product or service (or a point of differentiation on a product or service), then figure out what your target market finds difficult, hard, impossible, or unfathomable, and sell a solution to that.

If you are in business and looking to grow, take a look at that problems your products or services solve and how high the pickaxe factor is. Then, take a look at the marketing messages in your sales funnel and identify whether you are making full use of the pickaxe factor by highlighting the challenges of hard work and explaining how your product or service eliminates the pickaxe factor completely.

Schedule time to return to the pickaxe factor in your sales funnel every 3-6 months. Develop your products or services further to solve even higher-pickaxe-factor problems, and hone your marketing and sales language to keep up with the challenges that your target market faces.