The most important part of building a business is creating a sales funnel around the problem you solve for your target market. Your sales funnel will articulate how you’ll attract that target market to your business and ultimately sell them your product or service.
But how do you know if your sales funnel is working? What are the indicators that tell you that everything is moving along nicely. Here are the qualities of a successful sales funnel that you can compare your sales funnel against:
- A successful sales funnel articulates a specific solution to a specific problem experienced by a specific target market: Of course your product or service might solve other problems and be enjoyed by other target markets, your sales funnel will be the most successful when you recognize the solution, problem, and market and focus everything around those elements. (Note: Your business might have more than one sales funnel because you solve other problems for other target markets. Don’t try to squeeze everyone into one sales funnel).
- A successful sales funnel has cash flow: Only one sale doesn’t necessarily indicate a successful sales funnel. Rather, you should be able to repeat your sale over and over. The more often you can sell, the more cash flow you have. (One of your key goals as the business owner is to increase the amount of cash flow moving through your sales funnel)
- A successful sales funnel is profitable: This one seems obvious and easy – the money coming in should exceed the money going out. (One of your key goals as the business owner is to increase the amount of profit from your average sale)
- A successful sales funnel is efficient: This is hard to measure but is still important. An efficient sales funnel moves the potential buyers through with the minimum number of steps. As the business owner, you need to figure out the fewest number of steps that your target market can move through your sales funnel… but still move through your sales funnel! If you have too many steps, your target market will go somewhere else because their problems aren’t solved in a timely fashion. If you have too few steps, your target market will feel like you are jumping the gun and not taking the time to understand their problem so it can be solved.
- A successful sales funnel is trackable: You should be able to know how many people are in each stage of your sales funnel at any given time. You should be aware of the ratios between stages (i.e. your conversion ratio as well as your lead-to-prospect ratio).
- A successful sales funnel is scalable: This one is going to be hard for some entrepreneurs (especially those who are used to doing it all themselves). A successful sales funnel should work just as well when 1 person goes through it as when 100 people or a 100,000 go through it. Scalability should be reflected in the infrastructure that supports the sales funnel as well as in the business’ ability to handle a growing number of customers.
Your business has a sales funnel (hint: EVERY business has a sales funnel)… but does it look like what I’ve described above? If not, what changes can you make to correct it?