Sales funnels are the most important part of your business. Get an early glimpse into how they can help your business by reading this early draft excerpted from my Sales Funnel Bible book.
One question I’m asked frequently is “why is it important that I study my sales funnel?” This chapter is meant to answer that question.
First, let me reiterate what I’ve talked about because (in my opinion) that’s the best reason to study your business’ sales funnel: Every business exists to sell something at a profit. The way that a business does this is through a very basic structure called a “sales funnel”. The sales funnel is a sort of map of the journey that a prospective buyer takes as they discover their need for the product or service and they develop a relationship with the business to buy. Therefore, a business owner who focused on understanding their sales funnel and optimizing it is building out the one key structure that contributes to their business’ ultimate success.
I can’t think of a more important reason to invest time, money, and effort into your sales funnel! But if you need other reasons, here they are…
A sales funnel is more than just theory. There are many theories about business growth. Just browse through a selection of business books on Amazon or at your local bookstore and you’ll discover innumerable business gurus with the latest and greatest no-fail strategy about how to grow a business. But they are theories and very few of them are built around fulfilling the ultimate purpose of a business. Instead, they might contribute to one part of the business – making some aspect healthier or more successful without regard to the whole business. Even some of the biggest and best-known theories fall into this category (like Michael Porter’s Value Chain, the Business Consulting Group’s Portfolio Analysis, and the McKinsey 7S Model). Theories are helpful, and it’s okay to focus on one aspect of the business, but you must first understand the whole business – starting with the business’ ultimate purpose and the structure that every business uses to fulfill that ultimate purpose.
A sales funnel can be a strategic tool. Expanding on the point above – a sales funnel isn’t just about knowing how your business works but rather it is a strategic tool that you can use to truly understand and grow your business. You’ll know how a change in one area of your sales funnel can impact the rest of your business.
A sales funnel can help you make decisions. Small business owners are inundated with choices: Should they implement this marketing technique or that one? Should they try this sales method or that one? Should they try to connect with this target audience or that one? Should they try this method or that system for increasing profit? Should you hire this person or that person? Should you spend money on this software or that software? All of these are choices and the choices seem to be unlimited. Understanding how your sales funnel works will make the decision-making process so much simpler. You’ll easily filter through the choices you have to make to help you make the best decisions for the most successful business.
A sales funnel keeps you focused. There are many moving parts in a business and some business owners can feel overwhelmed as they attempt to juggle everything. A sales funnel keeps your mind fixed on the ultimate purpose of your business – to sell something at a profit – and it helps you take actions and make decisions that contribute to that purpose.
A sales funnel informs all aspects of your business. Unlike other aspects of business a business, your sales funnel helps to inform all aspects of your business. Understanding your sales funnel and keeping your finger on its pulse helps you to market and sell, manage your finances, manage your staff, track inventory, and stay in control of your business’ growth.
A sales funnel can help you make more money. Your business’ ultimate purpose is to sell something at a profit. Since your sales funnel is so closely tied to that purpose, improving your sales funnel will improve the amount that you sell and the amount that you can sell it for.
A sales funnel can help you save money. Your sales funnel is your business and all aspects of your business are tied to your sales funnel. Therefore, your sales funnel can highlight ways to save money by showing how you can be more efficient in some of your core activities, and it can help you avoid wasting money on non-essential activities and investments that do not directly contribute to your sales funnel.
A sales funnel can help you generate more customers. Once you understand your sales funnel, you will naturally attract more of the right customers. (Keep reading – you’ll see why). Not only that, you’ll be able to speed up your sales funnel and bring more people into it (because it’s running more efficiently – again, keep reading to find out why).
A sales funnel can help you innovate. Businesses that never change run the risk of growing stagnant and irrelevant to their market. They become eclipsed by businesses doing new and exciting things. Your sales funnel gives you a way to focus on innovation – including process innovation and product/service innovation.
A sales funnel can help you sell more at a higher profit. Again, it all comes back to the ultimate purpose of your business – to sell something at a profit. When you do that (and more of that, over and over) your business succeeds. The sales funnel is the best way to focus your attention, help you make decisions and take the right action, and grow manageably.
This chapter is excerpted from an early draft of my book. Comments and constructive criticisms are welcome. Please be aware that the chapter content and chapter order may change by publication.