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.
In an earlier chapter I talked about your target market and how your business didn’t serve everyone but rather served a small (or smallish!) group of people who share a similar problem or need (plus a few other commonalities).
Often, target markets are described by a few specific descriptors – “busy moms who want fast nutritious food for their families” or “Chief Technology Officers of Fortune 500 companies” or “empty nesters who live in Idaho and need to downsize to a smaller home”. And there are some unstated assumptions in this description as well (such as: English-speaking and with enough money to pay for your services, for example). Your defined target market might be substantially smaller than “everyone” but it’s still pretty large.
And as your target market starts to progress through your sales funnel, you’ll probably find that the way you defined them is still too broad. You’ll discover this as you watch people move through your sales funnel and you sell to them. You may discover that within your defined target market, there are several smaller “sub-groups” and each one moves through your sales funnel at different speeds, and some are ultimately going to be more profitable than others.
I’ll give you an example from my business. You may recall from my earlier discussion of target markets, that I originally served anyone who needed to hire a freelance writer. Then later, as I started to understand how sales funnels work and I analyzed the people who bought from me (and who I enjoyed working with the most, and who I found to be the most profitable) I narrowed it down to financial and real estate professionals. For years, I wrote almost exclusively for financial and real estate professionals.
But I was always watching my sales funnel and analyzing how people moved through, who ended up buying from me, who I liked working with the most, and how profitable they were. To some people, a target market like “financial and real estate professionals” might seem pretty small. But after regularly tracking my sales funnel, I discovered some interesting things:
- I enjoyed and profited the most from financial and real estate professionals who worked in Canada and the United States. (I’ve also worked with professionals in the UK, Australia, and the Middle East and although I made money from them, it wasn’t the most consistent and the most profitable). The exception to this was Australian payday loan companies, who always paid really well.
- Within the definition of “financial and real estate professionals”, I found that financial advisors were among the hardest to work with because they were (understandably) sensitive to the compliance rules of their firms.
- I also found that tax attorneys had a lot of work for me but were very hands-on. Sure, maybe not all of them but the ones I worked with.
- People who work in the credit industry (credit repair or debt collections) have sent me a lot of work and I’ve had a lot of work working with them over the years.
- Real estate agents were among the hardest to market to – because so many of them wanted to do what everyone else was doing (which wasn’t very much). The exception was: Real estate agents who work in foreclosures.
- I received a ton of work from people who serve the real estate market (such as, professionals who train real estate agents).
- My most lucrative client – the ones who are the most fun, most profitable, and who send me the most work are real estate investors.
So if I had to pick my top three customers, it would probably be: Canadian and American real estate investors, American credit professionals (credit repair or debt collectors), and Australian payday loan companies. I can get way more detailed than this but I just wanted to show you that even my supposedly small target market of “financial and real estate professionals” can really be subdivided further.
When I first started writing and focused on the financial and real estate professional market, I didn’t dream of the many different ways this market could be divided further. Today, I could pick just one of those markets and focus even further.
In your business, the same thing is possible. Your target market might be one specific definition but as you watch what is happening in your sales funnel, you’ll discover that you might have several sub-groups.
This information is useful and you can do a few things with it:
- You can narrow your marketing further so that you define your target market even more tightly than you once did, sending only that sub-group into your sales funnel. (And, of course, make sure that all of the marketing and sales activities in your sales funnel are now attuned to this more narrowly defined target market!)
- You can keep your target market at the higher level and create several sales funnels, driving each of those sub-groups into the right funnel. This might be done with websites that are substantially the same, and ultimately offer similar services, but are more targeted.
- You can keep your target market at the higher level and just take in whoever shows up – enjoying the more profitable sub-group customers when they arrive but also enjoying the variety of other customers from that larger target market. (Admittedly, this is a less efficient and less profitable model but it still works and many people do it).
I’ve done all three of these. I love how easy and profitable it gets when you focus on the smaller sub-group right from the very beginning. I love how busy it can be when you work on several sub-groups out of a target market. And I love the variety of working with many people from a larger target market, even if they aren’t my most profitable or preferred customers.
You can choose the approach you want to take. You can also adjust your course as you go, switching from one to the other if you ever want to change course.
The purpose of this chapter is not just to tell you that your target market is smaller than you might think it is. Rather, I’m writing this chapter to encourage you to watch carefully in your sales funnel and analyze who is really buying from you and compare that group to your target market. Then, modify your sales funnel so that you get more of the people you do want and less of the people you don’t want.
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.