Some of the most pressing questions business owners ask include:
- How do I grow sales?
- How can I generate more leads?
- What can I do to retain customers?
We will seek to answer these questions in this two-part series by explaining ways of how to effectively manage your sales funnel. In this post, we explain what is a sales funnel and demonstrate how it is relevant to your business. In the next post, we will discuss techniques that you can apply at each stage of the funnel to improve your chances of growing sales. We will also share some of our experiences at Bidvine on how we have built and manage our own funnel.
We look forward to going on this journey with you!
What is a Sales Funnel?
A sales funnel is the sequence of steps your customers took to purchase your product or service. It also involves the experience your customer has once the sale is made. A sales funnel can, therefore, be regarded as the process of mapping out a customer’s journey into four stages and understanding the type of experience they had when interacting with your business at each stage.
The below illustration summarizes the four stages of a sales funnel:
Lead Generation refers to prospecting and attracting qualified leads to your business. This step is often regarded as the most important in the sales funnel since it involves finding the right customer and initiating enough interest that the customer will consider transacting with you. There can be no sales without genuine inquiries. Bidvine’s service begins at the top of the sales funnel by offering a platform for businesses to generate leads based on their criteria.
Conversion is the process of moving qualified leads toward becoming paying customers. There is a greater chance of customers transacting if they see an inherent value in your product or service. Bidvine, for example, encourages professionals to build their profiles in ways that make them more marketable, which will ultimately increase the likelihood of successfully converting leads into paying customers.
Retention is the number of repeated transactions by the same customer. The ability to retain customers often involves delivering a service that, at a minimum, meets their expectations. Customer reviews indicate the level of satisfaction in the buying process and are one of the most telling tales of whether they will come back to make another purchase.
Referral is the ability to generate new leads from the recommendations of your existing customers (the success of which will likely depend on the quality of their own experiences). Often, customers will put their name behind a brand if they themselves have had a positive experience. Referrals can also be in the form of testimonials to help promote your brand.
Why is a Sales Funnel Important?
A sales funnel represents one of the simplest ways of understanding customer behaviour. The shape of the funnel will typically look like an inverted triangle which is widest at the top and narrowest at the bottom as customers move along the buying process (it is more likely to have a higher number of prospects at the top of the funnel than paying customers at the bottom).
A sales funnel will tell you:
- How healthy is your sales pipeline?
- What is the rate of your customer retention at each stage of the funnel?
- Where do you need to invest your time and money?
Investing in your funnel is a key component of growing your business; your sales strategy should take into account the cost of finding new customers which can be offset by either the price of a service or the number of times customers will likely transact. Some businesses may focus on investing in a high number of prospects to improve the likelihood of customers transacting, while others may focus on increasing conversion rates through direct follow-up and rapport building.
Understanding your sales funnel allows you to break up an ambiguous question such as “how do I grow sales” into smaller, more manageable components rather than tackling the issue as a whole.
We recommend to look for the following queues when building your sales funnel through Bidvine:
- Understanding how many bids you submit on Bidvine and how many inquiries you receive, will help demonstrate the number of prospective customers who are interested in your business.
- Understanding how many of those leads converted into paying customers, will allow you to evaluate the strength of your profile and the effectiveness of your sales follow-up presentation.
- Understanding how many paying customers came back for additional services will help demonstrate how successful you are at retaining customers.
- Understanding how many paying customers referred you to other leads is an indication of customer satisfaction and their willingness to support your business.
Narrowing down your focus to four stages of the sales funnel will help you understand where you have the greatest successes and challenges. From this understanding, you can determine where to concentrate most of your efforts and resources to improve sales.
Bidvine is here to support you along the way.
- Bidvine automatically matches you to customers based on your service and saves you time by filtering out customers who don’t fit with your preferences. You can then reach out to the customer directly by submitting a bid and message.
- With BidMatch, we take this service one step further, composing and sending bids for you. You set your service, your travel preferences, the first message you want to send to a prospect and add your price list. We match you with the right customers and bid on your behalf. Unlike with manual bidding, where you pay to bid, with BidMatch you only pay when a customer contacts you.
- As mentioned above, we also provide a wealth of information – from the weekly stats email, to the new insights section on the site, to the compare bids option in messaging – from which, you’re able to understand your competition and understand how to improve.
If you need any help in understanding any of the information provided to you today, or if you want to learn more about our data driven features – reach out to our support team.
At Bidvine, we pride ourselves on assisting professionals in their growth journey by offering a range of services and support guides. There will be more to follow in the second instalment of this article where we look at “Ways to Grow Your Sales Funnel.”