July 19, 2021
Sales funnels, also called ‘marketing funnels’ or ‘conversion funnels’, are a core part of digital marketing. Essentially, they’re the steps a visitor has to go through to make a purchase. Specific definitions differ, but the basic steps are:
Someone may start down a funnel by seeing an online ad. This is awareness. Interest is then nurtured through tactics like retargeted content, newsletters, and free trials. Eventually the person decides to make the purchase and goes to the product’s sales page. They take action by putting the product in their shopping basket and paying for it, completing their trip down the funnel.
The ‘funnel’ shape represents the smaller numbers of visitors on each step. The narrower the step, the fewer potential customers you have - but the more likely they are to make a purchase.
Without a clear framework to follow, you are left with a non-intuitive buying process that scares away potential customers and prevents your business from reaching its full selling potential. That’s what makes sales funnels so effective at bringing in leads and securing sales: they make purchasing the product more or less effortless.
A good funnel should identify the buyer demographic early on and make following the steps an enjoyable experience. They should encourage the potential buyer to proceed to the next step in a direct but non-invasive way, offering incentives to continue and fostering interest whenever possible.
Peloton, a popular exercise equipment and media company, has a highly effective sales funnel. Peloton generates awareness for its brand through extensive advertising, both online and through traditional channels like television. They have also invested greatly in search engine keywords (searching ‘exercise bike’ on Google brings up a Peloton ad on the first page), which more specifically targets people looking for exercise equipment. This awareness leads interested customers to research the company, perhaps by clicking an ad, which will take them to the website.
Their homepage features a live chat service, letting visitors speak to a salesperson almost instantly. Interest is further nurtured by the offer of a 30-day free home trial, as well as the option to book a visit to a physical showroom. Letting people experience their product hands-on for free is an effective way of overcoming the hurdle many people will face when considering the bike: the price. Starting at £1,750, a Peloton bike would be a significant investment for most people. Being able to experience the product before spending a penny goes a long way in turning interest to decision.
Once a person has decided to buy a bike, they will navigate to the purchasing page. There they can choose the package they are interested in and add it to their shopping cart. To encourage visitors to complete their purchase, Peloton lets them pay for the bike in monthly installments at 0% APR, and includes free delivery and set up. Peloton also upsells at this stage with an ‘Add Accessories’ option in the checkout section, encouraging customers to quickly add accessories like cycling shoes to their order.
Finally, the customer is taken to the checkout. There Peloton upsells one last time by offering to extend the bike’s warranty for an extra cost. The customer checks out and pays for the bike, and the funnel is completed.
Peloton’s sales funnel is so effective because of its elegant, streamlined design, its large presence on both online and offline media, and its many different methods of encouraging sales. It was not cheap to build or run - last year, their marketing budget was just under $100 million - but the company more than recouped its costs with a total revenue of $1.8 billion.
Sales funnels can either be set up in-house or through a specialised building tool.
Creating a good funnel takes a lot of consideration, research, and testing, as well as a significant amount of refining to make it work at maximum efficiency. Due to this complexity, tools are generally the more popular option.
One of the first and most popular building tools is ClickFunnels. ClickFunnels lets you build and design a funnel that suits your specific business. This includes features like payment gateways, mobile optimisation, and integration with all major autoresponders. It still takes time and effort to create an effective funnel, but using a building tool streamlines the process and saves you from needing proprietary tracking tools to see how well your funnel is working.
Setting up a sales funnel is an excellent way of improving your purchasing process. You can use it to make buying your product clear and easy for potential customers, and can track your funnel’s metrics to optimise and refine it as needed. The result is a smooth and enjoyable experience that will generate a wealth of new leads and repeat customers for your business.
If you would like to set up a sales funnel for your company, we can help. Contact us here and find out what we can do for you!
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