Unfortunately for your sales process, more than 95% of people aren’t ready to buy anything the first time they visit your site. Even if you’re lucky to convert website visitors into sales leads, less than 50% are qualified or ready to make a purchase.
The truth is different customers will travel on different buying journeys. Some may be just looking while some are ready to buy. Your goal as a marketer is to engage with people early in their buying process and convert as many visitors into paying customers.
And luck has nothing to do with it. It’s all about having a solid process and strategy in place.
Think of all that hard work you’re putting into growing traffic. No matter how you attract your visitors, the reality is that you’re going to lose most of them before they enter your sales funnel–Poof, they’re gone.
Your goal is to guide as many visitors as possible through the marketing funnel and to minimize that leakage. So before you get bogged down with a bunch of conversion hocus pocus, follow these five stages to build a high-converting funnel and grow the pool of your new leads for your business.
Conversion Funnel: What is it?
The basic idea of a conversion funnel is that first you attract traffic, then some of that traffic becomes interested in what you have to offer, and from that point you have their attention and your goal is to convert as many visitors into customers as possible.
The efficiency of your funnel determines the return on your marketing dollars and also the cost to acquire a new customer. That’s because getting traffic costs money and if you convert enough of that traffic that you paid for, you’ll make an impressive ROI.
The structure of your funnel will depend on many factors including your sales process and lead nurturing strategy. Dave McClure, CEO of 500startups and former head of marketing at PayPal, put together a very solid, unique conversion funnel.
The idea of it is that each stage of the funnel (Acquisition, Activation, Retention, Referral, Revenue) is the metric you should be tracking. Obviously, the idea is to optimize each stage of your funnel.
Like the sisters, your business goal is to pull in as many leads (or in their case, children) as possible. In order to do this, each stage of your funnel (or their child seeking strategy) should have a purpose and your target customer should be clearly defined.
Stage One: Acquisition
The first step is getting traffic. There are various ways to get traffic; such as advertising, content marketing, PR, business development, partnerships, search marketing, SEO, and so on.
The volume you get doesn’t mean much. It feels good to get a lot of traffic; but unless you’re in the publishing business, it’s just a vanity metric.
The focus at this stage is to measure which channels deliver targeted visitors and the best ROI. Some channels deliver a high volume of low quality leads; others are the other way around. You’ll have to try out various channels to start sniffing out the best lead source for your specific business.
Stage Two: Activation
Once you’re driving traffic you need to activate or engage your visitors. Your goal is to make sure they have a great first visit. This means, if you acquired traffic to your blog, it must provide value to the audience.
There are two ways to engage your site visitors. The first way is by enticing them with some sort of resource. You either get them to sign up for a trial and use your product, or sign up for a blog newsletter, download an eBook, sign up for a Webinar, or provide their details with permission to be contacted in some other way. If the resource you provide is valuable and a solution to their particular needs, you’ll get them hooked.
The second way is retargeting. Using tools like Adroll, Retargeter or Perfect Audience you can pixel your prospects and target them with relevant ads outside of your website.
Stage Three: Retention
Retention is where you get your prospects back. This is achieved through lead nurturing and engaging your leads through email marketing and providing them with more content that they value.
If you’re a software company and you got your leads to sign-up and use your product once, you want them to come back and use it again to become engaged users. You need to make sure your particular product meets their needs for the optimal customer experience and to make sure you keep them coming back time and again.
Stage Four: Referral
Here’s where things get interesting. Successful companies are the ones that have the most efficient marketing. Some of the fastest growing companies have spent very little on marketing because of simply nailing the referral portion of the funnel.
For example, Uber has captured most of its users through word of mouth marketing. Alternately, LinkedIn makes its users upload their entire email contact list and send out invites as part of the signup process. Dropbox built their massive customer base through referrals-giving customers additional storage for referring friends and family.
Whether you’re a small business, a retail store or a software company, referral is an incredibly important stage of your funnel. That’s because customer acquisition today is very expensive.
If you can get each customer to refer another customer, your business becomes self-sustainable. Even if your referral rate is something like 0.4%, it will boost your ROI dramatically.
What you want to do is find a way in which to either incentivize word of mouth or somehow make using your product part of customer acquisition (e.g. “Sent from my iPhone” signature). Other methods include creating viral campaigns or sweepstakes to which your customers can invite friends and colleagues.
It’s important to note here that referral isn’t necessarily a “stage four” in the funnel. It can come at any stage. The only thing that matters is that you pay attention to and actively work to boost your referral rates.
Stage Five: Revenue
Here’s where you monetize your leads. Either they sign up for the paid version of your product or make a purchase. When your leads are ready to buy, you present them with an offer.
Oh, and don’t forget about your paying customers.
The key metric here is the Customer Lifetime Value. You want make sure each customer generates revenue higher than it cost to acquire them, either through repeat purchases, up-selling, or simply retaining them long enough. That’s how you generate ROI.
Building a high converting funnel takes more than a little magic and hocus pocus. It’s about putting a consistent sales and marketing process in place to draw in more leads (Aka cast spells on more children) and to boost conversions at each stage of the funnel.