The concept of the  Sales Funnel  is one of the key tools used by many successful internet companies. Think of the sales funnel as an inverted pyramid. We make use of the metaphor of a Sales Funnel (wide at the very top, narrow at the end) to monitor the sales process. Here is an example of a very simple Sales Funnel:

———————– Leads ————————

————– Prospects ————–

— Customers  —

The metaphor of a funnel can be utilized because prospects drop out of different stages of an extended sales process.

At the very top of the funnel, you have  Leads,  someone who you have decided to pursue for a sale, trying to find as many as possible. A small percentage of those leads will be  Prospects,  people who are actually interested in your product or service and who are qualified to buy. The more good  leads  you bring into the sales funnel, the more prospects  you’ll have. The last piece is the  Customer. A small percentage of people who are interested will actually make a purchase and become a customer.

Using the Sales Funnel, and by calculating the amount of leads at every point of the procedure, you are able to predict the amount of prospects who’ll, over time, become clients.

A lot more than this, by taking a look at how these amounts change with time, you are able to spot issues in the sales pipeline and take corrective action early.

For instance, in the event that you spot that not many mailings were responded to during a month, you may be expecting that, in a couple of months time, sales may dry out. The following month, you can ensure that more mailings than usual are sent.

Utilization of the Sales Funnel shows obstacles and dead time, or if there are an insufficient quantity of leads at any point. This knowledge enables you to decide where sales agents should focus their attention and efforts to help keep sales at the required level, and also, to satisfy targets.

The funnel may also explain where improvements have to be implemented in the sales procedure. These may be as straight-forward as introducing extra sales coaching or making certain sales reps put adequate emphasis on each step of the process.

The very first stage in establishing Sales Funnel reporting would be to brainstorm the sales process together with your sales and marketing people to make certain that it is correct and comprehensive.

As you develop an image of a Sales Funnel, you can begin to comprehend where you are able to enhance your sales process. Take care to learn about the different components and set up each one properly so your plan doesn’t have any invisible gaps.

You need to know how to effectively use:

  • Squeeze pages
  • Entry points
  • Freebies
  • Low end offers
  • $ 1 offers
  • Up sells
  • Down sells
  • Cross sells
  • OTOs (one-time offers)
  • Repackaging
  • Repurposing
  • Recurring income products and services

You’ll also need to know how to perform specific functions:

  • Incorporating affiliate products into your sales funnel
  • Leading the customer up through different price points
  • Collecting opt ins
  • Building buyers lists and prospects lists
  • Separating the two lists

The Sales Funnel is the key to long term success as your marketplace becomes increasingly competitive. The companies without a defined sales funnel suffer as they are unable to compete with companies that know what a customer is worth to them long term.