If you do just one analysis for your business…

By Neicole Crepeau, Contibuting {grow} Columnist

Are you a small business owner or manager looking to improve your marketing and sales? If so, you’re also probably seriously time-constrained. So it’s important that the time you do spend yields tangible results with conclusions that can translate into actions that improve your bottom line. Based on my experience working with small businesses, if you only have time to do one thing, it should be becoming acquainted with your sales funnel.

In my experience, discussing and documenting the sales funnel has never failed to provide new insights, identify holes, and uncover opportunities to improve marketing, reach more target customers, and increase actual sales/conversions.

In this day of digital marketing, social media, and mobile, a simple sales funnel analysis may seem passé. But I guarantee that if you do the analysis and ask the right questions, you’ll find ways to improve all those aspects of your marketing … and more. That’s because reviewing how you acquire customers and the stages they go through to buy from you exposes the rocks in the stream.

Who should analyze the sales funnel?

One of the great things about sales funnel analysis is that it applies to all types of businesses—and even non-profits.  B2B and B2C companies can benefit from looking at how they acquire customers. Non-profits can use the same process to evaluate how they acquire donors.

You don’t have to limit your analysis strictly to sales, either. For example, I worked with a services firm recently who uses subcontractors. We used the same analysis technique to examine how they acquire subcontractors, especially for key positions. Since doing that is critical to their business, it warranted a thorough evaluation, so we could find new ways for the company to “market” to contractors.

It’s best to perform the analysis with a small group of people, rather than trying to do it alone. In a small business, the CEO is very often in the analysis meetings. If the goal is to improve marketing/sales, then the marketing owner should certainly be involved. Other likely candidates: any consultant you are working with on marketing/sales, a key sales person or the manager of sales (if you separate marketing and sales), whoever owns digital, social media, or content marketing (if you are doing those), and whoever owns your website and watches the analytics. You may also find it valuable to include someone from customer support or, if you provide services, project or account managers who work with customers after the sale.

What funnels should you create?

To start, determine which products or services or markets you’ll analyze.  If you have multiple products and they appeal to very different customers or are marketed in very different ways, you’ll want to analyze each. If you market different services or to different types of clients, then you may need to model each sales process separately. If you’re not sure whether you need to model them separately, start with one funnel. As you begin discussing the process, if you find yourself saying “Well, if it’s this product then xyz, but if it’s that product then abc,” you know you need to model each one separately.

How do I do the analysis?

I always draw a funnel on the white board. Begin at the top and work your way down.  The basic stages are generally the same, though you might end up modifying them as the discussion ensues. I usually start with:

  • Awareness of problem/need—Customer realizes that he/she has a problem or a need
  • Awareness of product/service solution to the problem—Customer realizes that there are products that can fill his/her need or vendors who can provide services to solve it
  • Awareness of your company’s specific product/solution—The customer discovers your product or service as an option
  • Shortlisting available products/solutions—The customer narrows down the products or vendors under consideration
  • Comparing shortlist products/solutions—The customer does additional research and comparison of the products/vendors. This step may only apply to large purchases.
  • Proposal and negotiation—The customer puts out an RFP and/or contacts you, you provide a proposal and/or cost, and negotiations ensue. This step may or may not apply to your business (typically a b2b step).
  • Sale—Sold! The customer purchases

Asking the right questions

The key to getting value from this analysis is asking the right questions. Start by trying to understand who your customers are. Include questions such as:

  • The role or title of the customer (in B2B sales)
  • The age, gender, and other demographics of the customer
  • The demeanor of your customer, at the time they are in this sales process. Is your customer frustrated, worried, in a hurry or taking their time, in the store or at home or on the move, under the gun from upper management?
  • The online behaviors and activity level of your customer. Is this a person comfortable researching or buying online? Is he or she a mobile user?

At this stage, you may decide to diagram separate funnels for different types of customers.

Now, for each stage, ask the right questions to prompt ideas, identify problems, and determine where you need more information.

Awareness

  • How do customers describe their problem/need? In what terms do they think of their issue?
  • How pressing is the problem? How likely are they to look for information about how to solve it?
  • Will customers know already that there is a product or vendor to solve this need?
  • How do customers learn about your company or product? What are all the possible ways now? How do they learn about competing products/vendors?

Short-listing

  • What’s the checklist in the customer’s head? What requirements have to be met for you to even be considered?
  • How do customers find out whether you meet these requirements? Where do they look for information? How hard do they look?
  • How short is the customer’s short-list? What are the determining factors as customers narrow down their choices?
  • Is there anything about a product or vendor that would cause customers to move directly to the next stage or even skip the comparison stage?

Comparison

  • How do customers do a detailed comparison? Who is involved at this stage in making decisions?
  • Where do they get the information they need?
  • What are the deciding factors for selecting a product/vendor?
  • How long does this process take and what can derail it?

Proposal/Negotiation

  • Is the process formal or informal?
  • How transparent are customers about their budget?
  • What approvals are necessary and what other stakeholders become involved at this stage?

These are just seed questions to get you started.  You may find that you don’t have the answers to even key questions, suggesting the need for further research. You’ll certainly see places where you may be able to improve. For example, you may realize that you don’t have the kind of information customers want to do a detailed comparison, at least not in a way that’s easily accessible to them. You may find that customers short-list by looking for reviews—and you don’t have any reviews on popular sites.

All of these represent opportunities to improve your marketing, and grow your sales.  Of course, that’s only half the battle. Next, you have to actually use that information, create a plan, and execute on it. A sales funnel analysis is a excellent and relatively easy way to take the first step in improving your sales and marketing.

Have you used a process like this in your business? What would you add?

Neicole Crepeau a blogger at Coherent Social Media and the creator of CurateXpress, a content curation tool. She works at Coherent Interactive on social media, website design, mobile apps, & marketing. Connect with Neicole on Twitter at @neicolec

Related Posts Plugin for WordPress, Blogger...

All posts

  • Pingback: What’s the one best analysis you can do to improve your sales and marketing? | fabriziofaraco()

  • I think that I probably disagree with this analysis. The sales funnel was developed in the early 1900’s by National Cash Register. Salesmen were routinely over optimistic about how many sales they would close, and over production resulted. The sales funnel was developed as a predictive measure to help modify over production. Each step in the sales funnel was discrete and could be measured.

    With digital marketing, there isn’t so much of a sales tunnel as a sales blizzard – leads are flying at you from all over. But more importantly, if you have a digital product, you don’t have an over-production problem that the sales funnel needs to solve.

  • Anonymous

    I love to see this levle of thought Nicole! too many marketers are willing to allow these things to happen ‘to them’ rather than taking responsibility ‘for them’.
    I use the following process analysis with my clients all the time, and I’d have to challenge Michael’s view that you are utilising an outdated or redundant model here. Its basic consumer buying behaviour
    1) Need Identification
    2) Information Search
    3) Evaluation of Alternatives
    4) Purchase decision
    I always add in (and particularly relevant today)
    5) Post Purchase Analysis
    The other thing I would add, is to try to understand where in the process you are most able to leverage the relationship you have with the customer (or what we used to call ‘sell’ the customer!)
    Knowing where you can ‘safely’ intercept, or interject, withour scaring them off or being overtly salesy is vital. We need to think of adding value to the process, not backing them into corners.
    Is it in providing the information as you have discussed, or in terms of trying to set the agenda for the evaluation maybe?
    or even a little more overt, how can we influence the purchase decision (dicounts? Volume deals? Closing techniques?)
    I think you are bang on with this, and typically for this blog I love the fact that you guys are facing the hard marketing questions unflinchingly
    Thanks so much! More of the same please!

  • Anonymous

    Apologies for getting the spelling of your name wrong Neicole, sorry.

  • No problems on the misspelling. I’d be unhappy all the time if that offended me. And thanks for your adding your methods and questions.

  • Thanks, Michael. That may have been why it was originally developed, but that certainly isn’t the only way it’s been used.
    Ultimately, the sales funnel is just a framework for thinking about the process your customers take to the purchase, and the factors that influence them. You could use another framework, but I find that people need a model of some kind to guide them through the process of analyzing how people discover and decide to make a purchase from them. Knowing where those leads are flying from and–more importantly–where they should be coming from is critical. You could, however, use another framework to help you ask all those critical question. I’m sure others have other models they use.

  • This is a really great post Neicole, and right in line with our EQ Listly initiative (EQ for Entrepreneurs’ Questions) It comes down to asking the “right” questions.

    If you were inclined it would be great if you would add to one or two of our listly lists such as the sales list & customer development list ~ These are part of the lists of the “right” questions Entrepreneurs should ask.

    What are the killer QUESTIONS an Entrepreneur should ask about SELLING & SALES?

    What QUESTIONS should an Entrepreneur ask for CUSTOMER DEVELOPMENT?

    Of course if you would like to add your own category of list to our Master list it can be done

    Master List: What are the LISTS of QUESTIONS an ENTREPRENEUR should ask?

    If you add any questions please link to your post as this is an extremely useful and valuable resource for Entrepreneurs.

    We are looking for SME contributors and I hope I am not off topic in asking you (and others) in the comments here for valuable contributions. We are building a resource of questions for Entrepreneurs to ask.

    If the links don’t work to the listly questions please find me on twitter as CASUDI.

  • Anonymous

    These are the kinds of questions I ask my clients–in a much more informal way–in order to narrow down how to sell their products and services. I like how you made it look linear and organized, for the questioner’s sake of sanity! I’m usually getting these answers out of people who are not experienced at answering them, so we do more of a series of spirals down to the core.

  • Love it – We’re trying to improve our sales funnel right now, too. We’re getting some great insight & I *KNOW* there’s a lot more we can discover.

  • Yes. Of course, then it’s all down to putting that new knowledge into action…

  • Well, as you know, this kind of thing is just a framework. You have to be willing to let the discussion go on different tracks, take tangents, and use different approaches as befits the situation. Spirals are good!

  • I love your insight, Neicole. Always.

  • I’d definitely check it out. I don’t see any links in your comment, so I’ll connect with you via Twitter. Thanks for asking me to contribute, too!

  • Neicole you had me at Pink Panther – yes yes Most ingenious and content is really good too. The article and Casudi’s comment really resonate. Asking a lot of questions, especially good ones is so important to the iterative marketing process. Thanks for sharing lots to ponder.

  • I’ve followed you on Twitter and realized we are in the more or less same geographic location ~ as the crow or the float plane flies it’s about 60 miles. Cheers.

  • Thank you!

  • Pingback: Why not celebrate life by giving thanks? My 2,800 word “thank you” list.()

  • I’ve been away from the {grow} blog for far too long – two days to be exact. This is a great article Neicole and also learned something new from @Michael_Webster with his comment about the origin of the “sales funnel” concept and National Cash Register. That’s an interesting bit of B2B marketing history I didn’t know about.

    Thanks!

  • This is a great post, Neicole. I recently audited a site for a client and was amazed at how little they knew about their sales funnel even though the site was primarily an online store.

    This is just another reason to get into metrics too.

  • Pingback: It’s June Already?! Best of the Web!()

  • Pingback: What’s the one best analysis you can do to improve your sales and marketing? | Market to real people | Scoop.it()

The Marketing Companion Podcast

Why not tune into the world’s most entertaining marketing podcast that I co-host with Tom Webster.

View details

Let's plot a strategy together

Want to solve big marketing problems for a little bit of money? Sign up for an hour of Mark’s time and put your business on the fast-track.

View details

Close