Relationship Building

The Digital Sales Funnel 101

How does any online marketer secure a successful sale? In order to answer this pivotal question confidently, we need to take a look at the process building up to a sale, as well as the factors that eventually convince customers to make a purchase. Anyone who’s ever studied the basic principles of digital marketing is sure to have come across the concept of a sales funnel. But: Most online shoppers and browsers out there don’t even realise that they are forming part of this process every time they are visiting an online store – or let alone at which stage of the funnel they find themselves in.

In some instances, these funnels work extremely effortlessly, supporting the customer’s online purchasing activity from start to finish, while in others cases, marketers are left scratching their heads as to why their model hasn’t produced any effective results. The reason for this is that the funnel has probably not been adequately laid-out for the appropriate customer base. In fact, most sales funnels are compiled to favour economic goals, rather than the customers themselves. Too many marketers only think of themselves and their revenue goals, instead of placing themselves in the shoes of the browser. This then leaves potential buyers frustrated and annoyed, and eventually results in the marketer’s sales conversion rate to plummet.

Your digital sales funnel should encompass a pleasant journey that places an emphasis on interacting with your customers. They should be informed about what you have to offer and compelled to complete the purchase.

Identifying potential customers

Let’s take a closer look at a digital sales funnel – from the advertisement, the landing page to the checkout process, and why it’s such an effective marketing module when executed successfully. Once you’ve finished with this article, you will be equipped with the basic knowledge to ensure that your next sales funnel is successful and that you improve on your sales significantly.

But, before we go into all the specifics, let’s take a look at a few basic principles. What did you think about when you when you came across the term digital sales funnel for the first time? In case you’re still not entirely sure of the concept, here is a short explanation (just to get the creative juices flowing):

“A sales or purchasing funnel is as a customer-focused marketing model which illustrates the theoretical journey or sequence of steps that customers follow toward the purchase of an online product or service. The process usually commences from a traffic source, directing the customers to a landing page that offers a product or service through a special offer. The aim is for both the customers and the marketer to achieve their desired results in the sales process.”

The most crucial part of the definition is that a sales funnel is never solely company-orientated. It is designed to combine the needs of the customers and the business, so that both parties achieve their desired goal. The reason why this point is so paramount is because the marketer’s interest is almost always different from the outset of the marketing process, as all they want to do is to direct the customers in the direction of purchasing one of the products whilst they are still in the process of collecting information about the product. Customers simply aren’t ready to follow through on the purchase at this stage – no matter how much the company wants them to spend their money – and any attempts to squeeze, bend and break through the sales funnel at an inappropriate stage will only result in a minimal sales conversion rate and ultimately deter potential customers from actually going through with the purchase. So, how and where do we go from here?

Steps to compiling an effective sales funnel

Well begun is half done, so a well-planned and clearly-communicative sales funnel is the ultimate goal. This may sound taxing, but the process doesn’t have to be complicated at all. With the help of four simple questions, you can easily decide what needs to be placed at the respective stages of the funnel, whilst making sure that the process always centres around the interest of your customers.

Question 1: What is my customer’s level of knowledge?

Are your customers aware of their needs, the solutions available on the market and your business at all? This information has a tremendous effect on their purchasing decisions on the way through the digital sales funnel. The famous copywriter, Eugene Schwartz, has defined the following levels of customer awareness:

  • Most aware: Your prospective customer is already committed to your solution and, in principle, only requires facts and a checkout page in order to complete the purchase.
  • Product aware: Your prospective customer is familiar with your brand, but not yet sure whether your product is the best fit for his or her needs.
  • Solution aware: Your prospective customer knows what his or her needs are, but is not yet sure of how you can help him or her.
  • Problem aware: Your prospective customer is aware that he or she has a problem, but hasn’t done any research of the solutions that are available on the market.
  • Unaware: Your prospective customer doesn’t know anything and still needs to be convinced of his or her needs, as well as the solution you have to offer.

How much persuasion you can afford to give and how many arguments you need to put forth for your potential customer depends on the stage of the sales funnel in which the customer finds him- or herself. This applies to the individual parts of the digital sales funnel, such as landing pages and advertisements, as well as the entire process, e.g. knowing where your potential customers are located at the moment. This helps you to assess if they are positive about your product and ready to take the next step. The closer your prospective customer is to the level of being most aware, the faster you can act to bring about a successful sale. However, the further down your potential customer is on Schwartz’s levels of awareness, the more time and energy you will have to invest in convincing him or her of the benefits of your product or service. In some cases, you will even be required to make potential customers aware of the fact that they have a need that is waiting to be fulfilled.

The golden rule is to build confidence by offering quality solutions to all customer needs.

Question 2: What problems does my product solve?

If you really want to sell your product, you have to realise that you’re not actually selling products or services online, but rather the promise of your product or service actually solving and meeting the needs of your customers; that their lives will be improved and made easier by your product. It is, therefore, essential for you to understand what problems your product solves and also who your prospective customers are.

Question 3: What are the needs and desires that influence the decisions of my customers?

Your customers’ needs and desires must be at the heart of your decision-making process, as it is the emotional component that ultimately decides on the purchase of the product or service. It is our desires that drive us to come up with quick and effective solutions to our problems, and it is precisely where this third question comes into play. You should use your customers’ desires to your advantage and connect them with the benefits that your product or service offer. It’s also very important that you look beyond always trying to save money and time; to ask questions and do market research until you’ve arrived at the deepest desires of your customers. If you succeed in triggering these wishes and you make sure that your product is relevant, your target group and sales conversion rate will only increase.

Another useful tip would be to always formulate the features of your product as benefits so that your product will be presented as a solution to the desires of all your potential customers. It is, therefore, important to keep improving and extending your knowledge about your customers’ needs and desires for you to reap the rewards. What are you waiting for?

Question 4: Where and why does my customer hesitate?

Whether you like it or not, your customers will always hesitate before they spend money on anything. There’s always reasons to doubt when money needs to be spent. These reasons may not always be major grievances, but may manifest itself in the form of simple issues, for example, if your prospective customer is unclear – even for a brief moment – of where to click, or if they are not fully acquainted with your brand. No matter what the reason for hesitance is, there is always a chance that the sale may fail.

The key to a smooth and effortless customer journey lies in timing; when the appropriate information is placed at the appropriate time and at the appropriate stage of your digital sales funnel. But how do you know in which sequence your customer should see the messages so that all areas of concern can be eliminated? The answer lies with customer research. Let’s suppose that many online customers are terminating the purchase at the checkout process. This means that you will have to determine the exact reason by asking yourself the following questions: Are there too few payment options available? Or: Is the shipping cost too high? The list of possible questions can be very long, but it is the only way of determining where the root of the problem is. The goal is to minimise the list of potential problems and ambiguities before your sales conversion rate is too heavily affected.

Most people don’t like ambiguity – especially when it comes to matters affecting their money – and prefer a clear and predictable process. Your job is to make the journey as meaningful and secure as possible. Better safe than sorry!

Minimizing customer doubts

A digital sales funnel can only be effective if as many financial concerns are eliminated as possible and any doubts that may exist within the mind of the customer are addressed. Netflix, the heavyweight of all streaming services, is a prime example of this and addresses the issue of financial concern from as early as the landing page. The service advertises that a subscription may be terminated at any time and that anyone can start out with a free first month. This is a brilliant strategy because the risk seems to run at zero.

Also, in the next step, customers are assured that no costs will be incurred until the free month is over and it’s only when customers click on the subscriptions tab that they finally get an overview of the monthly costs for the first time.

Very cleverly, the option of terminating your subscription is once again clearly spelled out.

All these factors contribute to the fact that users feel safe and satisfied when creating a Netflix account and specifying their payment data. Netflix has, therefore, managed to provide a complete digital product by charging monthly costs, but that is virtually free of any financial fears. And they have the statistics to back it up, as more than 130 million paying members were recorded in the second quarter of 2018. The previous year concluded with less than 100 million members, proving once again the effectiveness of Netflix’s digital sales funnel module.

So, how has Netflix managed to convert us so easily into the purchasing of a  monthly recurring fee? Well, first of all, the layout of the website through which we are being funnelled is extremely effective, incorporating a striking layout with clean backgrounds, radiating a tone of security and seriousness. This is the case except the initial landing page, where the colours are a bit darker and give you the cozy feeling of being at the movies. This is brilliantly used in conjunction with the strategy of removing any financial doubts from the path. Let’s face it, the luxury of a free month and the option of cancelling your subscription instantly and at any time, is more than enough to convince anyone of creating an account.

Your own digital sales funnel

Now that you know what an ideal sales funnel encompasses, you can go ahead and compile your own. Remember to always refer back to the four questions and to utilize them as a guide when creating your own perfect funnel:

  • What is my customer’s level of knowledge?
  • What problems does my product solve?
  • What are the needs and desires that influence the decisions of my customers?
  • Where and why does my customer hesitate?

By answering these questions, you will be able to keep your sales funnel free from ambiguity and also to bring your prospective customers closer to the desired end result of making a purchase. If your potential customers feel comfortable and understand the path you have laid out for them, the chances of them converting to a sale will be very high.

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