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The primary aim of any business would always be focused on the profit or the net income. Mathematically, the loss or gain of a business could be determined by deducting the total amount of expenses from the total amount of income. There would be loads of factors affecting the gain or loss of a business, just as there would also be ways to increase revenue for your business.


An Overview of the Basics

The revenue, also referred to as the income, is the amount of money received by the company during a specific period. To be able to achieve a high rate of profit or just gaining little from the capital, the revenue and the expenses have to be apart. Simply put, the amount of money going out of the company should be lower than the amount of money going into the company.

One way of distancing the revenue, or the income, from the expenses is through a sales funnel. It is a tried and tested marketing approach, validated by testimonies of several businessmen who have tried and already succeeded.

Among the best ways of explaining the concept is by using one simple thing as example – the ordinary funnel, the household funnel stored in the kitchen or in the garage. That household funnel serves as the passageway of basically all forms of matter, regardless of whether the material may be solid or fluid. It is used to easily and more efficiently transfer condiments, oil, powdered ingredients, or basically anything from one container to another.

It may not be guaranteed that all bits and particles of the material would be transferred, due to some which would stick onto the surface of the funnel. However, the rate of transfer efficiency when using a funnel would still be higher compared to when one isn’t used. Spilling or wasting components of the material would surely be lessened.

With regards to a marketing approach, the sales funnel is a representation of the path that a customer takes from being a prospect to being a buying customer that would bring sales conversion or revenue.

Analogous to the household funnel, the sales funnel is also wide at the top and narrow at the bottom and is composed of at least four stages – awareness, interest, decision, and action. Should the process be done correctly and effectively, there would also be a high rate of efficiency and the spilling or losing of possible buying customers could be avoided.


A Focus on the Four Stages

To effectively execute the sales funnel, exploring the different stages is a must. The four basic stages may vary depending on the personality of every customer or prospect.

The Awareness stage of the sales funnel attracts the most number of customers. People learn about the business, may it be a specific and/or new product or service, from a TV advertisement or an ad on social media, and other media platforms which are widely used at present in promoting almost anything. This leads to a large number of customer prospects.

In the second stage, Interest, the customer prospects are more appropriately called unqualified prospects because the ones who are losing interest in the product or service disappear in this stage. The number of customer prospects from the first stage decreases, however, on the other hand, the possible sales conversion increases. Due to the fact that the customer prospects that have remained are positively interested in the product or service.

In the third stage of the sales funnel, Decision, the customer starts to decide whether or not the product or service should be purchased or availed. The third stage is composed of the creation and execution of sales offers. Also, further research and data gathering can be started by the possible buying customer in order to further supply his thoughts with different factors leading to the decision.

The fourth and final stage of a basic sales funnel is Action. This shows the prospects that made their way into the final stage through the past three stages. They are the ones who ultimately end up spending money on the product or service.


Tapping into Understanding

An analysis of the sales funnel reveals various possible factors that affect the decrease customer prospects. One possible scenario is the existence of a competitor that creates a better solution – one more satisfying than the one being promoted. Another scenario involves the costing of the product or service. The retail price of the product or service may not be affordable enough for most of the prospects in the Awareness stage, prompting their exit in the Interest stage.

One question remains and it is, “Why and how would a Sales Funnel be beneficial to any specific business?” Using the sales funnel basically gives the businessman access to valuable insights regarding customers, creating a chance to predict the outcome of any situation the business may engage into. Analysis of the figures that have come in contact with the business can be an easy way of calculating the chance or the probability of a buying customer.

While the answer to the “why” question needs a lot of patience and hard work, especially in monitoring the activities done in the business, the answer to the “how” is mostly a walk in the park. It generally follows the typical master plan of a business that would enable the company to profit effectively and efficiently. It may require a remarkable amount of creativity and again, patience.

Actually, there are six possible ways to increase the revenue of a business. Basically, these are ways for an effective sales funnel. The first among them is creating a “list of opportunities and their total dollar value”. In this world of necessities and luxuries, there will always be lots of opportunities for both consumers, businessmen, and marketers. Knowing the respective “dollar value” of every possible opportunity available can lighten the burden of prioritizing whichever opportunity.

The second way is about documenting the cycle taken by the business. An important plan towards the efficiency of the sales funnel is keeping in line with the pace that the business runs. Simply put, each step is a milestone toward a finished sale and adds dollars toward your revenue. Examples of these milestones include the first contact, needs assessment, presentation, and sample or concept approval.

The third one focus on calculating the percentage possibilities of getting the sale to each step. As implied in this article, all businesses intend to direct customer prospects through the four stages of the sales funnel. However, not all customer prospects are turned into buyers since most are eliminated in the second stage.

The next way towards increasing revenue is to lead the prospect through the cycle. In order to lead the prospect, there should be a documented cycle or process organized. This will enable the businessman to locate any possible reason for a customer prospect to refuse the sales offer and turn down the product or service completely. Most deals are wasted due to the absence of a selling cycle or a process that should have been documented. The inability of the businessmen to make an offer that could help the customer prospect only lessens the probability of closing a deal.

Another instance where documentation greatly benefits the businessman is when the action plan of the business is reviewed. Regular reviewing of the business’ master plan lets flaws or hindrances to a closed deal be identified, making it possible to carry out the necessary changes and further develop improvements for the business plan.

The last one is all about seeking help from various sources. Use tools from different media platform, may it be an online software that helps simplify the task. It’s easy enough to search the web for helpful hubs. Various management tools, including the sales funnel, can be located in dedicated websites. Despite the abundance of tools on the web, don’t forget to use one of the simplest yet most useful options available – Microsoft Excel, which has various templates available in its official site.


When to Reap the Rewards

The revenue increase would be seen upon starting the use of the sales funnels equipped with the six tips that were mentioned above. Also affected by the use of the sales funnel would be the time and energy spent in making money.

Again, how does a sales funnel eventually increase a business’ revenue? While some focus on the six ways mentioned above, there are those who choose to follow another approach or concept – although the two does have certain similarities. This other approach is simply referred to as the five best practices.

The first of these practices is to live and breathe sales metrics. Managing the sales funnel (sometimes referred to as sales pipeline) requires an understanding mind that can translate all the available and incoming figures to the business. The familiarity with the figures that define the status of the product or service can also define the status of the whole business itself. It also needs right and accurate data which will be composed of these: new leads rated per month by source, the conversion rate of leads to opportunities, the conversion rate of opportunities to closed deals, average won deal size, average sales cycle length, win rate, and the total number of open opportunities.


The second practice has a similarity with a component from the first list mentioned. The second speaks of executing regular pipeline (sales funnel) reviews. One benefit of having regular pipeline reviews is the increase in the number of qualified and open opportunities. A regular forecast meeting has lower efficiency compared to a pipeline review. As explained, holding pipeline reviews would be helpful to the business and more beneficial because of the focus that it could give on both the top and in the middle of the funnel. Regular forecast meetings, on the other hand, focus only on the deals that were about to be closed.

The third on the list is about focusing on the small improvements at each of the four stages of the sales funnel. It has always been said by successful businessmen and marketers that a small change and/or improvement could greatly impact the business. It might turn into greater revenues or even a higher rate of probability of closing deals. Companies that have utilized a Predictable Revenue System have claimed high volumes of leads, which further led to their advantage. A situation like this has caused companies to focus less on quality opportunities – an act that could damage the sales funnel.

The fourth practice towards a more revenue-bearing sales funnel intends to regularly clear the sales funnel of possible weak sales opportunities, thus keeping the sales pipeline “squeaky clean”. It would be more effective if the sales funnel would be optimized and measured and the tools that might just be helpful in doing so are headlined by the already mentioned Pipeline Reviews. Among the tools are online application software, funnel metrics, and the Predictable Revenue System which further leads the marketers away from weak sales opportunities. The positive mind that most businessmen has can also backfire and make them waste time on lackluster opportunities.

The final practice is to form a Pipeline Management Operations Manual. This is basically the same as the instructional manual that comes with every new appliance at home. This can help the business personnel and marketers do their specific tasks appropriately and probably, help the customer prospects to make a decision that would be favorable to the product or service.


Looking into Sales Funnel Metrics

It’s also of great importance to start measuring the sales funnel metrics of the business, and doing so would eventually lead to an effectively-managed sales funnel.

Measuring the sales funnel metrics of the business starts all the process needed. Most beneficial if illustrated on a graph to clearly highlight the discrepancies and developments, the figures in the graph can help in benchmarking against current results and future trends.

An added advantage due to the measured metrics is the ability to make decisions which allow for business promotion and further improvement. However, one question emerges at this point, “How often should this data assessment strategy be done?” Most experts would surely agree that carrying it out at least once a year will yield the best rewards.

Another widely used tip in the business and marketing fields is to have a clear picture of the targeted sales funnel. As you go on, months after the sales funnel master plan has been created and analyzed, there would be either minor or major change, prompting developments for the company. Either way, a major or a minor change would have noticeable impacts on the business, eventually.

Don’t Overlook the Framework

A sales funnel also serves as a framework, enabling marketers to do what they should do to secure the most number of customer prospects and turn them into buying customers. As mentioned above, the customer prospects start to decrease upon their entry in the second stage. This could also be another point of improvement for the marketers, which will force them to think of new and creative ways that will make the customer prospects or the unqualified prospects stick with them up until the last stage – the act of purchasing the product or service.

If you would like to learn more about funnels, check out this post:



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