Most folks that I talk to that want to start a new business are thinking a lot about the actual products and services that they plan to offer. They spend a small about of time thinking about how they are going to actually get customers to purchase. Even if you are planning to run a website that allows people to purchase items you still need to think about this part of the puzzle of building a business. New customers (which is all a new business has) need information and trust established to be willing to purchase.
So we need to take a step back and look at the very practical side of this with the creation of a Sales Funnel. The Funnel, like all things at this point in a business, is likely to change from the start of the business as information is learned and the School of Hard Knocks teaches its lessons. But just like any other part of the Business Plan, it is better to have and change than to have none at all.
You can find plenty of pictures of a Sales Funnel online and they all have to essential points of commonality. There are Leads that enter the top of the Funnel and customers that exit the bottom. The Leads that don’t exit out re-enter the top at some point as new Leads. The percentage of Leads that become customers is known as the Conversion Rate. You should also be able to imagine that numbers like Cost per Lead ($ spent on Marketing/Number of Leads) and Cost per Customer ($ spent on Sales+Marketing/Number of Customers) can be determined.
This leads us back to our Ideal Client – who is someone we will meet regularly along the way. The questions you should be asking are:
– Where does my Ideal Client look for my type of Products and Services? This will help you think about where and how you advertise your products. Even just a sign on your door is a form of advertising. You need to think broadly about this topic.
– What will my Ideal Client value from my Products and Services? This will help you understand your Brand and the inform Ideal Client about your value. This messaging should be added to your marketing materials. Remember, think through the eyes of the customer.
– Once an Ideal Client becomes a Lead, how do I want to convert him or her to a Customer? This will be the outline of the steps in your Sales Process. Each step along the way creates a conversion rate from step to step of through the process.
This Outline will generally contain multiple steps. Some of them may be small, like setting an appointment. But being clear about this helps create a thoughtful way of thinking through the information that will be needed in the Sales Process. Hopefully as well, some holes or challenges might be identified clearly . Finally, the use of a process allows measurement of different points of the process. Set goals for the measurements and adjustments can be made, making the process more efficient.
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