Is Your Sales Funnel Still Working?
Chances are it probably is not working as well as it did in the past. It is probably requiring an ever increasing amount of time, energy and resources to produce the results it once did for your business. You are not alone! The old sales and marketing model is changing, particularly in recent times where social media has really taken off.
Many people currently in sales cut their teeth on the AIDA Sales Funnel strategy, AIDA stands for Awareness, Interest, Desire and Action. Basically, the goal was to move as many people possible through this process (or funnel) in order to make a sale. You would need to target a large number of people at the Awareness phase in order to have a percentage of them move to the Interest phase. You would then aim to take a percentage of prospects from Interest to Desire. Then from Desire you would aim to take a percentage of them to Action, or the sale. As you can see, the number of prospects would need to start out large and slowly it would reduce to just a few who would actually buy.
What if we flipped this model on it’s head?
What if we focused on the customer who had already purchased and were able to inspire that customer to not only buy more but more regularly? What if we could create a customer experience worth referring to other prospects? A business model like this would actually expand in it’s marketing reach rather than need constant topping up costing you time, energy and money. How can we do it? Reward and acknowledge your existing customers. Thank them regularly and apologies when you do make a mistake. Keep on investing into your customers and it will pay off.
We as business often spend 75% of our budget trying to gain new prospects and customers and just 25% on the existing customers. This in my opinion is the old model of business. It’s the old sales or marketing funnel many of us grew up on. This system creates a ‘churn’ of customers that buy once and then move on. It is a costly business model long term. Yes, we do need to attract new prospects and customers regularly, however I believe we should be spending the majority of our time and energy on our existing customers.
My big mistake
Just the other day, I was told by a customer he didn’t realise we provided a particular service and he had already commissioned another company to complete a project. This is ultimately my fault, I was spending too much time attracting new customers and neglected the needs of this customer by not informing him of our full range of services. The new business was right under my nose, ready to buy and I missed the mark.
Attracting brand new customers is the most expensive way to grow a business
Most agree it cost 5 or 7 times the amount to attract a new customer than it does to work with an existing customer. When trying to attract new customers, many businesses are tempted to provide discounts or introductory rates that eat into your profit margin while your loyal, regular customers pay full price. When you think of it this way, it makes no practical sense. We should be spending our time, energy and resources working with and supporting our existing customer base. It’s not about ringing the last dollar out of your existing customers. It’s about providing added value and support to those that are loyal advocates for your business.
Our existing customers are the biggest influencers. Not the media or PR agencies. Real, genuine people with genuine stories. Bad news travels fast. Most of us would have heard it said “If you please a customer they will tell five people about the experience if you disappoint a customer they will tell 20 people.” This is now even more amplified than ever before. With social media making it so easy to communicate to the masses, you have got to ensure you provide a great customer experience at all times. It’s all about customer service, we must invest in our customers.
