“Sales funnel” is a phrase some folks use to describe their sales process. For most business models, sales is a numbers game. You need to get the word out to lots of people in order for a certain percentage of them to become revenue producing customers. The fact that my sales funnel is on a pivot is a realization that not everyone who enters the sales funnel exits it in the same place. Thanks to my friend Phil Gerbyshak, I’ve started referring to the multiple exit points of the pivoting sales funnel as the revenue escalator. We’ll get to the revenue escalator in a moment but that’s the end of our story and we need to start at the beginning.
Filling your sales funnel
The top of the sales funnel is wide because you typically need to reach about 100 people in order to get one to react to your message – and that’s just a reaction to your message such as signing up for your email newsletter list. Think about that for a minute. If you want 1,000 people to sign up for your email list, about 100,000 need to visit your website in search of quality content and information. That’s why the top of your sales funnel is so wide. You need to cast a very wide net and do everything you possibly can to get your message out.
Creating great content is awesome; but getting people to visit your site to consume that content is spectacular. When someone signs up for your email list, it’s like the fireworks display has started. So it’s a matter of getting them from the beginning of the fireworks show to the finale – which is when they commit dollars to purchase the goods and services you have for sale.
If you are just starting out or working on growing your enterprise, how do you reach 100,000 people? You do it through partnerships. Make friends in real life and online. Help others and they will want to help you. You’ll be amazed how many organizations will happily partner with you if you offer to write articles for them or produce webinars with them. Then they can share your content with their larger audiences.
This content marketing example is just one way of reaching people without committing a lot of dollars. If you have more dollars to commit, you can try traditional advertising, trade shows, or even buying lists. I really don’t recommend buying lists; but it can be successful and economical. The trick is to reach lots of people in order to convince them to willingly take an action such as visiting your site, consuming your content and signing up for your email newsletter list.
Now that you have them in your sales funnel …
You need to create a compelling email newsletter that these people will want to read. Some of them will unsubscribe and that’s okay as long as you have more new subscribers than those leaving you.
Here’s where sales continues to be a numbers game. Let’s say your email list contains 1,000 subscribers. If you properly announce and offer them a new product, expect no more than about 1 percent of them to purchase. So from that original 100,000 folks you reached, about 10 will actually buy your product or service. Your success rates could be higher or lower but even if you achieve an unheard of 10 percent success rate, you need to initially reach a lot of people to make a relatively modest number of sales.
So far this example has been a fairly simple and unsophisticated one. We are reaching lots of people to point them toward content that lets them know we are subject matter experts in an area related to the product we intend to try and sell them in the future.
Once they’ve shown interest by signing up for our email newsletter, we continue providing useful content along with offers to purchase our product. The email newsletters will direct readers to a sales page where they can sign up and provide their payment information. Here is where the revenue escalator begins.
What is a revenue escalator?
Most businesses offer goods and services at a variety of price points. For example, at ColorMetrix we have products and services that range from $600/year to six figures per year. That’s our revenue escalator. As long as you offer products and services at multiple price points, you already have a revenue escalator up and running.
Some clients at ColorMetrix have stepped on the escalator at the $600 level and ridden it all the way to the six figure level. Others have gotten in at the $600 level and stayed there for years. Still others have jumped on the escalator somewhere in between $600 and six figures.
Getting on the middle of a revenue escalator
So how do we get folks to board the revenue escalator in the middle? Most of us probably remember our parents and the mall security guards telling us to not play on the escalators or do things like walk down the up escalator. Well a revenue escalator is different because you don’t jump aboard without some helpful guidance from us.
I call that the sales funnel on a pivot. Once you enter my sales funnel by signing up for our email newsletter, attending one of our webinars or stopping by our trade show booth, we become focused on helping you find the right spot to enter our revenue escalator.
Our free educational offerings are designed to help you understand the potential usefulness of our product and service offerings to your organization. Depending upon how we met you, you may enter the portion of the sales funnel where we pick up the phone and give you a call. Sometimes that will even lead to a visit to your facility to demonstrate our products and services and close the deal. We call this portion of the sales funnel personal selling. At the $600/year level, there needs to be a limited amount of personal selling if any. However at the six figure level, there needs to be a lot of personal selling.
The sales funnel then pivots based upon decisions you’ve made while moving through the funnel and drops you off at the appropriate point along the revenue escalator. This is where it gets fun.
Once you become a customer, we don’t forget about you. Our goal is to make sure you’re at the right spot on the escalator at any moment in time. Then when the time is right, we want you to know how and why to move up the escalator or in some cases back down.
We do that with ongoing marketing in the form of those email newsletters, informative webinars, trade show booths and ongoing personal selling through phone calls and site visits. We do all this because it’s much more likely to gain additional business from an existing customer than it is to go out and convince enough new folks to enter our sales funnel to result in one new customer.
Want to learn more about the sales funnel on a pivot and revenue escalators? Phil Gerbyshak and I will be having a conversation on the subject in the next couple of weeks. We’ll post a recording of that conversation on this site as a podcast when it’s complete. Be sure to sign up for my email newsletter to be informed when the podcast is ready for your listening pleasure.