How to Create a Sales and Marketing Funnel
So you have a superb marketing campaign outlined! Well done! But in order for it to be effective, you must determine how leads will be qualified through the process. This will allow you to better utilise sales by only passing them truly qualified prospects.
Both your sales and marketing teams need to establish this qualification process together to ensure they have a unified picture of the funnel and standard definitions of each stage. And there must be constant communication between the teams to ensure the funnel is functioning correctly.
Follow these steps to create a sales and marketing funnel that both sales and marketing can collaborate around:
1. Understand What a Sales and Marketing Funnel Is
The sales and marketing funnel is a visual representation of the different stages your buyers go through from strangers to customers and, finally, advocates of your company. It is these stages that the sales and marketing teams use to categorise contacts. The top of the funnel represents people who are farther away from buying (e.g. strangers, visitors) and the bottom of the funnel represents people who are closer to buying (e.g. opportunities, customers, advocates). As you work down the funnel you will filter out the weak leads, allowing you to focus on the leads that have a much higher chance of buying.
Hubspot’s funnel looks like this:
The term “sales and marketing funnel” is from your company’s perspective. The buyer’s journey describes the same process, but from the perspective of the buyer. While the buyer’s journey maps out how close a buyer is to buying in general, the sales funnel looks at how close a buyer is to buying from your company.
2. Map Your Own Sales and Marketing Funnel
If you don’t already have a funnel, get together with sales and map out each stage, identifying who owns the lead at each.
It will be useful to think about your buyer’s journey at this point, i.e. how your buyer moves down your sales funnel and what information/interaction is relevant to them at each stage of their journey. This will help determine how many steps you need.
Your funnel might look like the example above, or it may have more, or less, stages. It completely depends on your own processes.
3. Know What Makes a Quality Lead
Clearly defining and agreeing the criteria for a quality lead ensures that your sales and marketing funnel will be filled with more quality prospects from the start – improving your conversion rates all the way down the funnel.
The quality of a lead relies on two things, their fit with your target customer and their interest in your company. Fit refers to how closely the lead matches your company’s definition of an ideal buyer. Interest refers to how interested the prospect is in moving forward with your company’s solution.
Is the prospect a good fit?
Think about your target customers. Are they large companies, small companies or individuals? Do these people have specific job titles that allow them to make decisions? How closely a lead aligns with your ideal customer will determine whether and when you hand it over to the sales team.
Has the prospect shown an interest?
A lead’s activity can reveal how close they are to a buying decision. For example, if they only looked at the home page and then left your site, they are probably not ready to buy. But if they have requested a demo, they could be.
Taking into account these two factors indicates how your marketing or sales team should act. For example:
Leads that have high interest and good fit: Your sales team should follow these leads up as soon as possible – in fewer than 24 hours – as they are a good fit for your company and actively seeking a solution.
Leads with low interest but good fit: These leads closely resemble your target customer, but aren’t seeking solutions right now. They need to be nurtured and passed over to sales when they are ready to make a purchase.
Leads with high interest but not a good fit: Leads in the lower right don’t fit your ideal customer profile, but are highly engaged. Have a sales rep do a follow-up with these to see if there’s an easy sale to make. Sometimes leads that don’t seem like a fit have a good reason to buy your product.
Leads with low interest that are a bad fit: These leads don’t meet your company’s target criteria and haven’t shown much interest in your marketing. They are unlikely to buy anything and your resources are better spent elsewhere.
4. Define a Marketing Qualified Lead (MQL)
A marketing qualified lead (MQL) is a prospects that has shown a combination of interest and fit that indicates real sales potential. Once an MQL has been identified, it will be passed to the sales team for follow-up so it’s essential that the teams agree on the definition.
You should make sure your definition of an MQL is right for your company. Some marketers may focus more on fit because they have a tightly defined market. So you would be more interested in their job title, company and industry. For example:
A contact with ABC title or role who has filled out any landing page form and works at a financial services company in the U.S. with more than 5,000 employees.
Other marketers may have a broad customer base and focus more on interest, so would be targeting a person with roughly the right job title at any company, in any industry who asked for somthing like a product demo. For example:
A contact with the ABC title or role who has requested a product demonstration from a sales rep and works at any U.S.-based company.
4. Define the Rest of Your Stages
You now need to agree on clear definitions for the rest of your sales and marketing funnel stages. While these may not be handover stages, and may not need as detailed definitions as an MQL, you will treat prospects differently according to where they are along your funnel.
For example, prospects who are just visiting your website for the first time will require very different content and interactions to those who have become opportunities.
5. Implement Lead Scoring
Using a lead scoring program that relies on data from your closed-loop analysis can help you determine which stage of your sales and marketing funnel your prospect is at.
Leads are scored based on the interest they show in your business (behaviours such as clicks, keywords, and web visits) and their fit in regards to your business (demographics such as company size, industry, and job title). A higher score means they should be fast-tracked to sales and lower score suggest they need to be developed with lead nurturing.
Lead scoring seriously improves the clarity of a sales-ready lead allowing marketing and sales to act more efficiently.
6. Optimise the Stages
So now you’ve got your funnel created, and you’ve defined exactly how your teams will interact with it, it’s important to optimise each of those stages on an ongoing basis.
This means continual analysis of key metrics at each stage of the funnel, such as:
- Conversion rate
- Close rate
- Entry source
- Time in Stage
With every piece of content you create and at every stage of your funnel, you’re generating data. As a result, it’s best to choose the 3-5 metrics that give you the information needed to make meaningful improvements so you don’t get bogged down. If you are working with multiple different types of leads, these metrics should be considered for each segment of lead.
By looking at these metrics constantly you can assess whether:
- You’re slipping in any one area
- Your funnel has developed a clog or hole somewhere that you need to fix
- Some segments are more valuable to your business than others or if some segments have more potential than you once realised
There are a number of different tools on the market today to help you track these and other metrics. Google Analytics is free and represents the most comprehensive, easy-to-implement solution. Use the service’s funnel tracking tools until you determine that you need something more advanced such as a complete marketing automation program.
Creating a sales and marketing funnel using the process described above isn’t a project you’re going to complete in one day, it’s something you’ll want to continuously address as long as your company is in business. However, it’s a great opportunity to make significant improvements in your effectiveness at making sales.