Sales funnels offer a uniform, straightforward way to understand the steps a client or customer takes on their buyer journey, where the business is succeeding, and where it could be improved.
Though every modern business owner makes use of this long-established marketing model, many don’t approach it with the right analytic techniques to fully understand where leads and prospects are dropping off, and how they can optimize the funnel for stronger long-term growth.
If you’re struggling to make your funnel work for you, here’s a closer look at the best practices for approaching analysis, and how the findings you glean from it can inform powerful optimizations to help you power towards your sales goals.
Creating an Effective Funnel Analysis Process
Guessing your way through the funnel analysis process is a sure-fire way towards poor-quality data and confusing trends. Before you think about targeted optimizations for your sales funnel, here’s some of the crucial elements in an effective funnel analysis process.
Identifying Crucial KPIs
Your analysis of each individual stage of the funnel can be influenced by a plethora of metrics drawn from the various touchpoints where customers interact with your brand. For effective analysis and optimisation, you’ll need to separate the metrics that have the greatest impact on success for your business.
Verticals like the total conversions across the whole funnel, account creations and active users, and revenue and customer churn rates, are all KPIs that are commonly used in sales funnel analysis, but the exact metrics you zero-in on will depend on your broader business goals and your current growth stage.
Visualizing your Funnel
Once you’ve drawn the details of your customer journeys from your most crucial KPIs, the next step in building a robust analysis process is visualizing your funnel.
Creating an accurate visualization of your funnel will give you a bird’s-eye view of the buyer journey for a better understanding of the factors influencing each stage, and help you make informed, scalable decisions regarding future optimizations.
Furthermore, it will serve as a helpful visual aid for anyone else involved in optimizing your sales funnel, and an overarching reference point to help marketers see where their optimization initiatives fit into the broader sales strategy.
Testing for Flexibility
Customers won’t always move in a linear, predictable fashion through the stages of your funnel. With this in mind, it’s important to ensure your touchpoints are accessible to as many buyer behaviors as possible.
One of the best methods for testing your sales funnel for flexibility is to reorder its stages in various models. Once you’ve planned out reordered versions of your funnel and given time for the data to populate, you may uncover some powerful insights about how different audience segments move from one stage to the next, and whether you should be reconsidering your sales funnel’s structure.
Best Practices for Funnel Analysis
Once you’ve got a clear idea of what your funnel looks like and the process you’ll follow for studying it, it’s time for the fun part: practical steps towards analyzing your funnel! Here’s some of the best practices for analyzing your sales funnel in a way that will provide the maximum future benefit for your goals.
Identify Churn Bottle Necks
A large proportion of online businesses have certain conversion “bottlenecks” where the standard buyer journey seems to hit a wall. For example, if you’re seeing a lot of users who provide all the basic details during a sign-up process, but then drop out when they’re asked to complete a CAPTCHA, this could be a tell-tale sign that there’s something wrong with the way your CAPTCHAs are displaying.
Identifying true bottlenecks can be a challenge depending on the particulars of your industry and company. Within ecommerce, for example, the point where a new customer comes to enter their payment details almost always tends to show a big drop in engagement. Rather than raising the alarm whenever you notice large numbers of prospects disappearing in terms of raw numbers, focus on the funnel stages where you see a high churn rate relative to your expectations.
Take some time to review your historical data, marketing benchmarks, and any other materials at your disposal to come up with logical qualifiers for a high churn rate, and use this categorisation to highlight the most severe bottlenecks in your funnel.
Study Sales Velocity
Studying your sales velocity, a metric that spans the whole sales funnel, can be a great route towards understanding customers’ path to conversion, the root causes of drop-offs, and much more.
Leading sales software provider Sopro defines sales velocity as “a sales pipeline metric that measures how quickly your business is generating new revenue”. It’s calculated by multiplying your opportunities, deal size, and conversion rate over a given period of time, then dividing this figure by the length of your sales pipeline.
Tracking sales velocity over time can equip you with a useful early warning system, with drops in velocity often indicating a potential issue in one or more of your touchpoints. It can also be a great metric to keep an eye on when you’re trying out new ways of approaching projects in your sales and marketing.
For example, if you initiate a new approach to your audience segmentation to inform better lead nurturing, and you see your sales velocity go up, this can be taken as a win for your funnel and inform future decisions regarding optimizations.
Analyze Customer Behavior In-Between Events
Oftentimes, it’s easy enough to see the pages and stages where customers are falling out of the conversion funnel, but a clear problem and solution can remain frustratingly elusive. For truly effective sales funnel analysis, you’ll need to study the way that visitors are interacting with your site in between the key events that make up your funnel structure.
One of the best tools to do this with is heatmap analytics tools. Tools like Hotjar can give you a much more granular view of various stages in your conversion funnel, with visual heatmaps that will show an “aggregate of engagement across your website pages […] split by clicks, taps, and scrolling behavior”.
Visual representations of browsing behavior aren’t a catch-all miracle cure for mysterious issues with your funnel. Having said that, they can be the missing piece of your analysis when you notice bottlenecks at stages where there’s nothing obviously wrong with the user experience, highlighting broken links, ignored CTAs, varying scroll lengths, and more.
How to Optimize your Sales Funnel
Now that you’re armed with all the right data sets through careful sales funnel analysis, here’s some of the key best practices to optimize your sales funnel and supercharge your ROI.
Scale your Lead Generation
For many businesses, one of the biggest causes of drop-offs in the sales funnel is leads that enter the funnel without the right intent.
Your lead generation strategy needs to be optimized to attract a fertile kind of visitor at a sustainable cost, and to prioritize scalability above inflating KPIs with a raw quantity of new leads.
Aside from optimizing the messaging in your marketing campaigns to target a higher degree of intent, making sure you have the right tools for the job is an essential step when working towards better scalability in your funnel. Many modern CRMs come with features that will automate lead generation analysis, highlight issues in conversion, and suggest fixes for all stages of your sales funnel.
Try Qualifying Leads Earlier
Effective sales funnel optimization often needs to start at the very beginning, by raising standards of communication and lead qualification from the very first touchpoint.
Studies by Hubspot show that 90% of surveyed customers “rated an immediate response from businesses as “important” or “very important”, but far too many businesses don’t make this a priority when they set out standards of lead qualification.
Sales teams that respond to contacts promptly and proactively are far more likely to qualify leads, and improve the business’s chances of serving them before competitors. Whether through a sales tech platform or a more manual system of your own creation, making sure you’re responding to and interacting with contacts as proactively as possible will have positive impacts that will be felt throughout the sales funnel.
Optimize After-Sales Experiences
Aside from the value of your product, people who have converted with your business will be looking to the after-sales experience to judge the overall equity of your brand.
The after-sales experience can easily fall by the wayside, but if you take the right steps to optimize it, it can have a major positive impact on the value and efficiency of your whole funnel.
By over-delivering once your customers are “out the door”, you’ll not only receive valuable feedback on the customer’s experience at every stage of the funnel, but also encourage satisfied customers to talk about you in the right spaces, thereby stimulating referral traffic and making for an even stronger funnel.
If you’re a fast-growing business your resources are likely stretched enough as you work at bringing in new business. However, if you make a point of checking in with your prospects and ensuring their expectations are met, you’ll stimulate much more top-of-funnel activity in the long term.
Even if your sales process seems to be performing well, by taking the reins with sales funnel analysis and optimization, you’ll be able to delight your customers and push towards sales figures you’ve never seen before. We hope you find this guide useful as you zero-in on weaknesses in your funnel, seek out new ways to optimize performance, and start smashing those KPIs!