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It is the ultimate goal of any marketing campaign to produce sales, and online marketing is no exception. But it does have a few, yet significant, advantages and that is lower operating costs and the ability to track and analyse how a marketing plan is working.

In this article we’ll be exploring the latter, and that is how and why it's important to track the processes/elements of a marketing plan as well as the steps taken by customers in the sales process: from discovery of the brand/website, call-to-action events (customer response and action), to the purchase, providing marketing planners the information they need to build, optimize and troubleshoot as needed.

This system is called the sales funnel.

Planning for success: The Sales Funnel.

So why is it called a sales funnel? Like its real-world counterpart (which is composed of several material layers decreasing porosity toward the tip), a sales funnel works to filter out a niche audience from the masses (known as a target audience).

This analogy perfectly details the major points that customers pass through in a sales process and the ensuing ‘filtering' by customer potential. Typically, the process starts when; 1.potential customers find the product/service website through advertising media (i.e. social sharing, pamphlets, etc.).

This then; 2. leads them to go through the content of the website (or landing page). This is when relevancy and interests in the product or service is established.

And those that show interests might click into a call-to-action button or similar item will; 3. become leads that the marketer can then; 4. follow up on in the hope of influencing a sale, ideally converting them into loyal, returning customers (customer retention).

Sales Funnel Process 1

This illustration shows a simple sales-funnel describing the steps in a basic marketing plan.

And where Online Marketing really shines is in its availability of software tools that allow the marketer to derive detailed information on each component used in the marketing process.

Online analytical tools.

For example: Google Analytics is a tool that can be used to that track the number of click-ins/dropouts on a website, its bounce-rates, as well as provide real-time video recordings of each visitor's session.

There are even tools that help you spy on your competition, keeping you updated on their latest moves. Pricing ranges from free tools like SpyOnWeb to premium services like Majestic SEO (which starts at SGD53.24/quarterly)

Knowing the information will allow a marketer to perform a very important task: to scrutinize and evaluate each and every step in the marketing process objectively and to apply optimizations as needed – or even overhauling in its entirety.

Sales-Funnel Google Analytics

Tools like Google Analytics give its users an incredible amount of information at their fingertips for use in process evaluation.

Let's reexamine the analogy of the first layer of the funnel again. With the highest porosity, the first stage filters out the largest parts first. In a sales funnel this represents the broadest searches; quickly eliminating individuals who would find the product or services irrelevant.

And in this context: the Search Engine Optimization (SEO) forms the core. SEO can be further divided into several methods:

  1. Organic traffic searches.

Searches made on Google, Yahoo – traffic generated from search engine searches are essentially free traffic building. High organic traffic can be achieved with a combination of good Search Engine Optimization (SEO) practices and, of course, good content that’s worth reading. Every sales funnel/marketing plan should prioritize building up its organic search priority.

  1. Paid search traffic.

As the name suggests, paid ads are pay-per-click searches that involve a monetary injection to (near instantly) push the website ranking up to the first few pages of a search engine result. Although paid ads are a quick way to push the website/brand initially  keeping this tactic up is costly in the long run. It's a great way to get a new and unknown brand out there and hopefully this awareness translates into more organic traffic (remember? Organic = free) in future.

  1. Banner Advertising Traffic.

Similar to paid-ads, this pay-per-click mode of advertising uses banner ads which are located on the sides or top of a google search result page. The advantage over paid-ads is the use of imagery, which is usually more eye-catching and larger, therefore making them more noticeable.

  1. Social media marketing traffic.

Social media is a treasure cove for marketers. With the right tools, this avenue of advertising allows marketers to view and analyse detailed demographic information (age, job, interests, contacts, etc.) and identify their target audience from the onset.

  1. Email marketing traffic.

Email marketing takes advantage of email compiled from leads captured from lead-capture system found at a later phase in the sales funnel/marketing plan. Assuming that the contact emails derived are authentic and not spam, email marketing is a powerful tool in generating to get your product/services noticed.

The second layer of the funnel will then slightly narrow that search to a smaller group, representing more promising prospects or  the target audience. This step is usually where the the lead-capture system kicks into full effect.

lead-capture system is the bread and butter of online marketing, and is used to collect information of customers who come to the website, such as name, email and contact number, and usually in the form of a short form or questionnaire. Aside from good content, a lead-capture system should always be accompanied by a lead-magnet (e.g. free gifts to help influence customers to click into the lead-capture).

To learn more on how to build an effective lead-capture system read our article, 4 quick tips for attracting potential clients online”!

The next step further narrows down the search with almost pinpoint accuracy to what you’re looking for before the last step, which are the target audience – and the ones that you should take action on (or leads).

Why not having a sales funnel is probably costing you.

1. There's no way to tell if your marketing money is yielding desirable results.

Running a marketing programme without a sales funnel is, literally, like running around blind. Traditional marketing and advertising are perfect examples of this; there simply isn’t a reliable way to track the effectiveness of any advertising programme except for when customers call in or step into the physical shop. And even there's no way to tell which part of the marketing process had contributed to it.

Ineffective processes wastes resources, whether it’s the cost of keeping those processes running, or potentially diverting customers away, directly or indirectly. So not improving on them or removing them altogether is counterproductive to your interests.

2. Cold calls are harder than warm calls.

Also, a good sales funnels should keep be keeping a record of buying customers. Selling to a customer who had previously made a purchase is far easier than to a new one – unless they weren’t satisfied with the product and/or aftersales service. Often forgotten, good aftersales service is key in building a good rapport with customers who then likely to become returning customers. Do not underestimate the value of developing customer loyalty through acts of goodwill.

3. Unsystematic.

In addition, not having a sales funnel means you’re without a systematic method of tracking and analysing customer behaviour. Aside from building upon customer-business relationships from leads a good sales funnel allow marketers to develop: up-selling, cross-selling or tiered selling strategies. Not employing these tactics results in huge sales losses.