Funnels & Paths
paths that can boost retention, generate positive word of mouth
marketing and turn more customers into repeat customers.
Some of your potential customers are fresh into the market and exploring
their purchase options. Others have become customers and selected what
they wish to buy or they are waiting for delivery. And, some have already
received their goods and are (hopefully) satisfied with their purchase.
If you can continually enhance each customer’s experience at every one of
these stages you will gain an advantage over your competition, improve the
professionalism of your sales force, increase leads, and maximize sales
revenue. This is where customer opportunity funnels and paths can help.
Funnels & Paths
The term “bucket” has often been used to define segments of the customer
journey. Instead, it is useful to characterize groups of customers as
“funnels” or “paths” because these terms reflect the necessary goal of
moving customers in a desired direction.
To help visualize this, first think of a bucket of water that holds every
customer in your database regardless of how far along they are in the
buying process. The trouble with this is that it makes it difficult to
customize your system to best serve individual customers. For example, a
customer who is waiting for their delivery has different needs than
someone who accepted delivery of their purchased items three months ago.
Moving vs. Stagnant
Instead, imagine that the one big bucket is split up into four buckets,
each one representing one of the following individual customer groups:
The technology should be able to move customers along into the
appropriate phase based on triggered events. In other words, the
trigger causes an action.
- Unsold virtual prospects
- Unsold in-store prospects
- Sold customers waiting on delivery
- Past customers
Now you will have some transparency as to who is where. However, the water
is still sitting stagnant in each bucket. And, if you keep pouring water
into these buckets, they will overflow, and you will lose customers.
Finally, visualize these buckets as funnels. When water (a customer) is
poured into each funnel at the right speed, it will flow in the right
direction through the application of unique value-added actions. The
benefit is that when a customer exits a funnel, both you and your customer
make progress as they enter the next customer experience stage. This
successful progression can be represented as an appointment, a written
sale, a delivered sale, and a return customer.
If you successfully add value to each successive funnel, you will increase
customer retention, generate positive word-of-mouth marketing, and turn
more first-time customers into repeat customers.
#1: Virtual Opportunity Funnel
You often connect with prospects prior to in-store visits. These
opportunities include making contact via telephone, chat, email, text and
social media. It makes sense to place these opportunities into their own
funnel. Typical actions along this phase path might be:
Lead manager or salesperson has an initial conversation and does a needs
- Make a remote sale.
Attempt to either schedule an in-person appointment to view merchandise
#2: Physical Opportunity Funnel
When a customer visits your operation in person, the path starts with the
greeting. Then, your sales representative typically goes through a
customer needs assessment or qualifying stage followed by a
recommendation. This may result in an immediate sale or, in some
operations, a house call or the scheduling of a follow-up visit to present
a solution. Success in the physical opportunity funnel is the traditional
definition of close rate. The typical actions along this phase path might
- Initial conversation and needs assessment.
- Appointment to select goods or house call, where required.
- Quote, where required.
- Selection of Goods / Presentation of a solution.
- Sale made or not made.
#3: Customer Open Sales Funnel
The next funnel and opportunity path is the path from written sale to
delivered sale. For some in-stock and take-with business models, this
happens quickly—from the next day to a couple of weeks. For many,
especially with current extended supply chain woes, the process can take
six months or more. For this reason, it is critical that open sales
customers receive regular status updates. After the written sale, the
customer’s path may involve a thank you for purchase, multiple scheduled
follow-ups, delivery scheduling, delivery tracking, and a successful
delivery or customer pick-up.
The typical actions along this phase path might be:
- Thank you, sale confirmation, surveys, and next steps.
- Multiple follow-up – Order Status.
- Schedule delivery/pick-up.
- Delivery notification and tracking.
- Customer’s merchandise delivered or picked up.
#4: Post Delivery Funnel
Following delivery, customers enter the “next opportunity or re-marketing
(post-delivery) funnel.” It’s a path that can lead towards the enjoyment
of their purchases. If you thank them, follow up appropriately and provide
them with relevant ideas for the future, they just might be inclined to
shop with you again. The goal of this funnel is to secure lifetime
customers who are loyal and more likely to return as repeat customers who
re-enter via either funnel #1 or #2. The result is a continuous cycle of
enhanced customer experience. The typical actions along this phase path
Post delivery follow-up with reviews, pictures, and purchase receipts.
- Timed, past purchase follow-up.
- Next purchase ideas.
- VIP and customer loyalty programs.
New customer interest/return visit resulting in a return to funnel via
path #1 and #2.
Segmentation of the customer journey into funnels and paths is best
accomplished with technology. This technology may be available using an
ERP/POS system, a CRM/CXM system or likely a combination of the two
through integrations. The technology should be able to move customers
along into the appropriate phase based on triggered events. In other
words, the trigger causes an action.
Example: When a new customer reaches out to you via a
contact or chat on your website, that event should be recorded and moved
into funnel #1— the virtual opportunity funnel phase path—for an initial
conversation and needs assessment.
Example: When a customer buys, technology should move
that customer automatically into funnel #3—the open sale and phase path—to
get a thank you, sale confirmation, surveys, and next steps.
As customers move through the funnels and along the path, relevant
messages should be sent to salespeople and customers automatically to keep
everyone up to date, educated and informed.
Reporting & Success Measures
One of the useful results of using a system of funnels is that at each
stage there are measures of success. Each customer who enters a funnel is
an opportunity that can be measured as a conversion. A customer who exits
a funnel in the desired direction is counted as a successful execution.
Customers who do not exit in the desired direction, for example, a no sale
without follow-up, are counted as failures. Three common equations for
Virtual leads success percent:
Number of (virtual sales + appointments / number of virtual opportunities)
Standard industry closing percent:
Number of in-person sales/number of in-person opportunities
Sales efficiency rate:
(Number of sales + number of no-sale follow-up) / # opportunities)
An upcoming article will expand upon these and other metrics that should
be observed when using funnels and customer paths. Also shared will be
practices to improve metrics to further enhance sales and the customer