Nearly every company uses the metaphor of a "funnel" when thinking about their sales prospects.
- Top of funnel: everyone in our market who is aware of our product
- Middle of funnel: prospects–people who are actively interested in our product
- Bottom of funnel: customers–people who have bought our product
Each part of the funnel can be widened through marketing activities. You can build awareness through advertising and PR, generate prospects through lead generation, and close business with a well-designed purchasing process, strong sales support resources and, of course, a product that your target audience actually wants to buy. By measuring and analyzing the different parts of the sales funnel, you gain control over the rate of customer acquisition.
Most companies spend their marketing budget in the wrong place.
Before spending a nickel on awareness or lead generation, before you even launch the product, you need to be sure
1. that your product is what people want and
2. that you have a lead management process
It's hard to believe, but a lot of companies are so focused on being well known, that they don't apply resources to generating leads and systematically converting them into customers.
The money is at the bottom of the funnel. Start there, with a great customer experience. If you aren't confident that your customers will be happy, fix the problems before you try to get more customers. Only then, should you focus on how to care for your prospects, and convert them into customers.
Awareness and generating new leads is a waste of money if you don't know how to convert and retain.
