It has always bugged me when I see how nearly every marketer visualizes their sales funnel.
Most of the time, they seem to leave out any form of retention marketing, or they tend to describe it in a way that makes it appear far less valuable than it really is.
Obviously, the main focus of the sales funnel is the conversion stage, this is where the money is made for yourself or your company, however, statistics have shown that there can be up to a 700% increase in cost when converting new leads, rather than trying to keep a current customer.
We all love new customers coming on board, but isn’t it easier to just retain the customers you already have? Let’s dissect the standard sales funnel to understand more.
What Most Sales Funnels Never Show
Most sales funnel are designed so that uninterested/unqualified leads will ‘filter’ out through the funnel, ending up with engaged customers who want to buy your services. Always having a far greater quantity of leads than when you finish.
All of the above funnels are almost identical, sure some might label the sections differently or add in a few extra steps, at its core, these funnels all have 3 main principles.
Stage 1: Awareness
In this stage, the goal of the funnel is to be as visible to leads as possible, some if not all of your leads probably aren’t aware that even need the services that you provide, this is why the funnel is so wide, as to build exposure to your products.
Stage 2: Engagement
The engagement stage is where your now prospective clients may be researching other options to your provided product. It is now your goal to demonstrate to them why your solution should be their only choice, providing information on pricing, ROI, and ease of use will help them decide to pick your product over your competitors.
Stage 3: Conversion
The final stage of nearly all current sales funnels is conversions. The only goal here is to secure a sale, you have convinced your customer that your product is far superior to any others, and you can rest knowing you have made a profit.
All These Models Are Missing One Key Stage…
So you have collected your payment from the customer, surely you can kick back and can relax now? No way! you have missed the most important stage.
Stage 4: Retention
It seems sensible to combine all aspects of post-conversion into retaining the customer. This is where they will begin to not only make one sale but to continue to purchase your products, you have the opportunity to also get:
- Recurring Revenue – Month after month, year after year.
- Upsells – Pushing past the initial purchase level, to the big ticket items you have to offer.
- Referrals – Free warm leads, marketing on easy mode.
- Testimonials – Free reviews for yourself or your business.
It is no surprise, large companies have entire teams dedicated to making sure their customers are satisfied and feel like they are being oversold. A happy customer is a customer willing to spend their money on your products.
People who ignore this critical step may gain the easy sales, but miss out on the bigger picture, recurring sales with hardly any extra effort.
What Sales Funnels Should Look Like
When your focus shifts towards retention marketing, the sales funnels changes, and won’t look like a stereotypical funnel anymore. It looks more like an hourglass
This new funnel shape is wider at the bottom after the conversion stage, looking like this:
At the core of all sales funnels is the goal of aligning your sales and marketing efforts. Turning visitors into leads, and turning those leads into customers when they make a purchase.
The hourglass funnel has the subtle benefit of bringing to light that customer retention is some that should not be ignored. With ‘normal’ sales funnels looking like they tend towards zero. Showing that the value of a marketing effort diminishes over time, when really it is an area of business growth. You will see satisfied customers praising your business, returning for more of your products, and persuading new customers to buy your products. This is why it continues to grow at the retention stage.
How To Increase The Value of Your Existing Customers
The main goal of retention marketing is to maximize revenue through happy customers. Or to put more technically, you want to aim to maximize the lifetime value of your customers.
But does this really matter? Yes! loyal customers have been shown to be work nearly 1000% more than their first purchase with you, and can account for nearly 80% of your companies revenue, the Pareto Principle
It isn’t very hard to promote loyalty with your existing customers.
1. Consistently Deliver Quality Products.
This shouldn’t even be a point of discussion if you aren’t providing as much quality as possible with your products, why would customers sing your praises? Find a niche you can dominate with passion and knowledge and quality services and products will follow.
2. Build Up The Relationship With Your Customers
Communities have the potential to be the largest driving force of new customers. If your customers are satisfied, they will like your content on social media, even share your content with their friends, boosting referrals.
Answer dissatisfied customers reactions if they try to reach out to you on social media, mediate their problems if they see you are willing to put in the effort then how can they not think you are a great company/person.
3. Encourage Repeat Customers
You should never just run marketing campaigns aimed at gaining new customers. Push to upsell to your existing customers with loyalty programs or bonuses just for already purchasing with you.
All big brands have some kind of loyalty scheme, Subway has a card that will give you a free sub when you spend enough money in their stores, it’s not even imaginative, however, it dramatically boosted their sales numbers
4. Testimonials & Referrals
What is more persuasive than other people saying how good you are? When your customers wholeheartedly believe in your product, promoting their positive recommendations on your website or social media page, it a free and easy way of getting shares and boosting the moral of your existing customers.
Don’t be afraid to ask for referrals, the worst response you could receive would be people ignoring the request. There is nothing to lose!
5. Learn From Mistakes
Always ask questions to the customers who want to leave your email subscription or newsletter. They were going to leave anyway, asking them why can help you find out why they want to leave and save you losing more customers.
Sometimes offering an incentive to your customer when they want to leave your email campaigns or your loyalty program can make them stick around, you will be surprised how many customers this will work on.
On the same note, apply this same principle when you handle complaints, always try and answer them as quickly as possible. Caring about your customer’s complaints not only boosts the relationship with that individual customer if it is on social media or a comments section, it proves to others that you care.