Hiten Shah, Co-Founder of Quick Sprout, KISSmetrics and Crazy Egg, is a proven sales and growth expert. His years of experience founding, advising, investing in or working with startups have crystallized into a wealth of knowledge about how to grow a successful company.
If you have the time, watch the video below to hear Hiten reflect on how he thinks about sales funnels. To help you out, we’ve outlined the major points below for your easy perusal, as well as provided some foundational information about sales funnels to further illuminate Hiten’s point of view.
Hiten explains that essentially, a sales funnel is the “step-by-step process of things your user or customer does to accomplish a goal.” You may not think that your customers go through a process, but Hiten asserts that you’d be wrong—he says that every business he’s seen, whether offline, online or mobile, has a sales funnel.
What’s tricky though is that even businesses that are doing the same thing will have different funnels. Their customers’ behavior varies from those of their competitors, so naturally the steps in the funnel are different, too.
If you’re not measuring your funnel and your key metrics, you’re not able to improve your business.
— Hiten Shah
Hiten breaks it down for us, explaining why it’s so important to understand and optimize each and every step of your funnel. As he says, “The earlier you take people’s money, the faster you’ll make money.” Plus, you’ll be able to learn more about your customer—you can’t understand what your customers are willing to pay for until they’re actually paying for it.
Now that we’ve covered Hiten’s main talking points, let’s dive a little bit into Sales Funnels 101. We consulted these two great articles:
The folks at Prodality summed it up well: “The sales funnel, also commonly known as the purchase funnel or marketing funnel, is a customer’s journey from the moment a brand or product attracts his or her attention to the point of action or purchase.”
This journey will typically look like this:
Awareness > Opinion > Consideration > Preference > Purchase
The aforementioned HubSpot piece explains that a lot of companies struggle to refine their sales funnel because of a lack of agreement between the sales and marketing departments. Don’t underestimate the negative impact this can have on your company’s growth! According to a study by the Aberdeen Group, companies whose sales and marketing teams were aligned achieved 20% annual revenue growth in 2010; companies with poor alignment saw a 4% decline in revenues.
In order to reach a consensus, you should define a marketing qualified lead (or MQL). A MQL is a customer that is:
From here, you should be able to work backwards and identify the different stages of your company’s unique sales funnel—and begin the important work of optimizing each of those stages.
This is just the 1st in a series of 10 videos Hiten Shah created with us. To learn more about content marketing, check out the rest of the videos!