Know your sales funnel and identify profitability per customer

Rentabilidad por cliente

You have probably heard of the term funnel or sales funnel which is a fundamental concept to understand how a company’s sales process works. This is a visual representation of the sales process, which shows how potential customers convert into actual customers and increases ROI.

To understand how this works, it is important to keep in mind that not all leads are the same. Some leads are more valuable than others, either because they have a higher spending power, because they are more loyal to the brand or because they are more likely to recommend the company to others.

It is therefore essential to identify the potential profitability per customer. This and the sales funnel are closely related; in order to understand this relationship, it is necessary to understand what a customer’s profitability is. This refers to the benefit that a user generates for a company throughout its life cycle, i.e., it is a calculation that takes into account both the revenue generated and the costs associated with its acquisition, retention and service.

In this sense, a customer’s profitability is not a static concept, but varies over time. At the beginning it may be profitable, but it may become unprofitable if retention costs are too high or if its purchases decrease over time.

The sales funnel is therefore a key element in ensuring customer profitability. If an efficient sales funnel can be designed, i.e. a process that allows the company to identify potential customers, attract them, convert them into real customers, build customer loyalty and get them to make recurring purchases, profitability will be assured.

How to achieve an efficient sales funnel?

Today we have a great tool that allows us to be much more precise and to go for a fixed shot and this is: technology. Nowadays we can see it present in lead management processes with assisted sales, in martech and adtech tools such as: Google Marketing Platform, Facebook Business Manager, etc.

The first step, hand in hand with technology, would be to get to know the potential customer and his buying process. This implies understanding their needs, motivations and behaviors, as well as the channels and moments in which they are willing to interact with the company.

Based on this information, personalized marketing strategies can be designed to attract potential customers to the company and guide them through the purchasing process. It is important to keep in mind that this cycle does not end with the sale, but that loyalty and the generation of recurring purchases are essential to ensure long-term profitability.

In the past, invasive advertising methods were used, but now the solution lies in being able to communicate in a way that is relevant, the more personalized the better, and making this communication happen when the consumer wants it, without invading his time or overwhelming him with repetitions.

Knowledge of these and many other aspects is now possible thanks to technology. There are technological platforms capable of collecting a wide range of information about consumers, so that we can target each one of them, taking into account all their characteristics and preferences. For example, Walmeric’s Delio is able to collect information about a lead even before we know who it is.

Now that I have raised this concern, I would like to know what you think about using technology to understand your sales funnel.

Publicado originalmente en nuestra newsletter de Global ROI Hub (GRH).

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