4 July 2024 |
By - Sudha Mariappan
When you start a business, there are many end goals that you might have, including brand visibility and customer satisfaction.
But the main thing required for a business to thrive is gaining profit.
A profit for business is something that we, as humans, cannot survive without.
To gain profit, it's essential to have sales.
If profit is the air we breathe, then sales are the support system, that is, the heart of your business.
Without sales, no business could thrive, as there would be no awareness about the products and services. It would be impossible to drive revenue and grow your business.
Let’s understand the process of sales and the sales funnel.
Sales are activities and strategies involving the selling of products or services in exchange for money.
It includes understanding the needs of customers, introducing them to related solutions, and convincing prospects to buy your products.
Such sales may take place in the form of retailing, wholesaling, direct selling, or even online sales. The prime objective is to create revenue through the conversion of prospects into customers.
The Importance of Sales in Business:
Sales are the real-life blood of a business. It’s their job to generate revenue and build growth. It is considered an indispensable and robust sales strategy when it comes to winning new customers, retaining old ones, and gaining financial stability.
All these sales efforts directly influence scaling, innovation, and competitiveness in the marketplace.
Effective sales teams strive towards achieving customer satisfaction by ensuring that the suggested solution meets buyer needs, which turns into long-term loyalty and repeat business.
The Sales Process: Breaking Down the Steps
Basically, the sales process is an organized and controlled means of guiding the salesperson through specific steps in the prospecting process for effective deal closure. Typically, the following is the content involved in the process:
Prospecting: It involves the search for people who can become potential customers for a product or a service.
Lead Qualification: Here, it assesses the availability of leads and whether they are worth pursuing or not.
Presentation and demonstration: The seller must present the product or service to the prospect and explain to him or her its benefits while eliminating any type of fear.
Overcoming Objections: Addressing the concerns or objections a prospect may have in the mind with regard to buying a certain product or service.
Closing: Closing the sale by getting the commitment of the customer.
Follow up: Ensuring that customers are satisfied and are having long-term relationships with after-sales support.
Understanding the Sales Funnel
The sales funnel, known as the AIDA funnel, can be viewed as a diagram used for the mental process that a prospect goes through throughout the customer journey, from awareness of your product to the final purchase decision.
It allows a business to know at what exact point prospective clients are in the process of buying and therefore design appropriate strategies.
It is important to know about the potential customer’s perspective, or on what stage of the funnel they are. Because at any point, they might have the need to opt out of your business.
Unfortunately, when that happens, you as a business owner will have a clear idea on how to improve your sales strategy to get your customers to the final stage of the sales funnel, which is the decision stage.
Fundamentally, the sales funnel has four key stages: Awareness/Attention, Interest, Desire, and Action.
Read Also: Mastering Digital Sales: Strategies and Tactics for Success
The Awareness Stage
In this stage of awareness, customers are made aware of the product or service. Customers generally come to know about the product from various sources, such as social media, advertising, or word-of-mouth.
The main objective is to attract attention and influence interest.
When prospective customers are curious about your product, that is when a marketing tactic becomes effective. Effective marketing strategies play a huge part in this stage, furthering the overall goal of reaching a large audience and creating brand awareness.
For example, in India, brands like Amul have mastered the awareness stage of the customer journey through their iconic hoarding ads. Most of the ads carry the Amul girl commenting on current events, which not only catches eyeballs but works really well for building a strong brand presence.
Another example is Flipkart, which creates consumer awareness about their sales and new product launches through large-scale digital campaigns supported by social media marketing.
Interest Stage
In the interest stage, once prospects have become aware of a product, they look for more information and begin to analyze how the solution solves their problems. This could include engaging content in the form of posts, webinars, and demos that teach and educate potential buyers.
Businesses need to provide valid insights through answers to common questions in order to move prospects through the funnel.
An example from India is BYJU's, which involves parents and learners with free webinars, demo classes, and informative blog posts. In this way, prospects get to the site with all the information necessary to make an informed decision about their educational services.
Prospects work out the options with a view to possibly making a purchase. They compare the features and benefits of products with various prices.
The sales representative has a very defined role here regarding personalization of recommendations, overcoming other objections, and even offering some incentives like discounts or free trial products to choose their solution.
An example of a brand getting to this stage really well is Tata Motors.
It is common for their sales teams to offer prospects personalized test drive experiences or detailed comparisons on features or financing options to enable a decision. Offering some kind of promotion during festivals or end-of-season sales helps prospects finalize the sale.
The Action Stage
The action stage is where the final decisions of a prospect are made to buy. Among the effective sales strategies at this stage are clear calls to action, easy purchasing processes, and fast follow-up to ascertain customer satisfaction.
This is the point where closing sales leads to customers, and hitting the sales targets matters quite a lot.
Still, Amazon does offer a customer-friendly, smoother buying experience in India. Their follow-up strategies are such that no one can be left in a state of doubt regarding their ordered goods.
It provides a great buying experience in terms of order confirmation, delivery, and customer service support, thereby giving customers good enough reasons for repeat purchases.
Key Performance Indicators (KPIs) in Sales:
KPIs Key Performance Indicators are the essential metrics that measure the efficiency of a business in the sales strategy and process. Key KPIs include:
- Revenue Generated: Total income from sales activities over a specific period.
- Customer Acquisition Cost (CAC): The cost incurred to acquire a new customer, including marketing and sales expenses.
- Customer Lifetime Value (CLV): The total revenue expected from a customer over the entire relationship.
- Win Rate: The percentage of leads converted into closed deals.
- Sales Pipeline Metrics: Metrics such as lead conversion rates, average deal size, and pipeline velocity.
- Customer Retention Rate: The percentage of customers who continue to purchase over time.
- Churn Rate: The percentage of customers lost over a specific period.
- Upsell/Cross-sell Revenue: Income from selling additional products or services to existing customers.
- Sales Activity Metrics: The number of calls, emails, meetings, and proposals generated by sales reps.
Read Also: The Impact of AI on Sales Pitching: Revolutionizing the Art of Persuasion
Sales vs. Marketing: The Collaborative Relationship
While the sales and marketing functions of a business are separate, they are very closely aligned. Here, you can learn more about sales and marketing.
What marketing does is largely related to generating leads and creating brand awareness, and what sales does is take those leads through the process to customers.
As a matter of fact, one cannot successfully do business without the other. Shared vision, communication, and strategy help the teams coordinate their efforts in the most efficient and revenue-maximizing manner.
For example, marketing can provide instructional insights into customer behavior and preferences, which are valuable takeaways through which sales teams can inform and customize their approaches effectively to close deals.
Any business that wants to thrive and dominate competition in the marketplace today must have good knowledge of the sales process and sales funnel.
The better a company becomes at mastering the concepts, the better it can be at attracting customers, converting them, having them for repeat business, or retaining them. Hence, at being successful in growing sustainably and profitably.
Are you planning to develop your business through innovative strategies? Then connect with us at info@ontogendigital.com. Subscribe to us for more blogs.