Why Your Sales Funnel Isn't Converting & How To Fix It

Why Your Sales Funnel Isn't Converting & How To Fix It?

Are you spending money on ads that aren’t converting? Are you getting qualified leads but they’re not closing? Is your CPA (cost per acquisition) too high… but you don’t know how to lower it?

In this lesson, I’m going to show you exactly how to troubleshoot your sales funnel and fix it like a mechanic—step by step.?

Step 1: Understand Your Metrics?

How do you troubleshoot a funnel that’s not working? Step one is to understand that there are two types of funnels… Marketing Funnels and Sales Funnels.

1. A marketing funnel’s goal is to get visitors to your point of sale (meaning: show up to your B&M store or visit your website).?Whereas...
2. A sales funnel’s job is to convert those shoppers into leads and customers.?

For each of these funnels, you need to track certain metrics.?

For your marketing funnels, you're going to want to know your Cost Per View (CPV), meaning how many people are reading your blog or seeing your ads. Basically, how many people are interacting with you at the top of the funnel, that's your Cost Per View…

After this, look for how many people are actually clicking on that ad or that social media post. i.e. how many people go to your website...That’s your Cost Per Click (CPC).

For your sales funnel, you have to track your Cost Per Lead (CPL), your conversion rate, and your Cost Per Acquisition (CPA).?

These are the metrics that show you how many people who clicked on your ad ended up buying your product or opting in for your lead magnet or free trial.?

So for example, if you have 100 leads, and 20 of them become customers, your conversion rate is 20%. How much you spent to get this customer is your Cost Per Acquisition, which is obviously the most important metric here.

If your CPA is not low enough, most likely, you don't have a business…?

For example: if you spend $10 to get a customer to buy your $5 product…? you don't have a company. You’re just wasting your money. So, the goal of everything I’m about to teach you is to lower your CPA. Your CPA is life or death.??

So how do you lower your CPA??

Four ways: lower your Cost Per View, Cost Per Click, and Cost Per Lead, and then increase your conversion rate. If this sounds too confusing to you, stay with me. I’m going to break it down into action points.?

Or if you’d rather hire experts to build out and test your funnel for you, you know where to go.

Step 2: Define Success

Now that you have a general understanding of the metrics you need to track, step 2 is to decide where the problem is.?

And right off the bat, and just to clear the air, there's no magic formula. There’s no “good” conversion rate. It completely depends on your industry and margin.?

If you have a hyper-targeted top of the funnel, where you're manually reaching out to people one by one, and by the time they become qualified leads, there’s no barrier to entry, then you want a very high conversion rate. For example, if you use LinkedIn sales navigator to give away free trials of your software. This conversion rate should be 20% or higher. At least.

Whereas if you're selling a mass market, eCommerce product, like a hoodie or a blanket or a t-shirt, then a 2% conversion rate is fine because your Cost Per View is going to be much lower because a lot of people could potentially buy your product. Your TAM is much higher.?

So, this is not the sexy answer, but it’s also the truth: a good CPV, CPC, CPL, and conversion rate, depending on your company. But either way, you need to know what your Cost Per Acquisition is, and then reverse engineer the percentages that you want in order to reach that target CPA.?

Which means you just need to look at the data and use common sense. Ask yourself: “Is this a good Cost Per Lead relative to the CPA I want? Is this a good Cost Per View relative to the CPA I want? Is this a good conversion rate?” If they’re not, then you know where the problem is.?

So… what if your problem is your marketing funnel? What if not enough people know about you, and the people who do… aren’t clicking. What do you do?

Step 3: Troubleshoot Your Marketing Funnel?

P90X is a well-known fitness program. When they first started, they spent a lot of money on marketing, so they were getting a lot of views, but still, their CPA was too high. So what did they do?

They changed two things: One, their infomercial…they rewrote the entire copy and refilmed… adding videos of people doing their workout with tons of before and after testimonials…and two, they said that their unique value proposition was that they used “muscle confusion,” which they made up… but it worked. It had a sticky/virality to it.?

Meaning: they basically changed the ad… which got more leads calling… which led to more sales at a lower CPA. Downstream of that change… they reached hundreds of millions in sales.??

The lesson here: A small change in your marketing funnel can TRANSFORM your business…even if nothing else changes.

So how do you know there’s a problem in your marketing funnel? The metric to look for is your Cost Per View (CPV).

If the cost per view is too high, that means you're not getting enough visitors to your website or your store. No one knows who you are.?

If this is your problem… and you're running ads, the problem is either your targeting is off… OR…you're not spending enough…OR…the actual ad creative needs to be improved—the copy, or the image, or the video. Just like what P90X did.?

Or if you're not doing any organic content, then start a blog and go harder on social media so more people will see you.?

And if a lot of people are reading your articles or viewing your ad, but no one's clicking. That means that your call to action isn't strong enough or your offer is weak.?

Let’s recap here. If your Cost Per View is too high, then you have a problem with your marketing funnel…Which basically has two branches: ads and organic content. If the problem is your ad, then check your target audience, your daily budget, and your creative. And if you’re not doing organic marketing, you better start on that blog or start scaling your social media channels…Lastly, never forget your CTA, and your call to action, and make sure your offer is enticing enough for people to click.?

Step 4: Troubleshoot Your Sales Funnel?

Suppose you have this amazing offer: “I'm going give you 10 blog posts for free.” People are excited, they go to your website, but they don’t find any forms to fill out. There's nowhere to put your information, and then at the bottom of the page, it says, “Give us a call on blah, blah, blah. We’re only available from 9 to 5, Monday through Friday.”

A lot of people click away, but some don’t… They really want the free blog posts, so they call you… but then, no one answers.?

How are you ever going to make a sale?

This is an extreme example of a sales funnel that doesn’t work. The goal here is to remove all friction and make it so easy for a customer to buy your product. A great example of this is what we’re doing at VWN and Sonic Solutions. We’re straightforward. If you have a meeting with our team, we give you a proposal within two hours, we review resumes within two hours, and we'll give you a free sample of whatever solution you want… within two hours. This is why our sales cycle is so tight. We don’t “talk” about our products, we give them a taste.?

Now, if you’ve checked and your marketing funnel is fine. The Cost Per View is under control. Everything we talked about is working well, you have a problem with your sales funnel.?

So how do you troubleshoot it?

Start with the Cost Per Lead (CPL)?

Let's say people are clicking on your ads and going to your website, but no one is actually converting into a lead. Then you need to give them a reason to opt-in. Offer a lead magnet, a free trial, or a free consulting call…something that will make them WANT to give you their information in exchange. Build reciprocity.?

Or what if you're getting tons of leads, and a lot of people are filling out the form? They love your lead magnet…may it be an ebook, a free web class, or a consulting call… BUT…when people go to the checkout page, they abandon their carts… and they never come back… OR, do they schedule a call with you but never show up on time?

In these cases, the problem is that you're not nurturing your leads. So you need to add email, text, and voicemail sequences… OR you need to hire a sales setter who can autodial call everyone to improve the chances that they buy.?

Or maybe everything is fine… the leads go all the way down the funnel and show up to your call…but you don’t close? This means your sales script and sales materials are bad. You might want to try replacing your FAQ with a menu or offering a demo of your software to allow them to test the waters.?

So… if the problem is your CPL, update your funnel with clearer messaging and give a free trial, consulting, or lead magnet to get leads in the door.?

If the problem is conversion percentage… people aren’t showing up to the call or they’re not actually buying… improve your sales script and sales materials… and improve your nurturing sequences.

Step 5: Maybe The Funnel Is Not The Problem

So you’ve checked both your marketing and sales funnels, and they’re fine…You’re crushing on social media, you have a really good offer with strong CTAs, you have killer copywriting, and your website is optimized…but still…no one is buying, it’s one of two things:

One is that you're pricing yourself out of the market because your competitors are better AND cheaper.?

Either that or you just don't have product market fit. People just don’t need what you’re offering. In this case… you’ll have to revamp your entire service or product. Which by the way, this is totally fine and normal. You don’t have to feel like a failure or curse the fate that gave you a product no one wants. It’s incredibly common for companies to remove underperforming products.?

Do you remember what Google Wave is? You probably don’t... Google Wave was supposed to be a communication platform that combined the best features of email, instant messaging, online chat, social networking, etc… But it didn't catch on because it didn't have product market fit. Google didn't do enough research to test whether or there wasn’t enough demand yet for that type of product given the market conditions. So even Google makes mistakes. But they don’t die because of these mistakes. They switch gears quickly when they need to. That’s the smart thing to do. And you should too.

The Meta Lesson

In short… Most people think of marketing as a brand and a tagline… or they put so much time into choosing the colors of the logo…You know, Mad Men style.

All of that is crap.?

Until you're an international fashion brand or you're competing for Coca-Cola versus Pepsi campaigns, none of those design/vibe elements matter.?

Most likely, your funnel isn’t working simply because you’re not looking at the data correctly… you’re not aware of what’s working and what’s not working and WHY…?

Marketing is half data, half psychology. Think about the data like a car. If you're a mechanic, and the engine is smoking and there’s a clicking noise…You know the problem is not the front right wheel. It’s not the trunk or the air conditioning…The problem is the engine.?

You have to approach business the same way. If no one even knows you exist, you shouldn’t be trying to improve your sales materials and your demo. Focus on the top of the funnel. Or if you're getting 30 qualified sales calls a day, but no one is converting, your price might be way too high or you just don't have product market fit.

The data always shows you the problem. So if you're not tracking any data, then you don’t know the problem. And if you don’t know the problem… you can’t possibly fix it. And btw… I know this lesson was a bit complicated… so you may have to reread it… and that’s okay. You have to do what you have to do. But at the end of the day… if you don’t know your cost per view, cost per visitor, cost per lead, conversion rate, and cost per conversion or acquisition… you can’t fix your funnel because you don’t know what to fix in the first place. So start there.?

#Jonathonkendall #leadgeneration #ROI #emailmarketing #businessgrowth #salesfunnel #customeracquisition #funneltheory #mailmarketing #coldemails #marketingtips ?

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