Waterdrain letting Water flow through like a faulty Sales Funnel

Got a Leaky Sales Funnel!? Why this happens in the first place and how to fix it

The other day I had a chat with an acquaintance who is a relatively well-known creative coach in the US; let’s call her Susanna. When I asked her how things are going, she pulled a face and says, “Boah, that whole Sales Funnel thing I’ve always been told about just doesn’t work. This whole social media thing… it’s exhausting, and I really don’t feel like it anymore. As fruitless as it is.”

Now Susanna is a creative coach and sells workshops – with a price ticket of about $300. This part works well so far. However, the idea was (and it is always essential to check with the original goal) that this would happen:

  1. Give people free content – price for customers $0
  2. Have them trust you and purchase your workshop – the price for customers of $300
  3. Afterward: Upsell to purchase the coaching package for about $3000.

And what is not working out is the latter; the upsell from workshop to coaching package simply doesn’t work for her.

Now let’s assume this is not caused it’s not caused by her generally approaching upselling incorrectly or not trying to upsell at all (those would also be logical gaps, but she had already made sure to close them).

So what the heck is going on with her Sales Funnel and her customers?

Once again, the solution is not rooted at the level at which we are now thinking (Sales Funnel), but one track further ahead / up if you will – the root cause is actually at the strategy level.

Zooming out of a big city to see the structure, the big picture

So, let me share with you

The Secret of Dysfunctional Sales Funnels:

Ok, so the solution to the riddle is simple:

The audience that spends $300 on a workshop is not the same as the one paying $3000 on individual creative coaching.

In principle, both offerings CAN work for Susanna’s business, but for the $300 spenders, the price tag for the coaching is too high – and those who would spend $3000 want the individual service – and not the workshop with others. Probably, the latter “high-value target group” would even doubt that Susanna’s performance can be good if the price is below a certain price level. So the problem started not with the sales funnel itself, but on the marketing strategy level: with an exact analysis of the target group segments and their expectations as well as the matching pricing strategy.

4 tips to fix such a gap in a sales funnel:

  1. Check whether you really got the target groups and your assumptions about their needs right. If in doubt, you might want to have a direct check in with real human beings there – or have an agency like us do some focus groups for you.
  2. If your new insight is that (like here) there is not just one target group but more and therefore several the respective sales funnels are needed, go ahead and set up a separate AIDA for each of the two target groups (HERE, you can find examples of how can look). Make sure to give it a really fresh review of whether and which social media or content marketing is suitable for this purpose.
  3. Also, check whether you can adapt the offer in each case – e.g., it could make sense for the DIY / On a Budget people to offer already further cross- and up-sells – but in a way that fit their price thresholds – i.e. maybe for $19 or $29.
  4. The price points would also need to be checked… Price thresholds can be much more decisive than many think. E.g., the 3K Club can if necessary, and with a few more extras, even become perfectly happy with $3,900 – and feel like they are getting tremendous value for money. Again, a simple way to test this would be to conduct a focus group (we would be happy to do this for you, with a possibility to go international – budget approx. 2,500 – 4000 € depending on the concrete details, should you be interested in that get in touch here).

You may still be wondering:

This gap in the sales funnel: Could it have been prevented?

The answer is: Pretty sure, yes.

From my point of view, the real gap is that the Target Group Definition was not done thoroughly or simply underestimated. Unfortunately, this is a frequent problem in recent years and we are always happy if a team opens up to optimize their approach there as this can provide such a lot of leverage.

That is because those fundamental concepts that are good in themselves, such as the idea of the persona or the ICA (Ideal Custom Avatar), are confused with it. These concepts are helpful, and while they seem to be doing similar jobs, they are simply not.

For now, the following information is enough to avoid making the same mistake for your Sales Funnel:

  1. Target Group Definition – this is primarily a business perspective. It is ultimately about where money can be made. This information would have its place in the business plan, for example. It lays the fundamental premise. No solid target groups with potential = no business.
  2. Persona: This concept mostly makes sense to design well-made websites in detail – e.g., it helps to define the customer journey
  3. Ideal Customer Avatar: This approach mostly serves a communicative purpose about how to approach one’s target group. Here you mentally focus on a specific psychological profile and create content with that in mind.

So if you were to start here with clean craftsmanship, you would start with

Step 1: The target group analysis:

  • who out there would like some creative coaching?
  • are there enough of these people?
  • do these people already know that this is what they want? (the difficulty level increases enormously if not because “missioning” costs money 😉)
  • what is creative coaching worth to these people – and do they have the money?
  • are they responsive to offerings like that so far – and if so, where and how?

Insight into target group segments earlier in the process

While thinking about this, one would have stumbled relatively quickly upon the fact that the people who want to use creative coaching are not one target group but several – the DIY people with a writing hobby and the quasi-pros for whom the pursuit may cost more.

The solution: 2 customized Sales Funnels instead of one

It would have become clear that the willingness to pay for the $300 people, for example, is just right there. Mentally, these people have a budget for what their writer hobby may cost them. Per year. Per month.

The offering(s) should then be developed and positioned according to this willingness to pay. These DIY people are probably already reachable via Insta, FB, etc. – and ads would be the method of choice here. Probably it needs a sophisticated system of autoresponder emails – a primary effort first, later a system running in itself.

The wealthier or simply more ambitious people Susanna has as clients for the individual creative coaching sessions, on the other hand, don’t flinch at all because of the 3K. For them, this price tag is perceived within a completely different field of comparison – e.g., this budget for the creative coaching compares to the planned trip to Europe, which would also have easily cost 5K.

However, this audience is generally tricky or very specific to reach on social media – which makes Susanna’s efforts there so fruitless. Perhaps instead of more web content, a few info PDFs would be more helpful, or even direct mail or a high-quality brochure that feels like it matches the price level/pro coaching that they will be indulging in.

Does that mean that once the marketing strategy is solidly established, success is guaranteed?

Frankly, you can’t guarantee pretty much anything in marketing and sales.

At the same time, you can provide for significantly increased probabilities of success.

After all, especially in times of digital marketing, there are plenty of facts and figures that we, as experts, know how to filter and use. For example, it makes no sense to include TikTok in the sales funnel if my target audience is simply over 30 and lives in Germany.

Well-done marketing planning removes much guesswork and beliefs and replaces them with facts and higher probabilities of hitting your targets.

Good to know at the same time: Even if you have planned well and with a lot of know-how, it pays to try out many things first and test hypotheses (if you do this systematically, it is also called “growth hacking”).

Strictly according to the motto:

Fail almost. Fail forward.

That is how you quickly get new insights on the table.

Once you have these new insights, the challenge is to be really matter-of-fact about it, not stick to old beliefs, and translate the latest insights into adapted action/tests as soon as possible.

So is the development of a marketing strategy worth the investment after all?

What shall we say? 😉

We know from our conversations how hesitant many are to spend money on marketing strategy topics such as “target group definition” and creating sales funnel strategies in the first place. At the same time, we see again and again that getting prepped like this ensures that the clients can proceed in a planned and focused manner.

Dart hitting the goal, a photo, like a functional Sales Funnel.

As you can see here, with the sales funnel example, which wanted to become two sales funnels,

by getting prepped in more diligent way on strategy level, you give yourself and your product a better chance of success.

And even if parts of the hypotheses don’t pan out right away, for example, the opportunity is there to quickly identify and adjust points of attack – instead of pointlessly being super disciplined about doing more of the wrong thing and investing money and time unnecessarily.

Have you ever experienced something similar when trying to build your Sales Funnel?

Feel free to write us your experiences or questions – we’ll be happy to answer them in one of the following blog posts!

Kristin Reinbach

As the owner of agency „OVERW8“ and building on more than 20 years experience in marketing, Kristin is consistently thinking along the terms of ‚customer value‘, ‚brand value‘ as well as business models. Consistently meaning when she’s out for dinner, sitting in a cosy ski hut as well as having a sundowner wine at a vineyard. Like this, it’s simple logic that her primary job now is to support entrepreneurs and entrepreneurial teams with this know-how to create more brand value, more customer value and thus more company value. She’s sharing some of these nuggets here on OVERW8’s blog.

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