No matter what you might think, finding clients in B2B is not hard.
If you spend a lot of time doing sales prospecting or if you decide to spend a lot of money on ads, you’ll be able to generate leads.
What’s really difficult is to make all your unit economics work.
Essentially your customer acquisition cost needs to be as low as possible so you can maximize your margins and invest more to grow your business.
For example, let’s say you spend $400 to acquire one customer who will pay you $500.
This means that your margin is $100.
With that $100, you won’t be able to acquire another customer since your Customer Acquisition Cost is $400.
But now, let’s say that you manage to reduce your customer acquisition cost to $100. It means that your margin is now $400.
So technically, you could acquire a lot more customers faster now.
So how exactly do you decrease your customer acquisition cost?
Well, that’s where sales funnels come into play.
A good sales funnel can 10x your return on investment with the exact same initial effort.
To illustrate it, think of a chef using a funnel to fill small bottles with sauce.
Without the funnel, pouring the sauce directly from a large pot would be inefficient.
He’d have much of it spilling and going to waste, similar to broad, unfocused efforts.
But by using the funnel, the same amount of sauce is directed precisely into the bottles, ensuring minimal waste and maximum efficiency.
The reason we look at the funnel before acquiring customers is because we don’t want to waste our effort.
With a good sales funnel, you will generate more revenue with a similar effort.
With a good sales funnel, your customer acquisition cost will be lower, which means that your margins will be higher.
Higher margins mean that you can spend more money on customer acquisition and, therefore, generate more revenue.
What’s a sales funnel?
If you’re new to sales funnels, they’re essentially a series of steps your prospect will take from the discovery phase to the closing phase.
The 3 steps to creating a good sales funnel
1- You want the funnel to be smooth.
I’ve seen people adding calendar links in their funnel where you can only book 3 weeks from now.
That’s not smooth. Nor fast.
2- You want your funnel to allow you to qualify people.
Time is our most precious asset.
Don’t waste yours, and don’t waste your prospect’s time.
If they’re not a fit, that should be clear in the funnel.
For example, if you have something saying, “Our pricing starts at $10k per month – is it a budget you’re comfortable with?”
You know that every single person who is not in that target of the price will not continue.
3- You want your funnel to be as fast as possible.
It’s either a YES or a NO, but you should know as quickly as possible.
Sales velocity is extremely important as it will determine whether or not you can grow fast.