4 Tips SaaS Founders can use to Optimize their Sales Funnel

“Leads are dropping faster than water poured into a leaky bucket” Khan exclaimed to his business partner. He was visibly frustrated.

And it was true.

A close look at their Hotjar dashboard reveals that they attract visitors to their website all right. But they hit a snag when it comes to converting those users to paying customers.

Ouch.

Khan and his partner aren’t the only ones battling this problem, however.

In fact, according to , a massive 79% of leads are not converted to sales.

If you’re losing that many leads, then it’s time to take a step back and analyze the path your customers take to conversion. This is so you can uncover friction in your customer journey that reduces the efficiency of your SaaS sales funnels.

A confusing task if you don’t know where to begin. But it doesn’t have to be.

This article will show you 4 tactics for optimizing your SaaS sales funnel. But before we jump into that, let’s be clear on what a sales funnel is.

What exactly is a SaaS sales funnel?

Imagine all the steps your prospects go through on their way to becoming paying customers.

• The moment they discovered your brand
• How they decided your product is worth a trial
• When they decided they’ve found the real deal and became your customer
• And started spreading the good word about your product

All of these stages are what make up the SaaS sales funnel.

Source:

Think of it as a multi-staged selling process that begins the moment your prospect first becomes aware of your brand and continues even after the prospect becomes a paying customer.

How do you know it’s time to optimize your funnel?

Serial entrepreneur turned VC, David Skok, gave a warning in . In his words:

“No matter how large or successful your business is, you will have at least one place that is a blockage point in your customer acquisition funnel. This is the point where the conversion rates from one stage to another are not satisfactory or you have a scaling problem…”

What does David mean?

He’s saying it’s always time to optimize your funnel. A perfect funnel — one that is 100% efficient and requires no fine-tuning — isn’t achievable.

There’ll always be stages in your customers’ journey where the conversion rates are less than ideal. And the onus falls on you as the business owner to find these blockages and clear them.

There are three main places to look at when searching for funnel blockages.

• Top of the funnel. Are your leads stuck on top of your sales funnel? This means you have no problem driving visitors to your website. But they do not seem interested enough in your offering and messaging to move on to the next stage.
• Middle of the funnel. Are your leads stuck in the middle of your funnel? It means you’re generating leads. But they’re not just qualified. Qualified leads show a clear indication that they’re interested in your business.
• Bottom of the funnel. Are your leads stuck at the bottom of the funnel? This means you’re having no sales. Your leads show intent but you can’t convert them into paying customers.

Once you’re able to pinpoint where these funnel blockages are, the next logical question becomes:

“How do I eliminate them?”

These are 4 tactics for you.

4 tactics for optimizing your sales funnel

Create content that solves the specific needs of your prospects

It’s not just enough to create content for SEO's sake. Your content has to appeal to prospects at specific stages in their buyer journey. That’s how they get enough information to move from one funnel stage to the other.

This stat by the emphasizes that. According to the research, 95% of buyers choose SaaS companies that provide them with sufficient content to navigate the buying process.

Wondering what type of content you should produce at each stage of the funnel?

This illustration by Myk Pono provides the answer. It also shows how each content type fits into your customer acquisition framework.

Source:

Shorten your sales process

Have you ever forfeited your spot on a queue because it was too long?

At that moment, your time suddenly becomes so valuable that you’d rather go home without what you came for. Or find somewhere else to get it.

That’s how your prospects feel when you make them go through multiple (unnecessary) steps on their way to conversion.

Time is money. The shorter your sales cycle is, the more optimized your funnel is. Not to mention your customer acquisition costs rise with every increase in your sales cycle.

Source:

Here’s one effective way to figure out where the time traps in your sales cycle are.

Revisit your interactions with existing customers. What specific issues extended your sales process? Depending on what funnel stage this issue occurs, create content that provides a solution to your customers.

Measure your funnel metrics

Remember the saying “what can’t be measured, can’t be managed.” It holds true here. The only way to improve your SaaS funnel is if you have data on what’s wrong.

Not everyone realizes this though. This surprisingly revealed that 68% of companies have not identified or attempted to measure their sales funnel.

If you’re wondering what sales funnel metrics you should keep tabs on, these are the most useful ones.

• Leads
• Conversion rates
• Acquisition costs
• Customer lifetime value
• Average deal time
• Cycle time
• Total sales

This by David Skok gives a deep dive into understanding and calculating SaaS funnel metrics.

Do not forget your old customers

Often when founders think of their sales funnel, they only think of how new prospects can become new customers.

But what about your old customers?

80% of your company’s profit will come from 20% of your existing customers, according to this research by . This underlines the fact that you should include existing customers in your funnel optimization plans.

How do you do that?

One way is to roll out a referral program. Dropbox used this tactic to improve the efficiency of its sales funnel. And , the company’s co-founder, referrals increased their signups by 60%.

by Avoma gives actionable tips on how to set up a SaaS referral program.

Conclusion

To grow your SaaS business and drive predictable revenue, understanding how your customers become customers is vital. That’s how you get information on how to get new customers to grow your customer base.

With this in mind, the importance of a SaaS sales funnel in mapping out the journey your customers take becomes important. What’s also important is optimizing your funnel so that the customers’ journey turns out to be a smooth ride.

The four tips detailed in this article will show you how to do that.

Also published .