How to build a digital marketing sales funnel

A digital marketing sales funnel utilizes a combination of marketing tactics to generate leads and nurture them properly to become loyal customers who then advocate for you.

Old ways of marketing are not as effective anymore. Traditional marketing strategies are losing steam and for good reason. There is not a great way to measure the performance or effectiveness, not to mention it’s brutally inefficient in terms of cost. Digital marketing continues to advance and has changed the way large and small organizations communicate with their customers and increased engagement. With all the different platforms available for internet marketing, the opportunities are endless.

Your mindset is everything. It determines your success or failure. — Josh Burns

What is a digital marketing sales funnel?

It's definitely a play on traditional funnel use. To put it simply. A digital marketing sales funnel follows the exact same concept. -> Build your sales funnel to achieve a specific objective –> a customer purchasing product/service -> Then you fill your sales funnel with traffic using digital marketing tactics and drive that traffic from the top of the funnel to the bottom of the funnel where they convert into a paying customer -> Then ultimately become an advocate for you.

To build a digital marketing funnel you need to create “compelling user first content”. This is content that the user is actively searching for, but not necessarily the content that your sales and marketing team want to push. A digital marketing funnel is an essential part of your Inbound sales strategy. To do this successfully you will need to create high quality content for each stage of the buyer journey.

Top of the funnel engagement

Right now prospects are in research mode, not buying mode and are simply gathering information. It is important to have content that speaks to the problems of customers and position yourself as the subject-matter experts. Some popular content here would be: How to guide, explainer videos, blog posts, lead magnets, case studies.

Middle of the funnel activities

The middle of your sales funnel is when prospects start to evaluate specific solutions based on what information they gathered. These kinds of offers would include:

Events/Presentations
Product demos and trials

Bottom of the funnel activities

Partnering closely with sales is critical to dialing in and optimizing the activity down funnel. A string partnership with sales will accelerate growth and provide better predictability when forecasting ARR or pipeline.

What does the sales funnel look like?

A sales funnel is a sequence of actions, or stages that a lead/contact goes through before purchasing a product or service. Digital marketing sales funnels are designed to allow marketers to track, record, and optimize the sales process to improve targeting and outcomes.

There are some common sales operations, metrics, and KPIs that many in sales and marketing are familiar with.

—Demo conversion ratio (DCR)
The number of demos that successfully convert to the next stage in the funnel.

—Lead to trial conversion (LTT)
This is the number of leads who have converted to a trial.

—Lifetime Value of the customer (LTV)
Average total value a customer will spend before leaving the service. Difficult to measure if your product is better because, without customers leaving you will not know how long they stay and their total value.

—Number of customers leaving (Churn)
Customers will leave and that’s not always a bad thing. Customers who leave and fit your ICP (Ideal Client Profile) then you have a problem.

—Monthly recurring revenue (MRR)
The monthly recurring revenue gives you an overview of your success, however, it’s only an overview and you need to look at the details within the data to gain a more accurate picture.

—Annual recurring revenue (ARR)
The annual recurring revenue gives a good overview of the business, but like the MRR you should study all the data to obtain a more accurate picture on the health of your venture.

—The time from initial contact through to a closed order (Sales Cycle)
This is typically short for lower value simpler solutions and longer for complex Enterprise sales. For example a sales to a Tier 1 bank may take 18 months from initial contact to close.

—Customer Acquisition Cost (CAC)
It’s important to understand how much it costs you to acquire a single customer. In an ideal world you would discover this in the initial phases of the business when you are proving the value proposition. Without this figure it’s impossible to put in the systems and processes to scale the business as you won’t know how much you can spend on the front end marketing and sales.

—Negative Churn
A powerful growth metric which indicates that the revenue from upselling and cross-selling existing customers out strips the revenue lost when customers leave.

Some additional thoughts

Creating a digital sales funnel is all about building a journey all the way from first touch, to advocate. Your sales funnel should emphasize each of the key stages your prospects will travel through on their way to an agreement/contract.

Many have failed after struggling to implement a digital marketing sales funnel. Marketing and selling digital products in particular can be challenging. Chances are your target audience is already overwhelmed with offers from competing software vendors.

A smooth flowing digital marketing sales funnel could be the difference between a viral success, or returning to the drawing board.