How to Set up a Successful Sales Funnel for Your Online Courses
This article was originally published on the Quaderno blog. Click here to see the original one.
Sales funnels can be a mystery to even the savviest of business owners. As a course creator who creates and sells online courses, you rely on a steady stream of new customers to keep the revenue flowing, right? But if you want your business not just to get by but to thrive, it’s important to create a sales funnel that will convert leads into paying customers.
Acquiring new customers can be expensive and time-consuming — plus, there’s a heated battle on the market that keeps getting stronger. In fact, Gartner forecasts that SaaS will remain the leading public cloud services market segment in 2022, with end-user spending expected to reach $176.6 billion. Putting it simply? There is fierce competition, and you must stand out!
So, how do you optimize your sales process to make it as efficient as possible? If there’s one thing all SaaS businesses have in common, it’s the need for a rock-solid sales funnel that will convert potential buyers to paying customers.
Without a successful SaaS sales funnel, you’ll spend all your time and energy chasing after leads instead of closing them.
We see those hands raised to ask the question: how do you go about creating the perfect sales funnel for your SaaS company? Good news! In this blog post, we’ve gathered the best tips and best practices that actually work and will help you achieve your desired results.
Let’s find out more!
TABLE OF CONTENTS
- What Is A Sales Funnel?
- Is Your Online Course Business In Need Of A Sales Funnel?
- How Can You Set up a Successful Sales Funnel for Your Online Courses?
- Keeping Track Of Your Progress And Measuring Your Success
- Final Thoughts
What Is A Sales Funnel?
A sales funnel, also known as a purchase funnel, is the set of steps an individual takes to turn from visitor to potential customer and paying customer in your sales pipeline. Regardless of your business type, you need a sales funnel to help you attract and convert your audience into customers.
In relation to the online course business, a sales funnel can be the steps a potential learner takes to become an enrolled student at our online academy.
A sales funnel consists of three different stages: top of the funnel (TOFU), middle of the funnel (MOFU), and bottom of the funnel (BOFU). Your sales funnel aims to move people through these sales stages until your audience is ready to purchase your digital products or services.
With a sales funnel, you can track your leads as they progress closer to becoming paying customers and optimize your sales and marketing activities to this effect.
Let’s see a couple of examples of marketing and sales activities that belong to TOFU, MOFU, and BOFU, respectively:
TOFU: activities that attract prospects to your business, like:
- A paid ad on social media (Facebook, LinkedIn, etc.) or on Google
- The landing page you have created to promote your online course
- An article you have written on your blog that discusses the topic of your online course
MOFU: activities that prompt potential customers who are already aware of your online course business to learn more about your offerings and line of business, like:
- A case study where you analyze the success story of a happy customer
- A landing page featuring all the benefits a paid customer enjoys when enrolling in your online courses
- A 1:1 or a group coaching session where you answer your potential learners’ FAQs.
BOFU: activities that prompt your potential customers to purchase your digital product (e.g., enroll in your online course, buy a subscription to access your online academy), like:
- Your online academy’s checkout page where potential customers will actually make the purchase by entering their payment details.
Here is an illustration of what your online courses and academy sales funnel will look like:
In general, your online courses academy sales funnel includes the following steps:
- Your audience learns about your online courses
- Your audience evaluates whether your online courses solve their problem (e.g., offer an extra skill, a certification, etc.)
- Your audience decides whether to enroll in your online course or not -and perhaps even compares it with other similar courses offered by other academies,
- Your audience enrolls in your online course, so they become your customers, and
- You keep your customers engaged and interested in completing their online courses.
Is Your Online Course Business In Need Of A Sales Funnel?
Yes, without a doubt! Using a sales funnel provides a valuable framework for analyzing your business and identifying improvement opportunities for your customers from start to finish.
Let’s say you have already created a sales funnel for your academy’s visitors and have determined there is significant churn between your checkout page and the actual transaction completion. This information allows you to form a hypothesis and test ideas to increase conversions.
It may be necessary to reduce the number of fields prospective buyers must fill out on the purchase landing page, make your CTA button more visible, or even offer a limited-time offer.
Or, if you sell courses to different countries, maybe you need to revisit your checkout page and see how you handle your tax compliance procedure.
You can test all these ideas with controlled A/B tests. Your shopping cart abandonment rate will be reduced if more visitors reach the checkout and complete the funnel.
By mapping your sales funnel, you can discover opportunities to improve your customer journey at every stage, leading to various benefits for you and your learners.
The benefits of a successful sales funnel
A well-designed sales funnel can be a very powerful tool for your business, and it is an asset you will not want to overlook.
A sales funnel enables you to close more sales and increase your conversion rate by providing a structured approach to guiding potential customers through the buying process. You can also use a sales funnel to gain valuable insight into your target market’s behavior, enabling you to tailor your marketing strategies accordingly.
Let’s examine some of the most significant benefits.
- Improved customer retention
Keeping your customers coming back is what customer retention is all about. It is often overlooked, but customer retention is equally critical, if not more so than customer acquisition. If you refer to any credible online statistics site, you’ll find that acquiring a new customer costs five times as much as retaining one. Interestingly, Semrush reports that only 18% of businesses focus on customer retention, compared to 44% of businesses that focus on customer acquisition.
Retaining customers is one of the best ways for your business to succeed. This can be accomplished with a well-structured sales funnel that retains existing customers and provides a great experience for them. Keeping customers around will help you build a long-term relationship that will pay off in the future.
You can, for example, offer special discounts, free online training, or a 1:1 coaching session to your loyal learners through a loyalty program or referral program.
- Better lead nurturing
Without a well-designed sales funnel, your marketing team can only do so much to nurture leads. A B2B study conducted by Salesforce indicates that 68% of companies do not have a sales funnel or have not attempted to evaluate it, and an astounding 79% of marketing leads do not lead to paid customers. Clearly, the sales funnel will guide your team to follow up with these leads.
You can lead your online business more effectively by putting a sales funnel in place that provides everyone involved with the sales process a clear understanding of what the next step is and when to nurture each lead; through email, a call, or a live meeting. By doing this, you will also improve both customer satisfaction KPIs and your recurring revenue.
- Optimized course content
You can use a sales funnel to develop or improve your current online training or online course. In what way? Through your communication with your target audience, qualified leads, and customers, you will gain valuable insight that will help you improve your online courses and training.
Especially at the bottom of the funnel, prospects and customers are likely to voice their needs, requirements, pain points, and problems that they wish to solve. With all of this information at your disposal, you have the opportunity to improve your end product, your online course.
- Optimal scaling for your course business
All businesses struggle with scaling. Scaling requires a diverse set of sales and marketing strategies. In your case, it relates to growing your business by discovering new customer segments as soon as possible, in your case, new potential learner niches.
You can use a sales funnel to optimize your sales representative’s productivity and simultaneously reduce your customer acquisition cost and churn rate.
For example, if you don’t have a sales funnel, you won’t know how many leads you have, how many are converted to subscribers, or what your average customer lifetime value is. To scale your business, you need these actionable metrics and data. Thus, a sales funnel helps you measure what matters rather than vanity metrics.
- Efficient forecasting
What can be equally valuable to scaling your online course business? Predicting results and numbers. As a sales funnel enables you to understand your conversion rate better and measure how many leads you are capturing and how many of them convert, you can forecast your sales volume and manage your sales and marketing efforts ahead and efficiently.
Is Your Online Course Business In Need Of A Sales Funnel?
A typical sales funnel has five stages: Awareness, Interaction, Preference, Conversion, and Loyalty. The next step is to examine each stage in more detail.
In this stage of the sales funnel, your target audience discovers your product or service online; they become aware of it.
There are literally thousands of ways for prospects to learn about your business. Most people learn about your business through a Google search — so they land on your blog to read an article, whitepaper, or case study; or they read a guest post you published on a media site (we do live in the era of digital PR after all!), or they watch one of your podcasts, or they see a Facebook post; or they see a paid ad; or from a friend.
At this point, the prospect might enroll directly in one of your online courses or training. In most cases, however, you’ll need to capture their attention further before you can get them engaged and take action.
At this stage, we suggest that you also invest in SEO. The most popular search engines, such as Google, will be able to discover each page of your website if it is optimized.
At this point, your potential customers look to your product or service for solutions to their problems. Can your online training help them reach their goals (e.g., gain a new certificate that could lead to a promotion or another job)?
Prospects evaluate what you offer according to their interest level. Those who are not certain about the solution will not buy but will examine their options to find one that fits their needs.
Now is the time to convince them that your online courses are worth investing in. You can provide high-quality content that educates and informs them without selling directly. Help them make an informed decision by demonstrating your expertise.
A case study, testimonials from happy learners, a comparison blog post, or a landing page with a solution focus are all good ways to showcase your worth. Try not to be too pushy or aggressive with your sales approach to avoid turning your prospects off.
Now that your potential customers have narrowed down their options, they are ready to decide on their purchase. To choose the best option, they may compare factors such as pricing, payment options, discounts, and other price or subscription-related factors.
In this stage of the sales funnel, you must play your best cards and make your best offer. For example, you might offer a startup bundle of courses at a premium price or an exclusive discount code for their next purchase. Making your offer irresistible will encourage potential customers to choose yours.
Conversion occurs when your potential customers are ready to purchase your product or service. Nurture them with personalized messages and make the process as easy as possible for them.
For example, if you use a modern LMS like LearnWorlds, you can integrate it with Quaderno to automatically handle your sales tax compliance process. No need to burden your customers -or your business- with complex calculations regarding the online course they will purchase. Your goal is to get customers to click, pay, and enroll in your online course as soon as possible!
The sales funnel does not end with the sale. Time to get busy with some pampering and nurturing! The goal is to retain customers, so they make future purchases. Plan ahead and create a loyalty program for your customers. There are multiple ways to accomplish this.
If you want your customers to stay happy, you can ask them to provide all sorts of feedback (did they enjoy the course they enrolled in? Did they find your online academy useful for reaching their objectives? Did you provide them with good after-sales support?)
You can also invite new customers to join your newsletter and community and even design a rewards program to thank them when they achieve certain training milestones.
Take advantage of email marketing as well. You can create a drip-feed email sequence for your new customers with tips, how-tos, and mini-challenges to help them stay focused and accomplish their goals. Make a separate email list for loyal customers and send them personalized emails with special offers or loyalty rewards.
Keeping Track Of Your Progress And Measuring Your Success
Let’s examine the most important sales metrics to keep track of your progress at every stage of the sales funnel.
Lead metrics are important for tracking the success of your sales funnel, but they can also benefit both your sales team and marketing team.
Lead volume can be easily tracked, but digging deeper into leads will give you even more insight. Our recommendation is to look at more than just the number of leads. Take a deeper dive into your data, analyze qualified leads, and determine how long it takes them to reach each stage of the customer journey.
Also, consider where your leads come from. Are most of them generated by marketing activities or sales activities? A top-of-funnel analysis will identify ways to improve these activities.
Totaling your sales is as simple as it gets. The only thing you have to do is add up all the revenues from customer sales during the time period you are analyzing. Are your conversions on track? Do they result in the type and amount of sales you expect? A modern LMS like LearnWorlds allows you to view your total sales directly from the report center of your digital academy’s dashboard. Pie in the sky.
Total sales aren’t something you should track alone. We suggest you always compare it with the other sales funnel metrics you track to make the most of it. In fact, we suggest you follow our advice for all your sales funnel metrics. In metrics, too, teamwork is key!
Leads that convert into sales are more valuable to your business than leads that do not convert. Keeping track of your sales-converting leads requires measuring your conversion rate, calculated by dividing your sales by your leads.
Cycle time describes the amount of time it takes prospects to progress from one milestone to the next, from awareness to interaction to preference, and so on and so forth.
Cycle time is quite relevant. You can determine the ideal logical cycle time through practice and experience.
It is important to keep track of this metric from the beginning of the funnel to the end of the sale to measure the efficiency of your sales process. Is it possible to implement new techniques or add additional resources to speed up any slow spots?
Customer Acquisition Cost (CAC) & Lead Acquisition Cost (LAC)
There is no doubt that these are two of the more challenging metrics to define. What is the cost of acquiring a new customer or lead for your online business? Acquiring a lead or customer involves a combination of marketing and sales expenditures.
The Customer Acquisition Cost (CAC) refers to the amount you spend on each paying customer. Divide your total acquisition costs by your number of clients to calculate your customer acquisition cost.
The Lead Acquisition Cost (LAC) is the cost associated with getting one lead (or potential customer). Divide your total acquisition cost by the number of leads generated to calculate your lead acquisition cost (LAC).
Customer Lifetime Value
You can assess your business model’s effectiveness over time by measuring your customer lifetime value. Essentially, it tracks how much revenue your typical customer brings throughout their relationship with your online course business.
To calculate a customer’s lifetime value, you need to divide the average revenue of all your currently active user accounts by the number of subscribers that unsubscribed or stopped paying in a given period.
If your training is membership- or subscription-based, you also need to consider other influencing factors such as upgrading, downgrading and churn patterns.
We cannot emphasize enough how crucial it is to keep your sales funnel updated over the course of your business. A sales funnel must contain a robust structure and the best possible ingredients to remain vibrant and appealing.
What can you do to achieve this? Before anything else, understand your audience to communicate effectively with them. Analyze your sales funnel metrics to identify opportunities for improvement, review your sales pipeline, and closely monitor your sales funnel metrics.
Maintain close contact with your customers and follow up with your leads. Keep your sales cycle short and efficient by discarding dead leads but tracking why they didn’t convert.
With the right processes in place and regular monitoring and optimization, you can run and grow your online course business like a pro.
Author: Rosemary is a Content Marketing Manager for the LearnWorlds team. She has a solid background in omnichannel marketing and content writing. Her mission is to improve the customer experience across all possible touch points through content.
* At Quaderno we love providing helpful information and best practices about taxes, but we are not certified tax advisors. For further help, or if you are ever in doubt, please consult a professional tax advisor or accountant.