Understanding the Sales Funnel
Sales funnel is not necessarily a term real estate agents recognize. That’s a mistake. Nurturing a lead means moving them through the sales funnel, from a new contact to a client to a referral.
Keep reading to learn everything you need to know about understanding the sales funnel and using it to build your business.
What Does a Sales Funnel Look Like?
It’s wide at the top, where it catches all sorts of potential leads, and narrow at the bottom, where it spits out clients with closed deals. It gets narrower because leads drop off at each stage in the sales process. For example, not everyone who asks for information about your new listing will actually buy a house with you. The funnel’s real power is helping you quantify how many leads drop away at each sales level—which lets you accurately predict how many you’re going to close.
Who Is In My Sales Funnel?
At the top of the funnel are Leads. Leads are people aware of your business who you’re actively pursuing for a sale.
Then there are prospects sometimes called qualified leads. These are people who meet the criteria for using your services. Anyone who likes your Facebook page is a lead, but only some of those people will be buying and selling in your market niche. You shouldn’t necessarily ignore unqualified leads as they may produce deals down the line, but sorting them lets you focus more energy on leads more likely to convert.
Then there are current clients, people you’re currently working with. A complete sales funnel also includes a section for repeat clients and referrals, since these people may well produce new leads in a few years.
How Does a Sales Funnel Help My Business?
A sales funnel quantifies leads, which helps you do four important things:
- Discover new ways to increase the number of leads you bring in.
- Predict your income and the number of deals you’ll close.
- Assess the effectiveness of your lead nurturing strategies.
- Pinpoint areas that need improvement so that more people become clients.
In other words, a sales funnel helps you create customers. Especially in real estate, customers rarely fall into your lap. You have to convince them that now is the time to buy or sell and to trust you with that transaction. A proper sales funnel turns unsure leads into clients and makes leads out of people who didn’t know you existed.
Bonus: Three Ways to Improve Your Sales Funnel
- Collect Data—use your CRM to record not just a lead’s name and contact information but also the likely value of their transaction and whatever information you have about their property specifications and interests. Creating comprehensive lead profiles determines how effective your follow up will be and therefore how likely you are to close the deal.
- Measure—To get the most out of your sales funnel, you need to know when leads drop out. Your funnel should have clear milestones as a lead travels through; each time they cross a milestone they become more likely to convert to a client. Make time once a quarter to take stock of how many leads move through your pipeline, where they drop out, and what you can do to keep them around.
- Invest in the Right Tools—You need a comprehensive, interactive CRM to build an effective sales funnel because you need to both record a lead’s contact information and track their progress. That’s why ZipperAgent has sales probability features that let you track the likelihood of closing a deal and predict your income. In today’s real estate world data helps you build your business. You need tools to track and understand that information.
Do you want to learn more about how a CRM supports your business? We’re here to explain.