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Think Loop, Not Funnel, When Selling Online

Loop Not Funnel Blog Image

The traditional approach to online sales is to move target customers through a sales funnel. Once the sale is closed, we often view the process as completed and move on. In effect, we are allowing the customer to fall out of the funnel and off our radar.

At Second Spring, we believe in viewing the online sales process as a loop, not a funnel. A loop takes into consideration an ongoing relationship with the customer and the constant potential to generate that next sale through an existing customer relationship.

Loop vs. funnel

Whereas a funnel is finite and usually short term, a loop is continuous and long term.

Customer satisfaction does not play an integral role in the standard sales funnel. In a customer loop, however, like the one below, customer satisfaction is really factored into everything you do. This is because satisfying your customers is what fuels your relationship to become ongoing.

Picture1-3When applying a customer loop model, it’s imperative that you become obsessed with customer satisfaction and actively generate new ways to achieve it. Make yourself indispensable to your customers.

Often, this will come in the form of really getting to know your customers. Take the time to learn from your interactions with each customer and analyze the business you generate as a result. Develop an understanding of their preferences and engage with them in a way that is meaningful to them.

As a result, your existing customer base will actively contribute to the growth of your company through increased sales, positive testimonials, and referrals. Investing in aggressive customer satisfaction pays off when these people become raving advocates for your brand. (See our complete series on creating brand advocates here.)

The customer loop approach focuses on using tools that will generate new and ongoing business. Social media testimonials, referral bonuses, discounts, loyalty programs, and other things of this nature are all excellent ways of keeping customers engaged

In a traditional sales funnel, marketing is generally focused on generating qualified leads and sales is focused on closing those leads. Using such a model, the customers themselves frequently become an afterthought. In many cases, your team is simply reacting to the actions of the customer instead of reaching out and adding that personal touch that keeps them coming back. Growth in this way comes only with significant effort by the sales team to close sales and generate new activity at the top of the funnel. Customer referrals are often scarce to none.

Looking at it this way, you can see how a standard sales approach is not effective for long-term sustainability and growth.

When you create a customer-focused sales loop, you will utilize the effort you put into customer satisfaction as energy. This energy increases over time as relationships strengthen and movement within the loop accelerates. Your customers will become more engaged and sales and referrals will be generated more rapidly as a result. Your time and resources should be invested into keeping as many customers in the loop as possible. Ideally, we don’t want to let anyone fall out.

The Process of Creating a Loop

So by now maybe you agree that e-commerce is better thought of as a customer loop, but how exactly do you achieve that?

The first step in building your sales loop is to attract customers. Before customers become customers, they are simply strangers. You need to implement creative ways of attracting strangers to your store to discover your products. This is the big opportunity online.

If you’ve built a business, you know how to sell to people that you encounter in person. In e-commerce, the vast majority of your customers are people that you don’t know or won’t have the opportunity to meet in person. This means that your marketing strategy is going to look very different from a brick-and-mortar concept. You can learn more about turning strangers into prospects here.

Once you’ve attracted strangers to your store and their interest is piqued, they become prospects. You will then need to nurture your prospects consistently until they’re ready to buy. Typically, only one in seven of your eventual customers will buy the first time they visit your site, so you need to keep the other six interested and informed, continuing to build momentum until they make that decision to purchase.

The second and most obvious stage of the loop is to sell your products. This is what we normally think of when we think of e-commerce. This stage includes setting up your store, receiving orders, and collecting money.

Step three is delivering on what you promised to your customer, also known as fulfilling the order. This could be pick and pack, working with your shipping providers, inventory management, or otherwise coordinating the distribution online and elsewhere. You may also have warehousing considerations depending on what the nature of your setup is. Depending on your business model, delivery may play a minor role or a significantly greater part in the story of your customer loop.

Stage four is to satisfy your customers. In e-commerce, this is the most important step because it presents an opportunity to build trust and forge a bond that transcends the digital environment. You want your customers to feel like they have that brick-and-mortar relationship with you even if they are located halfway across the world.

In this stage, you’ll want to collect and analyze satisfaction data, develop seamless processes, and be ready to manage any and all issues that come up with orders that are damaged, lost, or have otherwise lead to dissatisfaction by your customer. You want to be able to help them out and avoid returns and refunds wherever possible. Come up with innovative ways to make sure your customer is thrilled with the service you provide and eager to do more business with you.

Finally, step five is to grow those relationships and turn satisfied customers into raving fans. Trust online is at an all-time low, so effective remarketing is a must. When you secure a customer, you want to make it easy for them to buy from you again and again. Capture their testimonials and case studies and create an enjoyable and even profitable experience that encourages them to bring their friends to your store.

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