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There are several steps on the road to making a sale. You target your promotions at suspects.
They're the ones that have the same attributes as people who have purchased from you in the
past. A prospect is somebody who has expressed interest in your
products by responding to a promotion or showing up at your site unannounced. A qualified
prospect is one who has the need, the desire, and the means to make the buy.
Anybody who's been in sales for more than 10 minutes can describe a sales pipeline to you.
It's the numbers game side of selling that is so daunting to those who hate cold calling and
prefer that their efforts not be measured at all.
It takes so many cold calls to get somebody on the phone. It takes so many conversations to
find even an unqualified prospect. It takes so many unqualified prospects to find a qualified
one. It takes so many qualified prospects to find one that you can turn into a customer.
Sales managers want to see how many calls the salespeople are making to determine if they're
on the right track, the track that leads to the money. If a sales rep isn't making the cold calls,
there's no way he or she will make the grade. If the rep has lots of qualified prospects and no
sales, then training that rep on closing the deal is the obvious next step.
Identifying the qualification process on your Web site is the surest way to figure out how to
increase your conversion rate. What are the steps a visitor makes on his or her way to buying
your goods or services?
If you do not sell directly, that's okay. When I say buy or conversion, I want you to think of
whatever moment of commitment happens on your site. Conversion might mean:
• Registering for a seminar
• Subscribing to a newsletter
• Participating in a discussion
• Downloading a white paper
• Buying a product
Your qualification process will probably include a combination of factors, all leading up to
the conversion event on the preceding list. Think in terms of an optimal site path, but think
beyond mere navigation. The qualification process might include an email exchange, a
prerequisite number of repeat visits, or a willingness to share personal information. Each Web
site has its own set of stipulations that separate the wheat from the chaff.
Conversion Benchmarks
In terms of pure sales, you can become seriously depressed or maniacally happy looking at
some of the conversion figures periodically reported. Do you measure up?
An article posted at the Wharton School Web site (http://knowledge.wharton.upenn.edu)
laments how low online conversion rates really are:
According to Forrester Research, a consulting firm in Boston, more than 70% of Internet
retailers in 1999 had a conversion rate of less than 2%, which is to say that of every 100 visits
to a retail Web site, only two resulted in purchases. Industry experts suggest that market
leaders such as Amazon.com have conversion rates no higher than 15% to 20%.
Transaction Phases
In their paper "Web Assessment: A Model for the Evaluation and the Assessment of
Successful Electronic Commerce Applications," Dorian Selz and Petra Schubert from the
University of St. Gallen, Switzerland Institute for Information Management, outline three
transaction phases on a Web site:
Information Phase
In the information phase customers collect information on potential products and services.
They look for possible suppliers, asking for prices and conditions. The information phase
covers the initial satisfaction of a consumer's need for information to conciliate his demand
for a product or service with the offer.
Agreement Phase
Negotiations between suppliers and customers take place in the agreement phase. The phase
serves to establish a firm link between supplier and buyer that will eventually lead to a
contract, fixing details such as product specifications, payment, delivery, etc.
Settlement Phase
The last of the conventional steps is called the settlement phase. The (physical/virtual)
delivery of the product ordered will take place during this phase. Also possible after-sales
interactions like guarantee claims or help desk services occur.
We're interested in how those steps through the information phase and the agreement phase
can impact the first part of the settlement phase, where the order is placed.
Does your Customer Life Cycle Funnel resemble a martini glass? Then you're attracting a lot
of people to your site, but they're the wrong people. Banner ads that attract 14-year-old girls
to your BMW site are not helping you. Those girls come to the home page and leave upon
arrival. It's time to check your advertising and see why you're not pulling in serious leads.
Does your funnel look like a margarita glass? You have the right people showing up, but they
lose interest. You have a problem with navigation or persuasion. They're certainly interested,
but they came, they saw, and they got confused or bored and they bolted.
Does your funnel resemble a wineglass? You've got the right people and they like what they
see, but they just don't seem to be able to seal the deal at the end of the process. People are
abandoning their shopping carts. Time to review your sales order process and make it easier
to use. Show the shipping charges up front. Let them find out how much the tax is before they
have to enter their life story.
You say your funnel looks like a shot glass? Congratulations! You've got the right people,
they're interested, they've followed the optimal site path you've designed, and they end up
making a purchase. Well done.
Upper management at Oracle is very interested in the shape of their funnel. Rene Bonvanie,
vice president of Online Marketing, admits they are interested in revenue as well, but they're
more focused on the pipeline.
"To some extent revenues is kind of a result rather than a cause, so what we look at is
pipeline. And pipeline is determined by positive response to marketing campaigns and
conversion through a qualification cycle, which means that the marketing system has to
communicate very well with the sales system in which qualification happens."
Okay, the pipeline is where all good things happen. What factors go into moving visitors from
one phase of the relationship to the next? | 
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