Sales Funnel Strategy: Bottom Up Assumptions

The preferred method for estimating sales consists of focusing on the underlying components that drive customer acquisition and conversions. This method, which I refer to as the "Bottom-up" approach, takes more time to establish than the top-down approach but it has the potential to produce the most accurate outcomes and will almost certainly help you build an effective strategy for getting your product or service to market.

The Startup Virtue model includes six sales funnel modules that you can activate or deactivate to create your unique sales approach. Those five funnels are:

1. Website / Organic Sales - Sales from website visits driven by content marketing, social media engagement, SEO, events, etc.

2. Waitlist Sales - Sales you can predict based on the number of users on a waitlist to purchase your product/service as soon as it launches or otherwise becomes available for sale.

3. Founder-Led Sales - Sales completed by founders themselves. This is common for early-stage companies that are looking to acquire their first customers.

4. Paid Ad Campaign Sales - Sales you generate through purchasing paid ads.

5. Direct Sales - Sale generated through a dedicated sales team. This is common for B2B SaaS applications. Note that you will need to add sales staff to your Hiring Plan before this module can predict sales.

6. Channel Partner / Affiliate Sales - Sales generated through channel partners, including distributors, influencers, or resellers.

Note that, for marketplace businesses, these sales funnels drive the acquisition of sellers to your marketplace.

Start by checking the box to activate the bottom-up sales assumptions feature.

1. Website Traffic and Organic Sales Assumptions

Set the number of unique website visitors to your website that are driven by social media, SEO, events, or content marketing. Numbers here represent organic website traffic that is not driven by paid ads or affiliates (we will handle these in the sections below). The total number of unique site visitors will drive your organic sales and revenue from ads and data sales (activated in the Setting Up Your Revenue Model section).

Start by setting the number of unique website visitors to your site when it launches. Let's say you've generated some excitement on social media prior to launching your product and you can expect 1000 unique website visitors to your website in the first month you turn it on. Next, set the month in which you launch your website. For example, month 6.

Next, set the percent growth in unique site visitors you can expect each month. Set this figure for each year in the model. Adjusting these variables will change the total number of unique site visitors calculated in each year.

If you are converting customers via organic website traffic, activate the website sales funnel by checking the box next to "Use your Website to Acquire Customers".

Next, set the conversion rate for turning website visitors into customers (or trial users if you have a SaaS business). Then set a monthly website spend amount you expect will be required to achieve the rate of website traffic and conversions you set above. Add a growth rate to your website spend, if needed.

They grey calculated fields will reflect an annual summary of your website traffic, conversions and CAC. Adjust any variable in this section to change the outcomes.

2. Waitlist Sales Assumptions

The waitlist feature is designed to account for prospective customers who join a mailing list, newsletter, or social media group, signifying their intent to purchase your product or service before it is available for purchase. Activating the waitlist feature allows you to input the number of sales you are likely to make upon launch of your offering(s).

Activate the waitlists feature and set the number of customers you expect to convert, by tier, in the first month each offering becomes available for sale. The grey calculated fields show the projected revenue, by tier, from the starting number of customers you set in the blue boxes.

The waitlist fields for physical goods and transaction is the same. The waitlist fields for subscription offerings works a bit differently depending on whether you offer trial periods.

If your subscription offering includes a trial period, you have the option to enter a starting number of trial users and/or a starting number of subscribers.

The number of trials you enter will be activated in the first month that your first subscription tier becomes active. Note that only some of your trial users will convert to paying subscribers depending on the trial conversion rate you set in the subscriptions section of the model. Those who convert will be allocated across any tiers available in the month your first tier launches.

The number of subscribers you directly add to each tier will be allocated to monthly vs. annual according to your settings in the subscriptions section of the model.