What is a sales funnel?
A sales funnel, also known as a purchase funnel, is a consumer-based marketing model designed to replicate a potential customers journey through the stages of the buying process for any product or service. The typical stages of the sales process include:
The importance of the sales funnel process
A sales funnel is an easy way to visualize where your prospects are in their buyer’s journey and in turn, understand your customer’s behavior. With this understanding, your sales team can identify and resolve funnel “leaks” and increase conversion rates by qualifying leads generated by the marketing funnel.
Laying out the sales funnel stages step-by-step
Depending on the type of product or service you sell and/or the length of your sales cycle, the amount of steps in between the top and the bottom will vary.
Top of funnel: Awareness and interest
At the top of the funnel, you have website visitors that have engaged with your site in some form, whether it’s clicking through ads or content marketing (blog post, a webinar, or ebook). With enough engagement, these potential customers are considered new leads.
As these users continue engaging by requesting more information, wanting a demo of your product, or signing up for a free trial, they become qualified leads that are ready for your sales team.
Bottom of funnel: Decision and action
At the bottom of the funnel, you have SQLs (sales qualified leads) in the decision-making process and paying customers.
Sales Funnel VS Marketing Funnel: What’s the difference?
The sales funnel and marketing funnel are two separate stages of the customer journey, with the marketing funnel feeding directly into the sales funnel where generated leads become qualified leads. The most successful companies have a symbiotic relationship between sales and marketing, especially where the respective funnels connect.
Marketing’s job is to create awareness and interest. The marketing funnel attempts to give people a reason to be interested in your product or service. Some of the benefits include:
- Lead generation: Increase sales through personalized nurturing of leads
- Provide detailed insights on the leads’ behavior, easier for the sales team to close deals
- Can be automated – saves process time and effort.
- Create brand awareness for your target audience and trust among your leads, helping you create positive brand sentiment
- Fewer errors due to less human intervention since the system can be automated
From there, the sales team’s job is to take the handoff of qualified leads (MQLs) from the marketing teams with a goal of getting that person to convert and buy your product or service.
Benefits of a well executed sales funnel
Rule of thumb for proper sales funnel management? Garbage in, garbage out (GIGO). If you’re not properly tracking and updating your leads as they progress through buyers journey, you won’t feel the same impact as you would have a tightly-kept sales funnel. In order to get all of the benefits listed below, keep your funnel tight!
Benefits of a tightly-kept sales funnel:
- Discover funnel leaks
- Stabilize sales volume
- Increase conversion rate
A well-executed sales funnel will undoubtedly help you generate more revenue by providing you with:
1. Visibility: See how many leads you have at various stages.
2. Predictability: Apply dollar figures to leads, and predict performance with better accuracy.
3. Accountability: Know which stage of the funnel is the weakest so that action can be taken to resolve any issues.
4. Better insights into customer behavior: Get a sense of how long your sales cycle is, what type of actions or content triggers buyers to progress through your funnel, and why you might be losing deals.
By optimizing the customer experience based on intelligent understanding of your customer behavior, you can maximize conversion rate for each qualified lead in turn.
Continue the sales cycle
Sales does not stop at the bottom of the funnel, as you can continue with post sale marketing activities to encourage repeat customers and retain converted leads for future upsell opportunities.
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