What is a Sales Funnel and Do You Need One?
A lot of jargon is thrown around when it comes to lead generation marketing. One term you've probably heard bandied about is the sales funnel (or sometimes the marketing funnel).
But what is a sales funnel and should you be using one for your business?
What Does a Sales Funnel Mean?
While the term "funnel" may conjure up images of kitchen utensils, a sales funnel is simply a step-by-step process that businesses use to lead potential customers through when they are purchasing products or services.
Consider it as a visual depiction of the customer experience, illustrating the steps involved in a buyer's progression from initial awareness of your company to the ultimate purchase of your service or product.
In certain cases, this journey can be swift; a person comes across a social media post and immediately buys from you. However, for other businesses, particularly those in the B2B sector, this journey may be a lengthy and intricate one, involving careful deliberation and the involvement of multiple decision-makers.
Sales Funnel Stages
While some purchases are super straightforward, in many cases, a potential buyer will need to be gradually persuaded to choose your business. So it's important to understand what the customer journey might look like for your individual business.
Top of Funnel - The Awareness Stage
First thing's first. In order to do business with you, a customer needs to know that you exist. The top of the funnel, often referred to as the "Awareness" stage, is where potential customers first become aware of your brand or product. They might stumble upon a blog post, see an ad on social media, hear about you through word of mouth, or read about you in a magazine.
Middle of Funnel - The Consideration Stage
Here, potential customers are already aware of you and are considering whether your product or service is right for them. They might be comparing you to competitors, reading reviews, or diving deeper into what you offer.
Bottom of Funnel - The Decision Stage
This is the crucial moment. Potential customers are on the brink of making a decision to purchase or not. Your goal here is to make the decision as easy and attractive as possible for them.
How to create your sales funnel
While it's great to understand the journey, it's also important to think about how you can nurture your potential customers through each step of the funnel.
Top of Funnel - How to Generate Awareness
Many start-up businesses assume that building a website or having a social media page may be enough to make people aware of their business. Sadly, this is not generally the case. To get your message out there, you need to undertake activities that put your business in the path of your ideal customers.
There are so many different ways that this can be done, but here are some ideas:
Content Marketing for Awareness: Providing valuable and relevant content, targeted to speak to your audience, is an ideal way to catch their attention. This could be in the form of blog posts, videos, podcasts, or infographics.
Social Media Ads: From LinkedIn ads to TikTok videos, social media advertising can assist you in getting in front of your ideal audience faster.
SEO: Ensure that your website ranks well in search engine results for terms that your potential customers are looking for.
PR: Garnering press and media mentions can help boost your brand's credibility and awareness. Always make sure that you have something newsworthy to share.
Middle of Funnel - Making you the GO-TO choice
By the time potential customers reach the middle of the funnel, they've likely moved past mere awareness and are actively evaluating your product or service. This stage is pivotal, as customers are not only looking at what you offer but are also weighing it against alternatives. In other words, they're asking, "Why should I choose you?" Therefore, it's crucial to deliver targeted content and engagements that help them answer this question favourably.
Email Marketing: Regular updates, offers, or newsletters can keep you on your potential customer’s radar. Exclusive information or early access to sales can make customers feel valued and closer to your brand.
Case Studies: Share success stories or in-depth analyses to demonstrate how your product or service solves specific problems. Transparency here can build trust and persuade a prospect to consider you over a competitor.
Social Proof: Customer testimonials, reviews, and even influencer endorsements can add credibility and trustworthiness to your brand.
Webinars or Live Q&As: Offering real-time information sessions can provide value and create a more personal connection.
Interactive Quizzes or Tools: These can provide personalised recommendations or valuable insights, pushing the customer closer to making a decision in your favour.
It’s also worth considering using a lead magnet at the top or middle of funnel. This can enable you to collect email addresses to nurture your customers further.
Learn more about how to create a lead magnet here.
Bottom of Funnel - Turning leads into sales
The bottom of the funnel represents a watershed moment: the potential customer is ready to make a decision. At this stage, they are likely just a push away from becoming an actual customer. Your focus should now be on removing any last-minute objections or uncertainties they may have, making the path to conversion as frictionless as possible.
Clear CTAs (Call to Actions): Make it easy for the customer to take the next step, whether it’s “Add to Cart,” "Book Now," or "Get Started."
Free Trials: Offering a risk-free experience can give potential customers the final push they need to commit.
Exclusive Offers: A time-sensitive discount or bonus can create urgency, prompting immediate action.
Money-Back Guarantees: Such assurances can serve to eliminate or reduce perceived risks, making the customer more comfortable with their decision.
Follow-Up Calls or Emails: Personalised follow-ups can answer any last-minute questions and can make the potential customer feel valued and important.
Other Names for the Sales Funnel and Associated Methods
It's worth noting that the concept of a "sales funnel" doesn't always go by that name. Depending on the industry, the size of the business, or even the specific methodologies employed, you might come across different terminology. Here are some other names and methods commonly used to describe or implement the sales funnel:
Purchase Funnel: Often used interchangeably with the sales funnel, the term 'purchase funnel' is commonly employed to describe the customer journey specifically related to purchasing.
Marketing Funnel: This is similar to the sales funnel, but the focus here is mainly on the marketing strategies involved in moving the customer through the buying process.
Conversion Funnel: This focuses more on the metrics and actions that move a potential customer towards a specific outcome or 'conversion,' such as a sale, sign-up, or other forms of engagement.
Revenue Funnel: This term focuses on the financial aspects, looking at how leads move through the funnel to generate revenue for the business.
Lead Funnel: Mainly used in B2B contexts, this focuses on the stages of capturing and nurturing leads before they become sales-qualified leads (SQLs).
Customer Journey: A broader term that encompasses the entire experience a customer has with a business, from the moment they first become aware of it, to purchasing and beyond.
Methods Associated with the Sales Funnel:
Inbound Marketing: This method focuses on attracting customers through valuable content and interactions tailored to them. It's a more organic approach to move them through the funnel.
Account-Based Marketing (ABM): Predominantly used in B2B, ABM is a highly focused approach where marketing and sales collaborate to target a specific set of accounts.
Growth Hacking: Mainly used in startups, this involves rapid experimentation across marketing channels to identify the most effective ways to grow a business.
Content Marketing: This method employs valuable content to attract, inform, and engage an audience, with the ultimate goal of converting them into customers.
Understanding these alternative names and methods can help you better communicate and collaborate with other professionals, as well as broaden your approach to cultivating potential customers through various stages leading to a sale.
By meticulously nurturing your potential customers through each stage of the sales funnel, you're not only increasing your chances of a sale but also building a stronger, more lasting relationship with them. Therefore, understanding and implementing a sales funnel is not just beneficial, but essential for sustained business growth.
