What is a Sales Funnel?
A sales funnel is the marketing term for the journey users go through on the way to purchase and becoming the business’ customers. There are several steps to a sales funnel, usually known as the top, middle, and bottom of the funnel, although these steps may vary depending on a company’s sales model.
Each of the sales funnel stages has an impact on consumer behavior. You need to know them intimately.
By knowing each step, you can use tactics to improve the number of people that go from one step to the next.
Sales funnel is the path where users each step that someone has to take in order to become your customer.
This can have a crazy impact on your business.
Let’s say you double the number of people at 2 steps of your funnel. You double leads and you double the percentage of closed customers. That gives you 4X the number of new customers every month.
Defining and managing your sales funnel is one of the most powerful concepts in business.
Let’s dive in.
Let’s look at a brick-and-mortar sales funnel.
The people at the top of the sales funnel walk by your store. A certain percentage of them decide to walk in, that’s the next of the funnel.
A customer sees a rack of T-shirts on clearance. He or she thumbs through the rack, now they’re at the next step of the funnel. Then the customer selects four t-shirts and walks to the check-out. They’re at the last step. If all goes well, they finish the purchase and reach the bottom of the funnel.
This same process plays out for every business in one way or the other. Your sales funnel could exist as: retail store, sales team, website, email and personal consultation.
Any marketing channel can be part of your sales funnel. And your funnel might be spread across several channels.
Why is a Sales Funnel Important?
Your sales funnel illustrates the path prospects take.
Understanding your funnel can helps you find the holes in the funnel — the places where prospects drop out and never convert.
If you don’t understand your sales funnel, you can’t optimize it. We’ll go into the specifics of how the funnel works below, but for now, understand that you can influence how visitors move through the funnel and whether they eventually convert.
How does a Sales Funnel Work?
While there are lots of words used to describe different sales funnel stages, we’re going to go with the four most common terms to explain how each stage works as a consumer goes from a visitor to a prospect to a lead to a buyer.
A visitor lands on your website through a Google search or social link. He or she is now a prospect. The visitor might check out a few of your blog posts or browse your product listings. At some point, you offer him or her a chance to sign up for your email list.
If the visitor fills out your form, he or she becomes a lead. You can now market to the customer outside of your website, such as via email, phone, or text — or all three.
Leads tend to come back to your website when you contact them with special offers, information about new blog posts, or other intriguing messages. Maybe you offer a coupon code.
The sales funnel narrows as visitors move through it. This is partially because you’ll have more prospects at the top of the funnel than buyers at the bottom, but also because your messaging needs to become increasingly targeted.
What are the Sales Funnel Stages?
Read more here.