What is a Sales Funnel?
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- Angela Logan
- 13th September 2022
- 3 min read
If you want to get serious about sales, you need a sales funnel. Having a sales funnel creates customers, generates referrals, monitors and tracks your progress and focuses the company's efforts on making sales.
But what is a sales funnel? Let’s dive in.
Getting into the minds of potential customers
A sales funnel is essentially a way of describing the journey people will take from the moment they become aware of your product, up until they make a purchase (or don’t).
While the exact funnel will change from business to business, and from prospect to prospect, these four stages of a sales funnel are generally accepted:
- Awareness: Think of this as the courtship stage. You’re trying to woo the prospect into engaging with your business
- Interest: This is the research, comparison, exploring options and shopping around stage. It’s your time to be helpful and establish your expertise - don’t try to sell just yet
- Decision: This is the stage where you make your best offer. This could be a discount code, an extended free trial, a bonus product. Whatever it is, make it irresistible
- Action: Crunch time. If your prospect doesn’t decide to buy, don’t lose heart - they could still convert in the future
What does a sales funnel do?
Every customer goes through a thought process before they make a purchase - so why are we bringing it up?
The important thing about being clued into your sales funnel, is that it makes you and your business much more effective sellers. Let’s be honest, if you don’t understand your sales funnel, you can’t optimise it.
The sales funnel lets you tap into the mindset of the customer depending on where they are in their buying journey. This means you can tailor your messaging and how you communicate with people, maximising your chances of closing each sale.
It means you can control and tweak the journey for the customer, so you won’t turn them off by going in too hard too early, or by not giving them enough information when they need it.
Honing in on your sales funnel also allows you to find out where the cracks are. Where are most people dropping out? Is there a particular action that results in people disappearing? Finding out when people are leaving, means you can try and close the cracks and improve the journey.
How to get your sales funnel started
The best place to start your sales funnel is by building a landing page. This is where you will direct people across your site to find out more once they become aware of your brand.
And remember, your landing page should be the first port of call, way before you start working on an awareness campaign, because you need a destination to send people to!
On your landing page, you want to offer something of value in order to collect your prospects’ email addresses. An ebook or a whitepaper could be ideal.
Once you have your landing page, you can start building an awareness campaign - through targeted social media adverts, SEO optimised content or a mix of several things.
You can A/B test your landing page as well; you might find it surprising what things have an effect. Even things like fonts can subconsciously influence people’s inclinations.
Once you have people’s email addresses you can start nurturing your potential customers through email. Establish your expertise in the space, offer them advice or information.
Analyse your audience behaviours - develop buyer personas. You can even target your email campaigns depending on what persona a customer fits into.
If your customer gets to the end of the funnel and they don’t purchase, all is not lost. Keep communications going, so that if that person ever gets to the purchase point again, your business or product is front of mind.
Key sales funnel metrics
When you build your sales funnel, there are a few key metrics you need to keep track of:
- Average order value
- Customer lifetime value
- Conversion rate
- Entrances
- Follow-ups
- Flow rate
- Total revenue
- Win rate
Each metric helps to build the overall picture, and you can use these to work out how tight (or how loose) your funnel is.
Getting your sales funnel right is just one part of optimising your sales. Get the full picture and read the next article in our spotlight on sales.
