You might have heard the term “sales funnel” thrown around a lot online. You might have even used it without being 100% sure of what it means. This is why it sometimes helps to go back to the basics.
In this article, we’ll go over the definition of a sales funnel and its keys stages. More importantly, we’ll see why you should use one, and how it can help increase your conversions, whether it’s to sign up new users, create recurring customers, or actually boost your sales.
The basics of Sales Funnels
The first thing to understand is that sales funnels give a clear view of the efficiency of your sales processes. Unlike a sales pipeline, which shows what happens at specific stages of the selling process, the funnel is designed to picture all the stages at once.
In fact, the name “funnel” represents the usual shape of decreasing percentages at each stage. You start with a large number of prospects. Then some of them are turned into leads. Some of those leads then turn into conversions.
At its most basic, this is what a simple sales funnel looks like:
The final number in the funnel is usually an excellent representation of your success rate.
A real-life sales funnel example
Another thing to understand about sales funnels, is that they exist all around us, even if we aren’t aware of it.
For instance, let’s say you are in the market for a new hat. You walk along a street, and see a few hats in a window display. Your interest is piqued and you walk in. This is the first stage.
Then, a sales assistant offers to let you try a few hats on. This is the information stage, where you compare and gain knowledge about the product.
Finally, at checkout, the clerk offers to throw in a second hat at half price. This is an upsell technique that is also designed to boost conversion and make the funnel more efficient.
What are the standard sales funnel stages?
While all sales funnels start with a large number that is gradually filtered down, the stages themselves can vary depending on your pipeline or objectives. We’ve already seen a simple example above, but a more complex funnel could function as follows:
Sales pitch #1
Sales pitch #2
Similarly, if you use information to funnel prospects into buyers, your funnel could include the following stages:
Awareness (where prospects become aware of the solution)
Interest (where they investigate your solution)
Evaluation (where they try the solution)
Decision (where negotiation begins)
Purchase (where they become customers)
Revaluation (where the contract can be renewed)
Repurchase (where they sign up to become recurring customers)
In short, the stages will change depending on your sales process (5 step sales process, or 7 step process, for instance). But the good news is that thinking about your sales funnel will help you tailor and optimize your processes in the long run.
What about automated sales funnels?
One of the great things about digital technology is that you can automate processes fast, easily and at scale. And when it comes to sales funnels, they are particularly helpful when deployed as part of:
An automated email sequence: you can leverage email marketing tools to create complex sequences using triggers with what / if / then logic. For instance, you could start with a cold email, and see if the prospect opened it. If they did, you can send the follow-up email. If they didn’t, you can trigger a second cold email.
A well-designed website landing page: Using good practices in copywriting and UX (user experience), it’s absolutely possible to create a website that acts as an automated sales funnel. Various sections can help filter out potential prospects, and lead them towards a CTA (call to action) that turns them into customers.
A strong multichannel marketing campaign: similarly, your marketing campaign can work across numerous channels to direct potential leads towards your goal. Google ads and social media engagement are all great tools to use as part of your sales funnel.
Common Sales Funnel Mistakes
As we’ve already established, sales funnels already exist for your product or service, even if you aren’t aware of it. This is, in fact, one of the first mistakes organisations make: not measuring and tailoring their funnel. Other mistakes include:
Not following up enough: according to Business News Daily, 48% of sales representatives fail to follow up with interested prospects. Moreover, only 10% of these representatives go through the effort of making contact more than three times with the same prospect, which is particularly damaging since 80% of all sales close between the 5th and 12th contact.
Being too slow to respond: in sales, speed is key. In fact, it is often recommended to follow up within the first five minutes after a prospect expresses interest. While this may seem close to impossible, it all makes sense if you manage to create a powerful automated funnel, especially with the right newsletter tool.
Impersonal / non targeted automated communication: this problem arises when organisations fail to implement a good CRM solution. Poor customer management often leads to lost sales when leads realise they are treated as general prospects instead of receiving personal attention.
Sales funnels can be as simple or complex as you want them to be. On the one hand, this is great news for small businesses who only need to attract and convert the odd customers. But if you are serious about boosting your sales, you should put everything in place to effectively measure and refine your sales funnel.
This is particularly true if you rely on numerous tools. A great sales funnel can leverage products already at your disposal such as CRM solutions and email. For instance, Act! 365, provides a sales-boosting tool that integrates with Office365 and delivers all the productivity features you need to take control over your sales funnel in order to accelerate your ability to close deals.