What Is the Sales Funnel?
Regardless of how long you have been involved in marketing, it’s likely you have heard the term sales funnel. What exactly is a sales funnel; however, and why is it so important to the sales process?
In essence, a sales funnel is simply a type of marketing system. The goal of this system is to guide your customers as they make the transition from prospect to lead and then on to customer and finally to repeat buyer. Imagine the sales funnel similar to an ordinary funnel. Just as an ordinary household funnel is used to avoid spilling or wasting valuable contents, a sales funnel is designed to help you maximize your resources and ensure you cultivate the most sales possible.
The first step of the sales funnel is capturing the attention of sales prospects. While not all prospects will eventually become buyers, at least some of them will do so. This often occurs with the purchase of an entry-level product. With that purchase, your buyer has demonstrated they have a need for what you have to offer. Furthermore, they have proven they are willing to invest money to satisfy that need. You do not want to lose that customer after just one purchase, however. The sales funnel is designed to help you continue nurturing your best customers. Not all customers are good matches for your products and services. The sales funnel also helps you to filter out those prospects who are not a good match for your products and services while allowing you to focus on your specific target customer.
At the end of the process, the sales funnel will have allowed you to identify those customers who are highly-response and who will experience the highest degree of satisfaction as well as value from your offers. These are the customers that typically deliver the vast majority of profits.
What Are the Different Parts of the Sales Funnel?
In order to reap the most benefit from the sales funnel, it’s important to understand the various parts or stages to the sales funnel process. The first part of the sale funnel is the top of the funnel. In this larger section, your goal is to capture leads. These are usually individuals who have not yet had any contact with. The second part of the sales funnel includes prospects, those individuals who have confirmed interest in what you have to offer. You will usually have had some type of interaction with prospects.
In the third part of the sales funnel are qualified prospects. Qualification is crucial to the success of the sales funnel. During the qualification process, you verify that the prospect has an actual need for your product or service and that he or she sees value in what you have to offer. Yet another important element of the qualification process is confirming there is a budget for the purchase. It’s also important to confirm that you are speaking with the decision maker, the person who has the authority to make such a purchase.
The final part of the sales funnel is comprised of clients, those contacts who have made a purchase. This could include clients who make ongoing transactions or only those clients who have made a single purchase in the past. It is these people whom your sales funnel are intended to identify.
The Natural Path to a Sales Funnel
While it would be nice if all of your prospects immediately found their way to the final stage of the sales funnel, that is simply not how it works. A natural path exists to the sales funnel and in order to convert the greatest number of prospects to customers possible, you must have a solid understanding of that path.
The first step in the path to a sales funnel is brand awareness. In this phase, prospects become aware of your company and likely visit your website for the first time. The next step in the path of a sales funnel is consideration. It is in this phase that prospects begin the process of evaluating your brand as well as your products and services to determine whether they are a good fit for their needs. The final step of the natural path of the sales funnel is conversion. This is when prospects make the decision to shop with your brand. Eventually, some of those customers will become repeat buyers.
The Difference Marketing Can Make When Engaging People in Different Steps of the Sales Funnel
Unfortunately, this path does not simply occur on its own in most cases. To ensure your prospects make it successfully through the sales funnel you must have an effective marketing plan in place. The goal of such a marketing plan is to engage people at various steps of the sales funnel, guiding them to the next step. Without an effective marketing plan in place, people can often get stuck at various stages and never make it to the next step. As a result, you could easily lose a fully qualified prospect who would otherwise become a repeat customer.
How Marketing Automation Can Be Used to Help People Move Down the Funnel
Given the extreme level of competition in the world of online commerce, keeping your sales funnel filled with prospects can be a full-time job. This is precisely why many companies often deploy so many resources to bringing in new leads and closing sales. At the same time, you cannot afford to ignore those individuals who are already in the sales funnel. Nurturing those leads is also crucial. This is where marketing automation can provide a number of benefits.
Marketing automation technology makes it possible to gather and store the data related to a lead to provide that lead with a more personalized customer experience. Regardless of the size of your organization, you can use marketing automation technology to customize your marketing efforts. This can be accomplished through the following techniques:
In this technique, leads complete specific actions. Those actions are then recorded and the lead moves into a segmented buyer persona category. The benefit of this technique is that repetitive tasks become more efficient and easier.
By tracking the behavior of a lead it becomes possible to gather quantifiable data. Such behavior could include clicking emails or visiting pages on a website. The benefit of this technique is that it allows your sales team to identify precisely where a lead is located within the buying process.
The personalization methods of marketing automation make it possible to send lead emails based on triggered interactions. As a result, you can create more personalized user experiences.
While marketing automation does not retrieve leads to fill your sales funnel, it can help to keep your sales funnel filled by nurturing prospects with content that is timely and relevant. As leads enter a marketing automation database, it becomes possible to open the lines of communication between prospects and your marketing department. Leads can then be separated into lists based on their behaviors and actions. Through such segmented lists, you can focus your marketing efforts in a more direct manner in order to fulfill the specific needs of your leads. Gathering as much understanding as possible about your prospects is crucial. This understanding will give you the ability to develop replicable trends, giving insight into which techniques work and which tactics are less effective. Ultimately, you will be able to develop stronger bonds between your brand and your prospects, thus increasing sales and your return on investment.
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