What Is A Sales Funnel? A Definitive Guide

If you own your own business, you’ve probably heard of a funnel. But what are they and why are they such a crucial part of your marketing plan?

What is a sales funnel?

A sales funnel is a strategic, multi-step process that leads your prospect down the path to purchase, ultimately turning browsers into buyers. If you are making sales, your sales funnel exists whether you understand it or not. But the more awareness and knowledge you have about your customers and your sales funnel, the higher the chance you’ll be able to influence your customers and guide them down the funnel to conversion.

It can also help you understand when your customers are dropping out of the sales funnel. By finding these holes, you can discover how to fill them, and guide these customers back to the funnel and towards conversion.

How does a sales funnel work?

A sales funnel works the best when you understand your customer.

What demographic are they?

What is the journey of their path to purchase?

What ultimately drives conversion for them?

Maybe it’s a phone call, a blog, or an aggressive retargeting strategy? It might be special offers or discounts which are tailored to their needs, or simply a reminder email about their abandoned cart.

Most people think about the sales funnel in four different stages: Awareness, Interest, Decision and Action. These stages represent your customer’s mindset on the path to purchase.

Courtesy of Entrepreneur.com

Awareness


On the top end of the sales funnel, you have the awareness phase. In this phase, you want to attract as many relevant customers as possible, in order to give you the highest possible chance of leading a large number of people through the funnel to conversion.

You will likely utilise a variety of different marketing methods and channels to attract customers in the awareness phase. You might use social media, TV ads, radio, or even Google search.

While it’s true that you are targeting a large number of people in this phase, it’s still crucial that you are targeting the right people. Any efforts made in the awareness still phase need to be led by a clear overarching strategy, otherwise the rest of your marketing funnel won’t work.

Your aim from here is to create a relationship with your consumers, guiding as many people down the funnel as you can.

Your sales funnel should relate specifically to your brand, and may work completely differently to another brand’s depending on your category, price point and product or service niche.

From here, some customers might go from the awareness phase straight to action (or conversion). These customers might already be familiar with your brand, or you might have a unique product or service.

Other customers may move from awareness all the way down to decision, then back to the awareness phase again, or interest.

Interest

In the interest phase of the sales funnel, your consumer will be actively looking for solutions to their problems, and are searching for a product or service to fill this need. They might be searching on Google for a specific product, or widely researching a solution to their problems, for instance “how do I keep my house cool in summer?”

This is a clear opportunity for a number of brands to fill this customer need with content. Brands who sell home insulation, air conditioning or even heat-trapping roller blinds are products that can fill this customer’s need. The content that the customer consumes, the experiences of friend and family as well as other factors such as price and availability, will determine which product the consumer purchases.

In this stage, your potential consumer might follow you on social media, subscribe to your email list or read your blogs. They’re likely reading and researching (if needed) how your product or service works, and may be actively comparing it to other products in the market, if they exist.

In this phase, it’s important to be present and active for when your prospective buyer needs information. Blogs and other social media content can be crucial in these stages. If you don’t have a presence, you can bet your competitors will. This content can also be a key source of quality traffic to your site, therefore improving your organic search rankings.

Decision

As you might have guessed, the decision phase is crunch time for your brand. In this phase, your prospect is making the final decision whether to purchase or not.

This is when they’re looking at discounts, comparing products, and reviewing various packages to suit their needs.

In this phase, you can really make a difference by providing offers, discounts and using re-targeting cleverly to remind the prospect to buy.

Remarketing is actually much cheaper than targeting consumers in the earlier stages of the sales funnel, because these leads are already warm. These prospects are already considering purchasing your product, they may just need a final nudge to ensure that they convert.

If you’re selling a service or have a high-priced product, customer testimonials and reviews can be extremely helpful in this phase. For other brands, influencer marketing can be very helpful.

Action

This is the final stage of the sales funnel, when a customer is actually purchasing from you.

It’s important not to let your prospects fall out of the funnel in the final stages when, for example, they spot excessive shipping charges, or when you don’t have a variety of payment options for them to make a purchase.

If you do have a large number of consumers dropping out, it’s important to try to understand why. Are your shipping charges too high? Are they looking at cheaper products from a competitor? Is your competitor offering bulk discounts? Are your consumers waiting until your product goes on sale?

Creating a sense of urgency around the purchase can assist the buyer to move through your sales funnel and finalise the sale.

This can be achieved by creating limited time offers or exclusive discounts, or promoting your product as “limited edition” or a one-time only offer.

ClickFunnels is one of my favorite apps that will allow you to create Sales Funnels with One Time Offers super efficiently and easy.

Check it out here.

How do you create a sales funnel?

No sales funnel will be the same, and businesses use many different funnel types to create their unique sales and marketing strategies, according to their customer’s needs.

There are many different ways to create your own unique sales funnel, including assisted guides and services which can make creating a sales funnel a much easier process.

Check out my personal favorite here.

Ultimately, you should start by aiming to understand your customer, and your customer’s purchase journey. If you can understand the ways in which customers are currently purchasing your product or service, you can start to model your sales funnel from there.

If you really understand your customer, you can create an effective and relevant sales funnel which automates your marketing, speaking to only the customers who matter and that will turn your business into a selling machine.

Which is really what we all want, right.

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