What is a Sales Funnel & How Does it Work? (4 Stages of a Sales Funnel)

sales funnel

If you operate a business, you should be aware of what a sales funnel is. Chances are you’ve even used it, whether or not you’re aware of what the term means.

A sales funnel is very important for business, and understanding it will help you have better control over it.

In the age of digital marketing, it’s become even more important to pay attention to the various aspects of a sales funnel if you want to boost business growth in an environment of tough competition.

Here’s what you should know about a sales funnel and how it works.

What is a Sales Funnel?

A sales funnel is a concept in marketing that details the journey that a customer will go through before they end up making a purchase. It refers to all the processes set up to grab the interest of prospective customers and eventually lead to them making a purchase or generating a lead.

The analogy of a funnel is used because there are many prospects at the beginning of the sales process who are guided through several actions and ultimately narrowed down to those who end up making a purchase. As prospects go through the different stages of a sales funnel, they become more committed to buying your product or service.  

If you want to learn how to create sales funnels effectively, you can check out this article about the best funnel builder in the market.

How Does a Sales Funnel Work?

A sales function operates in stages and employs different techniques at each stage to get prospective customers more interested in the product or service you’re offering.

The methods to attract prospects at each stage differ, and the sales funnel always starts with a lot more prospects, tapering down to just a few actual buyers in the end.

The techniques you need to use in the early stages of the funnel are different from what you’ll need to do at later stages to retain prospects and help them commit to your product.

Initially, low cost, high reach methods can be used to reach a large number of prospects, but later, more targeted methods need to be employed to convert leads to buyers of your product or service.

The working of a sales funnel can be explained through basic stages that a prospect will pass through.

Each stage will require different actions from you as a marketer if you want to have maximum impact. The stages and effective actions required to be employed at each stage are described below:

Awareness

Not everyone knows about the existence of your business, and you have no idea just how many people would be interested in your business if they knew about it.

Creating awareness about your brand is the first step in the sales funnel. People could come across your business through a Google ad, a social media post, or even a blog article highlighting your business.

Especially in today’s world, where almost everyone seems to be on social media, using social media posts to increase brand awareness is a great way to help people enter your sales funnel.

In the internet marketing world, this is known as driving traffic and you can read more about it here.

Once people become aware of your brand and its products/services, it’s time to enter the next stage of the sales funnel.   

Interest

You can’t help your prospects move through the stages of the sales funnel if you fail to capture their interest.

Offering them a landing page with valuable content that they can access is a great way to capture their interest. You can even collect their email addresses and details in the process by requesting them to sign up to find out more.

At this stage, you must focus on communicating a story to prospects that expose their pain points/problems and offer your products/services as an effective solution.

Instead of making it a very obvious sales message, try to highlight your brand’s personality and establish a personal connect with your prospects.

Lead magnets, blog pieces, and videos showcasing your products in action or communicating the story of your brand can help to get your prospects interested and make them believe that they need the products or services that you’re offering.      

Decision

The next stage of the sales funnel relates to the decision making of your prospects. There are many brands offering their products and services in the same field, and you need to convince your prospects that your product/service is worth buying.

You can do this by highlighting the benefits of your products/services in comparison to that of your competitors and use Google as well as Facebook retargeting ads to ensure people are exposed to your message even when they’re not on your website.

Apart from these tactics, highlighting customer reviews and testimonials can help to convince your prospects of the value of your products. Your prospects will be more likely to believe that your products are worth it when they hear it from an existing customer of your brand rather than you because of the obvious profit motive involved.

You need to be likable and establish your brand as an authority figure for the products/services you’re selling. People need to believe that your products/services add value and can help to enhance their life.

You can also make it easier for prospects to make a decision and move into the next stage of the sales funnel by offering them discounts, special offers, bonuses, and free shipping. Such offers will help to excite prospects and move them into the next stage of the funnel.

Including a powerful and clear call to action at this stage can help prospects move from the stage of decision making to the stage of taking action to make a purchase.

Action

All that you’ve done till now will help your prospects move from the earlier stages to this final stage of action, where they eventually end up buying the product or service.

The number of actual buyers at the end of the process is much lesser than the number of prospects who initially entered the sales funnel. Remember the funnel picture?

As exciting as it is to win over a customer for your business, the process doesn’t end here. If you want to boost business growth in the long term and develop a loyal customer base, you need to take appropriate action to ensure customer retention.

This can be done by following up with existing customers and continuing to engage them with your brand and its products. Offering tech support and requesting customer feedback on products or services they’ve made use of is a great way to build customer loyalty and even generate more leads for your business.

You could also draw useful insights from customer feedback and implement changes based on this feedback. This will also help you build a better relationship with your customers.    

Need For a Sales Funnel

Having a sales funnel in place will directly contribute to a higher number of conversions. Without having a clear plan for targeting your prospects and converting them to customers, you’re not likely to see consistent results.

Having a sales funnel in place will help you reach out to a large number of initial prospects and then slowly filter out those who aren’t interested so that you can target more interested prospects through your actions at the different stages of the funnel.

With quantifiable data from the various stages of the funnel, you’ll be able to predict the number of sales you’re likely to make more accurately.

You’ll also avoid wasting time on those who aren’t interested and can focus your efforts on converting those who are more likely to buy your products and services.   

A sales funnel can also help you to identify any deficits in your marketing efforts by analyzing trends from the data derived at every stage of the funnel. When you have access to such information, you’ll be able to make the changes needed to see positive results. 

Targeted marketing at every stage of the funnel will take into consideration trends, culture, and demographic data of your prospects so that lead generation is a lot faster, and you can assess customer behavior at every stage. These benefits will eventually boost the success of your business.

Creating an Effective Sales Funnel

If you want to create an effective sales funnel, you need to understand your customers and their problems that can be solved through your products or services.

Mapping out the experience of prospects and deciding on the methods to be used at each stage is crucial to have clarity on what is to be done. Aligning the sales funnel with your pipeline stages will help you have control over the entire process from start to finish.

You should create sales funnel landing pages to help prospects get closer to buying your product/service. Using live chats to address customer queries will also help to speed up the sales process.

Blogs (like this website) and other guides can help to generate leads, and running retargeting ads can attract prospects who don’t convert automatically.

Attractive referral programs can also encourage your existing customers to promote your business among people they know and help you reach a wider audience.  

You can even connect at a more personal level with your audience on social media and show them that you value their opinions by listening to their feedback and using it to improve your products.   

Conclusion

In conclusion, every business needs a sales funnel. If you are looking for the easiest way to create a sales funnel, I highly recommend that you check out Clickfunnels, a software that allows you to build sales funnel in a matter of minutes!

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